Bloomberg News

AT&T Deal on Heels of Web Rules Has Congress Testing Wheeler (1)

May 20, 2014

The top U.S. telecommunications regulator, Tom Wheeler, received an earful from lawmakers concerned about his pending decisions on Internet-traffic rules, spectrum auctions and cable-industry consolidation.

Two House Democrats used an appearance before Congress today by Federal Communications Commission Chairman Wheeler to call for hearings into proposed acquisitions by AT&T Inc. (T:US) and Comcast Corp. (CMCSA:US) Representatives Anna Eshoo and Doris Matsui of California said the sizes of the deals merit more scrutiny.

“Both are some of the largest mergers in our nation’s telecommunications history,” Matsui said today at a House Energy and Commerce subcommittee hearing about FCC oversight.

AT&T’s bid this week to buy satellite-TV provider DirecTV for $48.5 billion comes three months after Comcast proposed a $45.2 billion acquisition of Time Warner Cable Inc. (TWC:US) Just as Wheeler begins vetting those deals, he’s also facing criticism for a rewrite of rules governing Web traffic that may open the door to regulating what Internet service providers can charge.

“The question before the committee today is, are we soon going to be calling him Mr. Wheeler Dealer?” said Representative Joe Barton, a Texas Republican.

Fast Lanes

Barton said he sees “no reason to try to shoehorn some sort of a regulatory approach” to constrain Internet service providers from charging for carrying some Web traffic.

Wheeler last week won an FCC vote to possibly allow paid fast lanes for Web traffic, and to consider bringing Internet service providers under rules that could include rate regulation. The tougher rules would be “burdensome” and “harmful to consumers, businesses and the future of the Internet,” said Representative Fred Upton, the Michigan Republican who is chairman of the Energy and Commerce Committee.

Wheeler said he is for “one Internet” that isn’t divided between fast and slow.

“When the consumer buys access to the Internet, they are buying access to the full Internet; and that’s what our rules attempt to protect,” Wheeler told the subcommittee.

Democrats also criticized the proposal. Wheeler’s plan could lead to “some giant company blocking content” on the Internet, said Eshoo, the top Democrat on the communications panel holding the hearing.

‘Massive Decisions’

Eshoo, along with Matsui, also focused on the recent spate of telecommunications deals.

Including the Comcast and AT&T bids, there is more than $130 billion of deals among cable and telecommunications providers that require regulatory approval. That’s the greatest amount of pay-TV assets sitting in front of regulators including the FCC at one time, according to Bloomberg Industries.

Eshoo asked, “Can anyone here today piece together the effects of the Comcast-Time Warner merger and the AT&T-DirecTV (DTV:US) merger on consumers and a free and open Internet?”

“These are massive decisions,” she said.

Wheeler is also preparing for an auction next year of U.S. airwaves needed to feed the booming use of smartphones and other mobile Internet devices.

The hearing today was held by the House Energy and Commerce Committee’s Communications and Technology subcommittee.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editors responsible for this story: Romaine Bostick at rbostick@bloomberg.net; Bernard Kohn at bkohn2@bloomberg.net Elizabeth Wasserman


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Companies Mentioned

  • T
    (AT&T Inc)
    • $35.47 USD
    • 0.31
    • 0.87%
  • CMCSA
    (Comcast Corp)
    • $56.74 USD
    • -0.11
    • -0.19%
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