FCC to vote today on Net rules opposed by top 2 wireless carriers

While the rules on Net neutrality that Federal Communications Commission Chairman Tom Wheeler will put to a vote today are yet to be revealed, his outline clearly indicates the intent to set additional regulation of wireless Internet carriers.
While the rules on Net neutrality that Federal Communications Commission Chairman Tom Wheeler will put to a vote today are yet to be revealed, his outline clearly indicates the intent to set additional regulation of wireless Internet carriers.

The Federal Communications Commission is set to vote today on a plan meant to protect consumers, in part by preventing Internet providers from blocking or slowing Web traffic.

It will mark the first time that U.S. regulators have weighed rules that govern how wireless carriers deliver online service.

AT&T Inc. and Verizon Communications Inc. oppose the proposed regulations, saying they will discourage service providers from making billions of dollars in network investment.

The proposal is exposing a division in the more than $200 billion wireless industry, with Verizon and AT&T -- the biggest and second-biggest carriers -- saying they oppose efforts to regulate how they run the networks that zip data wirelessly around the world. No. 3 Sprint Corp. and No. 4 T-Mobile US Inc. say they welcome measures that will rein in their larger competitors.

"If the industry wasn't regulated it would give them too much market power," Sprint Chief Executive Officer Marcelo Claure said in an interview this month. He said he supports "light-touch" regulation that applies so-called Net-neutrality principles without sacrificing the carriers' autonomy on network decisions.

The industry has had little oversight on the way it manages wireless Web content.

Verizon and AT&T say they need to hold sway over their networks, to keep Internet traffic moving smoothly.

"Really strident, heavy-handed regulations on wireless and broadband -- if we go down that path -- that's what causes everybody some apprehension and uncertainty and begins to change investment theses," AT&T Chief Executive Randall Stephenson said during a conference call last month.

The industry manages mobile-phone network flow through automated systems. The commission is expected to bar giving priority to certain content, which could interfere with such automatic controls.

The industry has vowed to sue to block regulation of wireless Internet services and said uncertainty over the rules' fate will keep investment in check.

Consumers increasingly are connecting to the Internet for news, entertainment and even paying bills not from their broadband connections at home but from mobile devices.

Industry heavyweights Verizon and AT&T invested a combined $21.7 billion in their wireless networks last year, according to their financial reports. The goal is to recoup their spending through sales of advanced services, such as television broadcasts to smartphones or Internet connections in cars.

Far-reaching limits on how carriers manage their networks could hamper services such as live TV broadcasts that require priority handling to ensure smooth video, the big carriers say. The pressure for such handling increases as consumer demand rises for music and video on millions of phones and tablets.

The rules on Net neutrality, which Chairman Tom Wheeler will put before the FCC for a vote today, aren't known yet. So while small wireless carriers say they welcome added regulation, they could get pinched, too.

If the FCC isn't careful, it could squeeze innovation "with a regulatory corset," said Roger Entner, the founder of Recon Analytics LLC, a telecommunications research firm based in Dedham, Mass.

While Wheeler has released only a broad proposal for maintaining broad access to the Internet, his outline makes clear that he plans to impose additional regulation on wireless Internet carriers.

"The FCC's goal is to ensure that carriers don't block or slow down traffic from particular sources, either because they feel they're competing with their own services or for other reasons," said Jan Dawson, chief analyst at Jackdaw Research LLC in Provo, Utah.

Consumers are unlikely to see any difference in the short term unless the FCC bars carriers from automatically slowing traffic to relieve congestion -- as opposed to selectively choosing which content providers get priority, he said.

Nevertheless, Verizon and AT&T are concerned that any limited regulations the FCC puts in place could "set up a framework which could be used to implement stronger regulation later on," Dawson said.

The big carriers have urged the commission to tread carefully.

"We continue to believe that a middle ground exists that will allow us to safeguard the open Internet without risk to needed investment and years of legal uncertainty," Jim Cicconi, AT&T's senior executive vice president for external and legislative affairs, said in an emailed statement.

Verizon referred inquiries to its trade group, CTIA-The Wireless Association.

"We do not ask that wireless be exempt from any new laws," Meredith Attwell Baker, the group's CEO, testified to a House subcommittee last month. "It is vital that any legislation is sufficiently flexible to preserve the competition, differentiation, and innovation mobile consumers enjoy."

Regardless of what the FCC does, Dawson isn't confident the wireless-Internet landscape will be clear soon.

"We'll likely see court cases which will drag on for months, if not years," he said. "There will continue to be uncertainty about both current and future regulation, which doesn't serve anyone well."

Information for this article was contributed by Todd Shields of Bloomberg News.

Upcoming Events