New FCC chairman vows to promote competition


New Federal Communications Commission (FCC) chairman Tom Wheeler. (Jason Reed/Reuters)
December 2, 2013

The new chairman of the Federal Communications Commission vowed Monday to promote competition in the telecommunications industry, noting the need to ensure that small wireless carriers have a chance to compete in the highly anticipated auction of public airwaves next year.

The remarks by Tom Wheeler were an indication that the nation’s top telecommunications regulator might limit how much the two dominant wireless carriers, AT&T and Verizon Wireless, can buy in the auction.

In his first policy speech since becoming chairman, Wheeler said he prefers a light-touch approach to regulation.

“I am a rabid believer in the power of the marketplace,” he said at his alma mater, Ohio State University.

But Wheeler, a former top lobbyist for the wireless and cable industries, added that the FCC should step in when competition is being stifled. “I have seen enough about how markets operate to know that they don’t always, by themselves, solve every problem,” he said.

The telecommunications industry is closely watching what Wheeler will do through the agency’s planned auction of a rare set of high-quality airwaves. Smaller wireless carriers, such as T-Mobile and Sprint, are counting on the auction to enhance their networks and have asked the FCC to place limits on AT&T and Verizon, which control more than six out of 10 mobile-phone contracts.

In his speech, Wheeler noted a paper written in April by the Justice Department that called on the FCC to ensure that smaller carriers have access to the best airwaves available for auction.

“A key goal of our spectrum allocation efforts is ensuring that multiple carriers have access to airwaves needed to operate their networks,” he said.

Wheeler stopped short of detailing how he would structure the auction. When asked after his speech if he would limit AT&T and Verizon’s participation, he demurred. “Stay tuned,” he said.

In outlining his philosophy for regulation, analysts said President Obama’s appointee walked a careful line and presented himself as a moderate.

“He doesn’t want to be pigeon-holed,” said Gene Kimmelman, a former senior antitrust official at Justice. “His speech comes across as forceful pragmatism.”

The new chairman also said he supports “net neutrality” regulations introduced by his predecessor. The rules, which prohibit broadband Internet companies from blocking Web sites from their networks, are being challenged in federal court by Verizon.

Wheeler said that a cable company that also provides high-speed Internet service should not be allowed to block a service such as Netflix. But he appeared more lenient toward allowing broadband Internet companies to impose controversial business practices such as data caps, data tiers and other billing models on Netflix and other similar firms. Consumer advocates and analysts have said such pricing techniques could unfairly punish innovative companies.

“We are seeing the market evolve in such a way where there will be variations in pricing, there will be variations in service,” Wheeler said. “As I said, I am a firm believer in the market. . . . We want to see those kinds of things evolve and observe them.”

Follow The Post’s new tech blog, The Switch, where technology and policy connect.

Cecilia Kang is a staff writer covering the business of media and entertainment.
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