May 2014

[Commentary] President Barack Obama made an important promise when he first ran for president. “The Internet is perhaps the most important network in history, and we have to keep it that way,” he said in 2007.

As a senator, he had similarly called for a “neutral platform” uncontrolled by “some corporate media middleman” like Verizon or Comcast. Sen Obama, in other words, was committed to preserving network neutrality -- the notion that Internet service providers like AT&T, Comcast and Verizon have to provide fair and neutral access to all websites and applications; they can’t make small websites slow to load and give “fast lanes” to monopolies and large companies who pay extra for special treatment.

But the chairman of the Federal Communications Commission, Tom Wheeler, proposed a network neutrality rule that would authorize those pay-to-play fast lanes.

The President (and everyone else) seems to be overlooking one power he does have: the authority to remove FCC Chairman Wheeler from the chairmanship, promoting another commissioner to that spot and leaving Chairman Wheeler as one of the other four commissioners. In particular, both commissioners Mignon Clyburn and Jessica Rosenworcel, the two other Democrats on the five-person board, spoke out eloquently in official statements, criticizing Chairman Wheeler’s proposal for authorizing fast lanes and being a “network neutrality” rule in name only.

Either Commissioner Clyburn or Commissioner Rosenworcel could take over the agency, scrap Chairman Wheeler’s plan in favor of an alternative and move quickly to ensure an open Internet, thereby fulfilling the cornerstone of the Obama campaign’s tech agenda after the four-month comment period. While firing Chairman Wheeler as chairman would be an unusual move, there are at least four solid reasons the president should do it.

First, he has every right to do it. The Communications Act of 1934, the legislation that created the FCC, makes clear in Section 4(a) that the president has the power to “designate as chairman” one of the five commissioners.

Second, it’s not just that President Obama can demote Chairman Wheeler -- he also should.

Third, Wheeler’s network neutrality rule is truly bad for business, leaving small or unconnected companies with few options if Internet providers discriminate against them.

Fourth, the other two Democratic commissioners, either of whom could potentially replace Chairman Wheeler, not only seem committed to network neutrality and the rest of the Obama tech agenda, but also have the courage and competence to follow through.

[Teachout is fellow at the New America Foundation and associate law professor at Fordham Law School]

Dish Network currently finds itself on the outside looking in amid the deal mania taking place in the cable and telecom industries. AT&T agreed to acquire DirecTV for $49 billion, a deal that follows Comcast Corp's $45 billion agreement in February to buy Time Warner Cable, Sprint has also been forging ahead on a possible bid for T-Mobile US.

Dish, run by Chairman Charlie Ergen, is noticeably absent from those pacts. Analysts say the company, which has amassed valuable wireless airwaves, needs a partner to start putting that spectrum to use. The more that the industry consolidates without Dish getting in on the activity, the fewer options it will ultimately have when trying to make a deal.

“We’d be surprised if Charlie Ergen sat on the sideline for long,” Credit Suisse analyst Joseph Mastrogiovanni, wrote in a note. “This deal could be a catalyst that causes Dish to act sooner rather than later.”

Ergen has said that Dish wouldn’t compete for DirecTV because the price would be too high, but Mastrogiovanni said he doesn’t necessarily believe him. “We believe he could get involved,” Mastrogiovanni wrote. “If nothing else, a higher bid would force the price up on AT&T.” Still others said regulatory hurdles to such a transaction would be far harder for Dish to clear than AT&T.

The Federal Communications Commission moved forward with two actions to help automatically control trains and avoid accidents. FCC Chairman Tom Wheeler said that the twin moves, which will help manage the rollout of the safety technology and preserve historic sites, was an important step forward for the effort.

“This agreement is an acknowledgement by the freight rail industry of the importance of environmental protection and historic preservation,” he said. The Positive Train Control system, he added, “is a transformative technology that has the power to save lives, prevent injuries, and avoid extensive property damage.”

The commission announced that it had signed a deal to allow seven freight rail companies to start testing almost 11,000 poles for the automated safety technology. In exchange, those seven railroads put together a $10 million fund to help states and tribal governments preserve cultural and historic areas.

Frontier Communications plans to offer a landline phone service designed for emergency use only, said Frontier CEO Maggie Wilderotter. He said Frontier is planning a residential VoIP product to be launched in the second half of 2014.

Frontier’s planned emergency phone service targets rural areas, which represent a large portion of Frontier’s customer base.

Like all local phone companies, Frontier is seeing customers canceling landline service and moving to cellular or other alternatives. But as Wilderotter noted, rural areas experience frequent power outages. And because traditional phone service is powered from the phone company’s central office, it could provide a reliable communications method even during an extended outage.

Frontier believes there is a market for an emergency landline phone, which would be capable only of dialing Frontier or a 911 operator. The service will have “four nines” reliability, Wilderotter said, using telecom jargon for a service that is available 99.99% of the time.