FCC Chairman states outright: they plan to classify internet access as a utility

It's official, Federal Communications Commission Chairman Tom Wheeler wants to reclassify internet service providers as utility providers under the FCC's Title II authority. The move aims to preserve the principles of net neutrality in law, barring ISPs from blocking, throttling, or prioritizing traffic.

Said FCC Chairman Tom Wheeler:

"I am submitting to my colleagues the strongest open internet protections ever proposed by the FCC. These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services. I propose to fully apply—for the first time ever—those bright-line rules to mobile broadband. My proposal assures the rights of internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone's permission."

We can expect the ISPs to fight tooth-and-nail to derail the FCC's effort — expect particularly vociferous objections from the likes of Comcast and Time Warner. They'll claim that this will stifle competition (when the two don't compete at all) and investment (when they've been investing in upgrading their networks for decades without using any of the potentially-violating tactics they seek to employ). They'll say that this is bad for the internet, when the internet has flourished under the blanket assumption of these very same rules. What the FCC is proposing is to set the current operating conditions of the internet as the standard operating conditions, to enshrine into regulation that this is how the internet should work going forward.

In a surprise twist, the FCC even plans to apply these rules to mobile network operators. Previously the FCC had taken a more hands-off approach to cellular networks, but it appears they're poised to enforce net neutrality principles onto wireless carriers that have played fast-and-loose with the idea.

We've been watching this fight unfold for months now, and things are about to get very real.

Source: Wired

Derek Kessler is Special Projects Manager for Mobile Nations. He's been writing about tech since 2009, has far more phones than is considered humane, still carries a torch for Palm (the old one), and got a Tesla because it was the biggest gadget he could find. You can follow him on Twitter at @derekakessler.

328 Comments
  • Wheeler, whatever drug you have been taken, don't stop. As a matter of fact, if you tell me what it is I will personally drive to my local pharmacy, refill it with my own cash and deliver it to you.
  • Its extremely sad when the drug he's taking is called the rite thing to do....
  • Like letting netflix eat up 80% of the internet bandwidth from everyone else each night and not being able to do anything about it... people jump to soon to think this is a good idea. Up till this point we didn't need any new regulation for the internet... why do we need more now???
  • Read the article or just assumed he's saying something controversial? Posted via Android Central App
  • Seriously, I have no idea what's caused this 180 from him, but I like it.
  • His boss.
  • i don't buy that just because Obama said it, that he changed his mind. Obama has said since his first campaign that he wanted net neutrality, it's not like Wheeler wouldn't have known that.
  • Naive
  • Actually you're ignorant. The FCC is an independent agency and thus outside of the control of the executive.
  • What branch of government does the FCC fall under? Legislative, Judicial, or Executive? Once you answer that, then ask yourself who is the head of that branch? You're welcome.
  • Did you skip over where you were told that the FCC is an independent agency? The president has no authority over them. He can only ask them to do something, he can't force them.
  • Do you always believe what you're told? Who appointed Wheeler?
  • Do you always disbelieve everything that doesn't fit with your opinion? Your question is a logical fallacy. Just because the president appointed him means nothing. He opposed the president's viewpoint for most of the time he has been in his position and only just publicly changed it despite the president having a long-standing policy of wanting net neutrality.
  • The FCC is under the Executive Branch of government. Civics 101
  • Independent Agencies of the United States government
    "Independent agencies of the United States federal government are those agencies that exist outside of the federal executive departments (those headed by a Cabinet secretary). More specifically, the term may be used to describe agencies that, while constitutionally part of the executive branch, are independent of presidential control, usually because the president's power to dismiss the agency head or a member is limited." I'll just leave this here. Anything else?
  • So we agree that the President can dismiss an agency head. Great! Can Congress? The Supreme Court? Thanks for playing.
  • Uh, no, we don't agree, and putting words in my mouth doesn't make me want to continue this discussion with you. Also "Presidential attempts to remove independent agency officials have generated most of the important Supreme Court legal opinions in this area.[3] Presidents normally do have the authority to remove heads of independent agencies, but they must meet the statutory requirements for removal, such as demonstrating that the individual has committed malfeasance. In contrast, the President can remove regular executive agency heads at will."
    So...no, the president can't just remove the head of the FCC just because Wheeler doesn't do what he says and removal is often subject to Supreme Court interpretation. What else you got?
  • So we agree that Obama appointed Wheeler and Obama is the only person on earth who can fire him. Sounds like a boss to me. Malfeasance isn't the only statutory requirement.
  • No, but "He didn't agree with me" is definitely not one of them. Anyway, I've proven my point to my satisfaction and i have nothing else to add, so I'm done discussing this with you.
  • You're definitely an honorable man, a man who knows when to quit when he's been defeated.
  • Haha, believe what you like, I really don't care, but everyone else knows that from that dumb ass comment you just made that you're just a dickhead (as if they couldn't tell from the other sarcastic comments you made to me). I attempted to kept things civil. You're the one who decided to be a jerk. I don't need to justify anything to you. Ciao.
  • Thought you were done.
  • Done discussing this issue with you, yes. Doesn't mean I won't call you out for trying to imply that I'm finished with that discussion for any other reason than what I stated. But, then, you want to get the last word because people like you always do. So, you may have it. From this point, I will not be replying to you on this topic. I am not conceding your points. By me deciding to end this discussion with you, I am not saying you "won", but you may have the last word.
  • http://www.wsj.com/articles/how-white-house-thwarted-fcc-chief-on-intern...
  • ... and then you taunted him, weird how that works. Posted via the Android Central App
  • You obviously didn't read the source article. He has real world experience with a failed start-up under his belt that illustrates why this is better for innovation.
  • The entire country is naive, Obama getting elected twice is undeniable proof of how immensely naive the population of this country is. Posted via the Android Central App
  • Comcast's check bounced.
  • Whoa. If he's serious about this and it comes to pass, I will leap for joy. It's time to put the monopolizing ISPs in their place.
  • And if corporations win out this issue, the American People are going to have to stand up and ban together to not let this happen as well
  • Explain to me how Comcast and Time Warner don't compete. Also, if the internet has flourished without this action, then why do it?
  • One word: monopolies.
  • Comcast and Time Warner rarely overlap in the regions that they cover. For the most part, they have monopolies over the areas they cover. And in the rare places that neither of them cover, there is usually just one smaller ISP that has a monopoly as well. That's the case in the small town I live in. Because of this, the prices are outrageous, and you have to pay more for faster speeds. What the FCC Chairman is proposing here would turn ISPs into utility companies. Electric companies can't charge more for "better" electricity, so why should ISPs be able to charge more for better internet connectivity. That's what he's getting at. The internet has flourished under the assumption of net neutrality. Companies like Comcast are wanting to prioritize or throttle certain websites and services (like Netflix), which is anti-net neutrality. The FCC is wanting to prevent them from doing that.
  • Rarely overlapping regions they cover does not mean they aren't competitors. There is a such thing in business called mergers and aquisitions. How exactly will these rules change which markets these companies cover? It won't. State and municipal regulations are the reason this happens. Now, the internet will be a utility, like the power companies. For example, I live in Louisiana where there are only two choices for power, Entergy and Demco, with Entergy having like 85% market share. They are classified as utilities and there is little to no competition. This is all a bunch of bullshit.
  • "Rarely overlapping regions they cover does not mean they aren't competitors." Semantics. My point is that the vast majority of people in the US only have one ISP to choose from. While they may be nationwide competitors, they rarely have to compete with each other on pricing because no one is going to pack up and move to a different region just so they can get a different ISP. This results in higher prices. That's the case where I live, where the one ISP here (Home Telecom) charges $50/mo for the lowest tier of internet access. When I lived in St. Paul, MN, there were multiple ISPs, resulting in me being able to get internet for $25/mo because they kept undercutting each other with various pricing promotions. "They are classified as utilities and there is little to no competition." Well, as I mentioned above, there already is little to no competition, so I don't really get your point. This will at least give so oversight so that everyone can get decent internet connectivity.
  • Then we agree! The reason why you have higher prices where you live right now vs. St Paul has nothing to do with the federal government. It has everything to do with the state and local governments. Now the Feds will regulate this and your situation where you live won't change. All of a sudden now someone will wave a magic wand sprinkling unicorn fairy dust and BAM, you'll have more ISPs to choose from where you live now? I don't think so. Very convenient to say, "semantics." Words matter. My point was that this will not encourage competition.
  • If you regulate cable companies as utilities, then it's a lot easier for new competitors (Google fiber) to come in and create a competing internet service while not having to deal with all the red tape that currently exists. Posted on my OnePlus One
  • Really? How so?
  • By creating a landscape whereby companies must compete on quality and cost instead of by leveraging size. Posted via the Android Central App
  • So Google is small?
  • That does not follow from what I said. Posted via the Android Central App
  • Oh Google Fiber gods....come save me here in San Diego.... Posted via the Android Central App
  • This! Government granted protections play a huge role in the lack of choice for ISPs! More regulation is never the answer! Abolition of protections, regulations and lowering the costs of barriers to entry would go a long way in encouraging competition. Posted via the Android Central App
  • That has worked so well let's keep doing that... Posted via the Android Central App
  • Regulation is sometimes the answer. People who say "always" and "never" are usually ideologues who's opinions should be taken lightly. Posted via the Android Central App
  • To bad more people don't see it this way... more regulations have rarely ever helped in this country. Why with an internet that's functioned so well for long do we now need the Government getting involved? Also so netflix hogging up 80% of the internet bandwidth at night from everything else is ok? People need to think this through a little more. Don't get distracted by the name net neutrality... up till now it's been pretty neutral without the FCC getting involved.
  • Exactly right. Posted via the Android Central App
  • You keep saying agree. I don't think that means what you think it means. Posted via the Android Central App powered by Droid Turbo
  • Thing is: utilities are natural monopolies. This is not the case with ISP's. Posted via the Android Central App
  • Then why classify ISPs as utilities. Get it now?
  • Because they are monopolies that provide a utility. Posted via the Android Central App
  • There is no such thing as monopolies. Mono means 1.
  • Way to define a word so narrowly that communicating a simple idea becomes difficult when you understood the point from the beginning. It is, of course, completely disingenuous to do so, and you sacrifice discussing actual ideas for the sake of a meaningless rhetorical point... But if that's your game... Posted via the Android Central App
  • In this article Comcast is talking with the senate and he admits there is no competition between Comcast and Time Warner. http://www.dailykos.com/story/2014/04/11/1291124/-Comcast-admits-what-ev...
  • @Razieltov Bingo. That's exactly what I was trying to say. Comcast and Time Warner may offer the same service, but they aren't offering that service to the same people. In that sense, they are therefore NOT competitors.
  • Hey even Comcast and TW agrees that they are not competitors and who are u say that they are not competitors?? Read their merger letter
  • Why would they want to merge if they don't compete?
  • Economies of scale.
  • So if McDonald's bought out Best Buy, that would be an example of economies of scale?
  • That's a ridiculous example. They don't sell the same product. More like if Jack in the Box merged w/ Steak and Shake. Posted via the Android Central App
  • Of course it is a ridiculous example. So, your argument is that companies who do sell the same product don't compete?
  • What are you talking about? Your comments aren't making any sense. Two companies that deal with different products or services are not in competition with each other. In no way is Best Buy in competition with McDonalds, except in the general sense that every company wants you to spend your money with them. That's it. But by that argument those companies are also in competition with your electric company and your bank and your son's Boy Scout troop and your daughter's ballet classes. Economies of scale doesn't really apply there either. In a situation where two companies offer similar products or services, economies of scale would absolutely come in to play during any merger or acquisition. That does not necessarily mean that they are competitors however. Air Canada and Southwest Airlines probably share 0 common routes. If those two companies merged, or one acquire the other, then there would certainly be benefits based on economies of scale. It doesn't do much to negate competition because those two airlines never competed for travelers on the same routes. When American Airlines acquired US Airways that was a completely different story. They had many of the same routes and so economies of scale comes into play as well as a decrease in competition because identical routes were consolidated. Posted via the Android Central App
  • If they're selling the same product to different people what could they possibly be competing for? They're not competing for customers. They're only competing for money in the same sense that best buy and burger King are. Posted via the Android Central App
  • That rhetorical statement makes zero sense. We are talking about two companies in the same industry. Even if Com and TWC don't compete, one legal department is cheaper than two. THAT is a reason to merge. Instant expansion of your business without (or minimal) CAPEX.
  • Do me a favor. Open www.google.com and type in definition of competitors in business. Tell me exactly what is says in the box.
  • Brandon Worley
    "Do me a favor. Open www.google.com and type in definition of competitors in business. Tell me exactly what is says in the box." You originally asked why companies that don't compete would want to merge. Whether or not TWC and Comcast actually compete is not what is at questions here, correct? By the way, I'm having a blast discussing all this :)
  • The first comment I posted in this comments section was "Explain to me how Comcast and Time Warner don't compete. Also, if the internet has flourished without this action, then why do it?" Me too!
  • Sorry, this format does not properly indent. I was responding to a comment you made further down. Even so, I think it would be hard to compete for customers if you are not marketing to the same customers (in a given market I mean). Part of my job is to analyze the competition for customers seeking commercial financing. We use the term "true competitor" a lot as a qualifier. Meaning, unless another company's business has a significant impact on the top line of our borrower by directly drawing away sales, they are not a true competitor.
  • But a competitor nonetheless.
  • If you would like to come up with a different phrase for companies selling the same product who have agreed not to compete feel free. If it's all just a word game to you. Posted via the Android Central App
  • Nah, they don't compete. Take a business class. http://m.huffpost.com/us/entry/4892435
  • There are plenty of reasons that non-competing companies merge. One might be to gain access to larger market share eg an airline merges with another to gain access to routes it doen't not currently offer. Another may be a vertical merger where a company would gain access to products or services that complement the ones it already owns while offering it the opportunity to move into these spaces.
  • Those are very good and valid points. It still doesn't change the fact that those airlines are in competition with each other. Airline A buys airline B to gain access to those routes. But airline B could have bought airline A to accomplish the same thing, thus competition. Your argument is also like saying Verizon doesn't compete with T-Mobile because T-Mobile doesn't have coverage in all the same places as Verizon.
  • "Airline A buys airline B to gain access to those routes. But airline B could have bought airline A to accomplish the same thing, thus competition." You're confusing market competition (making the most money) with being market competitors (two different companies with the same product). Here's a slightly different example:  If I start my own fast food restaurant where I live, and you start one where you live, but we live 1000 miles apart, are we competing?  There's practically no chance that anyone who spends money at my restaurant will spend any money at yours, and vice versa.  So, while we may be market competitors, we are not competing against each other directly, because neither can "take away" money the other is making.  For the sake of this example, lets say that our two fast food restaurants are the only two in the world.  Just you and me, mano-e-mano. Now, suppose we have both expanded our chains to cover the entire world between the two of us, but very, very seldom have we opened a store in the same town, so we're still not really competing for a share of each other's market (aka: a share of all the money spent on fast food in that area).  We don't compete with other types of businesses, because no one is going to be convinced to come spend the money they were going to use to buy a new computer on tacos. I decide I want to make more money, which means I have to expand even more, but the two of us already cover our respective halves of the world which leaves me with two options: 1)  I could open more restaurants in places where you already have a restaurant, at which point we *would* be directly competing for market share.  I *might* be able to undersell you, or up the quality, or come up with some kind of draw to steal enough of your customers to make it profitable, or the market could like you better and I lose my shirt. or... 2)  I offer to merge, when we both work together and sell the food to everybody in the world, and can charge anything we want because there's no one to stop us, and we end up taking over the world using our laser sharks! ..or something like that.
  • They aren't competitors. At the risk of sounding a little melodramatic, it's best to think of them as crime families that have divided the nation into turfs. Occasionally there are scuffles and grabs for power, but they only benefit the organization and never the people living in said turf.
  • That actually wasn't melodramatic at all. We ARE talking ISPs here. ;)
  • I like using hyperbole to illustrate my points. Some people balk at the tactic. ;-)
  • Excellent points made with an ironic parallel. One of the best things I've read on the interwebz. Posted via the Android Central App
  • +1 Posted via the Android Central App
  • Here is a great map of the areas the average ISP's we have in the US cover. Its clear that in the large picture they do compete, but locally they do not technically compete. http://www.huffingtonpost.com/2014/03/04/cable-company-map_n_4892435.html
  • double posted, sorry.
  • Good find. The map is a little misleading, though. I know the article says top internet companies by state, but some will think they are the only ones. For example, in Louisiana where I live there are at least 4 ISPs. Cox is the most widely used but I don't because they're garbage, but getting better, and less expensive.
  • He proposed this "Action" to save any possibility of what has worked for 20+ yrs to not change. I don't like the utility idea anymore than the next person but if it can Save Net Neutrality I'm all for it.
  • Comcast and TW are rival for sure but they are not competing.You will not find Comcast service on a TW location and vice versa. This would make service like Google fibre build out fibre freely in these areas and would increase competition
  • Local governments determine this.
  • No they don't.
  • http://www.wired.com/2013/07/we-need-to-stop-focusing-on-just-cable-comp...
  • True, but there are certain things the TelCo's would be required to do under Federal Law (which supersedes local law) that could potentially promote competition.
  • Like what?
  • Can you find Time Warner and Comcast both providing service in the same area? Previously they did not. Now they are merging from what i read, as of February 2014; I'm not sure how long that will take to complete. They're still not competing, just monopolizing a bigger area under one company versus two smaller areas under two companies.
  • Part of my area is served my Time Warner. The other part by Suddenlink. Still, this would benefit me by no longer having to pay more for "faster speeds" that I don't really get anyway. The only reason I pay for the "faster speeds" is so I can increase my Cable data cap from, Suddenlink, that didn't exist 3 weeks ago. Posted via AC App from my S4 mini WITH an LED CrackLight ;-)
  • Have you even heard of net nutrality or had cable service? I have never lived in a place where I could choose between cable companies, charter or comcast, they have their own territory. You get stuck with whoever services your address, or you get something else like dish. Cable companies basically hold monopolies and have limited competition with each other. The internet has been going down hill. AT&T and Verizon are guilty of throttling data speeds, I've been throttled by comcast so bad xbox live doesn't even connect. There is talk of being charged extra to stream movies, they can charge you to access netflix if they want or block you from using it. So Im all for the FCC getting involved and doing this. Posted via Android Central App
  • Because it's in danger of changing from what it's always been, into something no one in their right mind wants. This will ensure that doesn't happen.
  • To protect the future of where things are going. EVERYTHING is connected these days. HOW do you think it all connects? Fiber and wireless networks. Every day, the world becomes further entrenched in this reality. You honestly trust the private corporations (all two or three of them) who control the pipes NOT to bend us ALL (consumers, businesses, local governments...) over to make shareholders happy?
  • Yes, I do. Who built and paid for those fiber and wireless networks? The government? No, those greedy businesses. All two or three of them? Do you even know how many ISPs are out there? Shareholders aren't happy when customers of those companies aren't happy.
  • Shareholders don't give a shit if you're happy or not. If profits are low or losses are high, they care. If a quarterly dividend is below expectations, they care. The markets don't seem to care very much at all what public sentiment is. I notice that the price of oil closed up much higher yesterday. I don't like that. I'm sure most of the gasoline buying public doesn't like that. Yet the stock market closed over 300 points higher. Posted via the Android Central App
  • "If profits are low or losses are high, they care." Explain to me how companies with happy consumers have low profits and/or high losses beyond an occasional quarterly miss.
  • See: T-Mobile.
  • http://ratings.jdpower.com/telecom/index.htm
  • Yup, Comcast is at the bottom for wireline "happiness" ratings. And that is the ONLY provider in my area. Happy customers indeed.