Why Chairman Wheeler rejected broadband price caps and last-mile unbundling

When the Federal Communications Commission voted to regulate Internet providers as common carriers under Title II of the Communications Act in 2015, FCC Chairman Tom Wheeler made it clear that the commission could have imposed even stricter requirements. The commission primarily used Title II to impose network neutrality rules that prevent Internet providers from blocking or throttling traffic or giving priority to Web services in exchange for payment. But the FCC could have also imposed rate regulation and required last-mile "unbundling," which would force Internet providers to let competitors offer service over their networks.

Chairman Wheeler rejected that type of heavy-handed utility regulation, instead announcing that there would be "no rate regulation, no filing of tariffs, and no network unbundling." By promising only "light-touch" common carrier rules, Chairman Wheeler tried to convince Internet providers that the new regulatory regime wouldn't be that bad. Of course, the FCC was sued by broadband providers anyway. “Everybody sues us about everything,” Chairman Wheeler once said after a different decision on prison phone rates. Given that the FCC would have to defend its rules in court, why not go even further? If the FCC imposed unbundling, network operators would have to lease access to last-mile infrastructure so that any business could resell Internet service over incumbents’ networks without having to install their own wires. DSL Internet used to operate this way before the FCC under Republican leadership removed the unbundling requirement in 2005. Chairman Wheeler argued that competition should be brought by companies that build their own infrastructure, not companies that have to rely on incumbents for access.