How White House Thwarted FCC Chief on Internet Rules

In November, the White House’s top economic adviser dropped by the Federal Communications Commission with a heads-up for the agency’s chairman, Tom Wheeler. President Barack Obama was ready to unveil his vision for regulating high-speed Internet traffic. Days later, President Obama said he the Internet should be overseen as a public utility, with the “strongest possible rules” forcing broadband providers to treat all Internet traffic equally.

The prod from President Obama came after an unusual, secretive effort inside the White House, led by two aides who built a case for the principle known as “net neutrality” through dozens of meetings with online activists, Web startups and traditional telecommunications companies. Acting like a parallel version of the FCC itself, R. David Edelman and Tom Power listened as Etsy, Kickstarter, Yahoo’s Tumblr and other companies insisted that utility-like rules were needed to help small companies and entrepreneurs compete online, people involved in the process say. In an office on the fourth floor of the Old Executive Office Building, some companies claimed they would have never gotten off the ground if they had been forced to pay broadband providers. The big losers in the White House process were cable and phone companies, which spent years lobbying to gain support for their view that toughened rules would make it harder for them to offer new kinds of services. Executives who tried to go over the two aides’ heads, including by appealing directly to Valerie Jarrett, Obama’s senior adviser, got nowhere.