Wheeler to CTIA: Competition Doesn't Assure Openness

Also Tells Wireless Companies They Need to Step Up and Bid in Incentive Auction
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FCC Chairman Tom Wheeler pulled no punches with the wireless industry Tuesday, an industry he once lobbied for. He said they needed to step up and bid in the incentive auction, that the FCC would have to think hard about whether or not to apply the net neutrality rules to mobile as well as fixed broadband, that the FCC was still concerned about carriers throttling customers speeds, and said that competition, even when it does exist, may not be enough to assure Internet openness.

He told wireless carriers in a speech to the CTIA convention in Las Vegas Tuesday (Sept. 9) that they needed to show up to the incentive auction to make sure broadcasters had the financial incentive to participate. He noted the "strong expression of interest" in the auction showed by AT&T, and pointed to Sprint and T-Mobile's "big numbers" when they wanted to bid jointly--had the FCC allowed them to do so, which it is not. 

But he said the rest of the industry had been rather silent, and suggested they needed to weigh in, in part to refute suggestions by broadcasters that the reason wireless companies may not bid is that demand for mobile is not as great as the wireless industry suggests.

Wheeler did not mince words about the need for wireless companies to bid in the incentive auction: "If that is the case, if mobile operators don’t put their money where their mouths have been, the future of spectrum policy will begin to look a lot different."

CTIA President and former FCC Commissioner Meredith Attwell Baker assured Wheeler that her members "will show up to every auction to support this amazing, competitive industry."

Wheeler made it clear that he intended to play no favorites stemming from his background as a lobbyist. He said it was 10 years since he was at the convention of the association he once headed. "But today I have a new client, the American people; and I will bring to bear every ounce of whatever capabilities I have – and whatever understanding I have of the wireless industry – to aggressively represent the best interests of my client."

That insight included that apps were once restricted and developers charged.

"I remember when this industry was united around the walled garden where the only apps that reached the consumer were those which the carrier approved, usually in return for a payment," he said. "That wasn’t a good environment for innovation, or the expansion of consumer services, or the industry for that matter. The fast pace of technology which we have been discussing effectively destroyed those walls."

He pointed out that walled garden had been the case even with multi-carrier competition. "At least in the short run, this suggests that competition does not assure openness," he said.

Wheeler has sought information from wireless nets on their management practices, and said the FCC was still "very concerned" about customers not getting the requisite speeds for the capacity they have paid for, or are purchasing devices relying on promises of unlimited usage only to discover they are "subject to throttling."

Wheeler said he would be hard pressed to conclude either was a reasonable way to manage a network, which is one of the requirements of the Open Internet rules Wheeler is working on reinstating.

Wheeler delivered a similarly tough speech to the National Cable & Telecommunications Association convention earlier this year, where he also appeared to establish that his client is now the American consumer. He has been criticized in some circles for his former career as a cable and wireless lobbyist and how that might shape his regulatory approach.