2014 December

Does FCC Chairman Wheeler Know How Wireless Carriers Are Regulated?

Posted by | Broadband Internet, Wireless | No Comments

At last week’s FCC meeting, Chairman Tom Wheeler chose to rely on the regulatory classification of switched mobile voice services to support the notion that reclassifying broadband as a Title II service would not discourage investment: “For 20 years, Verizon Wireless, AT&T Wireless, all the wireless carriers have been living under Title II with appropriate forbearance and have been able to raise and invest hundreds of billions of dollars and build a mobile network that is the envy of the world.”

The Chairman’s example here reflects a basic lack of understanding regarding how wireless carriers are regulated under Title II. Hint: It looks a lot more like case-by-case review under § 706 than “strong” net neutrality rules under Title II.

Though mobile voice services are subject to the Title II “reasonableness” obligations in §§ 201 and 202, the FCC has not established per se rules to ensure that wireless carriers meet those obligations. The FCC generally relies on market forces to protect wireless consumers from unreasonable rates and unreasonable discrimination subject to a case-by-case complaint process to address potential market failures. See Orloff v. FCC, 352 F.3d 415 (DC Cir. 2003). In short, Title II hasn’t adversely impacted investment in the mobile voice market because it has been applied in virtually the same way the Chairman initially proposed to apply § 706 to broadband services — a proposal that didn’t raise the same investment concerns as the “strong” net neutrality approach endorsed by the President.

If that weren’t enough, the Chairman also ignored the fact that, for the last eight years or so, wireless carriers have been investing almost exclusively in mobile broadband services, which have never been subject to regulation under Title II.

(That’s the problem in a nutshell, but for those who want a deeper understanding, keep reading.) Read More