Bloomberg News

Obama Names Former Wireless Lobbyist Wheeler as FCC Chairman (1)

May 01, 2013

Obama to Name Former Wireless Lobbyist Tom Wheeler FCC Chairman

Tom Wheeler needs Senate confirmation before joining the U.S. Federal Communications Commission. Photographer: Lori Cain/Bloomberg

President Barack Obama named Tom Wheeler, a venture capitalist and former leader of cable and wireless trade groups, to head the U.S. Federal Communications Commission, where he may focus on nurturing mobile technology.

Wheeler, 67, managing director at Core Capital Partners LP in Washington, succeeds Chairman Julius Genachowski, a Democrat who has pushed to expand access to high-speed Internet service.

“Tom knows this stuff inside and out,” Obama said in announcing the nomination today. “For more than 30 years, Tom has been at the forefront of some of the very dramatic changes that we’ve seen in the way we communicate and how we live our lives.”

Wheeler needs Senate confirmation before joining the FCC, where he will guide policy responding to rapid change as smartphones and high-speed data lines upend markets, with voice traffic shifting from copper wires to airwaves and the Internet, and video moving to the Web.

Mobile operators including largest U.S. wireless carrier Verizon Wireless and No. 2 AT&T Inc. (T:US) “should benefit from a focus on their economic health” by a Wheeler-run FCC, Paul Gallant, Washington-based managing director at Guggenheim Securities, said in a note today.

Cable operators such as Comcast Corp. (CMCSA:US) and Time Warner Cable Inc. (TWC:US) may face reduced risk of the FCC seeking to regulate their lines using rules written for telephone service, Gallant said. Genachowski considered and abandoned such an approach after companies said the move could lead to rate regulation.

Wireless, Cable

Wheeler would be “receptive to many wireless and cable policy arguments, but would feel pressure from rivals and critics” to demonstrate independence, David Kaut, a Washington- based analyst for Stifel Nicolaus, said in a note yesterday.

Senator Bernie Sanders, a Vermont independent, in an e- mailed statement asked whether Wheeler would support the “dangerous trend” toward greater media holdings by large companies.

“Before the Senate votes on Mr. Wheeler’s confirmation, the American people deserve to know where he stands,” Sanders said. “I also am troubled that President Obama would appoint the former head of two major industry lobbying associations to regulate the industry.”

Michael Copps, a former Democratic member of the FCC who is advising Common Cause, a Washington-based advocacy group, said in an e-mailed statement that Wheeler “has the opportunity to expand on his experience as an industry lobbyist to make policy that benefits all consumers and citizens.”

First Chairwoman

Mignon Clyburn, the commission’s senior Democrat, will be acting agency head until Wheeler’s confirmation, Obama said. Clyburn in an e-mailed statement thanked the president for “this incredible and historic honor.”

“I am a firm believer that our government can be an effective problem-solver with an important role to play in opening doors of opportunity for all Americans,” she said.

The agency established by a 1934 law hasn’t had a woman leader, Genachowski said in an e-mailed statement. He said Clyburn has worked to promote competition and close the digital divide, a term referring to a lack of high-speed Internet service, or broadband, for the poor.

Wheeler in 2008 helped draft technology policy for the incoming Obama administration. He raised more than $500,000 for Obama’s re-election in 2012, and from $250,000 to $500,000 for the 2008 campaign, according to disclosures by the president’s campaign committee.

AT&T, T-Mobile

In a 2011 blog posting, Wheeler said the U.S. could allow a merger of Dallas-based AT&T and smaller rival, Bellevue, Washington-based T-Mobile USA Inc., which started trading today as T-Mobile US Inc. after buying MetroPCS Communications Inc. AT&T withdrew the bid after opposition from regulators. Wheeler said the FCC could have demanded the enlarged company commit to rules that would become de facto standards for the wireless industry and avert court challenges.

AT&T’s Senior Executive Vice President Jim Cicconi in an e- mailed statement today called Wheeler “an inspired pick to lead the FCC” where “the pace of technological change is clashing with outdated laws, antiquated rules, and approaches more rooted in the past than the present.” Wheeler in an April 2011 blog post called Cicconi “one of the smartest and shrewdest policy mavens in the capital.”

The Washington-based trade groups Wheeler once headed welcomed his selection in e-mailed statements.

Spectrum Auction

Michael Powell, a former Republican FCC chairman who is president of the National Cable & Telecommunications Association, called Wheeler “an exceptional choice.” Steve Largent, president of CTIA-The Wireless Association, said Wheeler has “a keen understanding of how mobile wireless broadband can drive our economy.”

Tasks that await Wheeler at the FCC include leading an auction to free airwaves for use by high-speed wireless Internet service, or mobile broadband. The auction would sell access to airwaves voluntarily relinquished by television stations, which would be paid for giving up their frequencies.

From 1992 to 2003, Wheeler was president of the Cellular Telecommunications & Internet Association, as the CTIA was then known. Members include the four biggest U.S. wireless companies, Verizon Wireless, AT&T, Sprint Nextel Corp. (S:US) and T-Mobile.

Wheeler was president of what was then called the National Cable Television Association from 1979 to 1984, according to Core Capital’s website. Members of the group headed today by Powell include the largest U.S. cable company, Philadelphia- based Comcast, and No. 2 Time Warner Cable, based in New York.

Since 2003 Wheeler has served on the board of Atlanta-based EarthLink Inc. (ELNK:US), an Internet-service provider.

Core is a venture capital firm specializing in early stage companies, including those focused on next-generation wireless services.

To contact the reporters on this story: Todd Shields in Washington at tshields3@bloomberg.net or Jonathan D. Salant in Washington at jsalant@bloomberg.net.

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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