For those of you too young to recall, John Mitchell, Richard
Nixon’s infamous Attorney General, famously advised the press: “Watch
what we do, not what we say!”
This turned out to be good advice back then.
In a similar vein, it is wise to watch what the Federal
Communications Commission and Tom Wheeler, its Chairman, do with regard to the
regulation of rates for broadband Internet services in the wake of the FCC’s
February 2015 decision subjecting Internet service providers to so-called
“Title II” regulation. This, of course, is regulation akin to the public
utility regulatory regime applied to the railroads in 1887 and the Ma Bell monopoly
in 1934.
On February 4, 2015, shortly before the FCC adopted its
Title II regulation order, Chairman Wheeler stated in a piece he wrote for Wired: “[T]here will be no rate
regulation, no tariffs, no last-mile unbundling.”
In his official statement accompanying the Title II
regulation order adopted on February 26, 2015, Chairman Wheeler declared: “That
means no rate regulation, no filing of tariffs, no network unbundling.”
According to an Ars
Technica piece published on March 3, 2015, referring to the Title II
regulation order, Mr. Wheeler stated: “This is not regulating the Internet.
Regulating the Internet is rate regulation, which we don’t do….”
If you like, you can find other statements to similar
effect.
I said at the time the FCC adopted the Title II regulation
order – and many, many times since –that the FCC’s action would lead to “rate
regulation” of Internet services, regardless of whatever the FCC called its
actions. I explained that subjecting interconnection arrangements to Commission
intervention would lead to regulating interconnection rates. That banning paid prioritization is rate regulation.
That prohibiting, or even curtailing, so-called zero-rating and sponsored data
is rate regulation because the FCC will be dictating the structure of the usage
tiers and rate caps in subscribers’ service plans.
Perhaps the
meaning of “rate regulation” is like the meaning of “is.” It all depends.
(Again, for those of you too young to recall, Bill Clinton famously said, by way of attempting to explain his
way out of a hot spot, that, “It depends on what the meaning of ‘is’ is.”)
Regarding the
FCC’s Title II regulation order, I was pleased to see that, this week, in
opposing a legislative provision intended to prohibit broadband rate regulation
by the Commission, Mr. Wheeler provided a bit more clarity – or perhaps I
should say “reality” – as to the meaning of his earlier “no rate regulation”
pledges. According to a report in the April 6
edition of Communications Daily
[subscription required], Mr.
Wheeler said this at a congressional hearing:
“Because at
the heart of everything is rates. So paid prioritization is a rate issue.
Throttling is a rate issue. Blocking is a rate issue. Interconnection is a rate
issue.”
This is true.
This is reality – at the heart of all the actions that Mr. Wheeler identifies,
and others, “is rates.” And, of course, so are any actions that curtail or
alter the various zero-rating plans now under Commission examination, if not
formal investigation, or that impact usage tier charges.
I’m pleased,
in a way, that, in trying to fend off “no rate regulation” legislation, Mr.
Wheeler at least is now acknowledging that much of what the Commission majority
did in adopting the Title II regulation order either presently amounts to rate
regulation or likely will lead to rate regulation. I just wish he had been more
forthright about the matter at the time of the FCC’s February 2015 action.
Going
forward, with regard to the FCC’s actions regulating the Internet, it will pay
to heed of John Mitchell’s advice: “Watch what we do, not what we say.”
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