Has Wheeler Accomplished What He Said He Would? Mostly, Say Many

Three months before a presidential election that could signal the end of his time in the driver’s seat, has Chairman Tom Wheeler’s FCC done what he said it would when he took office? Based on interviews with FCC officials, pay-TV executives and communications attorneys of many stripes, the answer is, “Mostly.”

In his first days there, Wheeler said his agency would be primarily concerned with the incentive auction, the IP transition and enforcing his oft-repeated vision of the “network compact.” The auction is ongoing, transition rules are in place, and he has trumpeted other plans since, such as reclassifying over-the-top video providers under pay-TV carrier rules and fixing the set-top box market. Wheeler has or will have accomplished the great bulk of what he set out to, and his few swivels have been justified, according to some industry observers.

“It’s good for people to have plans, but you also want them to change with the circumstances,” said Public Knowledge Senior Vice President Harold Feld. “You have to face reality.” Not everyone feels that way. “On important measures, Wheeler succumbed, or gave the appearance of succumbing, to intense White House pressure in a way that has compromised the agency’s perceived independence from presidential control,” said Free State Foundation President Randolph May.

In his first blog post as chairman, Wheeler called himself “an unabashed supporter of competition,” which "does not always flourish by itself.” Attorneys and industry officials said that in the early days of Wheeler's reign, his background and his words led to the interpretation that he would have a light regulatory hand. May said that was his own belief. “The conventional wisdom proved wrong,” May said. Instead, Wheeler used his “competition mantra to generally default to the pro-regulatory position,” May said.

From the beginning, an FCC spokeswoman said, Wheeler has “consistently taken on tough, high-impact issues and seen them through to completion, from setting clear rules of the road for an open internet, to expanding broadband in schools and libraries, rural areas and low-income consumers, to launching the first-of-its kind incentive auction to free up more commercial airwaves while also preserving broadcasters’ important role.”

Wheeler's vision of the network compact focused on wired and wireless consumers but left out broadcasters, one Washington-based broadcast attorney told us. That ignores broadcasting's place in the incentive auction, the FCC spokeswoman said. “The network compact doesn't favor any one industry,” an FCC official told us in support of Wheeler. His administration updated broadcast contest rules, relaxed foreign ownership restrictions and eliminated the sports blackout rule, the official said.

Though still in progress, the incentive auction is a place where Wheeler has accomplished nearly everything he said he would, said NAB General Counsel Rick Kaplan, a vocal critic of some auction policies. Though Wheeler initially planned the auction for 2015 and had to move it back, Kaplan said the initial deadlines were unrealistic and the auction required diligent FCC work to make it happen as soon as it has. “They couldn’t have done it any sooner than they did,” he said. Though it’s still not clear how the auction will shake out, Kaplan said that Wheeler delivered on making the auction happen and getting broadcasters involved. “He aggressively marketed it, they put a lot of effort into it, and they were very successful in getting broadcasters to participate,” Kaplan said.

One proceeding where Wheeler is perceived to have changed course is the net neutrality order. Pay-TV industry officials said they don't believe it was Wheeler's original intent to base regulation of internet providers on the Communications Act's Title II, reclassifying broadband as a telecom and not an information service. May called the move “an abrupt about-face,” and he and everyone we spoke to chalked the shift up to White House pressure. “It is notable that Chairman Wheeler’s signature 'achievement' -- Title II -- was foisted upon him against his will by the White House,” a spokesman for Commissioner Ajit Pai's office told us. Feld also believes Wheeler shifted to accommodate the White House, but he doesn't agree it was a 180-degree turn. Wheeler consistently had made it clear that if Title II turned out to be “the only way to do net neutrality,” it was the route he would take, Feld said.

Feld doesn't blame Wheeler for hyping a proposal to reclassify OTT streaming video services as multichannel video programming distributors that the FCC has yet to act on (see 1606060033). That plan is widely seen to have fizzled, said the proposal's foes and supporters. That's an example of Wheeler adjusting after gathering more information rather than changing his tune, Feld said. The FCC has let the proceeding drop because of a lack of interest from most OTT stakeholders, some said. “Sometimes, you think you have a good idea but you can't make it work” in practice, Feld said. Wheeler said he decided to pause the proceeding because of ongoing innovation in online video.

Wheeler's actions in the proceeding on good-faith rules in retransmission consent are seen as a sudden policy shift, said Mediacom Senior Vice President-Government and Public Relations Tom Larsen. After Congress ordered the FCC to review the good-faith rules, the commission seemed poised to take action that would limit broadcasters’ negotiation options in retrans negotiations, Larsen said. That abruptly changed “like a fire hose turned on a campfire” when the chairman announced that the FCC wouldn't act on retrans (see 1607140047) after all, Larsen said. That proceeding ended “with a fizzle rather than a bang,” said Feld, who would have supported more aggressive rules. Larsen believes the change may have been a reaction to MVPD intractability in the set-top proceeding. Declining to place new rules on the retrans process protected broadcasters’ ability to negotiate, an FCC official told us. Shortly after the retrans announcement, the FCC also reached a consent decree on joint retrans negotiation with Sinclair Broadcast (see 1607290067).

If the FCC doesn't act on some items it still has teed up, it could be because Wheeler ran out of time, Feld said. The FCC has ongoing proceedings on set-tops and cybersecurity, and broadcasters are pushing for action on the ATSC 3.0 TV standard. “If Wheeler’s objective from the start was to leave office with a more strict regulatory regime in place than when he began, he’s been successful," said May. “There's only so many fights you can take on,” Feld said.