March 2015

[Commentary] The Federal Communications Commission’s decision in favor of municipal broadband networks does more than “open Internet” rules ever could to increase competition in a broken market.

If there were more competition among broadband providers, it seems unlikely that we would need rules specifically guaranteeing an “open Internet,” aka net neutrality. Even now there isn’t really evidence that huge ISPs such as Comcast abuse their power by favoring their traffic over, say, Netflix’s. But the best argument in favor of net neutrality is that because there are so few broadband providers in any given market, ISPs could abuse their position and consumers would be hard-pressed to protest by taking their business elsewhere. One way the big ISPs show anticonsumer tendencies is by vigorously opposing cities and towns that want to build their own broadband networks as an economic development tool. The companies complain that city-run Internet services, which don’t have to earn a profit, amount to unfair competition. It’s a weak argument, given all the schools, insurance companies, transportation providers, and other private entities that manage to compete with services run by governments. Nonetheless, telecom companies have persuaded 19 state legislatures to block or restrain municipal networks.

Telecommunications is fast becoming a dirty word for companies that want to become much more than providers of basic connections in a digital world in which technology is undermining traditional revenues. Companies in the sector are still at risk of being left behind or being pushed to the margins as simple providers of the pipework that technology groups use to make their fortunes. And even the latter holds dangers if the telecoms groups cannot keep up with ever increasing demands from customers for instant videos and entertainment by investing heavily in next generation networks capable of carrying vast quantities of data.

The signs are that most groups are rising to the challenge, helped in regions such as Europe by regulators encouraging industrial growth through consolidation. This, alongside better economic conditions, is leading to higher profits and rising share prices. Now companies have the breathing space to invest in their future -- and various strategies are emerging among managements keen not to be left behind. At the heart of most strategies remains the desire to become the gatekeeper of the Internet -- and with it, the provider of services and content such as TV and music.

[Commentary] At no time did President Ronald Reagan or his representatives attempt to improperly influence me or the Federal Communications Commission’s financial interest/syndication proceeding.

His executive agencies properly did file comments in the proceeding, and I and Willard Nichols, my chief of staff, once briefed the president on the proceeding. At no time did the president lobby me on his position -- which he agreed not to do beforehand. He displayed the utmost of ethics and propriety, and expressed no opinion, either of his own or the FCC’s proposed action. He was polite and friendly throughout. By contrast, President Obama regrettably has bullied the FCC Chairman Tom Wheeler in an improper manner to achieve a disastrous result. The best evidence of the Reagan administration FCC is that the commission, contrary to the administration’s position, subsequently liberalized the financial interest/syndication rules, permitting partial network ownership of programming shown on the networks. President Reagan was a man of principle, and this was another time when he comported himself accordingly.

[Fowler was chairman of the Federal Communications Commission from 1981 to 1987]

Vivendi has said it will accept an offer from Franco-Israeli billionaire Patrick Drahi to buy its remaining 20 percent stake in French telecoms operator Numericable-SFR for €3.9bn -- in effect marking its exit from the telecoms business.