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THE
INCOMPAS SHOW
I APRIL 10-13, 2016
www.bekapublishing.comDAY 2
THE
INCOMPAS
SHOW
Wheeler said. “Both Chip Pickering and Verizon’s
Kathy Grillo deserve a special shout-out. … My own
views are in significant accord with your letter.”
Wheeler said finding common ground should
start with common sense, and “I believe the
principles I am supporting are firmly based in
the realities of the marketplace,” adding, “That
marketplace is changing – fast.”
He cited how new technologies offer IP-based
products alongside traditional legacy circuit-
based products and how new entrants are
playing a growing role in the BDS market.
“And the importance of business data
services to the economy is becoming ever more
important,” Wheeler said. “Think about wireless
competition today and the coming of 5G wireless
networks and the Internet of Things. According
to Intel, the number of connected smart devices
is going to increase from 15 billion in 2015 to
200 billion in 2020.”
Fifth-generation wireless trials have begun,
and the FCC is preparing to designate spectrum
for 5G this summer, Wheeler acknowledged,
saying that American leadership in this field is a
“national priority.”
“Without a healthy BDS market, we put at risk
the enormous opportunity for economic growth,
job creation and U.S. competitiveness that 5G
represents,” he added.
Wheeler said the FCC data as of 2013 show
competitive pathways – including cable – reach
less than 45 percent of locations where there is
demand. And while cable presence grows, some
locations are not benefiting from competition.
“For the Commission to be effective, our rules
must be based on market realities,” Wheeler
stated. “So we need a fresh start.”
That fresh start calls for broad principles
to find common ground for the Commission
to determine the best ways to act,” Wheeler
said, adding he wants the Commission to adopt
the proposed BDS framework this month and
conclude the proceeding by the end of the year.
“I assure you that I will treat this issue with
the urgency it deserves,” Wheeler said. “Where
competition exists, there is little for government
to do except to maintain the traditional over-
sight of telecommunications services; but where
competition does not exist, government’s role is
to ensure that non-competitive market conditions
cannot disadvantage business customers and
their ability to compete and innovate in down-
stream markets.”
Wheeler said the regulatory framework must be
technology-neutral, and that companies and tech-
nologies that deliver the same kind of BDS should
be treated the same. This means where “TDM and
IP deliver substitutable services, the market must
be judged by looking at both,” he explained.
However, he added the FCC still must
encourage the transition from TDM to IP.
“The supply of circuit-switched BDS is still big
business, but the future is in IP-based, packet-
switched communications,” Wheeler said.
It is why Wheeler has asked the FCC to vote to
declare unlawful contract terms used in a series
of tariffs that include so-called “all or nothing”
contracts that require a customer to make all of
its purchases on a single set of terms.
“Unfair contractual terms can both slow the
transition by customers away from TDM and to
IP and, by limiting the use of IP-based products
like Ethernet, actually discourage investment in
the construction of new BDS facilities,” he said.
Citing Harold Feld of Public Knowledge, who
likens BDS to crude oil, Wheeler said, “You
would never buy a barrel of oil, but the price of
crude impacts what you pay for almost all energy
services. The same can be said of business data
services. Business data services matter because
they are at the heart of virtually everything using
telecommunications.”
He also addressed set-top boxes as a
threat to what should be the golden era of
video competition, which is characterized by
consumers’ ability to mix and match the pack-
ages of programming they want from a single
provider or many over dedicated network facili-
ties, using the Internet or both.
“Ninety-nine percent of pay-TV customers lease
set-top boxes from their cable, satellite or telco
providers,” Wheeler said. “On average, consumers
are paying $231 a year to rent those boxes,
collectively $20 billion. Yes, despite Congress’s
mandate, they have no competitive choice.”
The FCC is out to correct that, Wheeler said.
“We believe our proposal clearly protects both
copyright and privacy, but if it can be made
better, we are open for suggestions. Clearly, it’s
in the public interest to introduce competition in
the set-top box marketplace.”
Wheeler also called for attendees to support
net neutrality.
“Access to the Internet may be the most impor-
tant commodity that exists today,” he said. “In an
economy built around information, broadband is
the key to individual and corporate opportunity.
Broadband must be fast, fair and open.
“Our approach to Internet openness is
simple,” he continued. “We must enforce the
bright-line rules for no blocking, no throttling and
no paid prioritization. We must ensure transpar-
ency. And we must apply the case-by-case stan-
dards in order to protect consumers from harm.”
The Chairman said he believes it is ironic
that the same organizations that complain the
open Internet rules aren’t sufficient also complain
about the Commission’s ability to create certainty
through “ex-post examination” of the market.
Wheeler emphasized one obvious principle
in the debate is one of the consistent under-
pinnings of FCC precedent for decades: “An
incumbent should not be able to use its position
as a gatekeeper to unfairly discriminate against
unaffiliated content or services that may, today
or tomorrow, pose a competitive threat to the
incumbent’s own business.”
Wheeler said it is time for a fresh start. So,
yes, it is time for a fresh start, but the fresh start
would be summed up with three words: Competi-
tion, Competition. Competition.
o
(Wheeler, continued from page 1)