Obama Appears to Contradict Wheeler's Paid-Prioritization Proposal

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By Bryce Baschuk  

Aug. 5 — President Barack Obama appeared to contradict the Federal Communications Commission's approach to reinstating open Internet rules.

“One of the issues around net neutrality is whether you are creating different rates or charges for different content providers,” Obama said at the U.S.-Africa business forum Aug. 5. “You have big, wealthy media companies who might be willing to pay more but then also charge more for more spectrum, more bandwidth on the Internet so they can stream movies faster or whatever.

“You don't want to start getting a differentiation in how accessible the Internet is to various users,” Obama said. “You want to leave it open so the next Google or the next Facebook can succeed.”

Net-neutrality advocates told Bloomberg BNA that the president's comments run counter to FCC Chairman Tom Wheeler's proposal to permit the nation's top ISPs—Comcast Corp., Time Warner Cable Inc., Verizon Communications Inc. and AT&T Inc.—to enter into paid prioritization deals with content companies like Netflix Inc., Google Inc. and Amazon.com Inc.

FCC Proposal Pending

Later this year, the agency plans to vote on an order that seeks to prohibit ISPs from blocking legal content and discriminating against Internet traffic in ways that the commission considers to be “commercially unreasonable.”

Though Wheeler has previously said he does not favor the concept of paid prioritization deals between ISPs and Internet content providers, his open Internet notice of proposed rulemaking (NPRM) (GN Docket No. 14-28) would sanction such agreements. The NPRM also seeks comment on whether the FCC should explicitly ban paid prioritization deals.

Congressional Democrats, public advocacy groups and thousands of citizens have urged the FCC to instead reclassify broadband Internet services under Title II of the Communications Act of 1934, which would regulate Internet services like public utilities.

‘Impossible to Square' With Wheeler

“President Obama's statement is not only welcome, it's impossible to square with the Wheeler approach,” Free Press Policy Director Matt Wood told Bloomberg BNA. “The president clearly is not saying big, wealthy media companies might be willing to pay more––and hey, that's OK so long as the FCC thinks those deals are commercially reasonable.”

“On their face, these statements are inconsistent with the idea that large companies should be able to reach ‘commercially reasonable' deals for special treatment, which is something the chairman's current plan would allow,” said John Bergmayer, a senior staff attorney at Public Knowledge. Obama's comments “show that the president understands one of the key issues with net neutrality—the creation of a pay-for-play Internet where only the wealthiest companies have a chance to compete,” he told Bloomberg BNA.

One opponent of the FCC's net neutrality effort said the president's suggestion “borders on incoherence.” “Chairman Wheeler recognizes that the real Internet we have today—with CDNs, the cloud, mobility, and various forms of peering—is the result of individualized bargaining between all the content and service providers,” said Richard Bennett, a visiting fellow at the American Enterprise Institute. “Nobody wants to deprive the Internet of its dynamism, but there is a healthy debate about how we can best protect it.”

The FCC did not respond to Bloomberg BNA's request for comment.

To contact the reporter on this story: Bryce Baschuk in Washington at bbaschuk@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com