(Bloomberg) -- Online companies such as Amazon.com Inc. are vulnerable to unfair competition from internet service providers if the Federal Communications Commission’s open-internet rule is reversed, agency Chairman Tom Wheeler said Tuesday.
“Nobody is safe,” Wheeler, a Democrat, said in an interview three days before he leaves office and a Republican administration led by President-elect Donald Trump takes office.
For instance, Wheeler said, Amazon video that competes with entertainment from Comcast Corp., Charter Communications Inc., Verizon Communications Inc. and AT&T Inc. is vulnerable to unfair competition because it rides over broadband lines offered by those providers. Similarly, he said, internet service providers could unfairly compete with Amazon’s cloud service by offering free online storage. And broadband providers could intervene to decide which devices in the so-called internet of things gain preferential network access.
"This is fundamental,” Wheeler said. “Open networks have always been the policy of the United States.”
Wheeler said his Republican successors won’t find it easy to reverse the open-internet rule -- also known as net neutrality -- adopted by the FCC in 2015 on Democratic votes. The regulation forbids internet service providers led by Comcast and AT&T from blocking or slowing competitor’s web traffic. Courts that upheld the rule already will need good reason to accept a change, Wheeler said.
In a 2014 tweet, Trump called the net neutrality rule, then under consideration, an "attack on the internet" that would serve to "target conservative media."
He named critics of net neutrality to his transition team, and both sitting FCC Republicans voted against the measure.
"There is a significantly high hurdle that the agency would have to go through,” Wheeler said. “It doesn’t mean they’re not going to try to jump over it. But this is not going to be the slam-dunk that everybody predicted.”
Wheeler said the election and change of administrations intervened before he could step in to stop what he called “anti-competitive, abusive processes” of AT&T and Verizon offering consumers services that don’t count against monthly limits on data consumption, thus avoiding extra fees. Both companies reject the FCC’s assertion, saying the programs are legal and a benefit to consumers.
The FCC’s ongoing auction to free airwaves for use by mobile providers “is working fabulously,” Wheeler said. “Our job was to create a market. And that market worked."
The FCC on Jan. 13 said it was offering TV broadcasters $10.1 billion to give up their frequencies, down from $40.3 billion earlier in the months-long process.
Wheeler, 70, has served since 2013 as the second FCC chairman under President Barack Obama. He said he’ll join the Aspen Institute, a Washington-based think tank, as he considers what to do next.
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