Wheeler Isn't Seen as Lame Duck as He Starts Final Stage of FCC Chairmanship

Wheeler teed up two NPRMs for Thursday’s open meeting, a Further NPRM and tariff order on special access prices, which is controversial (see 1604120045), and an NPRM on the text technology-to-real-time text transition (see 1604080053), which is widely seen as noncontentious. Other big-ticket rulemakings also are pending and attracting industry concern.

Last month, the FCC launched a highly contested NPRM on ISP privacy. Other proceedings, especially one on set-top boxes, are already before the agency. Wheeler has made clear that final rules on high-frequency spectrum are expected this summer. Wheeler said at various forums, including a recent appearance on C-SPAN (see 1604070071), that he expects to complete all of the proceedings. Wheeler was particularly emphatic about special access reform in his remarks April 11 at the Incompas Show (see 1604110065).

Former FCC officials said the reality is Wheeler already has a busy agenda for the remainder of his chairmanship and it will be difficult to finish the items that are already started, let alone launch new initiatives. One big wild card is whether the U.S. Court of Appeals for the D.C. Circuit overturns all or part of the net neutrality rules, the former officials said.

“If the FCC has to reengage on net neutrality in a significant way, it will take countless hours and could take over the agenda for much” of Wheeler’s remaining time as chairman, a former FCC official said. Wheeler will be hard pressed to wrap up ISP privacy rules, let alone all the proceedings open, a second former FCC official said. The former FCC officials said Wheeler could move on some issues more quickly by forcing agreements without going through a rulemaking proceeding. The closer any chairman comes to the end of a term, the less leverage he has to get industry to come to the table, the officials said.

One big wild card is whether Democratic Commissioner Jessica Rosenworcel is confirmed for a second term. Absent that, she would have to leave when the current Congress adjourns "sine die" and former FCC officials said it's unlikely Wheeler would leave in January if that would mean a single Democrat left on the commission, especially if presumptive Democratic nominee Hillary Clinton wins in November.

“I’m certainly not going to put out a challenge to him to create new initiatives,” Bob Quinn, AT&T senior vice president-federal regulatory, told us. “I think we’re getting to the point where he has announced probably most of the initiatives that he’s going to do and the rest of his tenure will be spent trying to finish those initiatives.” Quinn said Wheeler could probably start new initiatives into June, but it’s hard to go from an NPRM to final rules in a matter of months. “I think we’re getting to that point,” he said of Wheeler. “I’m certainly not going to predict that he’s done.”

Wheeler hasn’t been a conventional chairman, said former FCC Commissioner Robert McDowell, now at Wiley Rein. “Conventional wisdom may not apply to how much he might be able to get out the door before a change in administrations,” McDowell said. Also, if Clinton wins the presidential election and Democrats the Senate, “he might have even more time to tie up loose ends, and the political cover to do so, while the new administration installs its appointees,” McDowell said. “Since November of 2013, this commission has proven that it can multitask and be highly productive. So I'd expect a steady stream of new rules gushing out of the commission until Tom turns out the lights in his office for the last time."

The FCC has a big job ahead addressing the changing communications industry, which will continue after Wheeler departs, said former FCC Chairman Reed Hundt. “Seismic, secular trends, coupled with Earth-shaking technological change, have required a major overhaul of the commission’s agenda,” Hundt said. “I think the agency is not nearly done yet and neither Tom Wheeler yet or anyone else has shown flagging spirits or diminished energy.”

Wheeler has a “very clear vision” that broadband is an “innovative platform that erases the boundaries between wireless and wired, where any content that can get onto the platform in any use case is encouraged,” Hundt said. He said likely priorities include addressing mid-band spectrum for 5G, including wrapping up an order on one of his clients, Ligado. “The overhaul of the agenda is continuing and I think it stretches through 2016 on into 2017 and so I reject the premise that there’s any bunch of stuff that has to be finished or that there’s a deadline,” he said. “I think it’s a continuous process.”

“I believe in full speed ahead,” said Michael Copps, former acting FCC chairman, now at Common Cause. “You can produce a baby in nine months … you ought to be able to produce a pretty impressive package of policymaking, too.” Chairmen should lead until their last day in office, he said. “Hopefully, you can get changes done and if not you can tee them up for the next administration … in hopes that you’ll have an enlightened successor,” Copps said.

The alternative is paralysis on policy every presidential election year, Copps said. “We’ve got really important decisions to make across all of these fronts.” Heading Copps’ wish list is FCC action on rules requiring the disclosure of the sponsor of political advertisements under Section 317 of the Communications Act. “The commission already has authority to demand fuller disclosure of whose sponsoring all of these negative and anonymous ads that we’re going to be bombarded with” heading into the election, he said. “We don’t have to wait for a new president to introduce a law or Congress to pass a law.”

Contrary to popular opinion, “presidents serve for four years not three,” said Free Press Policy Director Matt Wood. “The FCC has business to take care of that doesn't actually hinge on electoral fortunes. So while it's quite true that time may be getting short for this chairman, there's certainly a lot of work to do and we're glad that he seems committed to doing it, even if we don't always agree with the outcomes.”

Elephant in the Room

The “elephant in the room” for Wheeler and the FCC is the net neutrality appeal, said Larry Downes of the Georgetown Center for Business and Public Policy. “Many of the chairman’s most contentious proceedings, including privacy, special access, muni broadband, lifeline reform, and rumored action on zero rating or interconnection, all rely in part or entirely on the legality of the Title II order,” he said of the FCC finding Internet a telecom and not an information service. “If the court determines it was procedurally flawed, there won’t be time to get through it again. If the court determines the agency had no authority to reclassify, or at the least not to do so for mobile broadband, the FCC may appeal to the full court or try for the Supreme Court, all of which likely take us past the election.”

The FCC’s “most politicized initiatives” are already facing problems in court, Downes said. “The Department of Justice refused to support the agency in the muni-broadband case, for example, and the commission has been rebuffed twice now in its half-baked effort to reform prison telephone rates.” Downes called the set-top-box NPRM “incomprehensible.” Wheeler “is appropriately getting substantial resistance from Democrats and Republicans, as well as Hollywood and a growing number of technology companies,” he said. “At the very least, he needs to push pause and do actual market analysis and weigh the true costs and benefits, if not the likely reality of yet another failed standards process that would take years and produce nothing but expense and distraction. Better to let that one die or at least go into hibernation.”

Unlike most chairmen, Wheeler has been focused on his legacy from the start, said Adonis Hoffman, chairman of Business in the Public Interest and a former aide to Commissioner Mignon Clyburn. “He is, after all, an historian and big football fan so he probably had the first 20 plays scripted out in advance,” Hoffman said of Wheeler. “He also wanted to distinguish himself from the overly cautious [Julius] Genachowski regime and raise the bar on performance, scheduling and efficiency.”

'Competition, Competition, Competition'

Wheeler found plenty of opposition from Republicans at the FCC and on Capitol Hill, but also established himself as a chairman who can get things done, Hoffman said. "The calendar has caught up with the ambitious chairman, and I suspect he only has time to finish up what is already on the agenda,” Hoffman said. “As much as we all have valued and appreciated the Wheeler approach to ‘competition, competition, competition,’ all good things must come to an end."

Wheeler has been an aggressive chairman who has moved items quickly, said Richard Bennett, network architect and free market blogger. “His leadership style ensures that a pile of unfinished business will be piled up on his desk when the time comes for him to leave the agency,” Bennett said. “If the D.C. Circuit validates his net neutrality approach, he will continue tackling new issues in hopes of expanding his legacy. But if the court rules against him on procedural or other grounds, the entire enterprise collapses like a house of cards.”

“The FCC is entitled to its policy goals, but it is a bit frustrating when outcomes feel predetermined,” said Doug Brake, telecom policy analyst at the Information Technology and Innovation Foundation. Too many big proceedings have had aggressive comment deadlines, he said. “It almost seems the strategy is to overwhelm detractors, rather than have legitimate policy debate to find the best policy.”