FCC Chairman Tom Wheeler

Memorial Day weekend also marks the 200th year anniversary of the first official telegraphic message sent over a long distance.

On May 24, 1844, Samuel Morse famously telegraphed, “What hath God wrought!” from Washington, DC, to Baltimore, the first official telegraphic message sent over of a long distance. Coincidentally, 18 years later to the day, Abraham Lincoln would send nine telegraph messages to Union generals, becoming the first President to regularly use electronic communications. Eighty years ago, Congress passed a law largely to deal with the network revolution Morse unleashed -- the Communications Act of 1934, which established the FCC.

Fast forward to today, and the Commission is grappling with the transition to the next network revolution -- the digital revolution that is being fueled by ubiquitous high-speed connectivity and increasingly powerful computing devices. June’s open Commission meeting will be highlighted by an update on our efforts to facilitate the transition from the circuit-switched networks of Alexander Graham Bell to a world with fiber, cable and wireless Internet Protocol (IP) networks.

Soon, the Commission will receive a status report on proposed experiments and how best to deploy next-generation networks, while preserving enduring values like universal access, competition and consumer protection. The Commission will also hear a presentation on progress made in processing Low Power FM applications from the October 2013 window.

We had an “all-hands” meeting of Federal Communications Commission staff to talk about the agency’s priorities and to provide an update on the Commission’s recent activities.

But the most important message I wanted to convey to FCC staff at this meeting was “thank you.” The public servants of the FCC -- and across government at all levels -- work every day on behalf of the American people with little or no fanfare.

The week is dedicated to making sure public servants across the country get the recognition they deserve. That’s because this is Public Service Recognition Week -- an annual celebration of the men and women who serve the United States as federal, state, county and local government employees.

We have circulated a Notice of Proposed Rulemaking to my fellow commissioners on the topic of the Open Internet.

There are two things that are important to understand. First, this is a Notice, which asks a number of questions and seeks input on the best way to protect and promote the Open Internet. Second, all options are on the table. Our goal is to put into place real protections for consumers, innovators and entrepreneurs that until now have been only a matter of debate and litigation.

I believe this process will put us on track to quickly get to legally enforceable Open Internet rules. There has been a great deal of talk about how our following the court’s instruction to use a “commercially reasonable” test could result in a so-called “fast lane” and Internet “haves” and “have nots.” This misses the point that any new rule will assure an open pathway that is sufficiently robust to enable consumers to access the content, services and applications they demand and innovators and edge providers the ability to offer new products and services.

The focus of this proposal -- on which we are seeking comment -- is on maintaining a broadly available, fast and robust Internet as a platform for economic growth, innovation, competition, free expression, and broadband investment and deployment. We will follow the court’s blueprint for achieving this, and, I must warn you, will look skeptically on special exceptions.

If someone acts to divide the Internet between “haves” and “have-nots,” we will use every power at our disposal to stop it. I consider that to include Title II. Just because it is my strong belief that following the court’s roadmap will produce similar protections more quickly, does not mean I will hesitate to use Title II if warranted. And, in our Notice, we are asking for input as to whether this approach should be used.

Some recent commentary has had a misinformed interpretation of the Open Internet Notice of Proposed Rulemaking (NPRM) currently before the Commission.

There are two things that are important to understand. First, this is not a final decision by the Commission but rather a formal request for input on a proposal as well as a set of related questions. Second, as the Notice makes clear, all options for protecting and promoting an Open Internet are on the table.

I believe this process will put us on track to have tough, enforceable Open Internet rules on the books in an expeditious manner, ending a decade of uncertainty and litigation. I do not believe we should leave the market unprotected for multiple more years while lawyers for the biggest corporate players tie the FCC’s protections up in court.

Notwithstanding this, all regulatory options remain on the table. If the proposal before us now turns out to be insufficient or if we observe anyone taking advantage of the rule, I won’t hesitate to use Title II. However, unlike with Title II, we can use the court’s roadmap to implement Open Internet regulation now rather than endure additional years of litigation and delay.

Let me be clear, however, as to what I believe is not “commercially reasonable” on the Internet:

• Something that harms consumers is not commercially reasonable. For instance, degrading service in order to create a new “fast lane” would be shut down.
• Something that harms competition is not commercially reasonable. For instance, degrading overall service so as to force consumers and content companies to a higher priced tier would be shut down.
• Providing exclusive, prioritized service to an affiliate is not commercially reasonable. For instance, a broadband provider that also owns a sports network should not be able to give a commercial advantage to that network over another competitive sports network wishing to reach viewers over the Internet.
• Something that curbs the free exercise of speech and civic engagement is not commercially reasonable. For instance, if the creators of new Internet content or services had to seek permission from ISPs or pay special fees to be seen online such action should be shut down.

On January 13, 2014, Sen Robert Casey (D-PA) wrote Federal Communications Commission Tom Wheeler asking the FCC to investigate the coverage and reliability of the telecommunication system in rural areas after a driver had to make separate 911 calls as he crossed over the Maryland/ Pennsylvania border.

He wrote, “While I understand the FCC is aware of the concerns that rural communities face when dealing with dropped calls or poor quality services, I believe a renewed effort must be made to drastically improve these services. I also ask that your office take a particular look at how emergency services and responses are being affected by poor quality phone service. Phone services are vital to rural communities and we must ensure we are striving to expand new and updated technologies to all Americans regardless of where they live.”

On April 11, Chairman Wheeler wrote back saying the FCC has taken important steps to increase mobile coverage in rural areas. As of October 2012, 99.3 percent of the total rural US population and 92.6 percent of total rural US road miles had mobile voice service coverage from one or more providers.

To address areas with limited mobile coverage, the FCC established a universal service support mechanism dedicated exclusively to mobile services. Specifically, the Commission set aside $300 million in one-time support to accelerate immediate deployment of networks for mobile voice and broadband services in unserved, largely rural areas.

This support was made available through a nationwide reverse auction, which took place in the fall of 2012. There were 33 winning bidders, extending broadband coverage up to 83,494 road miles in geographic areas located in 31 states and one territory.

In December 2013, a number of Members of Congress wrote to Federal Communications Commission Tom Wheeler seeing “swift action to improve and modernize the E-rate program in order to help connect our nation's schools with high-speed broadband over the next five years.”

In April 2014, Chairman Wheeler wrote back saying that E-rate modernization is among the most important tasks currently facing the FCC. Commission staff is reviewing the record that has been developed in response to the July 2013 Notice of Proposed Rulemaking, and meeting with stakeholders to ensure that we have robust input from all interested parties.

Just a few weeks ago, the staff released a Public Notice seeking focused comment on a handful of specific issues that have been raised by commenters. And my goal is for the Commission to adopt an Order later this spring that would implement fundamental structural and administrative changes, the results of which would go into effect in 2015.

We need to ensure that the E-rate program supports the high-capacity broadband needed to give our students access to twenty-first century educational opportunities, while simultaneously improving the efficiency and administration of the program and establishing explicit program goals and measurements.

In December 2013, a number of Members of Congress wrote to Federal Communications Commission Tom Wheeler expressing concerns about opening the door to wireless voice services being used by passengers on airplanes above 10,000 feet.

They wrote, “We are in support of new options for airline passengers to safely use wireless data for non-voice services such as text messaging, email, and internet browsing; but we are adamantly opposed to the use of cellular voice services during flights.”

On April 8, Chairman Wheeler wrote back to the Members outlining the FCC’s process for process for considering modernization an outdated technological rule and enable in-flight connectivity options that are available elsewhere in the world to the available in the United States. He noted that if the Commission determines that airborne mobile use is possible without negative effects to cellular networks, the *airlines,* under the FCC's proposal, would have the ultimate say as to whether and how to provide service using cellular airborne access systems, subject to applicable Department of Transportation and Federal Aviation Administration rules.

On March 25, Reps Doris Matsui (D-CA) and Brett Guthrie (R-KY) wrote to Federal Communications Commission Chairman Tom Wheeler encouraging the Commission to create a band plan that encourages a robust bidding process that maximizes revenue in the upcoming AWS-3 auction.

On April 15, Chairman Wheeler wrote back noting that the FCC unanimously adopted the AWS-3 Report and Order. The Order adopts allocation, service, licensing, and technical rules for 65 megahertz of spectrum, including 50 megahertz of paired spectrum at 1755-1780 MHz and 2155-2180 MHz. The upcoming auction will expand the workhorse A WS-1 commercial wireless band, which today is available for mobile broadband use.

The Commission adopted a band plan that will promote competition by offering licenses comprised of different geographic license areas and block sizes. This band plan will serve the spectrum needs of a variety of applicants, and promote auction participation and robust competition.

The Commission's action set the stage for an auction of the AWS-3 spectrum licenses later this year.

While adopting the A WS-3 Report and Order is a big step toward making this spectrum available for commercial use, additional details must be resolved before this auction can take place. We will address these challenges so that all parties have certainty about their rights and obligations in A WS-3, and to ensure that the auction is robustly competitive and successful.

Next year the FCC will conduct the first-ever “Incentive Auction,” which will harness market forces to reallocate valuable low-band (below 1 GHz) spectrum from television broadcasters who voluntarily choose to relinquish their channels in exchange for incentive payments, to wireless providers who will bid against each other to buy those frequencies to provide mobile broadband services.

Two national carriers control the vast majority of that low-band spectrum. This disparity makes it difficult for rural consumers to have access to the competition and choice that would be available if more wireless competitors also had access to low-band spectrum. It also creates challenges for consumers in urban environments who sometimes have difficulty using their mobile phones at home or in their offices.

To address this problem, and to prevent one or two wireless providers from being able to run the table at the auction, I have proposed a market based reserve for the auction. Any party desiring to bid on any license area will be free to do so. When the Incentive Auction commences, all bidders will be bidding and competing against each other for all blocks of spectrum.

We expect a fulsome bidding process. There will be no “reserved” spectrum during this initial stage of the auction. When the auction reaches a “trigger” point that the Commission will set in advance of the auction -- largely based on meeting a price threshold -- wireless providers with a dominant low-band position in a license area will be constrained from bidding on a few “reserved” spectrum blocks.

The exact amount of “reserved” spectrum available will depend on how much spectrum non-dominant providers are actively bidding for at the trigger point, but in no instance will the reserve exceed 30 megahertz. Those “reserve-eligible” bidders who are still actively bidding at the trigger point will then begin bidding for reserved spectrum against only other eligible bidders, and not against bidders who already hold a dominant low-band position in that license area.

The Incentive Auction is a once-in-a-lifetime opportunity to expand the benefits of mobile wireless coverage and competition to consumers across the Nation -- particularly consumers in rural areas -- offering more choices of wireless providers, lower prices, and higher quality mobile services.

Getting the Incentive Auction right will revolutionize how spectrum is allocated. By marrying the economics of demand (think wireless providers) with the economics of current spectrum holders (think television broadcasters), the Incentive Auction will allow market forces to determine the highest and best use of spectrum.

In developing such an auction, we must also be guided by the rules of physics. Not all spectrum frequencies are created equal. Spectrum below 1 GHz – such as the Incentive Auction spectrum – has physical properties that increase the reach of mobile networks over long distances. As part of the Incentive Auction process, we will also make available on a nationwide basis spectrum for unlicensed use (think Wi-Fi).

With the increased use of Wi-Fi, this spectrum has also become congested. Opening up more spectrum for unlicensed use provides economic value to businesses and consumers alike. Whether television broadcasters participate in the Incentive Auction will be purely voluntary, but participation in the Incentive Auction does not mean they have to leave the TV business. New channel-sharing technologies offer broadcasters a once-in-a-lifetime opportunity for an infusion of cash to expand their business model and explore new innovations, while continuing to provide their traditional services to consumers.

We will ensure that broadcasters have all of the information they need to make informed business decisions about whether and how to participate. On April 17, I provided my fellow Commissioners a draft Report and Order that will determine many significant issues and policy decisions related to the Incentive Auction. The Commission will also make additional decisions to implement details pertaining to the Incentive Auction in the coming months.