Enlarge / FCC Chairman Tom Wheeler in his Washington, DC, office in February 2016.Jon Brodkin
reader comments 13
Share this story
Donald Trump’s election has put Republicans in position to eliminate net neutrality rules and gut the Federal Communications Commission’s authority to regulate broadband providers.
But Trump voters need the consumer protections provided by the FCC as much or more than anyone, said Tom Wheeler, whose resignation as FCC chairman takes effect today. Wheeler, a Democrat appointed to the FCC by President Barack Obama, isn’t happy about Trump’s victory.
But in making the case for continued net neutrality rules and consumer protections, he pointed out that Trump voters in rural areas are vulnerable to the actions of major broadband providers.
“The Trump administration campaigned that they are the voice of the forgotten,” Wheeler said in a phone interview with Ars yesterday. “Well you know, the half-dozen major carriers [lobbying against FCC regulations] are hardly forgotten.”
The people who are forgotten are the “two-thirds of consumers in America who have one or fewer broadband choices,” Wheeler said. “Where are those choices most limited? In the areas where Donald Trump got the strongest response, in rural areas, outside of major cities.
If indeed this is an administration that is speaking for those that feel disenfranchised, that representation has to start with saying, ‘we need to make sure you have a fast, fair, and open Internet because otherwise you will not be able to connect to the 21st century.'”
Wheeler brought up Trump voters again when asked about his own Internet service. Wheeler once noted that he is “a happy Comcast subscriber” but has generally avoided describing his own experiences as an Internet customer. “I’m a privileged consumer, you know? I live in the Georgetown section of Washington, DC.
The problem is what do you do about the non-privileged?” Wheeler said. “Let’s talk about Trump voters.
The Trump voters are people who don’t have choices in Internet providers, the Trump voters are folks that don’t have the resources to pay the ever escalating bills for either cable or broadband.”
Wheeler: Gutting consumer protection is “tragic”
But so far, signs point to the Trump-era FCC dismantling consumer protections opposed by Internet service providers. Republicans at the FCC and Congress say they intend to repeal or replace net neutrality rules.
Trump’s transition team is also reportedly pushing a proposal to strip the Federal Communications Commission of its role in overseeing competition and consumer protection and to move those functions to the Federal Trade Commission.
Such a major change would require Congressional approval and thus may not happen, but it’s worrying to Wheeler nonetheless.
“I think it would be tragic,” Wheeler said of taking away the FCC’s competition and consumer protection authority. “This is tragic for the American consumer and the competitive marketplace.”
Upon my @FCC departure, I would like to sign off with 3 words of wisdom that guided me well: competition, competition, competition
— Tom Wheeler (@TomWheelerFCC) January 20, 2017
The FTC is “a great agency” that does excellent work but has more narrow authority over communications providers than the FCC, Wheeler said.
The FTC “has enforcement authority, not rulemaking authority,” he said. “They can say, ‘we think this is an unfair and deceptive act or practice,’ but they can’t say, ‘here’s how networks have to operate so they’re fast, fair, and open.'”
The only companies that would benefit from a weaker FCC and the repeal of net neutrality are the major ISPs, Wheeler said. (That would include Comcast, Charter, AT&T, Verizon, T-Mobile USA, and Sprint.)
“We’re talking about a handful of companies who are lobbying for their own self-interest, and trying to say to the new commission, ‘you need to listen to us, not to consumers, not to a competitive marketplace, not to those who could be affected by a network where we act as gatekeepers,'” Wheeler said. “And if they are successful, that will put in jeopardy tens of thousands of other companies that rely on open networks and millions of consumers.”
FTC could be powerless to stop ISP abuses
As evidence of the dangers of shifting FCC functions to the FTC, Wheeler pointed to a recent US Court of Appeals for the Ninth Circuit decision that could dramatically limit the FTC’s ability to regulate ISPs. The FTC is statutorily forbidden from regulating “common carriers,” a designation the FCC has long applied to phone companies like AT&T and Verizon and more recently to all ISPs.
The FTC attempted to punish AT&T for throttling the Internet connections of customers with unlimited data plans before the FCC reclassified broadband as a common carrier service.
The FTC assumed it could punish AT&T for activity that at the time was unrelated to its common carrier services, but judges ruled in favor of AT&T, saying that the carrier is exempt from FTC oversight entirely.
ISPs have been pushing the idea of moving FCC authority to the FTC for years, Wheeler said. “The surprise is that they continue with this mantra despite the fact that AT&T sued the FTC alleging that they did not have authority over common carriers,” he said.
The idea of removing FCC authority has also been pushed by the conservative American Enterprise Institute (AEI), “and lo and behold AEI comes in as the principal force in the Trump transition,” Wheeler said.
Three of the advisors Trump appointed to make recommendations about the FCC transition are affiliated with the AEI, and one of them has proposed eliminating most of the FCC.
ISPs, competition, and Google Fiber
Under Wheeler, the FCC pushed for more competition in part by requiring further broadband construction as a condition for granting the AT&T/DirecTV and Charter/Time Warner Cable mergers.
In May 2015, Wheeler challenged cable companies to compete directly against each other.
“I thought [calling for competition] was a conservative message,” Wheeler said. “I thought Republicans would be responsive to the idea that a competitive economy is the basic bulwark of how the American economy works and that there ought to be competitive alternatives.
I went to the cable association and I said, ‘hey, the costs of building are going down, you guys have to start thinking about competing with each other and not just having an exclusive franchise.'”
Cable companies have continued avoiding each other’s territory for the most part, but the emergence of Google Fiber was important for boosting competition, Wheeler said.
Though Google Fiber recently downsized, Wheeler said, “I’m thrilled at what Google Fiber did because every time they built something, wasn’t it amazing that the incumbent suddenly decided that it was time for them to build fast fiber as well?”
The FCC tried to encourage municipal broadband by preempting state laws that limit the rights of cities and towns to offer Internet service, but it lost in court.
Going forward, Wheeler said local policies should encourage competition by providing easier access to poles, conduits, and rights-of-way. He’d also like to see new ISPs get more affordable access to video programming so they can offer competitive TV-and-Internet bundles.
Chairman leaves unfinished business
Wheeler regrets not finishing certain initiatives, such as a rulemaking that would have required pay-TV operators to make free TV applications, giving customers an option besides rented set-top boxes.
Also unfinished was a proposed $100 million fine of AT&T for allegedly misleading customers about unlimited data throttling, as well as price cap decreases for business data services.
Wheeler told Ars that he didn’t have enough Democratic votes to push final versions of those items through.
Though Democrats had a 3-2 majority led by Wheeler, Democrat Jessica Rosenworcel didn’t support a final version of the set-top box rules because of concerns over how cable company applications would be licensed to third-party device makers.
“We lost. We got outmuscled” on the cable app rules, Wheeler said. “I call it Cablewood: it’s cable and Hollywood in this incestuous relationship… they did an excellent job lobbying the issue both here at the commission and in the Congress.”
Regarding that $100 million fine, the FCC never was able to negotiate a settlement with AT&T.
Given that, the FCC could have issued a final ruling requiring AT&T to pay the fine, waited for AT&T to sue, and then let a court decide.
But Wheeler said he didn’t have enough votes to support that approach, either.
Wheeler also ran out of time while challenging major wireless carriers over paid data cap exemptions. Just last week, Wheeler accused AT&T and Verizon Wireless of violating net neutrality rules by letting their own video stream without counting against mobile data caps while charging other video providers for the same data cap exemptions (aka “zero-rating”). Wheeler’s statement and a related report by FCC staff won’t have any impact in the short term because the FCC’s Republicans vowed to ignore the findings and they want to overturn the net neutrality rules altogether.
Wheeler said the FCC’s net neutrality rules didn’t ban zero-rating entirely because free data services can benefit consumers. “Free is good, OK?” he said. “But the problem is that when a carrier decides to favor its non-carrier activity by placing that for free on the network, but anybody who competes with that non-carrier activity has to pay full freight, that is a blatantly anti-competitive activity.”
This is the sort of behavior that shows “why you have to have an open Internet,” Wheeler said. “Unfortunately, we’re not going to be around to do something about it, so we thought it was important to make sure the record was clear.”
Wheeler won’t be a lobbyist again
Wheeler, a former lobbyist for the cable and wireless phone industries, surprised some observers by pushing for more extensive regulation of ISPs during his 39 months as chairman.
As he leaves the FCC, he said, “I’m proud of what we accomplished.
I wish there were other circumstances but the American people had other thoughts about that and I respect that decision.”
When asked if he might become a lobbyist again, Wheeler answered with an emphatic “no.” For now, Wheeler is joining the Aspen Institute as a senior fellow, becoming the sixth consecutive FCC chairman to do so upon leaving the commission.
The nonpartisan policy forum has become “the home for recovering chairmen,” Wheeler joked.
“What it allows you to do is, while you are chairman, not worry about what you do next, and therefore not have to lose focus, not have to start recusing yourself” from matters that might affect a potential future employer, Wheeler said.
That’ll be a temporary job for the 70-year-old Wheeler, who said he plans to “decompress” and spend more time with his wife. “I hope to write and teach and maybe do some consulting, but we’ll just see how things develop,” he said. “I don’t think I’m going to have a ‘job’ job, if you will.”