FCC chief leans on candor — and a megaphone — to get his point across


Federal Communications Commission Chairman Tom Wheeler has eagerly grasped a national megaphone on the defining telecom policy issues of the day. (Gary Cameron/Reuters)

For federal regulators, words really matter. An adjective too bold, a verb misconjugated or a particle dropped can ripple across the business world and send stock markets into chaos.

That’s why leaders of government agencies so rarely speak in public — and generally do so with great care.

Not Tom Wheeler, the dauntless and plain-spoken chairman of the Federal Communications Commission, who has displayed a rare joy for gab.

“I’m not sitting here sucking eggs,” Wheeler said at his first public meeting in November, a warning shot of what was to come. “I’m looking seriously at these issues.”

Such candor has defied early assumptions about President Obama’s FCC pick. The former lobbyist was pegged by many as a lame-duck regulator, likely to lay low and stick to worker-bee issues.

Instead, the 68-year-old has eagerly grasped a national megaphone on the defining — and the utterly arcane — telecom policy issues of the day.

In coming months, he faces the biggest test of his promise to put consumers first, deciding whether to approve the merger of two of corporate America’s least-popular companies: cable titans Comcast and Time Warner Cable.

His lengthy speeches, blog posts, a public town hall and news conferences have at times roiled the industries he once represented.

In a February news briefing, Wheeler said he was “skeptical of a proposed transaction” between Sprint and T-Mobile, even though the companies had not officially announced a deal. After that unusual pronouncement, Sprint’s owners doubled down on lobbying efforts to win over government officials for a potential merger.

After a speech last fall at Ohio State University, Wheeler said that when it came to Internet regulations he was a “great believer in the market” and that he generally supported “two-sided markets” between the companies — such as Comcast — that bring Internet service into homes and the Web services — such as Netflix — that ride on those networks.

It was business jargon, but Netflix took notice. Rumblings were afoot that Comcast would demand payment to ensure that Netflix videos would continue to command the bandwidth needed to ensure smooth streaming to subscribers. With Wheeler’s statement, Netflix understood that the FCC would leave it to the businesses to settle the matter, according to people familiar with the company’s thinking.

Netflix, in turn, agreed to pay to protect its service, they said.

The appointment of Wheeler, a fundraiser for Obama, drew raised eyebrows from even those most jaded about Washington’s revolving door between corporations and the government. As the past president of two major telecom lobbying groups, Wheeler’s critics expected him to quickly bend to the interests of wireless, Internet and cable carriers.

But after six months in the job, Wheeler has been harder to peg. He’s been an ambitious regulator, quickly ushering in a slew of rules that his early critics and consumer advocates now applaud.

Last month, he created regulations to prevent television broadcast consolidation. After the D.C. Circuit Court threw out previous rules, he has promised to rewrite net neutrality regulations for Internet service providers that prevent them from blocking sites and services. He has forced wireless carriers to accept emergency 911 texts. And he has put forth a plan to allow in-flight use of cellphones, even though, as he put it: “I’m the last person in the world who wants to listen to somebody talking” on a plane.

“We’re impressed by some of his decisions, and he’s been very much treading a middle line,” said Craig Aaron, president of Free Press. “But that also makes him hard to peg down on some issues. Every side can find something they like in what he says.”

It will be hard to please all sides with bigger and more controversial decisions ahead:

He will make the call on Comcast’s $45 billion bid for Time Warner Cable, a deal that would create the first national cable company and a broadband Internet titan with 40 percent of the market share.

His net neutrality proposal rankled consumer advocates, who say it could allow the richest Web companies to buy better access to users.

He will launch the biggest sale of television airwaves in years, an auction that could dramatically shrink local broadcasting and determine the dominant providers of mobile services for years to come.

And through it all, he seems likely to keep that megaphone at the ready.

The Washington insider

Wheeler knows the back rooms of Washington all too well. And he is unapologetic about the decades he spent leading the National Cable & Telecommunications Association and the CTIA wireless group and then as a venture capitalist with telecom, Internet and broadcast industry investments.

Often, he is the one to bring up his past.

In December, to a ballroom packed with 1,600 telecom lawyers gathered to hear their new chief regulator, Wheeler offered a lesson in the art of lobbying that drew a roar of laughter.

“Understand the priorities of the new chair. For example, don’t wait to ask him to pull out the pictures of the grandchildren,” joked Wheeler at the Federal Communications Bar Association dinner, known to Washington insiders as “telecom prom.”

“I’m not saying ooh-ing and aah-ing over the grandkids will get you the spectrum allocation you want,” he said. “But it won’t hurt.”

At the International Consumer Electronics Show in January, Wheeler joked in a keynote speech that he might be interested in taking over the top job of the lobbying group that runs the show.

The self-satire is quintessential Wheeler, who takes controversy head-on, observers and former colleagues say. In some ways, he fits the prototype of the ultimate Washington insider with a vast network of connections. His folksy idioms and direct Midwestern sensibility have won many friends in Congress, the FCC and at the top levels of corporate America.

“If I could wear a sandwich board up here saying, ‘The auction is open. Y’all come,’ I would,” he said about a planned airwaves auction in 2015.

Raised in Columbus, Ohio, Wheeler showed an early ambition for business. As a youngster, he charged neighbors to paint house numbers on their front curbs and he sold rare coins. In college, he grew interested in politics and, in an early sign of his networking skills, volunteered to chauffeur visiting lawmakers to an Ohio State University event. That car ride led to a summer internship in Congress.

He was never a top student, and in the halls of Washington he found a place that rewarded his willingness to work hard, his political acumen and likability, former colleagues said. Lobbying for businesses was a perfect marriage of his interests.

Indeed, as he sees it, his lobbying skills are key to his management of the FCC — a notion that might make others cringe. “This is a job that I’ve been training for my entire professional life,” Wheeler said.

“I can’t say I’ve had a Damascus road conversion, but you have to look at who I was representing and when I was representing them,” he said in a recent interview. He led the NCTA in the 1980s, when the cable industry was just starting out. When he led the CTIA in the 1990s, few consumers owned a cellphone.

“Now, my client is the American consumer,” he said.

In other ways, Wheeler doesn’t fit the picture of a slick lobbyist. He wears sensible V-neck sweaters under woven blazers. Tall and lanky, he walks around downtown in shoes made for comfort even though he has an FCC driver.

As the author of a book on President Abraham Lincoln’s use of the telegraph to win the Civil War, he has evangelized about the importance of history as a guide to the future.

“All of the new networks of history created upheaval as incumbents struggled to adapt while maintaining their position, insurgents fought for their rightful place, and the people had to adapt to a changing world,” he wrote in a blog post at the start of his tenure as the FCC chairman. “It is a historical reality that network change produces tempers that boil, voices that rise and cries of alarm.”

Yet for all his talk, he won’t share specific views on the competitiveness of broadband Internet markets, the basis for the Justice Department and FCC’s review of Comcast’s bid for Time Warner Cable.

“You have to define what is the scope of that competitive market,” Wheeler said in an interview. “Is it just wire? Is it wire plus wireless? Is it just fiber or includes coax? You have to look at all those things, and they change very rapidly.”

But his years fighting for specific industries are hard to forget. Broadcasters, smaller telecom competitors and Silicon Valley firms say they doubt his ability to shift gears at the FCC, where he has promised to put consumers before the interest of big businesses.

“I think we rank pretty low on the list of priorities,” said Rick Kaplan, executive vice president at the National Association of Broadcasters and a former senior wireless adviser at the FCC. “You can’t let any one industry dominate like wireless, because things will always change and it’s not a vote of confidence that he’s pushing forward with more regulations for our industry alone.”

Last month, he passed a rule that bans broadcast TV stations in the same market from sharing advertising staff. He also barred broadcast stations from joining together in negotiations with cable companies over fees to license channels.

Wheeler’s rules are meant to prevent concentration of media in local markets and to protect consumers from TV blackouts when broadcasters and cable firms are unable to reach fee agreements.

Stock prices of big broadcasters fell after Wheeler proposed the idea.

Kaplan said broadcasters think Wheeler is picking winners.

“Candidly, in light of his actions to date,” Kaplan said, “NAB’s members are questioning whether he has been able to put behind him his 20 years working for wireless and cable companies and against America’s broadcasters.”

An early fumble

Wheeler brought his business style to the FCC like an impatient executive eager to check off tasks.

The chairman is typically the first of his staff to arrive, around 7 a.m. He fills his days with in-person meetings with members of Congress and their staff, corporate executives and Wall Street investors and public interest groups. He carves out one hour for reading. Then he leaves around 7 p.m., often for an industry event, but is at home in bed with a history tome on Churchill or American history before 10 p.m.

At the FCC, hundreds of proposals have languished for years, which was why Wheeler said he took up the controversial topic of cellphone use on planes.

Yet with all his executive experience, Wheeler quickly stepped into a major public relations fiasco. As he saw it, the ban on in-flight cellphone use was clearly outdated. Innovations now ensure that phones wouldn’t interfere with cockpit radios. But he missed a most obvious hang-up: No one wants to be stuck sitting near a passenger yapping on his phone.

Consumers decried the proposal. They petitioned the White House. They complained to the FCC. And they launched social media diatribes.

Wheeler did not budge. He insisted that the public didn’t understand that the FCC’s job was to judge the technical specifications of in-flight devices. A Democratic colleague, Commissioner Jessica Rosenworcel, countered, saying the FCC also is obligated to act in the public’s interest.

“We are not the Federal Courtesy Commission,” Wheeler quipped.

Just weeks into his job and scheduled to appear before House lawmakers for a separate hearing, he would surely be grilled on the airplane proposal.

That’s where Wheeler’s deep Washington ties and know-how became his strength, people close to the chairman said.

Working with the Department of Transportation, Wheeler and his staff came up with a work-around: The FCC would go ahead with its technical approval of devices on planes. And the Department of Transportation would propose a separate ban on voice calls.

Wheeler announced the resolution at the House hearing and minutes later, the Transportation chief Anthony Foxx’s statement came out in support of new rules to block voice calls in air.

With that, the consummate Washington operator was off the hook.

Cecilia Kang is a national technology reporter, writing about tech and Internet policies at the Federal Communications Commission and Federal Trade Commission and how regulations affect businesses and consumers.
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