FCC Chairman Wheeler Commits to Competition and Unlocking Cell Phones

By Peter Bernstein December 03, 2013

Federal Communications Commission Chairman Tom Wheeler chose his first true public speech with strategic intent. Returning to his alma mater, the main campus of Ohio State University (OSU) in Columbus, OH—and with the obligatory introductory swipe his school’s arch-rival the University of Michigan, whom OSU defeated in a thriller football game this past weekend on the way to a possible national championship—Wheeler touched on two subjects clearly near and dear to his heart. These are his unwavering belief in competition as the best path forward for the U.S. to be successful in an increasingly online-centric world, and as kind of an opening tickler his intent in this regard to break the bonds we in the U.S. must have with mobile operators when we purchase a mobile device.   

The chairman, an accomplished student of history, is out with a short eBook titled, “Net Effects: The Past, Present and Future Impact of our Networks”. The book is available for free on the FCC website, Amazon Kindle, Scribd, and other platforms. The eBook, along with his public appearances, are designed to be the beginning of a process whereby the regulatory philosophy that will guide his time as chairman will be articulated.

Rather than paraphrase, it is interesting to see why and where he started where he did in the articulation process, since these are words we are likely to see amplified and detailed as we go along.

Starting with competition, Wheeler noted that, The FCC is the public’s representative to the ongoing network revolution. Congress charged the FCC to protect – quote – “the public interest, convenience, and necessity” of the nation’s networks.

In serving the public interest, the FCC has focused on dual responsibilities:

First, facilitating dynamic technological change to ensure the U.S. has world-class communications networks; and, second, ensuring that our networks reflect our civic values, most notably our belief that communications networks should be accessible to all.

Today, we find ourselves at a crossroads. As our networks evolve, so should government oversight. There are some who suggest that new technology should essentially free the new networks from regulation; that market forces are enough to ensure that the public interest will be served. I am a rabid believer in the power of the marketplace. But I have seen enough about how markets operate to know that they don’t always, by themselves, solve every problem.

Our new networks are even more important to society than were the old ones. The public has the right to be represented as we go through the transition that is the fourth network revolution.

The evolution of network technology changes neither the responsibility of networks to the greater society, nor the FCC’s mission to protect the public interest. Congress gave the FCC authority over interstate and foreign wire and radio communications. We have an obligation to live up to that mandate. Indeed, the success of the Internet would be imperiled were that not the case. The Internet is not a law-free zone. It depends upon standards of conduct. And it depends upon the ability of the government to intervene in the event of aggravated circumstances.

Wheeler goes on to explain that, “Regulating the Internet is a non-starter.”

Without going into details, suffice it to say this is a very strong signal to all industry stakeholders. There will be rules regarding appropriate conduct and safeguarding scarce public resources like radio spectrum, but competition in the context of serving the underlying public interest will be a core value of this regime.

It is going to be reflected in policies whose additional context will be that competition is nourished to meet the FCC’s obligations to be good stewards and assure that every citizen, and by extension every business, has access to the best we have to offer with competition preferred to regulation as the means to assure fairness and affordability. Wheeler emphasized this by saying, “As we fulfill our responsibility, we will be guided by two lodestars: competition policy and something I call the Network Compact.” The latter is something that is in his eBook and will be front and center in Commission deliberations.

Not surprisingly, given the Chairman’s tenure as head of the wireless industry’s trade group, Wheeler in this first address dovetailed his remarks about the FCC’s job being the promotion of competition with an interesting view on mobile competition in the U.S. which he claims is alive and well because of the FCC.

He cited as an example where the FCC will not fear to tread in promoting competition as the current practice of “locking” a mobile phone so that it only works on the network on which it was sold. In words that might bring a bit of pause to many in the mobile industry, Wheeler said:

“I believe that once a consumer upholds his or her end of the deal to buy a phone, he or she should be able to switch that phone to another carrier’s network – it’s called competition. Just last month I reached out to the head of the wireless industry’s trade association to encourage the industry to adopt such unlocking practices. I have been pleased with the industry’s responsiveness thus far, but the message was clear: if mobile phone companies don’t act voluntarily – and quickly – to adopt a policy to unlock phones, I will work hard to ensure the FCC will act to require them to do so.”     

To be honest, that is a fight I think you could sell tickets to at a premium price. It is why it grabbed industry headlines including the one at the top of this article.

It is hard not to go back briefly as the chairman did to the subject of the Internet and government interference with it doing more harm than good as a priority.  He explained that: “Allow me to repeat what I said previously. Regulating the Internet is a non-starter. What the Internet does is an activity where policy makers must be judiciously prudent and should not be involved. But assuring the Internet exists as a collection of open, interconnected facilities is a highly appropriate subject.”

Given the times in which we live, it should also be noted that Wheeler came out strongly on the subject that the FCC has enormous obligations that he intends to not just fulfill but strengthen in regards to public safety (911 call must go through and provide accurate information, was one example along with assuring the vitality of emergency communications capabilities), and protecting our networks from cyber threats.

As his first public speech, the line I resonated with the most is one he made near the conclusion of his remarks:

“I wanted to give these remarks in Columbus, not only because of my deep affection for this place. But because I think the dateline of my first speech sends a more powerful message than anything you’ll find in the transcript.

“It’s a message that the American people are our constituency. That how we connect determines how jobs are created and lives are lived. And that your FCC believes its mission is as integral to the prosperity of the Ohio Valley as Silicon Valley.

“It’s a message to young people that the new world of networks can be – must be – innovative and dynamic and competitive and serve consumer expectations. And that when these forces converge, opportunities abound.

“To get this right – to maximize the benefits of this great network revolution – the voices of the American people must be heard”

Not a bad first appearance. How the voices of the American people get filtered in the sausage grinder that is Washington, D.C., should be fascinating as spectator sport. It is already evident that the tone, if not the substance, of discussion is rightfully going to change with changing times. How industry interests can be expressed to impress their alignment with perceived public interests is always the tricky part, and the politics are never easy.

That said, we at least have a pretty good indication from the start of where Chairman Wheeler wants to steer the ship. How well he stays the course is something we are going to find out sooner than we have with previous regimes. The quickening pace of the industry, and the recognition that we are at a watershed moment, are going to force a lot of issues. It is also apparent that industry interests in maintaining the status quo aside, Chairman Wheeler is going to force many of them as well. 

Edited by Rory J. Thompson
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