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FCC And Telecom Emails Illustrate Cosy Relationship

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The Federal Communications Commission has long been accused of having a close relationship with the industry it regulates.

The accusations are usually leveled because of the revolving door that has seen FCC officials leave the agency to work as lobbyists for telecom companies, and lobbyists for telecom companies leave to work for the FCC.

Internal FCC documents obtained by VICE News in response to a Freedom of Information Act (FOIA) request we filed last April sheds a little more light on the revolving door and the cozy relationship between the regulators and the industry it oversees.

The 600-pages of documents, which include emails and letters, are especially noteworthy because they pertain to discussions revolving around rules for net neutrality, which FCC Chairman Tom Wheeler — he’s a former lobbyist for AT&T, Verizon, Sprint, and Nextel — is expected to unveil and enact in the coming weeks.

At the same time, the documents the FCC released do not tell the whole story about the agency’s net neutrality discussions with the telecom industry. The FCC said that in response to our FOIA request, it reviewed about 4,600 records, including 3,000 emails and “internal drafts, memoranda, charts, outlines,” and “notes.”

But the FCC withheld the vast majority of those documents from VICE News citing exemptions that protect personal privacy, “trade secrets and commercial or financial information,” and “deliberative” records — in other words, records that are part of the behind-the-scenes decision-making process. Moreover, the records the FCC released, particularly certain emails that contain information FCC officials sent to FCC spokespeople about how to respond to a wide range of queries from reporters about net neutrality, are completely redacted.

The FCC was supposed to release another batch of documents to VICE News on November 14. The agency said it now intends to turn over those records on November 26 — the day before Thanksgiving.

* * *

Net neutrality is a contentious issue. Last May, the FCC voted to approve a preliminary, open Internet proposal by Wheeler that could authorize broadband providers to create “fast lanes” for content companies like Netflix who are willing to pay for the service.

Net neutrality advocates reacted negatively to the proposal and flooded the FCC with 4 million emails during the two-month open comment period on the matter that followed the commission’s 3-2 vote.

Last week, President Barack Obama weighed in on the issue. In videotaped remarks, Obama urged the FCC, which operates independently, to adopt open internet rules that would ensure that “neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online.” Obama suggested that the FCC classify broadband as a public utility.

Wheeler, a major Obama fundraiser who raised $700,000 for his two presidential campaigns, has reportedly not yet decided how he will act. But some of the internal FCC documents show that telecom lobbyists and executives at internet service providers have a direct line to the chairman and have already attempted to influence his decision.

Two days before the FCC’s May 15 vote on the open internet proposal, John Chambers, the chairman and chief executive of Cisco Systems, spoke with Wheeler on the phone to express his concerns by some “advocates to impose the old fashioned telephone regulations of Title II of the Communications Act to broadband internet access service.” That is the proposal Obama is urging the FCC to adopt.

Chambers said Cisco “strongly supports” Wheeler’s proposal that the commission voted on, as it would spur innovation “by allowing new technology and business models to be deployed without onerous regulation.” Classifying broadband service as a public utility would chill “investment in new infrastructure,” Chambers said.

Neither Wheeler nor Chambers responded to VICE News’ requests for comment.

Republicans reacted angrily to Obama’s proposal, and to net neutrality in general. Senator Ted Cruz likened the issue to “Obamacare for the Internet.” But Republicans weren’t happy with Wheeler’s proposals either. Head Comcast lobbyist Kathy Zachem sent an email to Philip Verveer, the FCC’s senior lawyer, on April 24 — the day the FCC circulated new open internet proposals — and gave him advanced notice of the Republican response.

“This to go out from upton and walden shortly,” Zachem wrote.

Upton and Walden are Representative Fred Upton, chairman of the House Energy and Commerce Committee, and Communications and Technology Subcommittee Chairman Representative Greg Walden. In a joint news release on April 24, they said the FCC’s proposal on net neutrality is “a solution in search of a problem.”

‘Unlike arguments made in public, no one gets the opportunity to debunk the telecoms’ arguments when they’re made in secret.’

Later on April 24, Zachem forwarded an email to Verveer about an investor meeting sponsored by a venture capital firm being held for Republicans on why net neutrality is a good thing. “Fyi – please do not forward with my e-mail reference thanks,” Zachem wrote.

Verveer’s responses, if there were any, were not included in the documents the FCC provided to VICE News.

Zachem’s emails underscore the revolving door and the close relationship lobbyists have with the regulatory agency. Verveer is the FCC chairman’s senior counselor; he’s also a former Comcast consultant and industry lobbyist. Verveer was also hired by two industry groups — the powerful National Cable & Telecommunications Association (NCTA) and the Wireless Association (CTIA) — that have worked to block net neutrality. Neither Verveer nor Zachem responded to requests for comment.

Comcast is the only internet service provider in the US that is legally bound by full net neutrality rules; the company agreed to the arrangement as part of its deal to acquire NBCUniversal. But according to a report in the Washington Post published last July, Comcast has “two big goals” in Washington: “The first is to get its merger with Time Warner Cable approved by federal regulators. The second is to forestall what it views as potentially onerous new regulations on its broadband business.”

* * *

Kit Walsh, an attorney at the Electronic Frontier Foundation who works on net neutrality issues, reviewed the FCC documents. Walsh said the records show the telecoms were happy with Wheeler’s “weak” April proposal on open internet rules and “reacted intensely” when “Title II was on the table.”

But Walsh is troubled that the FCC withheld so much material.

“Unlike arguments made in public, no one gets the opportunity to debunk the telecoms’ arguments when they’re made in secret,” Walsh told VICE News. “But the documents we do see demonstrate telecoms have access and relationships with regulators. It’s a social network between regulator and the regulated.”

One of those documents is an email Wheeler sent former FCC Chairman Michael Powell, now the president of NCTA, after Powell delivered a keynote speech to the trade and lobbyist group last April 29.

“Michael, Great speech! Very statesmanlike challenge to your industry while putting things in perspective,” Wheeler wrote on April 29. Wheeler also used to be the chairman of the NCTA. “FYI, I’m going to get pretty direct about the Open Internet tomorrow. The press is full of misinformation and I’m going to use the visit to the largest broadband providers to deliver a message that shows that the perception that we’re gutting Open Internet is wrong.”

It’s unclear how Powell responded because the FCC withheld his reply. Wheeler, however, responded a day later to Powell and said that his chief of staff Ruth Milkman — another former industry lobbyist — would send an advance copy of Wheeler’s speech.

“I intend to be direct,” Wheeler wrote. “If you want to talk about these points in our discussion that’s fine with me.”

In his keynote address, Powell said, “We must continually prove that the private sector can achieve public good. We need to continue to build a faster and open Internet. We need to keep prices reasonable and the value of our services high…. We need to be good corporate citizens.”

The only insight into Wheeler’s thinking about the new rules for the open Internet was found in an email exchange he had with Richard Greenfield, a media and technology analyst at investment firm BTIG. Greenfield had sent Wheeler an email on May 11, four days before the FCC voted on its open internet proposal, under the subject line, “Maybe changing wording could help.” Greenfield wrote:

There will not be two internets — there is and can only be one

But there can be dedicated ip services called managed services that never touch the public internet

That was in the prior rulemaking and never caused this insanity from the tech world – even though they were effectively fast lanes

I honestly think everyone spins to their advantage and doesnt know what they are talking about

Hope u enjoyed our piece from Friday – we submitted to the official record too

Wheeler responded the following day, saying he had “repeatedly” read Greenfield’s research report, “Fast Lanes Do Not Have to Affect Internet Speeds & Why Reverse Blocking Should End the Net Neutrality Debate.”

“Can you tell me more about the Roku [streaming service] example? I didn’t realize that this relationship was in place. Are there other MSOs [multi system operators] or other edge services that have something similar? Specifically, how does it work in terms of cost, etc.?”

Greenfield replied and noted that: “Time Warner Cable’s Roku (and ios/Android apps) inside the home function as managed or specialized network services. The content originates from Time Warner Cable’s digital center in Denver and is transported only over TWC infrastructure — it never touches the public internet. It is not removing bandwidth from the Internet service that TWC delivers to me, it is a separate pathway — essentially a fast lane that never gets congested… which I think is exactly what was envisioned in the last rulemaking. There is no cost to the consumer.”

Some of the correspondence Wheeler received was from old colleagues who wanted to reconnect with the FCC chairman.

“Hey Mr. Chairman, I sincerely hope this note (from the public domain) makes its way to your desk,” wrote Laurence Master on March 31. “Just want to tip my hat and say kudos for all that’s going on in your life, seems like it has been a long time coming. Ironically, I find myself on the other side of the fence these days, as Director, Digital Distribution, NBC Sports, go figure, fill in the blanks (especially with the TW [Time Warner]/Comcast merger and net neutrality filling you inbox [sic])…. I hope Carol and family are well. If you still stay in touch with Stamberger, please pass along my best wishes to him as well.”

It is likely Master was referring to Richard Stamberger, a lobbyist for CTIA, the powerful lobbying group Wheeler used to head.

Master emailed Wheeler again on April 24. “TW – Good to see you all over the news taking lead on net-neutrality, hope things progressing well. -LM”

In Wheeler’s response, he spells Master’s first name wrong. “Thanks Lawrence. These are interesting times.”

It didn’t seem to bother Master, however. He replied, “From everything I’m reading, sounds like you have your hands full…. if anyone can handle this ride you’re certainly one of them…. as someone in charge of NBCS streaming partnership distribution, you bet I’m paying attention…. good luck, Tom hang in there.”


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