Tom Wheeler began his job Tuesday as the nation’s top telecommunications regulator with a promise to promote competition in the thriving broadband Internet industry and ensure that no Americans are left out of the digital technology boom.
In a speech to the staff of the Federal Communications Commission, Wheeler, the new FCC chairman, reiterated his philosophy that market competition, not regulation, will guide the growth of the telecom sector and provide greater options for consumers.
But in his speech, later posted in a blog, Wheeler, the former head of two giant lobbying organizations for the cable and wireless industries, said that does not mean the FCC will sit on its hands.
“Yet we all know that competition does not always flourish by itself; it must be supported and protected if its benefits are to be enjoyed. This agency is a pro-competition agency,” said Wheeler, a friend of and former fundraiser for President Obama.
Wheeler, who was most recently a venture capitalist in the Washington area, didn’t provide details about his agenda, which he promised will be revealed in coming days. But he referred to the major task of releasing more spectrum to commercial markets, partly through the expected federal auction of television airwaves next year to mobile broadband companies.
He also is responsible for carrying out a congressionally mandated diversion of funds from the multibillion-dollar Universal Service Fund to bring broadband Internet to rural areas.
“How networks enable a 21st-century educational system, enable the expansion of capabilities for Americans with disabilities; and assure diversity, localism and speech are basic underpinnings of our responsibility,” he said.
Analysts said that given Wheeler’s business-friendly past, they don’t expect him to introduce major broadband regulations.
Wheeler promised during his confirmation hearing to focus on consumer protection, which analysts say could lead to a rule or enforcement actions against feuding cable operators and broadcasters that black out channels when negotiations break down over programming fees.
Analysts note that he picked as a senior staff member a public interest advocate who has long been an irritant to regulatory agencies. Gigi Sohn, who founded the consumer advocacy group Public Knowledge, will serve as special counsel for external affairs, acting as a liaison to agencies, lawmakers and other interested parties.
“Mr. Wheeler’s inclination will be to pragmatically mix industry sympathy and savvy with liberal tendencies, in the pursuit of market-oriented solutions that include competitive and consumer regulatory safeguards where necessary,” David Kaut and Christopher King, analysts with financial services firm Stifel Nicolaus, wrote in a research note.
Industry observers say Wheeler’s first test will be whether he sets restrictions on how much the biggest carriers can buy in the airwaves auction.
Smaller wireless carriers and public interest groups have argued for caps on bids by the biggest carriers, AT&T and Verizon. Those two companies provide service to about seven out of 10 U.S. wireless users, and they bought the most spectrum in the last federal auction, in 2008.Such a concentration in the hands of the biggest carriers minimizes options for consumers, critics say.
The CTIA wireless lobbying group, which Wheeler headed in the 1990s, has noted that overall prices for wireless service have remained flat or declined. And the two biggest wireless operators contend that the auction should be open to all interested parties, particularly those with the most to spend. Proceeds will go to building out a nationwide communications channel for emergency responders as well as to the U.S. Treasury.
“We do not expect Verizon and AT&T will be prohibited from participating. More likely, Verizon and AT&T will face some bidding limitations,” said Jeffrey Silva, a media and telecom analyst at Medley Global Advisors.
Wheeler told the FCC staff that he is a history buff and described the agency as a pivotal agent in a major transition from phones to broadband Internet. He called the process a fourth major “network revolution” — after the printing press, the railroads and the telegraph.
He suggested that controversy is par for the course in telecom history. “It is an historical reality that network change produces tempers that boil, voices that rise and cries of alarm,” he said.
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