FCC's Wheeler to encourage competition, but mum on auction rules

Tom Wheeler, the FCC's new chairman, said he will work to ensure the U.S. telecommunications market remains competitive. However, in his first battery of media interviews after assuming his new position, Wheeler remained silent on how his stance on competition will affect his position on specific issues, including how the FCC will handle next year's spectrum auctions.

"The reason why the U.S. is the world leader on the Internet is because we have the home-field advantage," Wheeler told the Wall Street Journal. "We want to keep that home-field advantage. One of the ways to do that is to keep the environment competitive, so it's not the regulators determining what companies do."

Wheeler is a careful public speaker with decades of experience in telecom and Washington. Wheeler was president of the CTIA from 1992 to 2003 before joining D.C.-based venture capital firm Core Capital Partners as managing director in 2005. He also headed the National Cable Television Association from 1979 to 1984. Wheeler offered the same types of comments to the Washington Post.

"Competition is the fastest way to get the extension of services and get proper pricing of services and speeds," he said in an interview with the Post. "But I recognize that competition doesn't always happen in a vacuum and the job of the agency is to think of how it can protect competition and promote it where it exists."

Interestingly, Wheeler voiced support for the FCC's decision to block AT&T's (NYSE:T) proposed acquisition of T-Mobile in 2011. He said the action was a good example of how the agency can encourage competition in the market. Since the collapse of that transaction, T-Mobile US (NYSE:TMUS) has emerged as a significant competitor to entrenched giants AT&T and Verizon Wireless (NYSE:VZ) in the mobile market. Indeed, in the third quarter T-Mobile US managed to sign up more phone subscribers than market leader Verizon.

But Wheeler noted that the FCC's job is not to micro-manage the telecom sector. He said the agency's goal should be to encourage competition among companies and not to dictate policies.

How Wheeler's rhetoric on competition will trickle down into the FCC's actual handling of next year's spectrum auctions remains to be seen. Some are arguing for rules that would restrict the amount of spectrum AT&T and Verizon could acquire, while others caution that such rules would likely reduce the amount of money the government would raise through the auction.

For more:
- see this Washington Post article
- see this Wall Street Journal article (sub. req.)

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