“No secret instructions” from Obama to FCC, Wheeler tells Congress

Obama influenced net neutrality decision, but so did 4 million public comments.

Jon Brodkin – Mar 17, 2015 9:07 am | 170

President Obama announces the nomination of Rep. Melvin Watt, left, as director of the Federal Housing Finance Agency (FHFA) and Tom Wheeler, right, as Chairman of the Federal Communications Commission (FCC), on May 1, 2013. Credit: White House

With congressional Republicans accusing the White House of improperly influencing the Federal Communications Commission’s net neutrality decision, FCC Chairman Tom Wheeler is appearing before a House committee this morning to defend the process.

In his prepared remarks, Wheeler said, “There were no secret instructions from the White House. I did not, as CEO of an independent agency, feel obligated to follow the President’s recommendation. But I did feel obligated to treat it with respect just as I have with the input I received—both pro and con—from 140 Senators and Representatives. Most significantly of all, we heard from nearly four million Americans, who overwhelmingly spoke in favor of preserving a free and open Internet.”

The FCC last month voted to reclassify broadband providers as common carriers and impose net neutrality restrictions that prevent them from blocking or throttling Internet content or prioritizing content in exchange for payment. Today’s hearing is in front of the Committee on Oversight & Government Reform. Committee Chairman Jason Chaffetz (R-UT) accused the White House of improperly influencing the FCC’s decision-making process and demanded copies of all communications between the FCC and White House.

Wheeler explained that the FCC followed the process that Congress mandated:

The roadmap we followed to develop this order was a process that Congress established close to 70 years ago in the Administrative Procedure Act. We made a public proposal, we invited interested parties to comment on our proposal—which they did in record numbers—and then we adopted a final rule based on this record. The final result of this year-long process is rules that protect and preserve the open Internet, while promoting continued investment in broadband networks.

Obama made his position known on November 10 last year when he urged the FCC to reclassify broadband, subjecting Internet service providers to some of the same “Title II” rules that apply to telephone providers. Wheeler said the president’s public statement had an impact. “The push for Title II had been hard and continuous from Democratic members of Congress. The president’s weighing in to support their position gave the whole Title II issue new prominence,” Wheeler said.

One “key consideration” throughout the yearlong deliberative process “was the potential impact of any regulation on the capital formation necessary for the construction of broadband infrastructure,” Wheeler told Congress. “An interesting result of the President’s statement was the absence of a reaction from the capital markets.”

There were other concerns that helped sway Wheeler in favor of Title II, he said:

One was the recognition of interconnection as an important issue—a topic not covered by the Administration’s position. Another was my letter to Verizon Wireless about its announcement to limit “unlimited” data customers if the subscriber went over a certain amount of data used in a month, a policy it ultimately reversed. Of particular note was the active bidding (and ultimately overwhelming success) of the AWS-3 spectrum auction at the end of 2014 and the beginning of 2015, which showed that investment in networks—even in the face of the potential classification of mobile Internet access under Title II—continued to flourish. Other industry data points included the work of Wall Street analysts, and the statements of ISPs themselves, including Sprint, T-Mobile, Frontier, and hundreds of small rural carriers, that they would continue to invest under a Title II framework.

Ultimately, the collective findings of the public record influenced the evolution of my thinking and the final conclusion that modern, light-touch Title II reclassification, accompanied by Section 706, provides the strongest foundation for the Open Internet rules. Using this authority, we adopted strong and balanced protections that assure the rights of Internet users to go where they want, when they want, protect the open Internet as a level playing field for innovators and entrepreneurs, and preserve the economic incentives for ISPs to invest in fast and competitive broadband networks.

Although Wheeler said the president’s position did not cover interconnection, Obama actually did urge the FCC to consider imposing rules on interconnection. “If necessary,” the president said, the FCC should “apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet.” The rules adopted by the FCC allow companies to lodge complaints against Internet service providers who make unreasonable demands for interconnection payments.