As Tom Wheeler enters his last few months as head of the Federal Communications Commission during the Obama administration, he has turned early supporters into foes and invited an expensive lobbying battle that may stymie a last-ditch pursuit of regulations.
WASHINGTON — When President Obama picked Tom Wheeler, a former cable and wireless lobbyist, to head the Federal Communications Commission in 2013, AT&T celebrated the pick as “inspired” and the cable industry said it was “exceptional.”
But after days on the job, Wheeler quashed the idea that he would look favorably on his past employers. In a meeting at the FCC with the heads of telecommunications, cable and technology lobbying groups, he held up a newspaper article quoting industry executives publicly calling for weaker oversight from the regulatory agency.
“This is a rough way to begin a relationship,” Wheeler said, according to one lobbyist at the gathering, which was confirmed by the FCC. It turned out that the chairman had big regulations in mind for those industries instead.
Education: Ohio State University
Career: Headed the National Cable Television Association, 1979 to 1984; president and CEO of the Cellular Telecommunications & Internet Association, 1999-2004; managing director of Core Capital Partners, a venture-capital firm investing in early-stage internet protocol-based companies.
Annual salary: $165,300
Source: NYT, FCC, FederalPay.org
Now, as Wheeler enters his last few months as head of the FCC during the Obama administration — the next president is expected to name a new chairman — he has turned early supporters into foes and invited an expensive lobbying battle that may stymie a last-ditch pursuit of regulations.
Wheeler’s last act as chairman could be overseeing the review of AT&T’s $85 billion bid for Time Warner, a megamedia deal that has already elicited protests from some politicians and consumer-advocacy groups. AT&T and Time Warner will most likely try to avoid an FCC review by selling off the small number of broadcast television assets owned by Time Warner.
Yet some say that even if Wheeler does not directly review the deal, his regulations have created new restrictions for AT&T and other broadband companies at a time when they are trying to find new growth beyond their internet businesses.
In only three years at the helm of the FCC, Wheeler has redrawn the regulatory landscape for internet companies and telecom businesses by making the federal government a stronger watchdog. He declared broadband an essential communications platform as important as the phone — and that put internet service providers like AT&T under rigorous government oversight for the first time.
The reclassification of broadband as something akin to a utility came as part of the February 2015 passage of net-neutrality rules, which ensure that web users will get to any legal web content without paying extra tolls to internet service providers. Wheeler also opposed Comcast’s merger with Time Warner Cable to protect streaming video competitors and created subsidies for low-income homes to get broadband.
Now nearly all of these moves have created more challenges for cable and telecom companies such as AT&T. Many of those companies say Wheeler’s regulations have favored tech companies like Netflix and Google over them.
At AT&T, James W. Cicconi, the recently retired head of lobbying, once called Wheeler an “inspired” choice. But in an interview last month on C-SPAN, Cicconi said AT&T was investing more in Mexico right now because “it is, frankly, a better regulatory environment” than in the United States.
Even some tech companies that have benefited from the new regulations said Wheeler injected the government too deeply into the free market.
The FCC has “overreached,” Barry Diller, chairman of the internet holding company IAC/InterActiveCorp, said at a conference this month. Diller supported the net-neutrality rules passed last year but said that Wheeler had been “anti-cable” and that reclassification of broadband was a “crazy overreach.”
Wheeler, 70, said consumers needed greater government protection as the nation makes a transition to smartphones and streaming services from landline phones and television. His job, he has said, is to encourage nascent technologies and protect them from powerful incumbents that may want to block their success.
“Institutions such as the FCC are the point where the diverse interests of consumers and business converge in an effort to decide how society will deal with those changes,” he said in a statement.
Wheeler declined to comment on AT&T’s proposed purchase of Time Warner. AT&T declined to comment on the FCC, and Time Warner did not immediately respond to a request for comment.
Aides and friends said Wheeler’s actions in tightening the regulatory landscape around cable and telecom firms were not surprising. He has always fought incumbent communications providers, they said: first against broadcasters as the head of the National Cable and Telecommunications Association from 1979-1984; and then against telephone companies as the head of CTIA-The Wireless Association from 1992-2004.
By the time he was a venture capitalist in the mid-2000s, cable and wireless were the powerful incumbents, and he saw their grip on access to the internet as a threat to the web.
At the FCC, Wheeler became even more strong-handed. He was publicly criticized by the late-night television host John Oliver, and protesters sat in the driveway at his home, after he released weaker early versions of net-neutrality rules. The FCC was flooded with millions of comments protesting the rules.
Obama, who in late 2014 posted a video message in favor of treating broadband more like a utility, was crucial to the change. Obama weighed in again early this year to support rules on set-top boxes that would require cable and satellite companies to share programming with third-party device-makers and free consumers from cable box rentals.
Wheeler’s friendship with the president began when Obama was a junior senator in 2006 and called him to learn more about tech and telecom issues. Wheeler and his wife moved temporarily to Iowa in 2007 to campaign for Obama, and the couple became fundraisers, collecting $700,000 for the candidate. The relationship led Wheeler into government.
Now some lawmakers say Obama’s comments on FCC issues are examples of coordination between the White House and an independent agency. Republican leaders in Congress have called for investigations, threatened to take away FCC funding and urged laws to limit the agency’s abilities.
The most effusive supporters of Wheeler are now the most bitter.
Michael Powell, president of the National Cable and Telecommunications Association, who at one point called Wheeler an “exceptional” choice as FCC chairman, said in a speech in May that the cable and telecom industry had faced a “relentless regulatory assault.” Powell, whose group was recently renamed NCTA-The Internet & Television Association, declined to comment further.
Yet while Wheeler has lost early supporters, he has won over some former critics.
“This is a guy I fought in the 1980s and 1990s who was Mr. Deregulator,” said Jeffrey Chester, executive director of the Center for Digital Democracy, an advocacy group instrumental in child online privacy rules. “Talk about a conversion.”