Much of Wheeler’s Agenda as Chairman Seen as Preprogrammed Before His Arrival

Several issues left over from the Genachowski years will likely dominate Wheeler’s first year, starting with the incentive auction of broadcast TV spectrum, as well as the AWS-3 auction, which involves government spectrum that has to be cleared and its own layers of complexity. E-rate expansion, an administration priority, looks increasingly like a big time time drain for Wheeler, especially since Republicans are already lining up to oppose any expansion of USF, industry and agency officials said.

Net neutrality round two looms, with many observers of last week’s oral argument at the U.S. Court of Appeals for the D.C. Circuit expecting part of the December 2010 order to at least be sent back to the FCC for further clarification. The Internet Protocol transition is just getting under way. Media ownership and the UHF discount dockets also are ripe for action. Industry sources said several big transactions may also be in the offing, which also could consume agency time.

Cable industry insiders are conflicted over how much Wheeler will delve into the issue of net neutrality. “No matter what happens from Verizon, I don’t think he wants to make net neutrality a major issue,” said a cable attorney unconnected with that case, calling the issue a poor use of political capital. “One way or another he’s gonna have to deal with it,” said Fletcher Heald cable attorney Paul Feldman, who observed last Monday’s oral argument at the D.C. Circuit. No matter the net neutrality case’s outcome, constituencies on either side are likely to put pressure on the FCC chairman, said Feldman.

Genachowski had almost four years as chairman. Wheeler will have about three, assuming he is confirmed this fall, with a presidential election in November 2016. In contrast, Kevin Martin, who was already a commissioner, was designated chairman March 16, 2005, less than two months into George W. Bush’s second term as president. William Kennard, Bill Clinton’s second FCC chairman, also didn’t get started until November 1997, almost a year into Clinton’s second term, though he was already in the building as general counsel to former Chairman Reed Hundt. Hundt stayed until May 1997 to wrap up the original E-rate order.

Wheeler’s main role at the Genachowski FCC was as chairman of the Technological Advisory Council, though he was also a big player on the transition team that put together a tentative agenda for the Obama FCC.

"Julius came into a pretty wide-open, set your agenda atmosphere,” said a former FCC legal adviser. “Wheeler has an overflowing plate of things that he just has to do, many of which are big, many of which are controversial. And he’s got limited time to accomplish them.”

"Every new chairman has the challenge of newly stating the purpose of the FCC,” said Hundt in an interview. “This particular chairman has to do that in the face of AT&T very bluntly, brutally telling him that the FCC should accept a shrunken role on the implicit ground that it isn’t good enough as an agency to play the role that it has been playing. In addition, Verizon has gone to the D.C. Circuit to say that the FCC shouldn’t be allowed to be much of a regulator for the common media of communications, namely the Internet. Prospective Chairman Wheeler’s challenge is very clearly stated by these companies.”

"No one at AT&T is attacking the FCC, it’s a good agency staffed with dedicated people,” said Senior Vice President-External and Legislative Affairs Jim Cicconi in an emailed response to Hundt’s words, which he called “hyperbole” and “badly out of step” with Congress, the law, the White House and the public. “Any agency of government is challenged to keep up with the pace of change and to periodically modernize its approach. Our point is that the FCC needs to do the same."

The FCC has achieved the “three Cs” of regulation in that its policies have been cohesive, coherent and comprehensive, Hundt said. “That’s precisely why the big companies want to dismember it,” he said. “The American regulatory system for communications is the envy of the world. Every other country wishes they had a similarly consolidated and coherent and cohesive regulatory agency."

"Tom is coming to the chairmanship with the bulk of big-ticket items already preprogrammed for him,” said former FCC Commissioner Robert McDowell. “Effectively 36 months won’t give him much wiggle room to pivot onto other projects, and, additionally, the FCC’s bandwidth will be consumed and limited. So if he has other big plans, those could be tempered by a lack of time and resources.”

Wheeler faces an uphill fight, especially to the extent he takes on the phaseout of the plain old telephone system (POTS), said network architect and consultant Richard Bennett. “Genachowski started a lot more initiatives than he finished, so Wheeler would be hard pressed to clear the docket even if he didn’t have any ideas of his own, and he’s got plenty,” Bennett said. “The phase out of POTS is an enormous, historic challenge that’s going to be harder than it should be because there are so many vested interests in POTS both on the business side and the regulator … side.” POTS is widely seen as “obsolete and unsustainable,” Bennett said. “But every time a panel of small carriers is assembled in D.C., they paint POTS as the greatest arrow in the whole technology quiver,” he said. “Going from POTS to broadband, at any speed, is an enormous step up. It would be a shame to try to preserve a regulatory system that hasn’t made sense since the first DSL connection was lit up, in lieu of making the most of the diverse mobile and stationary Internet ecosystem that’s evolving so rapidly. Understanding this transition requires the kind of big-picture thinking that D.C. doesn’t do well.”

Wheeler is “disciplined and persistent,” and that will help him as he takes over at the FCC, said a former FCC eighth-floor adviser. “It’s going to be difficult because the Republicans will not be able to resist fighting back this E-rate proposal, even though it makes some sense,” the lawyer said. “They're going to try to characterize it as another Obama tax or another way of Obama extracting money to throw at projects that really aren’t very helpful.” But Wheeler will have to push E-rate expansion forward since it is an administration priority, the former official said.

Wheeler’s previous success and perspective will allow him to make the most of even a slightly shorter chairmanship, said former FCC Chairman Richard Wiley, of law firm Wiley Rein. “He’s coming to the job later in life, after a very successful career.” Wheeler’s perspective is likely to make him a comparatively active chairman, Wiley said. While he agreed Wheeler’s FCC will be consumed by the incentive auction, Wiley said the commission will likely also resolve the ownership proceeding, the long-delayed 2010 quadrennial review. “It’s got to be attended to,” said Wiley.

While it’s not clear what position Wheeler will take on every issue, public interest lawyer Andrew Schwartzman said Wheeler is a “terrific manager” and will run a very active and “efficient” commission. “I look forward to the commission accomplishing a great deal, cutting backlog,” said Schwartzman. He also said Wheeler would address the commission’s ownership proceeding.

Wheeler may have only three years, but the U.S. “basically invented” the atom bomb in less time than that, said Robert Atkinson, president of the Information Technology and Innovation Foundation. One advantage Wheeler has is that the chairmanship of the FCC may be his last job, Atkinson said. “He can afford to essentially go for broke and really make a legacy,” Atkinson said. “He may have a little less time, but he maybe has a little more willingness to knock over a few sacred cows.” Wheeler also has the advantage of knowing many of the issues well before he gets to the FCC, said Atkinson. “He’s been doing this for a long, long time and he knows all the players and he knows their strengths and their weaknesses and their foibles,” Atkinson said. “He knows where the bodies are buried. He knows the challenges within the agency.”

"It is a challenge for every chair to fit an ambitious agenda into a very limited time,” said Public Knowledge Senior Vice President Harold Feld. “In addition to everything else, you need to factor in unexpected emergencies, unanticipated mega-mergers, and -- to make things worse -- the possibility of government shutdowns and resource shortages from the sequester. Every successful chair learns to prioritize and to delegate. You have to be flexible and opportunistic in grabbing chances to move things forward. If you spend endless amounts of time on ‘consensus building,’ you can’t expect to get much done.” Feld also said Wheeler is well-suited to the job: “Wheeler also comes in with several advantages. He knows the issues and the agency. He has worked with at least some staff through his time on the TAC. He starts with a fair amount of ‘political capital’ from his personal relationships.”

"I really don’t agree with the suggestion that Tom Wheeler’s time as chairman will be ‘limited,'” said Free State Foundation President Randolph May. “While it may be true that, for a variety of reasons, President Obama will find himself a ‘lame duck’ in fairly short order, I don’t think the same dynamic is at work with regard to the head of a multimember agency like the FCC. My impression is that Wheeler will turn out to be an effective leader, and his leadership skills will have a lot to do with how quickly -- or not -- he can get things accomplished. To my mind, a lot of the things the commission does could be done more expeditiously and efficiently if a different agency mindset is established. … I might not agree with some, or possibly much, of what Wheeler wants to do. I just think it is a mistake to suggest he will quickly become a lame duck before he finishes hanging his pictures on the wall.”

Schwartzman is not sure that Wheeler will have a shorter term than other FCC chairs. Because Wheeler has been successful in the past and is politically well-connected, he would likely continue to serve if a Democrat takes the White House in 2016, Schwartzman said. “I would not assume Wheeler would have to or want to leave.” Even if a Democratic president selects a new chair, the replacement wouldn’t likely be confirmed until at best May or June after the election, said Schwartzman. “It’s not set in stone.”