Tom Wheeler believes that television programming is in the midst of a Golden Age.
When asked what shows he watches, the FCC chairman doesn’t hesitate, reeling off “House of Cards,” “True Detective” and “Sherlock,” and he admits to enjoying the fictional Beltway shenanigans on “Scandal” as a guilty pleasure.
In the coming year, Wheeler may well need a bit of such escapism as he navigates the commission through a storm of telecommunications policy battles that are blowing through the corridors of power in Washington, D.C. That is particularly the case with net neutrality, as he has defended his latest proposal for rules of the road for the Internet as tough and enforceable amid harsh criticism from public interest advocates that they are too weak.
That’s not the only controversy. From pulling off spectrum auctions — so controversial to so many — to being the crucial vote on Comcast’s proposed merger with Time Warner Cable, the FCC is in the eye of a hurricane fueled by moneyed interests with often conflicting agendas. There haven’t been as many substantial media-biz policy and regulatory issues brewing at once since the pitched battles of the early 1990s that led to the 1996 Telecommunications Act.
It will fall to Wheeler to execute the Obama administration’s vision for the digital future. He’ll be pressed into serving as a diplomat between warring business sectors and as a decisive leader on issues where the commission won’t encounter many shades of gray.
In his six months in office to date, Wheeler has shown that he’s willing to take a stand to defend his position. At 68, the Washington vet who was dubbed “the Bo Jackson of telecom” by President Obama has the resume to back his moves with decades of experience.
“In the midst of technological change, there are always monsters under the bed,” Wheeler says. “The job of the commission today (is to) ask, ‘Are the monsters real?’ And I can assure (you) that is the course we are on.”
In Wheeler’s view, as television programming enjoys a renaissance, distribution is going through nothing short of the “fourth great network revolution,” as he defines it, after the invention of the printing press, the introduction of the railroad and the laying out of telegraph wires. As such, he’s landed at the FCC at an inflection point, where his leadership could chart the course of the regulatory landscape for years to come.
In a May meeting, Wheeler and the commission will decide the guidelines for carrying out unprecedented incentive auctions, in which broadcasters are being urged to consider giving up spectrum in return for sharing in the proceeds from the sale of their airwaves to the highest-bidding wireless firms. In that same session, the panel will attempt to move forward with rules of the road for Internet access that can at once withstand a court challenge and yet be robust enough to prevent the Web from becoming a vast domain of pay video tiers. He faces skepticism that the current proposal can do that.
Perhaps no bigger test, however, is the decision Wheeler and the Democratic majority of the FCC must make over the proposed merger of Comcast and Time Warner Cable. The chairman’s mantra for the commission is, “competition, competition, competition,” and the mammoth transaction may show how the word is defined for the digital age. Comcast argues that the merger of the nation’s two biggest cable companies will leave consumers with no fewer choices in any market, while public interest groups are sounding the alarm that the combined entity would hold too great a concentration of power.
In the eyes of orgs like the Writers Guild of America, lack of tough net neutrality rules and the potential for a mammoth Comcast are corrosive ingredients that could tarnish television’s new golden age, in which content creators enjoy a plethora of new opportunities from the rise of Internet video.
The stakes are great. “What is decided in the months ahead will (determine) how the Internet evolves over many, many years,” former FCC commissioner Michael Copps says.
Wheeler won’t be pinned down about his position on the merger or on a host of other issues. But he’s already garnered attention for his frankness and, as evidenced in one recent instance, his willingness to take on a fight.
Case in point: Last month, the FCC voted 3-2 to place significant restrictions on broadcast stations from entering into so-called joint-sales agreements, in which two outlets in the same market form an alliance to sell advertising time. Wheeler, bolstered by a report from the Justice Dept., contended that JSAs were merely an end-run by big station groups to circumvent existing rules that curb media-ownership concentration. Broadcasters countered that the FCC was targeting them for tighter regulation on the local and regional level even as it considers a nationwide merger by the two largest cable operators.
The proposal triggered weeks of fierce lobbying on the part of the National Assn. of Broadcasters, which argued last March that the shared-sales pacts allowed many stations to boost local programming and diversity. But Wheeler and the two other Democratic commissioners, Mignon Clyburn and Jessica Rosenworcel, didn’t back down.
Ten days later, on April 8, broadcasters pounced at their annual convention in Las Vegas. Gordon Smith, president of NAB, blasted the FCC for imposing rules “as if the world is stuck in the 1970s.” Media mogul Haim Saban labeled the agency the “Friendly Cable Commission,” a reference both to Wheeler’s former tenure as the top lobbyist for the cable industry, and to his targeting of perceived collusion by broadcasters, while not addressing combined efforts by multichannel providers.
Some stations even griped that Wheeler might be singling them out in an effort to compel participation in the incentive auction. When a reporter relayed that notion, the FCC topper dismissed it as “baloney.”
Certainly Wheeler’s appointment to the FCC by Obama, for whom he campaigned and raised money, is a bit unusual, in that he is not a lawyer, like almost all of his predecessors. Wheeler has spent a big chunk of his career as a lobbyist, leading the National Cable Television Assn. from 1976 to 1984, and later the Cellular Telecommunications & Internet Assn. from 1992 to 2004. His tenure earned him induction into the Hall of Fame for the cable and wireless industries.
Raised in Columbus, Ohio, Wheeler went to Ohio State U., and spent part of his time as a booker for campus entertainment, becoming involved in a local club called the Bistro. It was there he met the First Edition, whose lead singer was a pre-country Kenny Rogers. He traveled with the group as a gofer for an appearance on “The Ed Sullivan Show” in 1968.
But even as First Edition’s managers encouraged him to get into the business side of showbiz, Wheeler was intrigued more by politics than music. A summer internship in Congress helped lead him to a career in D.C.
When his nomination was announced in May, some public interest group leaders expressed doubt that a former industry advocate would have the backbone to stand up to those who once employed him, or even to do what his predecessor, Julius Genachowski, did — reject a proposed telecommunications merger (in Genachowski’s case, AT&T and T-Mobile). But others said that as a Washington insider, Wheeler had the wisdom and savvy to spot the brinkmanship that often goes on between advocates for industry and government policymakers. When the new chairman appointed Gigi Sohn, the longtime leader of Public Knowledge, as a senior adviser, consumer orgs applauded.
Wheeler has at least one well-placed supporter in Congress, Rep. Anna Eshoo, D-Calif., ranking member of the House subcommittee on communications and technology, who calls the chairman a “real grown-up.” “He has industry experience and policy know-how. Those are a set of bookends you cannot put a price tag on,” she says, adding that Wheeler is unafraid to challenge the status quo, and exhibits a professional confidence without being arrogant.
Rep. Greg Walden (R-Ore.), chairman of the subcommittee, says that Wheeler is “as confident about his vision and agenda as he is passionate.” But reflecting the view of many congressional Republicans, he expressed concerns of regulatory overreach.
“Whether it is with net neutrality regulations — which are a solution in search of a problem — or proposed limits on the upcoming spectrum incentive auction — which if mishandled could upend the auction — the chairman is clearly using his enormous power to quickly move his policies forward,” Walden said in a statement.
Wheeler calls competition better than regulation, but adds that “where there isn’t competition, regulation needs to stand in.”
Writing in November in a short e-book that laid out a narrative for his tenure, and placed the FCC of today in historical context, Wheeler stated: “The real-world business environment inherently attracts anticompetitive antibodies seeking to immunize markets from its effects.” He has added that he would not hesitate to oppose attempts to limit competition.
The day after Smith issued his blistering critique of the FCC, it was Wheeler’s turn to address the broadcasters, which he did in a packed ballroom at LVH — Las Vegas Hotel & Casino. “Trust me, I get the skepticism,” he told the station executives gathered, before stepping out from behind the podium to riff on a prepared text, at first trying to emphasize a few of his broadcast credentials, including his roles as venture capitalist, most recently for Core Capital Partners, where he invested in mobile digital TV; and the fact that his wife, Carol, once helped lead government relations efforts for the NAB.
Yet his message was also one of urgency, telling broadcasters it was time to get with the future and realize “your content represents far more than the potential for retransmission fees.” As author of several books of history, including one, “Mr. Lincoln’s T-Mails,” which explains how President Lincoln used the telegraph, Wheeler used the past to inform the present. The canal companies of the early 19th century, he said, had failed to define themselves beyond being an industry of barges, and subsequently couldn’t withstand competition from their transportation brethren, the railroads.
“Broadcast licensees are no more in the television business than a canal company was in the barge business,” he added. “Your business horizons are greater than your current product.”
Such blunt talk is a refreshing departure from the usual carefully crafted politesse of presidential appointees. Wheeler went further in an interview with Variety after his NAB speech.
‘I come to this as an entrepreneur,” he said. “I see these things happening and I say, ‘My God, what an opportunity this incentive auction represents.’ If you define yourselves as being in television, that is inherently limiting. If you define yourself as an information provider in a digital world, that is a whole new future.”
At least as far as telecommunications is concerned, in steering and shaping the debates to come, and in defining new concepts, Wheeler may wind up being this generation’s Webster.