Cable operators must “overcome the temptation to use your predominant position in broadband to protect your traditional cable business,” he said.
He said that with that transition, too much was at stake for consumers and the wide ecosystem of businesses that rely on guaranteed access to the Internet.
"Often people say to me, 'I know you won't do anything crazy, but what about those who follow you?' " Wheeler said. "My response is, 'I take you at your word to protect an open Internet, but what about those that follow you?' "
The same thinking informed the FCC's decision to block Comcast's proposed $45 billion merger with TWC, a deal that would have put more than half of U.S. broadband subscriptions under one roof. Comcast withdrew its proposal from the FCC and Justice Department last month.
While the companies had argued that they do not compete in the same regions of the country so consumers would not lose options for providers, the FCC put more emphasis on a different aspect of the merger: It determined that the consolidation of the firms would give Comcast too much power over too many businesses -- from Netflix to Discovery Communications -- that would rely on it to deliver their programs over cable TV or online.
"It is important to understand that the tipping point from cable to broadband came while the transaction was under review," Wheeler said. "We recognized that broadband had to be at the center of our analysis, and that video was, in essence, an application that flows over networks and that could be supplied both by the owners of facilities and by competitors that use broadband pathways to compete against the owners of those broadband pathways."
The audience reaction to Wheeler's speech was tame, with light applause after it was done. But when media and cable industry executives in the following panel criticized the FCC's rules, the hundreds of attendees responded strongly.
Michael Fries, chief executive of Liberty Global, said he was "baffled" by Wheeler's speech and called the FCC's action "terrible regulation" to recast broadband as a utility in the mold of phone service.
The rules seem based on a "presumption of guilt and punishment of success that this industry has achieved," Fries said to loud applause in the audience.
Wheeler also criticized a lack of competition for the highest speeds of broadband. He urged the cable industry to invest in spreading and upgrading their networks.
But Time Warner Cable CEO Rob Marcus pushed back on Wheeler's assessment.
“I feel like we operate in a different environment than he seems to live in. In my world, broadband is incredibly competitive, and I think the competition has in fact fueled an incredible amount of investment on our part, and it is an investment we continue to make,” Marcus said.