FCC’s Wheeler Survives Round 1 of Oversight Hearings

On March 17, 2015, Federal Communications Commission Chairman Tom Wheeler celebrated St Patrick’s Day with a friendly visit to the House Committee on Oversight and Government Reform. Nearly three weeks after the FCC adopted new network neutrality rules, members of the Committee raised questions about whether the White House improperly influenced the Commission, an independent agency.

Committee Chairman Chaffetz (R-UT) criticized not the rules themselves but the agency’s process of passing and releasing them. He launched an investigation on Feb. 6 to determine if the White House had an "improper influence" over the development of the rules. Chairman Chaffetz said Obama's comments calling for tough net neutrality rules caused Chairman Wheeler to "radically alter course" on his net neutrality proposal so it would follow the President's approach. And, at the hearing he took particular issue with the two weeks between when the agency voted on the new rules and published them. The rules were subject to a period of so-called editorial privilege, typical of the FCC’s rule-making process, that allows the agency to make non-substantive final edits after a vote, in order to address dissenting arguments and legal questions to better protect against court challenges. The delayed release of the new rules was not unusual; past chairmen of the agency have, on occasion, taken several months to release the full text of an order. Chairman Wheeler argued that the agency has always kept draft rules secret to allow the commissioners to confidentially discuss and edit them. Republicans argued that the public had a right to see the net neutrality draft before the vote, and pointed out that Wheeler had the power to release it if he wanted to.

“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,” said Chairman Wheeler.

Facing a tough tone from Republican lawmakers about his handling of the rules, Chairman Wheeler said he remained confident in and proud of the agency’s choices. “There is no way I am apologetic,” he said. “I am fiercely proud of this decision.” He pushed back repeatedly, arguing that President Barack Obama had no undue influence on the rulemaking. "There were no secret instructions from the White House," Chairman Wheeler said. "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 the respect it deserves just as I have with similar respect the input both pro and con -- from 140 senators and representatives."

Chairman Wheeler said he was more influenced by the market’s lack of reaction to Obama’s statement calling for tough net neutrality rules. Stocks of Internet service providers didn’t tank, companies bid nearly $45 billion for wireless licenses in an auction that closed in January, and carriers like Sprint said a Title II approach wouldn’t harm investment. “The President’s focus on Title II put wind in the sails of everyone looking for strong open Internet protections,” Chairman Wheeler said.

Chairman Wheeler said that the President had not seen the text of the controversial order prior to the agency’s vote. He added that he had been in the Oval Office only once since he became chairman, days after he was appointed in November 2013. “In that meeting, he said, ‘I will never call you. You are an independent agency,’ ” Chairman Wheeler said of President Obama. “And he has been good to his word.”

Republicans focused on 10 meetings Chairman Wheeler had with various members of the White House over the last 12 months, asking about the substance of each conversation. Rep Jim Jordan (R-OH) pointed to a Nov 6 meeting at the FCC between Wheeler and Jeffrey Zients, Obama's top economic advisor. "My contention is Jeff Zients came to you and said, 'Hey, things have changed. We want the Title 2 approach to this rule. Am I wrong?” Chairman Wheeler responded, "Yes." But that didn't convince Rep John Mica (R-FL). "I think Mr. Zients on Nov. 6 strong-armed you," Rep Mica said.

Chairman Wheeler said that many of the 10 meetings had focused on unrelated issues, including trade, hacking and the agency’s auction of new airwaves for wireless broadband. Chairman Wheeler emphasized both his agency’s independence and its natural consideration of a variety of perspectives -- those voiced by members of Congress, by the millions of members of the public who submitted comments on the issue, and by the President. He added that the FCC’s rules were not entirely reflective of Obama’s specific vision. Wheeler suggested that President Obama "was piling on" when he went public with his push for a Title 2 approach, which already was being advocated by 64 members of Congress and the majority of people submitting comments to the FCC.

Democrats questioned the tone of the colleagues across the aisle. Rep Peter Welch (D-VT) called the questioning reminiscent of the Watergate hearings for their fixation on “what did you know and when did you know it,” regarding Wheeler’s digestion of President Obama’s input. Democrats also argued that the actions of the White House were consistent with actions of previous administrations. Some Democrats pointed out that presidents including Ronald Reagan, George H.W. Bush and Bill Clinton had expressed their opinions to the FCC, too. The President was not and should not have been silenced,” said Rep Eleanor Holmes Norton (D-DC).

The top Democrat on the committee, Rep Elijah Cummings (D-MD) added that if Republicans wanted to investigate any coordination between Wheeler and the White House, they should also turn the spotlight on the FCC's Republican commissioners and their coordination with members of Congress on net neutrality.

Chairman Chaffetz hinted at the possibility of new legislation to force agencies like the FCC to make new regulations public for a month before enacting them. “One of the things that’s evident to me is that we’re going to have to compel openness and transparency, because given the choice the FCC chose not to do that,” he said after the session.

At the end of the session, Chairman Chaffetz revealed that he had been informed that the FCC’s inspector general had launched an investigation into the matter. “It’s my understanding that it’s not an audit, not an inspection, but it’s an actual investigation,” he said. Chairman Wheeler said he was previously unaware of the probe but would cooperate. Jay Keithley, an assistant inspector general at the agency, said his office’s policy is “not to comment on the existence or non-existence of an investigation.”