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Obama Nominates Cable Industry Lobbyist and Campaign Bundler New Head of FCC

Nomination of Tom Wheeler shows Obama wants an FCC that manages monopoly competition – not a defender of public interest.

Paul Jay, Senior Editor, TRNN: Welcome to The Real News Network. I’m Paul Jay in Baltimore.

On May 1, 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.

Now joining us to give us his view on this nomination is Nicholas Johnson. He was a commissioner of the Federal Communications Commission, appointed by Lyndon Johnson. He was there from 1966 to 1973. He’s been codirector of a public health public policy institute, a network TV host, a congressional candidate. He’s the author of many books. He law clerked for the U.S. Supreme Court. And he now joins us from Iowa City.

Thanks very much for joining us, Nicholas.

Nicholas Johnson, Fmr. FCC Commissioner: Well, thank you, Paul.

Jay: So what do you make of this appointment of Tom Wheeler?

Johnson: Well, I think it’s somewhere between bizarre and outrageous. And there are three things that we can start with that are wrong with it, and then we’ll come to a couple more.

So let’s start with why is this guy important to Obama. He is what we call a major donor, not just of his own money, but a bundler. This is somebody who goes around and gets checks from folks who couldn’t give it in the old days before corporations became people. They couldn’t give it as a corporation, so you’d get checks from all the vice presidents, and you literally bundle them and hand them over to the presidential candidate. And this fellow, this Tom Wheeler, he pulled together some $700,000 to $1 million (there’s some difference as to how much) and contributed that to Obama’s campaign. So we start off with the fact that we’ve got somebody who’s sort of bought this appointment.

Number two, this is a really serious position. I mean, normally these large donors, you know, they let them sleep a night in the Lincoln bedroom in the White House or they give him an ambassadorship to a country that even the new ambassador has never heard of where they can’t do too much harm. So in this case, they’ve handed this fellow what I think is the single most important independent regulatory commission in the lives of Americans—parents, children, minorities, working class, you name it, for reasons that we can describe later.

So (A) he’s a big donor. (B) They’ve given him one of the most important jobs in Washington, D.C.

Now, third, as some of those presidential candidates would count, (A), (B), and third, he’s a fellow who is from this industry. The president of the United States has appointed a lobbyist to regulate lobbyists who lobby on behalf of the corporations that he lobbied on behalf of. He was a trade association president. He was a lobbyist for all those hundreds of companies, plus more, lobbied the FCC , lobbied the Congress, in and out of the White House seeking influence there. And finally, as if all of this was not enough, he’s a venture capitalist who has money in some of these companies.

Jay: Just to be clear for people that don’t know, we’re talking about the Federal Communications Commission, and this commission regulates anything—tell me if I’m right—everything from cell phones to television to cable TV to satellite TV, radio. I mean, you know, as you say, it’s hard to think of something that people interact with more than the communications industry.

Johnson: That’s right. Plus under-ocean cables, and police and taxi cab radios, and amateur radio operators. And it used to be the telegraph and the telephone company when AT&T was a monopoly on top of that, when I was on the commission. And so if those who are watching this will turn over their little handheld device or look in the back of their computer or TV screen or whatever, they’ll see that it’s been type accepted by the FCC. So this equipment itself is approved.

Jay: So, Nicholas, what are some of the big issues that are going to come before the FCC that one might worry about having an industry rep running the FCC?

Johnson: Oh my goodness. You—how much time you got? I mean, you’ve got questions of monopoly ownership, permitting firms to merge in ways that end up driving up prices and limiting competition and consumer choice. You have issues like net neutrality, where the question is whether or not your internet service provider can write the software so the only web pages you can get to are the ones that they own, which is the way cable television works instead of being open to anybody who wants to put their programming on the cable.

Contrast that with AT&T. So, I mean, there were a lot of jokes about AT&T, and Lily Tomlin’s routine—we don’t care, we don’t have to, we’re the telephone company. But one thing AT&T did do was it had to provide everybody that wanted a phone a phone, and once you got the phone you could say anything you wanted to say. And it didn’t mean that somebody else might not arrest you, but AT&T wasn’t going to control content, they were not going to control who you can talk to. They were not going to raise the price on you if you talked to people they didn’t think you ought to be talking to. So for all the criticism of AT&T, it was in many ways superior in terms of consumer choice and freedom and price regulation and so forth than what we have now.

Now, the thing is, about appointing a lobbyist to this job, we should remind folks that when this was created by Congress in the 1920s as the Radio Commission and then in 1934 became the Federal Communications Commission, the whole mission and purpose of this agency was not to further enrich corporate executives, to drive up shareholder value, to increase the cash flow. The purpose of the agency was to represent the people. The standard was you must operate in the public interest. And that meant that broadcast licensees, for example, did not own their frequencies. They had a license that was good initially for 18 months, then for three years. When I was on the commission it was still three years.

And in exchange for getting this right to make private profit from public property, they were obliged to serve the interests of their community. They were to deal with the controversial issues confronting that community, to provide a range of points of view. They were not to be an instrument of propaganda for one particular ideology or another. And they provided all kinds of service—lost dogs, newborn babies, you know, whatever.

So of all the agencies where you would not want to appoint a lobbyist or somebody out of the industry, the FCC is number one on the list of the agencies that ought not to have it. It’s bad enough elsewhere. You know this outfit that was supposed to be regulating the offshore drilling rigs and it turned out that the regulators were literally sleeping with people in the industry, and then the drilling rig blew up. We have an agency that’s supposed to regulate coal mine safety. They’ve given hundreds of violation notices to the Massey Coal Company, but they never closed them down. And what was it? Twenty-seven guys died down there. So it’s significant.

When you appoint people out of the industry, when you listen to businesses saying, oh, get the government off our backs, we don’t want regulation, well, that’s when you have salmonella outbreaks and that’s when elevators fall and kill people, and that’s when interstate highway bridges fall into rivers. There’s a reason why we have these regulations.

Jay: And the FCC, if—remind me how many members there are. It’s not very many. It’s five?

Johnson: There are five now. There were seven when I was there. We had seven-year terms. And the Senate committee wanted you to serve out your full seven years.

Jay: Right. And during the 2000s, when you had—essentially you had three Republicans and two Democrats—the two Democrats, you know, were not bad in the 2000s and this concept of fighting for the public interest. But everyone was waiting when there would be this Democratic appointment, so then in theory you’d have three Democrats and you’d have more of a pushback on the industry, except now the chairman is now essentially an industry representative. I don’t know how the Republicans could have appointed anyone, you know, more connected to those corporate interests.

Johnson: Well, that’s why I don’t expect any problem getting approval of this, because the same people who pay the senators—. You realize, if you’re—you know, these guys, they go across the street for about a half a day every day to make phone calls trying to raise money ’cause they’re not supposed to make those calls from their office. Now, I calculated once, years ago—and it’s probably much worse today—if you’re a United States senator wanting to be reelected, every morning, you wake up, you see the sun, you realize when that sun sets you’ve got to have found somewhere $10,000 cash, $10,000 dollars a day, seven days a week, 365 days a year, for six years. Now, you and I might be able to raise $10,000 that first day if you’ve got more wealthy friends than I do, but the second day it’s going to be a real struggle. And for the other 363 days that year, I think you and I are going to be out of luck. These guys have got to raise $10,000 every day. Well, the same people who were paying them money are the same people that Tom Wheeler’s been working for. So I think it’s highly unlikely that he’s not going to be approved.

Jay: Okay. Well—.

Johnson: [incompr.] another problem. You want another problem? I mean, I gave you three.

Jay: Yeah, go ahead.

Johnson: No, but another thing is, in addition to all this lobbying and representing trade associations and investing in these companies—. Well, let me just comment about that. You’ve got two problems here. One is an actual conflict of interest, that somebody like that will simply, like a colleague of mine on the commission—I ask him during a hearing, I say, hey, how are you going to vote on this one? He’d say, well, Nick, I don’t know. He said, some of my friends are for this and some of my friends are against it, and, well, I’m for my friends. And so one problem is that a fellow like Wheeler gets in there and he votes for his friends—the people he’s represented, the people he’s got investments in, and so forth. I’d like to believe that he’s an honorable enough guy that he wouldn’t do that, but that’s always a risk.

But whether he does it or he doesn’t do it, there is the appearance of this conflict. If you’re on the losing side and half of the people who appear in court or appear before the FCC end up being on the losing side, what are you going to think?

Jay: Well, isn’t part of what’s happened here, Nick—Nicholas, isn’t part of what’s happened here is this underlying principle or idea that the airways are public and the FCC’s role is to allow private companies access to them, but always reinforce the public interest, tThat seems to have been so pushed to the side now, that essentially really what the FCC’s role is is to manage the relations between the big monopolies to allow, you know, in theory a certain kind of equal playing ground that the one monopoly doesn’t get the advantage over the other monopoly, and it’s all about those intermonopoly relations? The public interest doesn’t seem to have all that much more to—much to do with it anymore.

Johnson: Well, but the law hasn’t changed. I mean, that’s still what they’re supposed to be doing.

Jay: Well, we’re going to keep following this story, and we’re going to come back to Nicholas as Wheeler’s term begins, and we’ll start looking at some—.

Johnson: Well, I’ve got my fourth thing. You want to hear that?

Jay: Oh, yeah. Go ahead. Finish off. Yeah.

Johnson: Well, he’s on the president’s intelligence advisory board. Now, one of the major issues in all this digitization, internet computerization stuff is our personal privacy, because if somebody’s following you around as a private detective or something, you’re probably going to figure out that they’re always walking behind you or driving behind you or whatever. But on the internet, there’s no way you can know who’s tracking you, who’s getting what, how much they’re getting on you, who they’re selling that data to, and so forth. And one of the worst offenders is United States government that thinks it’s necessary to spy on all American citizens on the off chance they might catch a terrorist or two. And the job of this intelligence board is to think about the interests of the government in this regard, rather than to think about the privacy interests of us. So that’s just one more bit of baggage that he takes into the commission.

Jay: Right. And that’s pertinent, because the FCC has a lot to say about to what extent these media monopolies have to safeguard people’s privacy.

Johnson: That’s right. So if folks want to know more, the website is, and they can find out how to send me an email, and I’m happy to answer questions and stuff.

Jay: Yeah, that’s good. Yeah, please, I encourage people to go there. And we’ll be back with Nicholas as things develop at the FCC. Thanks for joining us.

Johnson: Well, thank you.

Jay: And thank you for joining us on The Real News Network.

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