A Q&A with Senate Commerce Committee Chairman John Thune (R-SD).
With Republicans now in power across the government, Congress has moved aggressively toward undoing Obama-era tech policies. Network neutrality, the rule that ensures equal access to all websites, and broadband privacy rules are the first targets. Lawmakers also hope to play a bigger role than in the last administration on policies of particular concern to Silicon Valley and internet users, including driverless cars and the scaling back of Federal Communications Commission powers concerning broadband providers. Asked, "How do you want to change net neutrality rules?" Chairman Thune responded, "We’re open for business. We think a legislative solution is the best alternative and that the FCC under Chairman Tom Wheeler went too far with regulations that were overreaching and basically classified the internet as a public utility under a 1934 statute. Congress needs to be heard from, or you will have a constant back-and-forth on this issue depending on which party is in the White House."
In his first days as President Trump’s pick to lead the Federal Communications Commission, Ajit Pai has aggressively moved to roll back consumer protection regulations created during the Obama presidency.
Chairman Pai took a first swipe at network neutrality rules designed to ensure equal access to content on the internet. He stopped nine companies from providing discounted high-speed internet service to low-income individuals. He withdrew an effort to keep prison phone rates down. In total, the chairman of the FCC released about a dozen actions in the last week, many buried in the agency website and not publicly announced, stunning consumer advocacy groups and telecom analysts. They said Pai’s message is clear: The FCC, an independent agency, will mirror the Trump administration’s rapid unwinding of government regulations that businesses fought against during the Obama years.
“With these strong-arm tactics, Chairman Pai is showing his true stripes,” said Matt Wood, policy director at the consumer group Free Press. “The public wants an FCC that helps people. Instead, it got one that does favors for the powerful corporations that its chairman used to work for.”
Rep Anna Eshoo (D-CA) said, “Ajit Pai is intelligent and genial, but he is not on the side of consumers and the public interest.”
Edgar M. Welch, a 28-year-old father of two from Salisbury (NC) recently read online that Comet Ping Pong, a pizza restaurant in northwest Washington, was harboring young children as sex slaves as part of a child-abuse ring led by Hillary Clinton. The articles making those allegations were widespread across the web, appearing on sites including Facebook and Twitter. Apparently concerned, Welch drove about six hours from his home to Comet Ping Pong to see the situation for himself, according to court documents. Not long after arriving at the pizzeria, the police said, he fired from an assault-like AR-15 rifle. The police arrested him. They found a rifle and a handgun in the restaurant. No one was hurt.
Unbeknown to Welch, what he had been reading online were fake news articles about Comet Ping Pong, which have swollen in number over time. The false articles against the pizzeria began appearing on social networks and websites in late October, not long before the presidential election, with the restaurant identified as being the headquarters for a child-trafficking ring. The articles were soon exposed as false by publications including The New York Times, The Washington Post and the fact-checking website Snopes. But the debunking did not squash the conspiracy theories about Comet Ping Pong — instead, it led to the opposite.
Deal makers took notice in Oct when Donald Trump declared that he would seek to block AT&T’s $85.4 billion bid for Time Warner on the grounds that it would radically concentrate power in too few companies. But after an initial period of turmoil, deal advisers say that it is unclear whether a Trump administration — led by an avowedly pro-business real estate mogul — would really make life difficult for mega-mergers.
At the moment, AT&T’s planned takeover of Time Warner, the biggest merger of the year and one that is poised to reshape the world of media and telecommunications, appears to be the most likely candidate for hazing. The president-elect was among the first politicians to criticize the deal, vowing to block it if he became president. President-elect Trump said it was “an example of the power structure I’m fighting.” He also opposed a similar union between Comcast and NBCUniversal in 2013, which he called “poison.” But antitrust specialists and Republican strategists say a Trump administration may not fulfill his campaign promises.
Hours after Donald J. Trump won the race for the White House, scores of regulations that have reshaped corporate America in the last eight years suddenly seemed vulnerable. While many questions remain about how President-elect Trump will govern, a consensus emerged in many circles in Washington and on Wall Street about at least one aspect of his impending presidency: President-elect Trump is likely to seek vast cuts in regulations across the banking, health care and energy industries.
The idea of a Trump presidency triggered a sense of dread among many people in the liberal-leaning technology business. Trump is seen as less favorably disposed toward the concentration of power among the handful of large companies that dominate the internet, including Facebook, Google and Amazon, said Glenn Kelman, chief executive of Redfin, an online real estate firm. Trump has called for the rejection of AT&T’s bid for Time Warner. Still, analysts expect that he will appoint antitrust regulators at the Federal Trade Commission and Justice Department who will largely follow traditional Republican approaches to the free market. Trump will be under pressure by major telecom and cable firms to roll back aspects of net neutrality. The rule inhibits how broadband providers manage traffic on their networks to ensure any website is equally accessible to consumers. Telecom and cable firms continue to challenge the rules in court and Mr. Trump, with the encouragement of Republicans in Congress, may seek to abandon the regulation.
As Tom Wheeler enters his last few months as head of the Federal Communications Commission during the Obama Administration — the next President is expected to name a new chairman — he has turned early supporters into foes and invited an expensive lobbying battle that may stymie a last-ditch pursuit of regulations that starts on Oct 27, including voting on a proposal for broadband privacy protections.
Wheeler’s last act as chairman could be overseeing the review of AT&T’s $85 billion bid for Time Warner, a mega-media deal that has already elicited protests from some politicians and consumer advocacy groups. AT&T and Time Warner will most likely try to avoid an FCC review by selling off the small number of broadcast television assets owned by Time Warner. Yet some say that even if Chairman Wheeler does not directly review the deal, his regulations have created new restrictions for AT&T and other broadband companies at a time when they are trying to find new growth beyond their internet businesses.
AT&T, in addition to its billions of dollars of capital, has another arsenal at its disposal: one of the most formidable lobbying operations in Washington. The company’s list of nearly 100 registered lobbyists already on retainer in 2016 includes former members of Congress. AT&T is the biggest donor to federal lawmakers and their causes among cable and cellular telecommunications firms, with its employees and political action committee sending money to 374 of the House’s 435 members and 85 of the Senate’s 100 members this election cycle. That adds up to more than $11.3 million in donations since 2015, four times as much as Verizon Communications, according to a tally by the Center for Responsive Politics, a nonprofit research group. AT&T has also spent decades building a national alliance of local government officials and nonprofit groups — particularly from black and Hispanic communities — that it will certainly be asking to weigh in again in Washington, as it tries to get the merger approved.
“We have seen our fair share of deals,” said AT&T’s general counsel, David R. McAtee II. “Our job is informing consumers what a good development this is for them.” But navigating this transaction will be a test of just how much influence AT&T has in Washington these days. That is particularly the case as AT&T’s lobbying team undergoes a transition after losing its longtime leader, James W. Cicconi, a former aide to President George H. W. Bush.
A cable and internet provider decides to buy an entertainment conglomerate. The merger is met with skepticism by industry analysts and outrage by consumer groups, who complain that it would thwart competition, create unfair pricing and incite more media consolidation. That was 2009, when the cable giant Comcast announced it would acquire NBC Universal. When the next administration in Washington takes up the $85.4 billion deal between AT&T and Time Warner, the Comcast acquisition will be used as the lens to examine the changing media landscape.
In the end, the Justice Department and the Federal Communications Commission approved the acquisition of NBCUniversal, requiring some small management concessions but few divestitures. But AT&T and Time Warner will probably face a much sterner test. With a huge wireless business, too, the combination would be a new kind of media juggernaut. Donald Trump has already condemned the deal. Campaigning in Gettysburg, he Trump said he would block it if he were president, “because it’s too much concentration of power in the hands of too few.” Hillary Clinton, meanwhile, has promised to be tough on corporate megapowers and consolidation. Regardless of who wins next month, the AT&T acquisition of Time Warner will be among the biggest and most important regulatory cases to await the next administration. The merger would make AT&T unmatched in its size and reach to consumers through smartphones, home broadband, satellite television and a broad portfolio of cable channels and movies. For that reason, it may raise more cautionary flags than Comcast’s merger with NBCUniversal, which did not involve a wireless carrier.
There is an axiom in technology: New products typically go to wealthy customers first, before prices eventually fall to reach the masses. With broadband now classified as a utility, telecommunication and tech companies including Sprint, Comcast and Facebook are increasingly working to make high-speed Internet accessible to every American, not just a luxury. The companies are among those that have set their sights on bringing free or cheap high-speed Internet service to low-income and rural populations in the United States, spurred by philanthropy and, for some, the hope of turning Americans who are not online today into full-paying customers in the future.
Those goals were on display, when Sprint announced that it plans to give one million low-income high school students a free device and a free high-speed data plan until graduation. Facebook is also working to bring to the United States a service known as Free Basics, which gives people free access to certain websites, including Facebook. Comcast recently loosened requirements for its low-cost broadband service, expanding it to anyone in public housing. These moves go toward closing what has been an intractable divide between broadband haves and have-nots. Low-income broadband programs have been vital to closing the digital divide, where half of all low-income Americans lack broadband, said Mignon Clyburn, a commissioner at the Federal Communications Commission. “Lowering the price for service has been instrumental in bringing millions online,” Commissioner Clyburn said.
When the Federal Communications Commission announced a plan that would free people from having to rent cable set-top boxes, the cable and television industries balked and lobbied hard to forestall the proposal. But it turns out the biggest threat to the plan, which the FCC is expected to vote on Sept 29, is a low-profile Democratic commissioner within the agency itself.
Jessica Rosenworcel, a career telecom wonk whom President Obama appointed to the FCC in 2012, has become the crucial swing vote on the cable box proposal. She is one of three Democrats of the agency’s five rule-making members, which would normally be enough to carry a vote since commissioners typically act in line with their parties. But Commissioner Rosenworcel has not fully embraced the cable box proposal like her two Democratic colleagues and instead has indicated her unease with the plan. Rosenworcel’s concerns hinge on what she views as what may be too much meddling by the FCC in the private agreements between cable providers and device makers. However, consumer groups say the FCC needs to play an oversight role in those licensing deals to ensure fairness. Commissioner Rosenworcel believes that the market for costly set-top boxes required reform. But she said the cable box proposal needed to be revised to comply with copyright and licensing laws that would not give the FCC outsize power.