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FCCs Wheeler Denies Capitulating to Obama on Net Neutrality

Josh LongThe chairman of the Federal Communications Commission on Tuesday flatly denied the notion that President Barack Obama caused him to reverse course on the direction of Internet regulations.

Tom Wheeler told a CNBC reporter that he made an erroneous assumption and had his facts wrong after the reporter said Wheeler opposed Title II regulation of the Internet but appears to have changed his position due to pressure from the president.

In November, Obama recommended the FCC reclassify broadband service under Title II. Republicans on Capitol Hill have questioned whether the president improperly influenced the FCC, an independent agency.

Wheeler said he always favored a “strong and open Internet” and asked about Title II regulation under the original proposal. An alternative approach the FCC was considering focused on whether an activity was commercially reasonable. But Wheeler said he began realize over the summer that the latter approach wasn’t the right one.

“As I met with consumers and innovators and VCs from around the country, it became clear that that concept of commercial reasonableness could be interpreted as, ‘what’s commercially reasonable for the Internet service provider, not for the consumer and not for the innovator?’” Wheeler explained in the interview with CNBC.

Last week, by a vote of three to two along party lines, the FCC adopted Net neutrality rules that Wheeler favored.

Critics of the regulations have said they are burdensome, unnecessary to preserve the openness of the Web, and rooted in a 20th century monopoly era that is out of touch with current innovations and market forces.

But Wheeler said the FCC has chosen not to impose utility-like regulations such as regulation of rates or unbundling of networks. Last week, the FCC explained it has chosen to refrain or forbear from applying 27 Title II provisions, and more than 700 related regulations that are unrelated to broadband, under its legal authority.

“So the reality is that the day after our order goes into effect,” Wheeler told CNBC, “the revenues from consumer services for Internet service providers will be …

… exactly the same as they were the day before because we want those revenues to be there; we want those revenues to generate a good return so that the operators then have a reason to continue to expand the network and particularly to expand and to compete with each other.”

The actual Net neutrality order hasn’t been released. Once it is, the regulations become effective 60 days after they are published in the Federal Register.

The broadband industry is expected to file lawsuits, challenging the FCC’s regulations in federal court.

“What doesn’t make sense, and has never made sense, is to take a regulatory framework developed for Ma Bell in the 1930s and make her great grandchildren, with technologies and options undreamed of eighty years ago, live under it,” AT&T’s Jim Cicconi declared last week, commenting on the regulations.

One of the reasons the order was not immediately released following last week’s vote is related to the FCC’s need to defend itself in court. The final order must address arguments that were made by individual commissioners, explained John Sallett, general counsel of the FCC, in a recent blog.

Ajit Pai and Michael O’Rielly, the two Republicans at the FCC, voted against adopting Wheeler’s regulations and have questioned the legal foundation underpinning the regulations. Pai said he anticipates the FCC will be stuck in litigation.

If the FCC didn’t address arguments that were contained in statements, Sallett explained, a court could overturn the order for failing to address those issues. Last year in a case Sallett referenced, a federal appeals court in Washington, D.C., cited its duty to ensure an agency considers the arguments of its dissenting commissioners.


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