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Former FCC Chair Warns of Trump Team Plan to ‘Modernize’ FCC

Tom Wheeler, the recently departed chairman of the FCC, took aim at an idea to streamline the agency, saying that it was a “fraud” to say that it was “modernizing” the agency and suggested that it is really a way for major internet service providers to escape substantive oversight.

Speaking on Tuesday at the Berkman Klein Center for Internet & Society at Harvard University, Wheeler was referring to reports that the Trump transition team was looking to restructure the FCC and move functions like competition and consumer protection to other federal agencies like the Federal Trade Commission.

“It makes no sense,” Wheeler said at the event, moderated by Susan Crawford. “We are talking about 1/6 of the economy, but more importantly, we are talking about the networks that connect 6/6 of the economy.”

Wheeler pointed to a 2013 Washington Post story in which lobbyists for cable and telecom firms were quoted as saying that they supported the idea of transferring key FCC functions to the FTC.

“It is not surprising why they would want to transfer there. The FTC doesn’t have rule-making authority. They have enforcement authority,” he said.

Instead of establishing rules of the road for broadband, he said, the FTC would instead be limited to adjudicating whether a practice is “unfair and deceptive.”

“The FTC has to worry about everything from computer chips to bleach labeling,” Wheeler said. “Of course you would want to be lost in the morass.”

On Monday, President Trump named Ajit Pai, a commissioner since 2012, as the next FCC chair. Pai has been a supporter of deregulation and has been highly critical of one of Wheeler’s signature achievements, net neutrality. In 2015, the FCC ruled 3-2 to adopt rules that banned internet providers from blocking or degrading content, or from selling speedier access to the consumer. To establish solid legal footing, the FCC reclassified internet service as a common carrier, and their action has so far held up in court.

It’s still unclear if Pai will move to repeal the net neutrality rules. Sen. John Thune (R-S.D.), the chairman of the Senate Commerce Committee, said that he would pursue net neutrality legislation, but public interest groups have their doubts that any new bill would have the teeth of the current FCC regulations now in place.

Wheeler made light of arguments that the current FCC rules will discourage investment. He noted that he made the same argument when he led industry groups. He served as president of the National Cable and Telecommunications Association from 1976 to 1984, and the Cellular Telecommunications and Internet Association from 1992 to 2004.

“It is kind of the first line of defense for everybody, and it is balderdash,” he said.

He noted that broadband service is a “high margin” operation, and that the “reason you invest is to get a return.”

Since the net neutrality rules were put in place, Wheeler said, “broadband investment is up, fiber connections are up, investment in companies that use broadband are up, revenues for broadband providers are up, because people are using it more.”

Wheeler’s tenure was marked not just by net neutrality, but other contentious moves, such as the FCC’s adoption of privacy rules for Internet providers, and its efforts to supersede state laws than ban cities from offering their own broadband service.

He said that he was “worried about what the future looks like.”

“How we connect defines who we are both commercially and culturally,” he said, adding that it was an “existential question” as to whether four companies will control the broadband marketplace.

“What is amazing is how the commission and seemingly the Congress want to do things on behalf of these four companies that will have an impact on many other companies and tens of millions of other consumers,” he said.

Wheeler himself moved to a more robust approach to net neutrality after the FCC was flooded by more than 2.7 million comments in 2014, the great majority of them urging the agency to adopt stringent guidelines over how companies handle their traffic.

If the FCC or Congress tries to roll back the current rules, he said that “we need to be heard in different ways than before.”

“Economic ambition is what is driving these handful of companies,” he said. “There must be economic ambition that counters that.”

He said that companies that will count on such things as artificial intelligence have reason to be concerned if major Internet providers serve as “gatekeepers” to their connectivity.

“We need to be making sure the companies that are affected will be delivering the message, because I think that is what Congress will be responding to,” he said.

He also said that a challenge on many FCC issues is that they can be so wonky. Instead, he said that the focus should be on the effects of having little competition for high-speed broadband.

“We need to get out of our technocrat mode and into the mode…of the Trump voter who has the worst Internet experience,” he said.

He declined to predict whether the AT&T and Time Warner will get the greenlight from the Justice Department. During the campaign, Trump said he would try to block the deal, but since he won the presidency, Wall Street analysts believe that position will change.

“As someone said to me the other day, I have lost the Windex to my crystal ball,” Wheeler said.

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