LOS ANGELES – The Federal Communications Commission’s chairman delivered a tough message to cable and broadband executives last week, saying a lack of competition in their industry has hurt consumers.
The chairman, Tom Wheeler, said that the FCC intended to address the problem by writing tough new rules to enforce so-called net neutrality, preventing big broadband and cable companies from blocking access to innovative new technologies and startups that might emerge as competitors.
In addition, Wheeler told the group that he would use the agency’s federal authority to override state laws that restrict municipalities from offering inexpensive broadband service to residents. Cable companies have aggressively funded efforts to put those laws in place.
The aggressive stance by Wheeler represents his most vigorous attempt yet to convince both consumers and the industry he regulates that he intends to closely watch and protect open access to the Internet.
It comes as the FCC has faced vigorous criticism and lobbying over Net neutrality and the effect that a proposed merger between Comcast and Time Warner Cable would have on cable and broadband competition. A combined Comcast-Time Warner Cable would control about 40 percent of the broadband market in the United States, and the leverage it would have in the industry will be one of main factors the FCC will study as it considers whether to approve the merger.
“For many parts of the communications sector, there hasn’t been as much competition as consumers and innovation deserve,” Wheeler said at the annual meeting of the National Cable and Telecommunications Association.
That represents the first time that Wheeler has gone beyond encouraging competition in the broadband business to definitively stating that he finds it lacking.
Consumer groups and other critics have accused Wheeler of being soft on the industry in part because he formerly was head of the very trade association he was addressing on Wednesday. But at that time, Wheeler said, cable was the insurgent technology rather than the incumbent. Now, he said, both his and the industry’s responsibilities are different.
“As a result of the importance of our broadband networks, our society has the right to demand highly responsible performance from those who operate those networks,” Wheeler said.
In addition, he said, “as chairman of the FCC, I do not intend to allow innovation to be strangled by the manipulation of the most important network of our time, the Internet.”
The address came just two weeks before the FCC will release for public comment a first draft of Wheeler’s new open Internet rules. That will be the third time the FCC has attempted to outline principles for a free and open Internet. Two earlier attempts were struck down by the U.S. Court of Appeals for the District of Columbia Circuit.
Wheeler has said that the rules will follow a “road map” laid out by that court, which said in its rulings that the commission might achieve some of the same results using a different legal justification.
People who have been briefed on the chairman’s proposal say that while he opposes the blocking of content by an Internet service provider, his new outline would allow broadband companies to offer some content providers a faster lane through which they can transmit video and services, as long as they do not slow down other content to do so.
On Wednesday, Wheeler sought to emphasize that there were limits to how the lanes could be developed.
“Let me be clear,” he said. “If someone acts to divide the Internet between haves and have-nots, we will use every power at our disposal to stop it.” That includes the possibility of reclassifying broadband service so that it could be subject to the same strict regulation as utilities like electricity providers.
After the new Net neutrality proposal was disclosed last week, Wheeler said the FCC would have to ability to act if a company was not providing a “commercially reasonable” service. In his blog post, Wheeler specified behaviors that would fail that criterion, including degrading overall service to build a new “fast lane” or to force consumers to buy a higher-price subscription.
Critics say that the issue is still too murky. “It’s hard to understand how the FCC’s proposal, as reported, can allow avenues for paid prioritization and yet still serve as a pillar for Net neutrality,” Michael Weinberg, a vice president at Public Knowledge, said in a statement. “Standards that allow the web to have two lanes, with one for preferred traffic, seem to go against the principles that the FCC and the chairman himself have said they stand for.”