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Wheeler: Net Is Not Reg-Free Zone

FCC Chairman Tom Wheeler said Monday that he did not think technology was going to free networks from all regulations, saying that it was the FCC's role to step in to promote competition as well as to keep its powder dry when it was not needed.

In a speech to his alma mater, Ohio State, Monday, Wheeler said that the FCC would be the public's representative as digital networks revolutionize communications. It was billed as his first big address, and Wheeler said the fact that it was not in Washington was a signal that the FCC was out to do the people’s work, which includes insuring competition and access.

"I have seen enough about how markets operate to know that they don’t always, by themselves, solve every problem," he said. "The public has the right to be represented as we go through the transition that is the fourth network revolution."

But Wheeler said that does not mean he is for intervention for intervention's sake.

"If the facts and data determine that a market is competitive, the need for FCC intervention decreases," he said. "I have zero interest in imposing new regulations on a competitive market just because we can. I have repeatedly advocated the 'see-saw' rule – that when competition is high, regulation can be low. The effect of the 'see-saw' rule gives companies control over their regulatory fates based on the degree to which they embrace competition in their markets."

That public representation means living up to its congressional authority over interstate communications. He said that includes the Internet, but drew a distinction between regulating the activity of the Internet, which he called a nonstarter, and intervening to insure it remains open. "The Internet is not a law-free zone," he said. "It depends upon standards of conduct. And it depends upon the ability of the government to intervene in the event of aggravated circumstances."

In a follow-up to the speech, Wheeler said that what the Internet does should not be the subject of regulation, with exceptions like child pornography and making sure phone calls get through. But he said what else the net does should be off limits to government.

He said the government responsibility is to insure the Internet—connections among network carriers—exists. "The Internet exists, however, as a collection of open, interconnected entities is an appropriate activity for the people’s representatives."

"You can't have access unless you have the ability to access any lawful network," he said, which is why he supports the FCC's open Internet rules. He said he expected the D.C. Circuit to rule sometime this month or next on Verizon's challenge to those rules.

Asked about the broadcaster incentive auctions, Wheeler said he was most intrigued by the prospect of broadcasters selling capacity, but sharing spectrum with another broadcaster and retaining must carry rights. Broadcasters would be getting a payout, continuing to deliver their service in a more spectrum efficient way, and still reaching 80-85% of the country via cable. "That seems to me to be a pretty good deal," he said.

Wheeler said he expected some entrepreneurs and others in the incentive auctions. He did not say whether the FCC would limit Verizon and AT&T's participation in the auction, but did associate himself with a Justice Department, saying "a key goal of our spectrum allocation efforts is ensuring that multiple carriers have access to airwaves needed to operate their networks. The importance of such competition was reinforced by a filing with the Commission from the Antitrust Division of the Department of Justice last April."

Justice said the FCC should modify its local market spectrum screen, which triggers additional scrutiny of local market wireless spectrum competition. Such modification could limit AT&T and Verizon's participation in a spectrum auction.