Powell Says FCC 'Bias' Tilts Field; Blackburn Blasts Wheeler 'Arrogance'

FCC Chairman Tom Wheeler's leadership came under particularly heavy attack from House Commerce Committee Vice Chairwoman Marsha Blackburn, R-Tenn. She lit into Wheeler over the same issues and criticized the FCC's pre-emption of state restrictions on municipal broadband expansion. Wheeler “stretches the confines of the law,” something he has done “over and over again,” she said. Instead of showing humility, Wheeler acts with “arrogance” in seeking “nuclear options” and demanding that things be done his way, she said. “He is almost the regulatory bull in the China shop.” The FCC had no comment on Blackburn's and Powell's comments.

Wheeler pushed through a net neutrality and broadband reclassification order that “regulates the Internet like a 1930s utility,” disregarding the law but listening to President Barack Obama's call for increased regulation, Blackburn said. It makes “no sense” for the FCC to propose broadband privacy regulation, which “should be left to the FTC,” she said. “It's a power grab.” She also knocked the FCC's proposed set-top rules, which are aimed at stimulating retail competition but have “baffled” Nashville content creators by threatening “intervention and theft” of copyrighted material. The FCC muni-broadband order is "so radical and so over-reaching" that even DOJ didn't agree with it, she said. "The silence on that is deafening."

Commissioner Mike O'Rielly cited concerns with Wheeler's policy agenda and procedural practices, but was generally more restrained in his rhetoric. He said he simply would not support a pending Lifeline overhaul order without a “hard budget.” He called an FCC proposal a “phantom budget.” He said the FCC's set-top proposal went behind statutory authority to promote retail device competition and looks to regulate applications and software in a way that be believes will ultimately fail. He said releasing draft items ahead of FCC meetings would encourage “more fulsome discussion” but said Wheeler has no interest.

Commissioner Mignon Clyburn was more supportive. The FCC acted to combat waste, fraud and abuse in Lifeline USF, saving the program $3 billion in recent years, she said. Clyburn said she is open to discussing a budget but only if it accounts for currently low program use and the 39 million low-income people eligible for support. She said the FTC lacks rulemaking authority to adequately address broadband privacy, but said the two agencies have “complementary roles” to play.

Clyburn said the FCC proposed the set-top rules because 99 percent of pay-TV customers rent their boxes. She backs the FCC's "dexterity" in adapting the 1996 set-top statutory provisions to the current market. "I'm not as hung up on semantics," she said. O'Rielly called the expansion from regulating equipment to software "legal gymnastics" that "insulted the statute." Clyburn said the world has changed since 1996 but the FCC is implementing the statutory principles.

Asked about Obama's late broadband reclassification push, Clyburn said she has favored since 2010 a Title II approach under the Communications Act. O'Rielly called Obama's intervention through a video statement “unique,” and said it could further politicize the agency, whichever party is in power. "The administration has changed the game going forward," he said.

Powell, speaking later, said Obama's actions influenced the FCC, raised questions and set a precedent for increased politicization. "It certainly created a taint," he said. "The gloves are off." Presidents are entitled to weigh in, but they usually do so in written form through NTIA, he said. Powell disputed the notion of FCC/FTC “complementary” authority on privacy. He said consumers want privacy protection, regardless of the provider, whether it's Facebook or an ISP. He said the FCC is looking at “hypocritically” proposing regulation to control ISP data-collection practices while ignoring the data collection of edge providers, which is “10 times” as extensive.

USTelecom President Walter McCormick disputed the notion that ISPs have a “unique eye” as “gatekeepers.” McCormick said ISP-focused regulation will mislead consumers into believing they can "opt out" one time and be done with Internet privacy concerns. He said the FCC needs to be more aware that its broadband policies, particularly Title II reclassification, are slowing innovation and inhibiting broadband investment, something Wheeler has disputed.

CTIA President Meredith Baker agreed with Powell and McCormick on privacy and said the FTC approach is working well. She voiced more optimism about FCC plans to act this summer in a spectrum frontiers proceeding aimed at making huge new swaths of high-band spectrum available. "It's going to be key for our 5G leadership," she said. The next-generation wireless service will be 10 times as fast as 4G and connect 100 times more things, boosting the IoT, she said.

Powell said the set-top proposal “perfectly encapsulates” the FCC tendency to engage in unjustifiable market intervention. The video delivery market is undergoing “tectonic shifts” due to robust competition that has halved cable market share, and is now being transformed by Internet streaming from the likes of Netflix, he said. Even the market for cable boxes is strong and innovative, but the FCC is proposing to intervene using an “outdated law” that will benefit certain parties and create potential copyright problems, he said. “It really does pick winners and losers.”

NARUC General Counsel Brad Ramsay criticized an FCC Lifeline proposal to bypass the state role in designating broadband providers, which he said would invite abuse and endanger state matching funds. He also doubted it would spark new participation by major providers. To receive a $13.50 monthly California Lifeline subsidy, providers would still need state approval, he said. "It doesn't compute." Noting O'Rielly's comment about the current FCC insulting the statute, Ramsay quipped that the agency had been insulting the statute for 30 years.

The Multicultural Media, Telecom and Internet Council supports Lifeline modernization but hopes the FCC will proceed cautiously and not assume broadband service will be universal within three years, MMTC Vice President Nicol Turner-Lee said. She also urged the commission to re-energize efforts to consider and promote diversity, including of ownership.