FCC Chairman Tom Wheeler’s responses to lawmakers Tuesday...

Guggenheim Partners in a research note after the House Communications Subcommittee oversight hearing. “Our authority goes to good faith negotiations,” Wheeler said during the hearing. “There is reason to be concerned that because I happen to subscribe to an ISP who is in a dispute with a program provider, that the program provider blocks all access from all IP addresses coming from that ISP. I think that is something that is of concern and that we all should worry about.” Wheeler’s concern means Gallant “would not be surprised if the FCC uses its ‘good faith negotiation’ rules to prevent such blocking,” he said. “Should Mr. Wheeler pursue this approach, it has the potential to marginally reduce broadcaster leverage during future retrans disputes.” In other testimony, the question of whether the FCC can preempt state laws restricting municipal broadband networks will probably be “answered in court,” Wheeler said. He argued in favor of the FCC pre-empting these state restrictions. “If we believe in competition, we ought to let competition flourish,” Wheeler said. “This is a decision that ought to be made by the people of the community.” If local community residents want to bring competition by building their own networks, “they should not be inhibited … by the fact that the incumbents have been urging the adoption of legislation that would ban it,” Wheeler said.