By Julian Hattem - 09/04/14 01:39 PM EDT
The head of the Federal Communications Commission thinks the current list of options for high-speed broadband Internet is too short.
In a speech at a Washington startup center on Thursday, FCC Chairman Tom Wheeler said that the current market is “lacking” and called for “more competitive choices” to give people better services.
“Three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy,” Wheeler added.
The comments could spell trouble for Comcast and Time Warner Cable, which are looking for the FCC’s approval to allow their $45 billion merger to go through.
Wheeler did not make any overt references to either company, but critics have repeatedly said that the combination of the country’s No. 1 and No. 2 cable providers would handicap competition and leave consumers with a monolithic company that is not responsive to its subscribers.
In defense, executives have noted that the two companies currently do not compete in any segment of the American market, saying that the merger would not leave anyone with fewer options for Internet or cable TV service.
Wheeler’s speech, which the FCC said was the first in a series about the broadband Internet market, also seemed to indicate support for the idea that the agency should invalidate state laws that bar cities from building out their own government-run Internet service. Chattanooga, Tenn., and Wilson, N.C., have asked the agency to strike down such laws, and Wheeler has previously said the commission has the authority to act.
In part, the lack of competition depends on what precisely people consider high-speed Internet.
About 75 percent of the country has at least two companies competing to provide Web download speeds up to 4 megabits per second (Mbps), the FCC’s current definition of “broadband.”
But that speed is “yesterday’s broadband,” Wheeler said, and “isn’t adequate when a single HD video delivered to home or classroom requires 5 Mbps of capacity.” The FCC has said that the standard for broadband should be updated to 10 Mbps, which Wheeler said “doesn’t fully capture the increasing demand” for high-speed Internet, especially when multiple devices use the same connection.
For download speeds of 25 Mbps, which Comcast, for instance, advertises as part of its “Internet Plus” package, more than half the country has just one company to chose from. One-fifth of the U.S. has no option at all for that speed.
Wheeler’s remarks were greeted warmly by consumer interest advocates, including Public Knowledge senior vice president Harold Feld, who said that Wheeler has “the right diagnosis for our broadband ills” and should bar the Comcast merger to prevent further consolidation.
The National Cable and Telecommunications Association, which Wheeler led as president until 1984, used the speech to warn the FCC not to enact tough net neutrality regulations that would treat broadband Internet companies like traditional phone utilities.
“The surest way to stifle further competition and investment in the broadband marketplace is to impose public utility Title II regulation on Internet access,” the trade group said, referring to the legal authority some have urged the FCC to use for strong rules to prevent “fast lanes” on the Internet.