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Remarks of FCC Chairman Tom Wheeler at The Ohio State University

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Released: December 2, 2013

Prepared Remarks of FCC Chairman Tom Wheeler

The Ohio State University

Columbus, Ohio

December 2, 2013

Thank you. It’s always great to be back at The Ohio State University. But it’s even better two days after
we whipped that other school. I graduated more than 40 years ago, but I can assure you, beating the
School Up North never gets old.
Between Thanksgiving travel, The Game, and finals coming up, I was skeptical that anyone would be
here today. We thought of marketing the event as an anti-BCS protest, but things seem to be taking care
of themselves in that regard. The fact of the matter, however, is that you are here and I really appreciate it.
I chose to make my first policy address here in Columbus for multiple reasons. Primary among them is
the fact that the work of the Federal Communications Commission may be done in Washington, but the
reason for that work, the people of America, and the effects of that work are outside of Washington. Do
not confuse that assertion, by the way, as some kind of anti-Washington statement; far from it. The public
servants with which I am today privileged to work (and those I have known through the years) are just
that: public servants who struggle mightily in the quest of what is best for the nation, often at significant
personal sacrifice.
Today, I published a short eBook entitled Net Effects: The Past, Present and Future Impact of our
Networks
. The book is available for free on the FCC website, Amazon Kindle, Scribd, and other
platforms. Today’s remarks are the first of a series over the next several months that will begin to
articulate a regulatory philosophy. The purpose of the eBook as well as presentations such as this is to
begin a dialogue, not to dictate a conclusion. I am privileged to lead a Commission with four other
Commissioners. Together, we will make the necessary policy decisions.
I said there are multiple reasons why I came to Columbus for this occasion. I had the pleasure of meeting
Todd Snitchler, Chairman of the Public Utilities Commission of Ohio, a colleague in the regulatory
oversight world. And I’m sure Chairman Snitchler well appreciates how my favorite part of the day was
meeting with student leaders, some holding positions I once held on this campus, to encourage them to
consider careers in public service.
And finally, I came here today because I’m a proud Buckeye!
I hope to spend most of my time with you taking your questions, but first I want to pick up on the theme
of the Net Effects eBook: how we are living in a time of revolutionary technological change and the role
of the FCC in tackling the challenges and seizing the opportunities created by the new network that has
engulfed us.
Allow me to start with a little history lesson.
I may have majored in business administration when I was Ohio State, but I have always had a love of
history and that passion has only grown over time.
I’ve written two books on the Civil War, and, when President Obama nominated me to serve as FCC
Chairman, I was working on my third book, about the great network revolutions in history.
The first network revolution was Gutenberg’s printing press, which enabled the original information
revolution. The second was the railroad – the first high-speed network, which enabled the Industrial
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Revolution. The third was the telegraph, which converted information to signals, paving the way for the
telephone, radio and television, and eventually the binary on-off signaling of computers and computing
networks.
We are living in the fourth great network revolution – the marriage of computing and connectivity. Some
have labeled it the information age.
Each of the preceding revolutions forever changed the world; we should not, therefore, be surprised when
today’s network revolution hurls new realities at us with an ever-increasing velocity.
At the heart of these changes is this: the new information networks are the new economy. Earlier
networks enabled ancillary economic activities. The railroad, for instance, hauled coal that fired the
furnaces of industry. In contrast, what today’s new networks haul isn’t an input to a product, it is the
product itself. Our growth industries are today based on the exchange and use of digital information. As
such, information networks aren’t ancillary; they are integral.
How we connect with friends and family, how our homes use energy; the efficiency of our transportation
network; how we elect our public leaders and engage with government; all are impacted by our new
networks. Here at Ohio State there was a dramatic example of how networks are changing old practices
when Dr. Christopher Kaeding donned Google Glass to conduct a surgical operation that allowed medical
students located miles away to see through his eyes.
There is another aspect of the new networks that will differentiate the lives of the current crop of students
at Ohio State. Historically, networks have been a centralizing force, pulling users closer to the place
where the technology resided. The new network operates in an opposing manner, pushing activities
outward to the edge of the network. The result is an explosion in individual opportunity – a re-birth of the
entrepreneurial dynamism that characterized the pre-industrial era of our nation.
Enter the Federal Communications Commission.
The FCC is the public’s representative to the ongoing network revolution.
The agency was created originally in 1934 to oversee the third-generation networks of telephony and
broadcast and, eventually cable and wireless carriers.
Specifically, Congress charged the FCC to protect – quote – “the public interest, convenience, and
necessity” of the nation’s networks.
In serving the public interest, the FCC has focused on dual responsibilities.
First, facilitating dynamic technological change to ensure the U.S. has world-class communications
networks.
Second, ensuring that our networks reflect our civic values, most notably our belief that communications
networks should be accessible to all.
Today, we find ourselves at a crossroads. The old monopoly telephone network is being replaced by new,
more flexible and efficient digital networks. This is a good thing. The networks of the 21st century bear
scant physical resemblance to the networks that defined the 20th century.
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As our networks evolve, so should government oversight. There are some who suggest that new
technology should essentially free the new networks from regulation; that market forces are enough to
ensure that the public interest will be served. I am a rabid believer in the power of the marketplace. But I
have seen enough about how markets operate to know that they don’t always, by themselves, solve every
problem.
Our new networks are even more important to society than were the old ones. The public has the right to
be represented as we go through the transition that is the fourth network revolution.
The evolution of network technology changes neither the responsibility of networks to the greater society,
nor the FCC’s mission to protect the public interest. Congress gave the FCC authority over interstate and
foreign wire and radio communications. We have an obligation to live up to that mandate.
Indeed, the success of the Internet would be imperiled were that not the case. The Internet is not a law-
free zone. It depends upon standards of conduct. And it depends upon the ability of the government to
intervene in the event of aggravated circumstances.
Now, before anyone translates this into a call to “Regulate the Internet,” let me be clear. “Regulating the
Internet” is a non-starter. What the Internet does is an activity in which policy makers should be
extremely circumspect. The United States’ policy strongly favors Internet Freedom, limiting government
involvement to over-riding purposes such as the completion of 911 calls or the ban on child pornography.
Assuring that the Internet exists, however, as a collection of open, interconnected entities is an
appropriate activity for the people’s representatives.
As we fulfill our responsibility, we will be guided by two lodestars: competition policy and something I
call the Network Compact.
I’ll start with competition. Ask Urban Meyer or Thad Matta about the power of competition to motivate
you to make the necessary investments to improve and succeed.
My time in the private sector as both an advocate and an investor has left me an unabashed supporter of
competition.
And beyond my experience, competition is our fundamental national economic policy, a point often made
by the Supreme Court.
Competition is a power unto itself that must be encouraged. Competitive markets produce better
outcomes than regulated or uncompetitive markets. We must protect competition where it exists. We must
promote competition where it may not be fulsome.
The FCC has been in the forefront of promoting and protecting competitive approaches for decades, very
often in the face of opposition from established interests of every description—sometimes dominant
firms, sometimes others who benefitted from existing, but threatened, arrangements. Here’s one very
simple example: it’s because of the FCC that you have multiple competitive choices for your mobile
phone service.
As the FCC embraced and encouraged competition, good things happened. The enormous dynamism of
the communications and information sector, exemplified by what broadband and mobile technologies
have enabled—most dramatically illustrated by the Internet – is proof of that.
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With such a proof-set, the responsibility to protect workable competition with all of its benefits whenever
it exists becomes even more important. Where we are fortunate enough to have workable competition, I
intend to protect it
But the FCC’s job is also to promote competition. Congress has given us tools to accomplish this goal.
We will use those tools in a fact-based, data-driven manner.
One way is to ensure competitors have key inputs necessary to build out and operate networks. The best
example would be spectrum. Think of spectrum as our invisible infrastructure – the airwaves that beam
data from cell towers to our phones, or from Wi-Fi routers to our laptops.
Spectrum is finite, and the FCC is charged with managing the airwaves that are used for commercial
purposes. A key goal of our spectrum allocation efforts is ensuring that multiple carriers have access to
airwaves needed to operate their networks. The importance of such competition was reinforced by a filing
with the Commission from the Antitrust Division of the Department of Justice last April.
We also monitor other competitive actions in the communications economy. In this regard we encourage
voluntary industry codes of conduct; but we will monitor their effectiveness and will not hesitate to act
where warranted.
Consider the present practice of “locking” a mobile phone so that it only works on the network that sold it
to you. I believe that once a consumer upholds his or her end of the deal to buy a phone, he or she should
be able to switch that phone to another carrier’s network – it’s called competition. Just last month I
reached out to the head of the wireless industry’s trade association to encourage the industry to adopt such
unlocking practices. I have been pleased with the industry’s responsiveness thus far, but the message was
clear: if mobile phone companies don’t act voluntarily – and quickly – to adopt a policy to unlock phones,
I will work hard to ensure the FCC will act to require them to do so.
Another part of our competition policy is merger review. When two companies propose merging, like
AT&T and T-Mobile did recently, for example, the FCC is charged with reviewing the transaction to
determine if it’s in the public interest. In that particular case, the FCC refused to give the go-ahead to a
deal that could have pushed us toward a duopoly. And look at what happened. Following the signal that
the FCC is committed to a competitive mobile marketplace, both T-Mobile and Sprint have been able to
attract significant investment capital to build out their networks and increase competition in the mobile
industry.
Here’s the bottom line on competition. Our goal should be to ask how competition can best serve the
public – and what, if any, action (including governmental action) is needed to preserve the future of
network competition in wired or wireless networks.
Notice that I stressed “if any.” If the facts and data determine that a market is competitive, the need for
FCC intervention decreases. I have zero interest in imposing new regulations on a competitive market just
because we can. I have repeatedly advocated the “see-saw” rule – that when competition is high,
regulation can be low. The effect of the “see-saw” rule gives companies control over their regulatory fates
based on the degree to which they embrace competition in their markets.
It is important to remember, however, that competition does not and will not produce adequate outcomes
in the circumstance of significant, persisting market power or of significant negative externalities. Where
those occur, the Communications Act and the interests of our society – the public interest – compel us to
act and we will.
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I will not hesitate to invoke the full authority granted to us by Congress to protect competition, and I will
not hesitate to use the full authority granted us by Congress where competition is not available to secure
the public interest through the promotion of competitive markets.
Another guide to the public interest work is what I call the Network Compact. You can think of this as the
basic rights of consumers and the basic responsibilities of network operators.
There are three key elements of the Network Compact – accessibility, interconnection, and public safety
and security.
On accessibility, there is nothing more fundamental to the FCC’s work than ensuring every American has
access to our wired and wireless networks.
We’ve got some work to do.
According to the latest survey data, about 70 percent of Americans have adopted basic broadband service.
When you add in smartphone subscribers, about 80 percent of Americans can get online at home.
But having a significant percentage of Americans bypassed by the Internet revolution is unacceptable. We
can’t maximize economic growth and job creation when 20 percent of our population is cut off from the
digital economy at home.
In addition, 15 million Americans live in areas where they can’t get wireline broadband, even if they
wanted it.
We also will have failed as a nation if our schools aren’t capable of providing a 21st century education. A
recent survey of school teachers and administrators found that 80 percent felt there wasn’t network
bandwidth available to them to meet their educational needs.
That’s why the Commission is improving our universal service programs, including the eRate program
for schools and libraries. We are modernizing a program originally conceived to deliver plain old
telephone service into programs to ensure broadband access to all Americans, including American
schools.
The right of access also means the ability of users to access all lawful content on a network. That’s why
the FCC adopted enforceable rules to preserve the Open Internet.
Our commitment to universal access also requires that we go the extra mile to ensure persons with
disabilities can get online and the benefits of these incredible new networks can be harnessed to address
the challenges of Americans with disabilities.
In this regard, let me pause for a quick shout out about the closed captioning on the big screen at Ohio
Stadium. As our video realities change and expand, so must our vigilance to assure that access to those
new capabilities includes all Americans.
The second piece of the Network Compact is interconnection. The telephone network created an
identifiable, singular, end-to-end path for communications. The Internet is far different; it is a collection,
not a thing. It is the “Inter” net, short for its original description, “Internetworking,” because multiple
open, disparate networks exchange information seamlessly. Absent the interconnection of the parts of the
collective we call the Internet there is no Internet.
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Allow me to repeat what I said previously. Regulating the Internet is a non-starter. What the Internet does
is an activity where policy makers must be judiciously prudent and should not be involved. But assuring
the Internet exists as a collection of open, interconnected facilities is a highly appropriate subject.
The final piece of the Network Compact is public safety and national security. That means not only
assuring that 911 calls go through, but also ensuring that our networks are secure from cyber threats. Our
networks must continue to be the safety backbone during an emergency. We must have the ability to
summon emergency help, to coordinate an emergency response, and to do so via a network that is as
secure as possible from cyber attacks.
There are a number of actions the FCC is taking to promote competition and advance each element of the
Network Compact. Ordinarily I would be inclined to highlight them.
But I will not, because the most important thing I hope you will take away from my remarks today is not
what
the FCC is doing, and but why we are doing it. And the answer to that question is that we are the
people's representatives, acting on behalf of the public, who have the responsibility to maintain the values
you find important.
Which brings me back to you.
As you heard from President Alutto’s introduction, I’ve only been on the job as FCC Chairman for a few
weeks. I delivered brief remarks at a few internal events, but this is my first, quote-unquote “speech” as
FCC Chairman.
Let me close by returning to where I began. I wanted to give these remarks in Columbus, not only
because of my deep affection for this place. But because I think the dateline of my first speech sends a
more powerful message than anything you’ll find in the transcript.
It’s a message that the American people are our constituency. That how we connect determines how jobs
are created and lives are lived. And that your FCC believes its mission is as integral to the prosperity of
the Ohio Valley as Silicon Valley.
It’s a message to young people that the new world of networks can be – must be – innovative and
dynamic and competitive and serve consumer expectations. And that when these forces converge,
opportunities abound.
To get this right – to maximize the benefits of this great network revolution – the voices of the American
people must be heard. Starting with you, which is why I’m going to sit down, take your questions and
listen to your comments.
But let me leave you with one last thought. I graduated from this great university never expecting to
return as a public official.
As FCC Chairman, I see myself as the public’s advocate in the midst of an historic revolution. It is the
most humbling challenge of my life, and I’m committed to doing all in my power to live up to this honor.
Thank you.
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