New FCC Chairman Tom Wheeler: 7 Things to Know (Analysis)

5:00 AM PST 11/04/2013 by Alex Ben Block
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Tom Wheeler

He takes office as one of the most experienced commission heads in history and has close ties to President Obama. Still, rumors swirl in D.C. about his closed-door meeting with Sen. Ted Cruz.

On Monday in Washington, D.C., Thomas Wheeler will be sworn in as the Federal Communications Commission's 31st chairman since it was created in 1934.

STORY: Senate Confirms Thomas Wheeler As FCC Chairman

As is tradition, Wheeler was confirmed along with a Republican, Michael O'Reilly, a former Senate staffer, bringing the commission to full strength for the first time since Julius Genachowski resigned as chairman in May.

This isn't just another chairman, however. Wheeler arrives with the explicit endorsement of President Obama, who, in announcing the appointment May 1 at the White House, praised Wheeler as someone who has been at the forefront of dramatic changes in the way people communicate.

"He's like the Jim Brown of telecom, or the Bo Jackson of telecom," Obama joked at the ceremony, comparing Wheeler to the two former football stars. "So Tom knows this stuff inside and out."

Here are seven things to know about the new FCC boss:

1. Was Cruz in Control?

Wheeler was finally confirmed last week with support on both sides of the aisle, but only after a face-to-face, closed-door meeting with Sen. Ted Cruz (R-Texas), who famously filibustered against Obamacare and triggered the government shutdown. Cruz, grabbing the spotlight again, held up the appointment for weeks, demanding assurances that the power of the FCC would not be used to force complete transparency over who really paid for political advertising from third-party committees.

Cruz met with Wheeler, but before he made any statement on Monday, Senate Majority Leader Harry Reid (D-Nev.) filed for cloture to force the confirmation vote despite Cruz's objections -- amid rumors that there were enough Republican votes to override Cruz's hold.

When Cruz on Tuesday said he was lifting his hold, the guessing began about whether he had extracted a secret promise from Wheeler or if the first-term senator was just saving face.

"The rumors are flying all over the place, and they are highly contradictory," says Andrew Schwartzman, a D.C. communications lawyer with ties to Democrats. "One theory is the phone company and carriers wanted Wheeler in because of the uncertainty of a temporary chairman. There's only so much [Mignon Clyburn] could do without the mandate. And AT&T is from Texas. One theory is they went to Cruz and said, 'Your presidential campaign is going to be really affected if you sit on this nomination for very long, so do some face-saving and cut it out.' And the alternate view is that [Cruz] extracted some sort of commitment not to do this from Wheeler. And nobody knows."

There was no immediate response to comment from AT&T. Wheeler did not respond to a request for an interview, and Cruz's spokesperson would only provide his written statements.

2. In Sync With the President

At 67 years old, Wheeler will be the oldest person to accept the job of chairman and among the most experienced ever to hold the position.

He also has an unusually close relationship with President Obama, whom he has served as a fundraiser, heading transition teams and working with a special FCC committee created by the last FCC chairman, Julius Genachowski, to advise the president on technology.

Wheeler first became aware of Obama after his wife, Carole Wheeler, read one of Obama's books. They both became early, enthusiastic supporters. For nearly two months, the couple even moved to Iowa (where she is from) leading up to the 2008 Iowa caucuses to head up a field office. Obama took the district on polling day.

Wheeler has also been a bundler for Obama, raising more than $700,000, according to press estimates, to help him get elected twice. His past as a lobbyist and fundraiser has drawn criticism from some opponents, who claim his appointment violates a 2008 Obama campaign promise not to hire lobbyists.

STORY: How Long Will Sen. Ted Cruz Keep The FCC On Hold?

3. Spectrum Auction Will Be Priority One, Two and Three

Congress approved plans to auction off broadcast spectrum for the first time since 2008 by taking some that are underused and urging broadcasters to voluntarily return those which they no longer need in the digital age. The process has been difficult, and the compromises among business, government and public interest advocates have resulted in a hugely complex set of auctions and reverse auctions -- all of which awaits final FCC action on the rules of the process.

It will be voluntary for broadcasters to return spectrum, and Wheeler is the one expected to do the jawboning necessary to make the auctions a success.

That is what will take up much of the chairman's time in the early days of the FCC and may ultimately be what he is remembered for, predicts Dick Wiley, Republican former FCC chairman (1970-77) and now managing partner of the law firm Wiley Rein, an 80-member communications practice.

"The spectrum auction will be No. 1, 2, 3, 4 and 5 on his agenda," predicts Wiley.

4. TV Station Ownership Survey Way Behind Schedule

Rules governing ownership of TV stations are a hotbed of controversy (limits on ownership nationally and in any one market; rules prohibiting ownership of TV stations and a newspaper in the same market, among them).

The immediate problem is that the FCC -- under the 1996 Telecom Act -- must do a review every four years of the rules on media ownership. The current effort, entering its third year, has become hopelessly bogged down in business battles, court challenges and politics. It is so far behind schedule, the FCC is unlikely to compete the work by year's end as required by law.

5. Future of Internet Awaits Appeals Court Ruling

Net neutrality (how the Internet will work as a business in the future) is another hot issue but one that is currently stalled, awaiting a decision by the appeals court (which is likely to come early next year).

Currently, carriers can't discriminate against different types of traffic on their networks. That means Comcast can't slow down your Netflix stream because it eats up too much spectrum.

Major distributors such as Comcast and Verizon have said that they should be free to charge people who use the Internet for things like video streaming more than others because they use more resources. Public interest advocates say that any rules that go beyond equal access to the Web for all at a relatively fixed cost would stifle innovation and give businesses who also distribute broadband too much control.

Rules passed under Genachowski have been challenged in federal district court, and a verdict is expected late this year or early next year. What Wheeler does on the issue will depend on the ruling and how many of the old rules are thrown out.

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6. Wheeler Will Continue Obama's Push for Universal Broadband

Universal broadband service at a very high level has been a basic tenet of the Obama administration's approach under Genachowski. Wheeler is expected to continue the administration's push to expand Internet access for all and upgrade the technology.

However, he may not continue Genachowski's agenda to provide 100 million American households with access to 100 Mbit/s (megbits per second) connections by 2020.

"I don't think they can turn the entire system into a common carrier," says industry consultant Steve Effros, adding: "If the government was to pay for the broadband upgrade, it would cost over $300 billion, and that is not going to happen."

7. Wheeler Known as a Manager Who Can Bring All Sides Together

Genachowski was not known as a strong manager, but rather someone who took a long time making decisions. Wheeler is likely to be the opposite in both areas.

"Tom knows how to work with people," says Effros.

"I think the commission for many years now has tended to break down on partisan lines like everything else in Washington. If there was a criticism of Genachowski, it was that policy objectives got out of control," says Schwartzman, predicting under Wheeler that the FCC will return to looking at "the practical effects on business of what it is doing."

Wheeler is expected to be a chairman who can get the diverse players and his own commission to work together reasonably well.

Adds Effros: "He is an extremely competent, strong manager. People are looking to him to do a better job at what is ultimately the impossible task of making the trains run on time at the FCC."

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