Europe may be a synonym for stagnation, but Barcelona still hosts the world’s premier mobile telecom conference, and this year the theme was “woe are the carriers.” Both the New York Times and The Wall Street Journal produced front-page stories last week dwelling on the Facebook menace to the industry’s traditional voice and messaging revenues. Google used the Barcelona venue to roll out a new free Wi-Fi threat to mobile operators’ paying broadband traffic.
So the Barcelonans must have been surprised when the Tom Wheeler reputation salvation tour arrived, pronouncing that black was white, up was down.
Mr. Wheeler is the U.S. Federal Communications Commission chief who just found that telecom operators are actually dangerous monopolists in need of old-style utility regulation. Well, he actually said no such thing. He gives little reason why this step was urgent or necessary. Since applying Title II utility regulation to the Internet, he’s spent most of his time apologizing for his action, insisting why, against all historical precedent, the FCC will nonetheless protect investment and innovation in the vibrant, rapidly changing industry.
Like the Munchausen mommy, Mr. Wheeler has given us Title II so he can protect us from Title II.
He claims, for instance, in the tender hands of the FCC, Title II has refrained from stifling investment in wireless amounting to $400 billion over the past 22 years. This has been his most incessant talking point.
He forgets to mention, though, that in 2007 the FCC specifically ruled that mobile broadband was not a Title II service. He forgets to mention that in 2010 the FCC even exempted mobile broadband from net neutrality rules, which have become his diaphanous excuse now for exposing the entire broadband sector to the oppression of Title II.
Somebody should introduce Mr. Wheeler to the industry he regulates. Right after 2007, when Title II was waived, U.S. wireless investment took off, exploding 70% overnight. Compare this performance to the previous mobile broadband leader, Europe, where investment actually declined since 2007.
Mobile broadband, since being exempted from Title II, has come to dwarf the carriers’ traditional voice and messaging traffic, still covered by Title II. Mobile broadband, exempt from Title II, is what powered the rise of Skype, FaceTime, WhatsApp and other Internet-enabled apps that are now overthrowing those parts of the carrier business model still based on Title II services.
Title II has only hobbled progress where it still applies. A clear example is voice-over-Internet, or VoIP, which continues to be covered by Title II. The result for operators and their customers has been higher network costs and wasted spectrum.
We could go on about Mr. Wheeler’s prevarications, including his murky rendering of the 1993 congressional act that clearly sought to limit the application of Title II to then-emerging wireless. In his memoir, Bill Clinton’s FCC chief, Reed Hundt, boasted the law had “reversed one hundred years of pro-monopoly policy in the telephone and cable industries.”
Mr. Wheeler now reopens the molasses vent Congress thought it was closing, and over a much wider Internet industry. His invocation of archaic Ma Bell-era regulation gives interest groups and lobbyists an open-ended invitation to demand price controls, service mandates and new utility taxes on the whole swath of providers and even upstream network operators like Google, Facebook and Netflix(which is why Netflix has suddenly become mumbly about its support for Title II).
Mr. Wheeler’s endless rationalizations about how Title II is a bad idea whose time has come are meant to serve a single purpose. It’s all about providing supporting bombast for his desperate and implausible insistence that he did not cave to the shortsighted political machinations of the Obama White House.
Children, there’s a lesson here. A person’s moment of truth can come unexpectedly in life, and decisions made in a moment of weakness and timidity can become the legacy of a lifetime. But it’s also important to remember that we’re all human. We do chicken-hearted things. We make choices we regret. The world forgives. Unfortunately, some people’s self-image won’t let them shut up. The real death of their reputation is their need to go around trying to justify themselves with tall tales that everyone knows are untrue.
It’s been painful to see the FCC chief shrinking before TV interviewers who begin their questioning of him by stating matter-of-factly that he kowtowed to President Obama. Profiles in courage are rare in Washington and Mr. Wheeler is no worse than average. Still it must be said of his current embarrassment: “The judgments of the Lord are true and righteous altogether.”