Comcast Trips Over Wheeler Nixon-to-China Moment as FCC Boss

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Federal Communications Commission Votes On Net Neutrality Plan
Tom Wheeler, chairman of the Federal Communications Commission (FCC), speaks during an open meeting to vote on internet regulations in Washington, D.C. on Feb. 26, 2015. Photographer: Pete Marovich/Bloomberg

Tom Wheeler came to the Federal Communications Commission in 2013 with a resume featuring stints as the top lobbyist in Washington for both the cable and wireless industries. Consumer advocates weren’t amused.

Comedian John Oliver called Wheeler’s arrival as chairman “the equivalent of needing a babysitter and hiring a dingo.” Vermont Senator Bernie Sanders worried the new agency chairman would greenlight the “dangerous trend” of media consolidation.

Now, almost two years later, Wheeler is confounding his former allies and winning praise from public interest groups. He recently pushed for strong net-neutrality rules, and scrutiny by FCC staff helped push Comcast Corp. on Friday to abandon its yearlong effort to buy Time Warner Cable Inc.

“It’s like Nixon going to China,” said Gene Kimmelman, president of the Washington-based policy group Public Knowledge, which opposes the Comcast merger. “He’s used his industry background not to favor his old friends in industry but to take that knowledge and apply it towards strong public interest protections.”

With the cable industry facing its stiffest challenge yet from Internet-based video providers such as Netflix Inc., a central issue for the agency is how to promote innovation as well as protect competition, according to a person familiar with the Comcast case. The FCC’s net neutrality decision and its resistance to the Comcast deal both recognize that the FCC needs to keep up with a world that is changing rapidly.

‘Unacceptable Risk’

“Today, an online video market is emerging that offers new business models and greater consumer choice,” Wheeler said Friday in a statement. “The proposed merger would have posed an unacceptable risk to competition and innovation, including to the ability of online video providers to reach and serve consumers.”

It has been an evolution. Wheeler’s initial thinking in the open Internet case was to create so-called “fast lanes” for certain traffic that were opposed by advocacy groups. However, the FCC chairman frequently likes to take positions, invite challenges to them and let his thinking evolve.

There were signals that he might take this approach early in his tenure when he hired as an adviser Gigi Sohn, who was president of the policy group Public Knowledge before Kimmelman, and had been critical of large telecommunications and cable companies.

Finally, after a summer of considering the matter and amid an outpouring of 4 million public comments and a rant by Oliver, Wheeler set out to establish rules ensuring equal access to the Internet.

Comcast Deal

The Comcast deal quickly became the new test for Wheeler. The now-scuttled $45.2 billion merger of the two largest U.S. cable providers would have created a TV and Internet Goliath with a dominant presence in almost every U.S. metropolis.

After a year of deliberation, word came late Wednesday that FCC staff had joined lawyers at the Justice Department in opposing the planned merger.

Wheeler, 69, was nominated by Obama in May 2013 to take the helm of the five-member commission, which has broad authority over cable, wireless, broadband and spectrum sales.

After he was nominated, Wheeler, who had been most recently a venture capitalist at Core Capital Partners, disclosed to Congress investments in 78 companies and pledged to divest whatever was needed to avoid any conflicts of interest. The holdings included a Who’s Who of TV, Internet and technology companies, including AT&T Inc., Comcast, Google Inc. and News Corp.

Still, some consumer advocates viewed him as a smart choice.

Right Candidate

“This is exactly why I thought he was good for the job,” said Andrew Schwartzman, senior counselor at the Georgetown University Law Center’s Institute for Public Representation in Washington. “He’s been around the block, he’s made his money” and he knows the issues, he said.

Wheeler was also ready to take the political heat for setting the rules to regulate the Internet like a utility, which many Republicans blasted, he said.

“He’s a big boy and he understands that a particular decision is going cost some political capital,” Schwartzman said.

So, what does Oliver, the Daily Show veteran with a comedy show on HBO, make of Wheeler now? (To be fair, when asked about the monologue Wheeler said, “I would like to state for the record that I’m not a dingo.”)

After the FCC’s open Internet decision, Oliver said: “You are a dingo. It’s just in this one instance, you did not eat the baby. So good dingo. Keep it up.”

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