The FCC’s Big Wheel(er)

Former NCTA Chief Wins (Mostly) Praise As Confirmation Begins
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WASHINGTON — Nearly 30 years after he led the cable TV industry as president of the NCTA, Tom Wheeler — nominated last week by President Obama to be the new chairman of the Federal Communications Commission — is on his way to becoming one of TV’s most powerful regulators.

Calling Wheeler the “Bo Jackson of telecom,” Obama named him to replace Julius Genachowski, who announced his exit in march after nearly four years.

Obama also made history last week by appointing commissioner Mignon Clyburn as interim chairwoman, the first woman to head the agency, calling her an “incredible asset to the FCC.”

Clyburn will assume that post in mid-May when Genachowski exits, and will oversee the agency until the Senate confirms Wheeler’s appointment and he is sworn in — a process that could take months.

If and when he does take the reins of the FCC and its nearly 2,000 employees, Wheeler, 67, will have a busy agenda. The agency is preparing for spectrum auctions, weighing in on media ownership, overseeing the transition to Internet-protocol service delivery and deciding which regulations to apply — or not to apply — to IPdelivered voice and video.

Wheeler’s prior experience — the main reason the president tapped him — is expected to help him navigate the crossroads of commerce and regulation. He has worked for a venturecapital firm, is a former tech startup entrepreneur and was the top lobbyist for both the cable and wireless telecom industries. He headed what was then called the National Cable Television Association from 1979 to 1984 and CTIA-The Wireless Association from 1992 to 2004.

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The White House has made no secret of its disdain for the influence of lobbyists on government. But Wheeler’s technology smarts, business background and proximity to the president as a former counselor and longtime supporter carried the day. Indeed, Obama suggested that experience should satisfy anyone who was “wondering about” Wheeler’s qualifications.

Wheeler, who declined to be interviewed for this story, was a top Obama adviser during the 2008-09 presidential transition, and helped raise money from the technology sector while taking a break from venture-capital activities. He is described on both sides of the aisle as a very smart, very well-prepared man who is comfortable in his own skin.

“No one has ever come into the FCC better prepared than Tom,” former Democratic FCC chairman Reed Hundt told Multichannel News last week. He was one of a number of former chairmen who provided the magazine with their take on the pick. (See sidebar.)

“He may be the best-prepared ever,” echoed a former top FCC official.

In introducing his nominee at the White House last week, Obama pointed out that Wheeler was the only member of both the cable television and wireless industry halls of fame. “So, he is like the Jim Brown of telecom,” said the president, who then caught himself and updated the reference, at least a little: “or the Bo Jackson of telecom.”

For the past three decades, Wheeler was “at the forefront of the very dramatic changes that we have seen in the way we communicate and how we live our lives,” Obama said, adding that Wheeler was one of the leaders of a company that helped create thousands of good high-tech jobs.

“He has helped give consumers better choices and better products,” Obama said. “So, Tom knows this stuff inside and out.”

Genachowski had “frequently” benefitted from Wheeler’s “input and advice,” the president added.

In 2010, Genachowski named Wheeler to chair the FCC’s Technological Advisory Council. It wasn’t a stretch, as Wheeler had been tech adviser to Genachowski’s former Harvard Law buddy — President Obama.

Wheeler continues the trend of tapping an executive with real-world business experience for the FCC’s top job. Predecessor Genachowski proved to be a moderate, whose push for broadband resulted in some pro-cable policies (as ISPs, cable operators benefitted from billions in government investment through the broadband-stimulus program), but drew fire from the public-interest groups who initially supported him.

Wheeler’s FCC will continue to focus on broadband. And while one knock on Genachowski was that he did not move as decisively as some of his critics wanted, Wheeler at least preaches the gospel of no risk, no reward — and that’s no surprise for a venture capitalist investing in tech start-ups.

And after a run of chairmen in their 40s with post-FCC careers to plan, Wheeler is in a position — financial and otherwise — not to have to worry about the impact of regulatory “audacity,” another favorite word, in his next job.

“He has decades of experience, which is a real benefit, [but ] I don’t think he is going to care as much what [his decisions] will mean to what comes next,” an industry lobbyist said.

“Tom is perfect for the FCC chairmanship — equally comfortable as a serious Washington policy wonk and as a grand old man of the telecom and technology industries,” communications attorney George Foote, a partner at law firm Dorsey & Whitney, said.

Wheeler is described as having a healthy ego, but one that has been earned through accomplishment. In his book Take Command! Leadership Lessons from the Civil War, his first lesson is about daring to fail — in other words, taking risks.

“Don’t confuse victory with avoiding a loss,” Wheeler wrote. “In a time of strategic imperatives, if you don’t take risks, you lose.”

Wheeler could also get his first big test when a U.S. Appeals Court weighs in on the FCC’s network-neutrality rules sometime later this year. Genachowski has left open the docket, and the possibility of classifying Internet access as a Title II service subject to mandatory access regulations, if the court throws out its rules. But it will likely be up to Wheeler to decide how next to proceed.

It has been almost 30 years since Wheeler exited the NCTA. His mustache is gone, his hair is more grey — he cut a trim figure in suit and purple tie at the nomination announcement — and his resume is a lot more full, but he retains and has burnished a reputation for thoughtfulness and a good grasp of policy.

Even Wheeler’s potential critics — mostly those who have a hard time looking past his trade-association background — concede the tech smarts that President Obama cited in nominating Wheeler last week.

“Although the Writers Guild of America, East is always skeptical that people can become effective watchdogs over industries they once represented, we are hopeful and note that Mr. Wheeler appears to have a detailed grasp of the technologies that are transforming communications,” the heads of the writers’ union said last week.

While at Core Capital, Wheeler had plenty to say about the communications business, weighing in periodically on his blog (see sidebar). He stopped posting at roughly the same time he surfaced as a candidate to replace Genachowski.

In his blog, Wheeler has pushed broadcasters to get moving with mobile DTV if they want to establish their value in the digital world, and opined about what back in 2009 he called their “jihad” against spectrum auctions.

Perhaps reading the FCC writing on the wall, broadcasters have been talking about 2013 as a make-or-break year for mobile DTV, and made it one of the focal points of the National Association of Broadcasters Show in Las Vegas.

In that free-wheeling blog, Wheeler has aligned with the forces opposing the eventually-scuttled Stop Online Piracy Act; pushed broadcasters to either put up their spectrum for auction or make a business out of mobile DTV; and has talked up a free and open Internet — all stands that should endear him to public-interest groups.

He is also a self-professed lover of capitalism, which he has called the “celebration of business,” a notion he said he inherited from his insurance-salesman father.

Thoughts From a Future Chairman

WASHINGTON — Until last December, Tom Wheeler blogged regularly (at http://www.core-capital.com/toms_ articles.aspx). With his fortune made and the FCC chairmanship possibly the topper on his career, Wheeler’s “mobile musings” about policy and the industry’s potential direction are worth reading.

From a February 2012 blog posting on the Internet’s political “coming of age”: “Backed by Hollywood and others whose business model requires controlled scarcity of product, [the Stop Online Piracy Act] in many ways echoed the cable fight of 40 years earlier. The policy matter is not whether copyright holders should receive recompense for their products (they should), but whether legislation to protect that right is air cover to perpetuate old practices at the expense of new networks. There is no doubt there are honest- to-God Web pirates operating in China, Russia and elsewhere who are stealing copyrighted product. These pirates should be stopped. But SOPA’s effort to accomplish this — which also just happened to strengthen the hand of content companies in other regards — applied concepts more applicable to the command-and-control networks of yesterday than to the open-access networks of today.”

From a May 2011 blog posting on broadcasting’s future: “I’ve been mystified why broadcasters have declared jihad against the voluntary spectrum auction. Getting big dollars for an asset for which you paid nothing while still being able to run your traditional business over cable (the vast majority of its reach anyway) and maintain a broadcast signal at another point on the dial seems a pretty good business proposition — unless you really are serious about providing new and innovative services and need all that spectrum. “Actions speak louder than words and the broadcasters’ inaction on mDTV resounds like a thunderclap.”

From an August 2012 blog post on the Google Fiber rollout in Kansas City: “Some traditional cable channels like HBO and the products of the Disney Co., such as ESPN, have chosen not to provide retransmission rights to Google. It’s a risky move, as the Web appears primed to do for television what it did to newspapers …

“Unlike cable and telephone companies which must provide service in all areas of a city, Google will provide service only in areas where advance signups assure the economic viability of providing the service. Imagine the outrage cable companies would face with city councils and telcos would face with PUCs if they engaged in what some would no doubt describe as ‘redlining.’

From a January 2012 entry: “Verizon and four major cable television operators (Comcast, Time Warner [Cable], Cox and Bright House) entered into an agreement whereby Verizon would buy the cable companies’ AWS spectrum licenses covering 259 million pops for $3.6 billion. Other than being the definitive conclusion of cable’s flirtation with building their own mobile networks, this part of the announcement is a simple license transfer … The change in the business physics came in the other part of the agreement. The cable companies and Verizon are forming a joint venture to sell each other’s services. Comcast reps selling Verizon Wireless and Verizon stores selling Comcast is one thing … but what about a new ‘wireless cable’ service to take on the broadcasters and once again redefine video delivery?

“The business physics of the 21st century is all about screens and how to get to them.”

— John Eggerton

Thoughts of Former Chairmen

“No one has ever come into the FCC better prepared than Tom.” — Reed Hundt, Democrat, who served from 1993-97 under President Clinton

“He has it all: Skill, experience and leadership. A great choice.” — Richard Wiley, Republican, who served from 1970-77 under Presidents Nixon and Ford

“Tom brings a wealth of knowledge, judgment and experience to the job. He will be a terrific chairman.” — Bill Kennard, Democrat, who served from 1997-2001 under President Clinton

“I’ve known Tom for years and don’t know that you could find a more wellrounded person with the talents and skills necessary to serve as chairman of the FCC. His appointment is welldeserved and a crowning achievement to an exceptional career.” — Michael Powell, current National Cable & Telecommunications Association CEO and Republican FCC chairman from 2001-05 under President George W. Bush

“Tom is a true Renaissance man and a good thinker. He’ll be an effective advocate for his policy goals. He showed prowess when he was CEO of NCTA [and] when he made presentations to my team at the FCC. In short, extremely well-qualified.” — Mark Fowler, Republican, who served from 1981-87 under President Reagan

“The FCC’s role has never been more essential and with Tom’s deep policy expertise and his first-hand experience as a technology investor, he is a superb choice to advance the FCC’s mission of promoting innovation, investment, competition and consumer protection. Tom will be a great FCC chairman, and I urge his swift confirmation.” — Julius Genachowski, current chairman, FCC

“Tom is a man of many talents and wide industry experience with whom I enjoyed working when I was commissioner and acting chair of the FCC. We did not always agree on the issues, but I appreciated his candor, knowledge and ability to listen as well as to talk.” — Michael Copps, Democrat, acting chairman, January-June 2009, and commissioner, 2001-12, under Presidents George W. Bush and Obama

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