One Last Growl for F.C.C.’s Sharp-Toothed Watchdog

One Last Growl for F.C.C.’s Sharp-Toothed Watchdog
By CECILIA KANG
Oct 25 2016
http://www.nytimes.com/2016/10/26/technology/chief-who-sharpened-fccs-teeth-faces-final-hurdles.html

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, Mr. Wheeler quashed the idea that he would look favorably on his past employers. In a meeting at the F.C.C. 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,” Mr. Wheeler said, according to one lobbyist at the gathering, which was confirmed by the F.C.C. It turned out that the chairman had big regulations in mind for those industries instead.

Now, as Mr. Wheeler enters his last few months as head of the F.C.C. 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 that starts on Thursday, including voting on a proposal for broadband privacy protections.

Mr. Wheeler’s last act as chairman could be overseeing the review of AT&T’s $85 billion bid for Time Warner, a mega-media 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 F.C.C. review by selling off the small number of broadcast television assets owned by Time Warner.

Yet some say that even if Mr. 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 F.C.C., Mr. 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 neutralityrules, which ensure that web users will get to any legal web content without paying extra tolls to internet service providers. Mr. 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 Mr. 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 Mr. Wheeler an “inspired” choice. But in an interview last month on C-Span, Mr. 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 Mr. Wheeler had injected the government too deeply into the free market.

The F.C.C. has “overreached,” Barry Diller, chairman of the internet holding company IAC/InterActiveCorp, said at a conference this month. Mr. Diller supported the net neutrality rules passed last year but said that Mr. Wheeler had been “anti-cable” and that reclassification of broadband was a “crazy overreach.”

Mr. 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.

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