As I noted yesterday, new FCC boss Tom Wheeler has been saying all the right things as people attempt to get a bead on just what kind of an FCC leader he'll be. Wheeler, a former cable and wireless industry lobbyist, has spent his first few weeks in office absolutely gushing about just how dedicated he plans to be in regards to boosting industry competition
As such, it was a little confusing to hear him give a college Q&A earlier this week wherein he appeared to give the green light to not only caps and overages, but prioritized access to certain websites
In response to a question, Mr. Wheeler indicated that he would not oppose some type of usage-based pricing, with Internet service providers charging so-called data hogs different amounts for service depending on how much data they receive and transmit.
Mr. Wheeler said variable pricing and service plans represented the effects of competition. “We might see a two-sided market,” he added, in which a company like Netflix might pay an Internet service provider to guarantee that Netflix customers get the best available transmission speeds.
For a purported expert on broadband competition and broadband technology, this statement ignores a few key realities. One, consumer advocates repeatedly point out that usage caps and overages on broadband services can be and are used anti-competitively to artificially protect TV revenues from Internet video -- and they tend to only emerge in the least competitive of markets
as a very obvious form of price gouging.
Two, forcing Netflix to pay yet more money to reach consumers faster is a carrier pipe dream from way back. Trying to force content companies to pay additional tolls for no coherent reason is effectively what started the net neutrality debate in the States
, when in 2005 then AT&T CEO Ed Whitacre informed Google they wouldn't be able to ride his "pipes for free." Here again, consumer advocates frequently argue that forcing Netflix to pay yet more money to reach an ISPs consumers is about as uncompetitive as it gets.
In short, Wheeler appears to be claiming he hates the disease (a lack of competition), yet seems to enjoy many of the symptoms (low caps, high overages, pay to play prioritization). Needless to say, consumer advocates found Wheeler's latest comments a bit troubling.
"Allowing such anti-competitive practices would be antithetical to his promises to police market abuses and promote competition. Letting incumbent phone and cable companies exploit their dominant position by charging people more to use certain websites and services is a disastrous idea," noted Free Press in a blog post
Public Knowledge (whose former President Gigi Sohn left the group to work on Wheeler's staff) was equally concerned by the rhetoric but gave Wheeler the benefit of the doubt, calling on him to clarify exactly what he meant.
"His remarks could possibly be interpreted as endorsing CDNs instead of net neutrality violations," Public Knowledge's Michael Weinberg said in a blog post
. "If so, he needs to make it clear that he does not support ISPs charging to access their subscribers. More importantly, he claims to support an open internet – but what does that mean to him? If his “open internet” allows ISPs to charge websites and services to access subscribers, he may need to find another term."
You'll recall that Wheeler's appointment saw significant praise from the industry itself
, setting off the first wave of alarm bells for fans of something other than status quo at the FCC (lots of talk of competition, few real, substantive pro-competitive actions). If Wheeler's willfully oblivious to the anti-competitive impact of usage caps, overages, and pay-to-play access to consumers, then those alarm bells just got much, much louder.