President Obama's top telecom regulator just issued his strongest hints yet about a pending plan to regulate Internet providers, and judging by reports from the room, he's leaning hard toward the most aggressive proposal on the table.
Speaking Wednesday at CES, the world's largest consumer electronics show, Federal Communications Commission Chairman Tom Wheeler took aim at several industry arguments against the use of Title II of the Communications Act to regulate broadband providers. That's the legal tool that President Obama and many consumer groups say would prevent broadband providers from unfairly discriminating against some Web sites.
Wheeler also appeared to backtrack on one of his previous net neutrality proposals, saying it didn't go far enough in protecting consumers, according to tweets from the audience.
Now, analysts and policy experts from both sides of the net neutrality debate largely agree that Wheeler will seek to apply Title II to Internet providers after all, more than a year after a federal court tossed out the FCC's previous net neutrality rules.
Rich Greenfield, an analyst at BTIG, is opposed to invoking Title II — a process known as "reclassification." Yet on Wednesday, he read Wheeler's remarks as "essentially confirm[ing]" that reclassification will occur:
A spokesman for the cable industry also seemed to acknowledge that future:
In his remarks, Wheeler reportedly dismissed complaints that greater regulation would discourage Internet providers from further upgrading their networks.
He also argued that he had been moving in the direction of stronger rules even before Obama issued his November statement on net neutrality, which called explicitly for Title II, according to other audience members.
Wheeler pointed out that wireless carriers, which have been regulated under a version of Title II, have also thrived.
That remark drew objections from FCC critics who say you can't compare the effects of Title II on wireless carriers to the hypothetical effects of Title II on more traditional, fixed broadband providers. The critics also said that the law prohibits the FCC from extending Title II regulations to the wireless industry, as the agency has been considering.
Most significantly, Wheeler argued against a previous version of his proposed net neutrality rules that set up a "commercial reasonableness test." The test would have scrutinized deals struck between Internet providers and content companies, such as Netflix, to speed up services to consumers -- creating so-called "Internet fast lanes. If the deals failed the test, then the companies involved would have been found to violate net neutrality.
On Wednesday, Wheeler said the test would have been unworkable in practice, according to audience members.
Between his statements that a) that Title II would not harm investment; b) he was moving in the direction of Title II already; c) that wireless carriers have flourished under Title II already; and d) that the commercial reasonableness test he'd previously proposed was flawed, it's hard to avoid believing that Wheeler has made up his mind to use the FCC's Title II powers on Internet providers.
Even opponents of the FCC on the issue believe reclassification is coming. Wheeler told the crowd he will circulate his new proposal to the FCC's other commissioners on Feb. 5 and the agency will vote on it Feb. 26.