FCC Revisits Net Neutrality Exemption for Mobile Broadband – CNBC

Removing the wireless exemption from some net neutrality rules would be a change in the commission’s stance since May, when the regulator laid out a set of proposed rules called “Protecting and Promoting the Open Internet.” In that draft, the newly proposed rules would subject wired Internet service providers to “commercially reasonable practices” of network management.

But in recent weeks, voices calling for wireless broadband to be treated the same as wired services have grown louder.

Last week, Google weighed in, saying such rules “should apply regardless of whether you’re accessing the Internet using a cable connection, a wireless service or any other technology.” Microsoft has similarly said that wireless companies should be subject to the same legal framework as wired connections.

And while speaking last week at the annual convention of CTIA — the Wireless Association, the mobile-phone industry’s largest trade group, Tom Wheeler, the commission’s chairman, highlighted some provocative statistics.

“There have been significant changes in the mobile marketplace since 2010,” he said, referring to the year the commission first passed net neutrality rules, with mobile networks excluded. Those rules were later thrown out by a federal appeals court.

In 2010, 200,000 Americans subscribed to the fastest mobile broadband technology, known as LTE. Now 120 million of them subscribe to it, and 300 million have access to high-speed mobile networks.

Read MoreFCC to continue ‘net neutrality’ outreach

“The basic issue that is raised is whether the old assumptions upon which the 2010 rules were based match new realities,” Mr. Wheeler said.

An F.C.C. spokeswoman said Mr. Wheeler’s remarks were not substantially different from what the agency said in the “notice of proposed rule-making” issued in May.

But Gene Kimmelman, president and chief executive of Public Knowledge, a consumer advocacy organization, said he viewed Mr. Wheeler’s comments to the wireless industry group as “a shot across the bow.”

“We’ve sensed for a while the F.C.C. is looking to beef it up on the wireless side,” he said. “There’s less of a difference between wireless and wireline than there was five years ago.” The F.C.C. said it exempted mobile broadband from much of the 2010 regulation because mobile networks faced technical limits on the number of users that could connect to them. The networks were also said to be evolving rapidly and were more subject to competition than fixed broadband networks.

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Now, with advanced LTE networks complete, a growing portion of consumers use mobile as their primary method of connecting to the Internet, meaning a wireless exemption would leave those consumers without net neutrality protection.

According to the Pew Research Internet Project, in 2011, blacks and Latinos were more than twice as likely as whites to use mobile phones as their main source of Internet access; people with annual incomes of less than $30,000 also were more than twice as likely to use primarily mobile broadband as people with incomes of more than $50,000.

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The wireless companies say that they should continue to be treated differently. Meredith Attwell Baker, a former F.C.C. commissioner who is now the chief executive of the wireless trade group, responded to Mr. Wheeler’s remarks by noting that mobile broadband depends on the public airwaves known as spectrum, which is a finite commodity with limited capacity.

“The growth of smartphones and LTE — and the constant change in our ecosystem — is the clearest evidence we should retain a mobile-specific approach, because it has worked so well for consumers,” Ms. Baker said. “We were already open, always have been, always will be.”

At least a couple of times in recent years, however, the wireless providers have appeared less than fully open.

In July 2012, Verizon Wireless agreed to pay $1.25 million to settle an F.C.C. investigation into whether it was blocking its customers from connecting to an application that allows consumers to use a wireless phone as a modem to connect another device to the Internet, a practice known as tethering.

Read More What’s new in the ‘net neutrality’ proposal

The F.C.C. was investigating whether Verizon’s conduct violated net-neutrality-like conditions agreed to by the company when it bought a block of spectrum known as the C block.

In August 2012, AT&T said it would not allow customers with unlimited data plans to use Apple’s FaceTime application on its cellular data network. After several public interest groups threatened to file a complaint with the F.C.C. that the company was violating the open-Internet policy, AT&T announced a new policy to support FaceTime use.

Verizon raised eyebrows last week when its chief executive, Lowell C. McAdam, spoke about net neutrality at an investment conference. “Tom Wheeler has said that probably some of those principles should apply to wireless,” he said. “I don’t have any problem with that.”

Read More Verizon to pay $7.4M over failure to notify consumers on privacy rights

But a Verizon spokesman said Mr. McAdam was not changing the company’s position, which “supports the open Internet.” The company, the spokesman said, was against applying further net neutrality restrictions to mobile broadband.

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