Vise tightens on FCC chairman in fight over Internet rules

When Tom Wheeler took the stage at a Washington gala last week, he joked about being a marked man.

“The Hilton wants us to be out of here by 10 tonight … I told them, ‘I am an independent agency and nobody tells me what to do,’ ” he said to roars of laughter from hundreds of telecom lawyers, lobbyists and reporters.

{mosads}The self-effacing line alluded to the difficult dilemma facing Wheeler as he seeks to push through new Internet regulations at the Federal Communications Commission (FCC). 

The agency chief is under pressure from President Obama to issue the strongest possible net neutrality rules despite the vehement objections of industry groups and Republicans on Capitol Hill.

But “going big” with the rules would be hugely controversial, likely drawing accusations that Wheeler is playing politics with the work of an independent agency.

“I think the president has put him in a very horrible position,” said Lawrence Spiwak, the president of the Phoenix Center think tank and a former FCC staffer.

“Putting aside the policy … he literally has the credibility of the agency at stake,” said Spiwak, who has criticized Obama’s position on net neutrality. “Are you truly going to be an independent agency and make the call based on the laws and the facts as opposed to just make this a political fight?”

Last month, Obama took the unusual step of making a public call for the agency to regulate broadband Internet service like a public utility, which he said is necessary to ensure “that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online.”

Obama timed the announcement for maximum attention, releasing a blog post and YouTube video on a Monday morning when he was out of the country.

Critics said the statement seemed like a blatant attempt to excite the Democratic base after stinging losses in the midterm elections.

“Traditionally, when the White House wants to let an independent administrative agency know what it thinks, it files a very detailed substantive letter with the commission pursuant to the disclosure rules,” said Robert McDowell, a former Republican member of the FCC.

“Never has a president looked into the camera to make front-page, above-the-fold news directing the FCC to go in a particular direction.”

The president’s proposal was more aggressive than the plan Wheeler put forward earlier this year, which would have allowed Internet service companies such as Comcast to cut deals with websites like Netflix to create “fast lanes” with quicker service for some users.

Obama’s push created new political pressures for the FCC and outraged conservatives in Congress, many of whom fear the heavy hand of government regulation being applied to the Internet.

In public, Wheeler shrugged off Obama’s intervention.

“There is a process and [presidents] have every right to express themselves,” he told reporters last month.

He has also repeatedly defended the independence of the agency and insisted that it is not beholden to the executive branch.

The image of independence is critical for Wheeler, given his close ties to the president.

The chairman and his wife, Carol, spent six weeks knocking on doors and making phone calls for Obama in Iowa ahead of the 2008 election, a time Wheeler once said will “rank right up there as the best six weeks of my life.”

He also raised hundreds of thousands of dollars for Obama’s campaign and served on his presidential transition team after the 2008 race.

“Presidents don’t forget the people that showed up in the very early going,” said Reed Hundt, a former FCC chairman during the Clinton administration. “So I think that’s unforgettable and forever will be respected by Barack Obama.”

Many FCC observers doubt the policy spat has caused a rift between the two men.

Even in laying down the line, Obama signaled he did not intend to leave Wheeler out in the cold.

Before the Monday announcement, Obama dispatched National Economic Council Director Jeff Zients to the FCC to give Wheeler and FCC general counsel Jonathan Sallet a heads up.

Sending Zients was “very diplomatic, very courteous, very appropriate,” Hundt said. “In Washington signaling, it’s a special mark of favor.”

Not everyone agrees Wheeler is stuck between a rock and a hard place.

Some speculate that Obama may have unintentionally done the FCC chairman a favor by calling for utility-style rules under Title II of the Communications Act.

“What the president has effectively done, whether or not intentionally, is to give the chairman cover,” said Jack Nadler, a partner at Squire Patton Boggs who watches the telecom sector. 

“I think that Chairman Wheeler’s position on the Hill, dealing with the new Republican majority, and in dealing with the [Internet service providers], is actually strengthened if he can be perceived as the man who boldly charted a middle course in the face of tremendous pressure from the president, and from the other Democratic commissioners, to adopt a full Title II proposal.”