FCC Chairman Wheeler denies Obama pressured him on net neutrality

Oct. 8, 2014: Federal Communications Commission (FCC) Chairman Tom Wheeler speaks during a news conference in Washington. (AP)

Federal Communications Commission Chairman Tom Wheeler on Tuesday denied the White House pressured him to regulate Internet service providers similar to how the federal government handles public utilities.

Republicans have accused Wheeler of caving on the issue after President Obama released a video in November calling for such an approach -- by using so-called “Title II” regulations under the 1934 Communications Act.

Wheeler twice on Tuesday said he was not pressured by “secret instructions” from Obama.

“We heard from the administration, both in the form of President Obama’s very public statement of November 10 and in the form of the National Telecommunications and Information Administration’s formal submission,” Wheeler testified at a House Committee on Oversight and Government Reform hearing. “Here I would like to be clear: There were no secret instructions from the White House. I did not, as CEO of an independent agency, feel obligated to follow the president’s recommendation.

“But I did feel obligated to treat it with the respect that it deserves, just as I have with the input I received -- both pro and con -- from 140 senators and [House] representatives. …You have asked whether there were secret instructions from the White House. Again, I repeat: The answer is no.”

Wheeler also said he made the decision based in part on comments from 4 million Americans.

Wheeler’s comments follow the FCC’s 3-2 vote last month to adopt sweeping new regulations sought by Obama for how Americans use and do business on the Internet, aimed at barring service providers from creating paid "fast lanes" on the Internet, which consumer advocates and Internet companies worry would edge out cash-strapped startups and smaller Internet-based businesses.

The so-called "net neutrality" regulation has pitted Internet activists against big cable companies and prompted a record number of public comments to U.S. regulators.

The issue requires lawmakers to walk a delicate political line: Many consumers want to keep the power of cable and wireless providers in check, and they oppose the idea of paid fast lanes on the Internet. But service providers say the latest plan endorsed by the Federal Communications Commission will become a regulatory land mine that will discourage investment.

"We have seen no evidence to support" that Wheeler was pressured by Obama, Maryland Rep. Elijah Cummings, the top Democrat on the committee, said Tuesday.

The hearing was the committee’s first on the subject since the FCC’s vote to put the Internet in the same regulatory camp as the telephone, using the 1934 act. This means that whenever a company provides an Internet connection, it has to act in the public interest and not do anything considered "unjust or unreasonable."

The goal is to prevent Internet service providers such as Comcast, Sprint and T-Mobile from blocking or slowing data that moves across its networks. The idea is known as net neutrality because it suggests providers should remain agnostic about web traffic instead of capitalizing on it by creating the so-called fast lanes and charging "tolls" to content providers such as Netflix and Amazon.

The FCC's 3-2 vote along partisan lines was cheered by consumer and Internet activists. They say the move is critical to protecting the Internet as Americans have always known it -- an open architecture that allows anyone to offer web-based services without having to first get permission from service providers.

But cable and wireless companies have threatened to sue, saying that Depression-era regulation shouldn't apply to the Internet.

On Tuesday, committee Chairman Rep. Jason Chaffetz said the FCC's inspector general has opened an investigation into whether the agency had violated any rules.

Samples of 1,600 pages of emails and other documents released by the House committee -- while falling short of any blatant impropriety -- raise questions about whether senior Obama aides went to unusual lengths to engage independent regulators on a popular issue, and if the FCC gave these aides too much access to internal deliberations while shutting out Congress.

"A president should be able to weigh in, make his opinions known. I don't have a problem with that. But this seems to be very one-sided," Chaffetz said.

Still, the political sparring on Capitol Hill was unlikely to affect the recent decision by the FCC to impose tough new regulations on Internet service providers.

Chaffetz said he had been told that the FCC Inspector General's office launched an investigation into the agency's deliberations process on its net neutrality decision. Wheeler said he was not aware of any investigation, but said he would cooperate.

Much of the focus on the hearing was on behind-the-scenes talks last year among lobbyists, agency staffers and White House aides as Wheeler struggled with how exactly to regulate Internet service.

A court had knocked down the FCC's previous legal approach, which had prohibited cable and wireless companies from blocking or slowing Internet traffic. The idea is known as net neutrality because it suggests Internet service providers shouldn't discriminate against various web traffic.

Throughout the process, Wheeler gave the White House a front-row seat to the deliberations process, according to the emails. In one April 2014 email exchange, Wheeler loops in John Podesta, a close aide to Obama, denouncing a story by The New York Times that suggested the FCC would be too soft on net neutrality.

"Brutal story. Somebody going on the record to push back?" Podesta asks Wheeler in an email.

Wheeler responds: "Yes. I did with a statement similar to what I emailed you."

Contact between the FCC and the White House escalated in the fall. On Nov. 6, Obama's top assistant on economic policy -- Jeffrey Zients -- took the unusual step of meeting with Wheeler on the chairman's turf at FCC headquarters. Zients told Wheeler that the president planned to call out the FCC to impose Title II rules.

The meeting raised some eyebrows. An AT&T lobbyist's email to a top Wheeler aide suggested it was "bad for any semblance of agency independence." The FCC aide, Philip Verveer, circulated the commentary among his colleagues with the note "FYI."

Four days later, Obama released his YouTube video announcing his support for Title II. That same morning, a group of civilian protesters were outside Wheeler's house blocking his car. Wheeler notes the timing cynically in an email that day to top aides.

"FYI. Isn't it interesting," Wheeler wrote. "The day of the (net neutrality) demonstration just happens to be the day folks take action at my house" and after the White House sends an email to its supporter list calling on "anyone who cares about saving the Internet."

"Hmmm..." he concludes, signing his email "T."

While Wheeler was exchanging emails and meeting with Obama's aides, he declined to testify before Congress or pass along documents until after his decision was made.

"I think Mr. Zients on Nov. 6th, strong-armed you," Rep. John Mica, R-Fla.

The Associated Press contributed to this report.