Outgoing Chair of the Federal Communications Commission Tom Wheeler speaks with Harvard Law School Professor Susan Crawford about his work at the FCC, and where telecommunications might go under the next administration.
About Mr. Wheeler
Tom Wheeler became the 31st Chairman of the Federal Communications Commission (FCC) on November 4, 2013. Chairman Wheeler was appointed by President Barack Obama and unanimously confirmed by the United States Senate. Chairman Wheeler is widely viewed as having been one of the most consequential leaders of the FCC since the agency's creation in the 1930s.
For over three decades, Chairman Wheeler has been involved with new telecommunications networks and services, experiencing the revolution in telecommunications as a policy expert, an advocate, and a businessman. As an entrepreneur, he started or helped start multiple companies offering innovative cable, wireless, and video communications services. He is the only person to be selected to both the Cable Television Hall of Fame and The Wireless Hall of Fame, a fact President Obama joked made him “The Bo Jackson of Telecom.”
Prior to joining the FCC, Chairman Wheeler was Managing Director at Core Capital Partners, a venture capital firm investing in early stage Internet Protocol (IP)-based companies. He served as President and CEO of Shiloh Group, LLC, a strategy development and private investment company specializing in telecommunications services and co-founded SmartBrief, the internet’s largest electronic information service for vertical markets. From 1976 to 1984, Chairman Wheeler was associated with the National Cable Television Association (NCTA), where he was President and CEO from 1979 to 1984. Following NCTA, Chairman Wheeler was CEO of several high tech companies, including the first company to offer high speed delivery of data to home computers and the first digital video satellite service. From 1992 to 2004, Chairman Wheeler served as President and CEO of the Cellular Telecommunications & Internet Association (CTIA).
Chairman Wheeler wrote Take Command: Leadership Lessons of the Civil War (Doubleday, 2000) and Mr. Lincoln's T-Mails: The Untold Story of How Abraham Lincoln Used the Telegraph to Win the Civil War (HarperCollins, 2006). His commentaries on current events have been published in the Washington Post, USA Today, Los Angeles Times, Newsday, and other leading publications.Presidents Clinton and Bush each appointed Chairman Wheeler a Trustee of the John F. Kennedy Center for the Performing Arts, where he served for 12 years. He is also the former Chairman and President of the Foundation for the National Archives, the non-profit organization dedicated to telling the American Story through its documents, and a former board member of the Public Broadcasting Service (PBS).
Chairman Wheeler is a proud graduate of The Ohio State University and the recipient of its Alumni Medal. He resides in Washington, D.C.
About Professor Crawford
Susan Crawford is John A. Reilly Clinical Professor of Law at Harvard Law School and a co-director of the Berkman Klein Center. She is the author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, co-author of The Responsive City: Engaging Communities Through Data-Smart Governance, and a contributor to Medium.com’s Backchannel. She served as Special Assistant to the President for Science, Technology, and Innovation Policy (2009) and co-led the FCC transition team between the Bush and Obama administrations. She also served as a member of Mayor Michael Bloomberg’s Advisory Council on Technology and Innovation and is now a member of Mayor Bill de Blasio’s Broadband Task Force. Ms. Crawford was formerly a (Visiting) Stanton Professor of the First Amendment at Harvard’s Kennedy School, a Visiting Professor at Harvard Law School, and a Professor at the University of Michigan Law School (2008-2010). As an academic, she teaches Internet law and communications law. She was a member of the board of directors of ICANN from 2005-2008 and is the founder of OneWebDay, a global Earth Day for the internet that takes place each Sept. 22. One of Politico’s 50 Thinkers, Doers and Visionaries Transforming Politics in 2015; one of Fast Company’s Most Influential Women in Technology (2009); IP3 Awardee (2010); one of Prospect Magazine’s Top Ten Brains of the Digital Future (2011); and one of TIME Magazine’s Tech 40: The Most Influential Minds in Tech (2013). Ms. Crawford received her B.A. and J.D. from Yale University. She served as a clerk for Judge Raymond J. Dearie of the U.S. District Court for the Eastern District of New York, and was a partner at Wilmer, Cutler & Pickering (now WilmerHale) (Washington, D.C.) until the end of 2002, when she left that firm to enter the legal academy. Susan lives in New York City and Cambridge, MA.
Welcome to a very special Tuesday talk here at Pound Hall, across the street from the Berkman Klein Center. As with a lot of our events on campus, this is being live webcast and recorded. Please just keep that in mind if and when you ask questions, which I hope you will toward the end. I have the privilege and the pleasure of being able to introduce Prof. Susan Crawford and Chairman Tom Wheeler this afternoon. As I'm sure you know, Prof. Crawford teaches here at HLS, works with us a lot in the Cyberlaw Clinic, and works a lot on issues related to telecom as well as civic innovation, government innovation, and helping cities think through data-smart governance and policies. Joining Susan today, Chairman Tom Wheeler who spent three decades working in telecom on both the business side and law and policy side. In November of 2013, he was appointed by President Obama to the position of FCC chairman, where he was unanimously confirmed. His tenure as FCC chair was one of the extraordinary accomplishments on a wide range of issues, and it's particularly well-known for ushering in the FCC's final rule on net neutrality in April 2015, which I'm sure is one of many things that Susan and Chairman Wheeler will talk about. Without further ado, I'm going to turn things over to Prof. Crawford and FCC Chairman Tom Wheeler. Thanks so much.
Thanks so much, Chris.
Thank you, Chris.
It is indeed a singular pleasure and honor to have Tom Wheeler here as the country goes through this whirlwind over the last few days. The 31st FCC chairman, a proud graduate of the Ohio State University and a recipient ...
Tom Wheeler You got that right, the ...
The Ohio State University and a recipient of its Alumni Medal, a former president and chairman of the National Archives Foundation, a student of history, who cares about America's documents and America's future and America's past, and the most consequential FCC chairman since a 35-year old Newt Minow went to the Sheraton Park Hotel, to the lion's den, to the National Association of Broadcasters in 1961, the beginning of the Kennedy Administration, and told those broadcasters that they were supposed to be serving the public interest.
Tom Wheeler Interesting concept …
Isn't that something? Tom Wheeler told four companies that want to control our destinies that they should be serving the public interest as well and was active on a huge range of issues, as Chris mentioned.
Tom, I know that someone you revered was your grandfather. Pretend you're speaking to your grandfather right now, someone with absolute compassion and affection for you, and tell him what you're really proud of in your tenure at the FCC.
Tom Wheeler Golly, Susan.
Susan Crawford What are you really proud of? What did you do?
Tom Wheeler I think we did a lot of things.
Susan Crawford Okay. You did.
Let's start with the basic. Note that I said, "We did a lot of things," because what I'm most proud of is the team that did these things. Here's the silly thing. You're chairman. You're the guy who ends up in the newspaper or in front of the Congress or whatever the case may be, but you're just the band leader. I mean the people who are making the music and playing the instruments are the people who were doing the real work. We were just incredibly fortunate to be able to attract to the commission a team of new senior folks, bureau chiefs, folks in the Office of the Chairman, General Council, et cetera, to work with a really strong staff. I mean they are really dedicated, really bright, really caring people on the staff of the FCC.
What am I proudest about? I got to work with them. I went around on the last couple of days, and I met with every bureau, and I had one thing that I said in common to all of them, and that was that I was proud of the fact that I was able to say I was their colleague because there's a lot to be proud of in that agency. I think you have to put everything in perspective because it basically boils down to it's all about people. Now, really what you're going for is ...
Susan Crawford How do you know?
Tom Wheeler Let's talk about net neutrality. Let's talk about privacy. Let's talk about …
Susan Crawford Actually, I wanted to put the personal angle on it, but really the human pride here.
Tom Wheeler It only happens because of the people. You mentioned this small struggling educational institution called the Ohio State University. When I was in graduate school there, I was Assistant Alumni Director, and my job was the care and feeding of Woody Hayes. It was a fabulous experience. That's an overstatement. My job was that I would, I traveled the state with the coaches including Woody, and so I got to know Woody Hayes up close and personal.
It was, "Son." "Yes, coach." Woody used to say, "You win with people," and there's nothing more true than that, "You win with people," and so the reason why Woody really gets some things done so we had really good, really dedicated people who busted their ass, who believed in things and busted their ass.
Susan Crawford Let me tick off a few things then.
Tom Wheeler Okay.
Susan Crawford Bringing fiber access to about 50% of America's schools, the ...
Tom Wheeler More than that.
Susan Crawford What, more than? We're at about 50 now?
Tom Wheeler Here's where we are. When I came in, two-thirds of the schools in America did not have fiber connections and the third that did did not have Wi-Fi; only half of them had Wi-Fi to the student's desk. The latest report out of EducationSuperHighway says that 90% of the school districts in America now have the standard, the 100 megabits per student to the student's desk.
Susan Crawford Terrific.
Tom Wheeler That's because of a team that worked together to overhaul a program that had originally been envisioned by Al Gore but had atrophied as a narrowband program that wasn't making sense in a broadband world. I'm very proud of that.
Susan Crawford Big one and revolutionizing the idea of subsidizing low cost phone service, changing that over to high speed Internet access, that's a big deal.
Tom Wheeler We've always had a program where, starting with the Reagan administration, we have had a program that subsidized low income Americans to be able to have phone service because how are you going to dial 911, but same story. It atrophied as dial-up telephone service, when the world had gone broadband. How do we make sure that the same kind of concept supports subsidies for low income Americans for broadband. The champion for that was Commissioner Mignon Clyburn. She was the person that was constantly, constantly pushing on that, and she was my conscience on that issue.
Susan Crawford It's a wonderful issue. There are some things that didn't happen, before we get to the Title II discussion, the Comcast-Time Warner Cable merger.
Tom Wheeler That didn't happen, and T-Mobile Sprint didn't happen.
Susan Crawford T-Mobile Sprint, that’s the one that didn't happen.
Tom Wheeler We had dinner last night with former Assistant Attorney General for Antitrust Bill Baer and his deputy Renata Hesse and then my two key folks who had been involved, Phil Verveer and Jon Sallet. We had dinner to reflect on not only the substance of the issues we had worked on but, again, back to this people angle, I don't think there had ever been a better working relationship between the Antitrust Division and the FCC because we all shared a common belief, and we all liked each other and liked working together with each other.
Susan Crawford A lot of learning on both sides. Everything depended on a lot of information trading around.
Tom Wheeler No. I mean the Comcast-Time Warner decision broke some new ground.
Susan Crawford Privacy?
Tom Wheeler There's a really simple issue that I think that we're going to have to face again because of the new administration, and that is that privacy is a civil rights issue of the 21st century, of the connected era. Let me give you an example of it. We had, for decades, rules that applied to telephone companies that said that the information that was transmitted in order to set up the call could not be used by the telephone companies. For instance, if I call Air France, Verizon can't turn around and sell that information to some tour operator or hotel company in Paris.
That doesn't exist in the broadband world. You had that strange situation where your smartphone, if you used it to make a voice call, your privacy was protected. If you use that same device and the same network to go on the web and go to the Air France website, that information was for sale. It was not your information anymore. The very fact that you had used the network meant you were giving that information. We said no. This is the consumers' information, and so we put a rule in place that said that the consumer gets to make the choice as to how the network is going to use the information. That was another one of our three to two votes.
Susan Crawford We'll talk about party line in a bit. I want to get there. I'm still ticking off the great moments of Tom Wheeler.
Tom Wheeler Do you want me to keep talking about it? Are you interested?
Susan Crawford The idea of labeling an Internet service provider as a common carriage Title II entity. That was pretty big. I've always wanted to know, what is it like to hear from 3.7 million Americans? What's that feel like?
Tom Wheeler They crashed our servers.
Susan Crawford Exactly.
Tom Wheeler You don't always want to hear everything they say about you. I've heard more descriptions about what could I do to myself with a pineapple than I ever want to hear. The whole open Internet discussion debate was fascinating. You're a part of this because you and I, we're on the phone discussing this. For me, it was kind of a Damascus Road experience. You go back, and let's put it in perspective that twice before the commissioner tried to do something and twice before the broadband companies, the carriers, took it to the court and the court said, "No, you can't do that."
Let's see. I walked in in November, and then in February the court came down with a rising decision that threw out the previous attempts at open Internet. It seemed to me that the court was leading us in a certain direction built around Section 706 and protecting what's the virtuous circle of, if you have good broadband that'll drive more services, which will drive more broadband, and the job of the commission is to protect that.
Initially, my proposal was that we should follow what I thought the court was trying to signal to us. At the same point in time, I asked in the notice proposed rule I can ask about Title II and other areas. It became clear over the debate, the discussion, that that wasn't going to be sufficient, 706 wasn't going to be sufficient. People like to point to John Oliver and all that. I will show you one thing here that my daughter gave me. This is my cell phone case. It says, "I am not a dingo."
Dingo is inherently funny no matter what.
Tom Wheeler Dingo is inherently funny until you stand up and say, "You know, I've decided I'm not a dingo." That's not funny. Do not mess with that guy who is funny for a living.
One of the things that you and Chris didn't mention in my background is that I was the CEO of the Wireless Industry Association for a dozen years. In 1994, 1993, the Wireless Industry went to Congress and said, "Please make us a common carrier but put us under Title II." Because Title II was designed for a different era, with different technology, less competition, et cetera, remove a lot of these old requirements that were in Title II. Congress did that, and the commission followed through, and the Wireless Industry went like this.
The summer of 2014 I guess, I'm going through options, and it's kind of, "Wait a minute. Section 332 of the Communications Act, which is this structure that I subscribed for the wireless industry, is the perfect model for this. Yes, you should be a common carrier with all the responsibilities that come with a common carrier, but at the same point in time you can forbear from some of the most ridiculous things. The statute says you got accounting rules, who's on your board, who you can buy from, and all kinds of things, including ex-ante price regulation. We can forbear from that.
Let's take that as the model of how we implement Title II in a broadband world, and that was the decision that we ended up making. We were constantly working through various iterations of it. The President, of course, came out and said he was a strong Title II supporter, and so we were able to put together three votes and uphold it in court.
A very strong decision.
Tom Wheeler With a very strong decision that was crucial for that. Third time we got it right because we did it this way, and the court strongly agreed to this.
Susan Crawford I got a quote from you, recent speech. You've said recently, "Those who build and operate networks have both the incentive and the ability to use the power of the network to benefit themselves even if doing so harms their own customers and the greater public interest." We're hearing from the Trump Administration today that they're looking forward to getting rid of 75% of regulations. The idea is that they inevitably dampen innovation in the investment. What's your view of that claim, the dampening of investment by regulation?
Tom Wheeler Part of my experience is that I've made the same argument when I was an advocate.
Susan Crawford How about that?
Tom Wheeler Let me tell you a story. I was CEO of the Wireless Industry Association, and I was proud of the job that I did at the Cable Association when we were taking on the broadcast because they were trying to shut down in the early days of wireless when I was at CTIA. The least proud moment of my public policy life was when I opposed the commission's efforts to have local number affordability so that …
Susan Crawford That means for humans?
Tom Wheeler If you decided you could take your, if you wanted to switch your service from AT&T to T-Mobile that you could take your number with you, it didn't used to be that way. I was imposed by regulation, and I opposed it and you know that. Saying, "Okay. So, I mean, how are we gonna oppose this?" You can't exactly go out and say, "Hey, you know, we think it's a really bad idea that consumers can't, can't leave us, and they're trapped in their carrier because they can't, they're giving everybody their telephone number." That's not an argument that's a real winner.
The argument I made was, "Ah, stalling this is gonna take money that should be spent on infrastructure and expanding connectivity." Unfortunately, that didn't sell. Like I said, I regret that activity, but I'm guilty of this. It is going to slow down our incentive to invest is kind of the first line of defense of everybody and it's balderdash. I clean that up.
Susan Crawford That's a strong word.
Tom Wheeler I clean that up. The reason that you invest is to get a return. You don't say, "Well, I'm not gonna invest because I might trigger some regulations." The question is: Am I going to make a return off of this? Broadband is a high-margin operation. You can make a return off of it.
The facts speak for themselves. Since the open Internet rule went in place, broadband investment is up, fiber connections are up, usage of broadband is up, investment in companies that use broadband is up, and get ready for it, revenues in the broadband providers are up because people are using it more. The reason why you invest is for this reason, to generate more revenues and a good return on those revenues. The oh-my-goodness-it's-gonna-be-a-terrible-thing-for-investment is just the first refuge that everybody makes, and you have to look past that.
Susan Crawford As a student of the Civil War, you don't remember that one of the big prizes of 1863 was Chattanooga: railroad hub, three railroad lines, two big rivers, two mountain ranges. What role did Chattanooga play in your tenure?
Tom Wheeler What a setup. That was well done.
Susan Crawford Thank you.
Tom Wheeler That was real. You want to talk to the Cracker Line that broadened the supplies after Tennessee?
Susan Crawford It's an incredible story. We're going to get there but let's start with something related to telecom.
Tom Wheeler My good friend, Susan Crawford, says to me when I took this job that I should bear three things in mind. I wrote these down. I kept them in my desk. The first was to return the regulatory ideal, that there is a legitimate role for regulation to benefit the broad scope of the population. The second was that we should have a legitimate credible definition of what broadband is because broadband used to be defined as 4 megabits a second. That's hardly broadband. The third was to tackle the outrageous practices that the ISPs, the Internet service providers, the telephone companies, the cable companies, were doing where they were going around the country and going to state legislatures and getting state legislatures to pass laws that prohibited cities in that state from building their own broadband network to compete with.
I thought, "Hey, you know, if the people through their local government decide they don't like the quality of service that they're getting, they ought to be able to organize through their government and say, 'I want something better including the government building it.'" Chattanooga was the case study of a Tennessee law, so we sued Tennessee and North Carolina, making the argument that this was overreach of the states’ authority. Unfortunately, the Sixth Circuit disagreed with us.
The great thing is all the hubbub about this woke up an awful lot of cities, triggered an awful lot of referenda to do things, and there is more activity to build competitive broadband in the municipal levels, never has been. You know what happens? You do know what happens. Of course what happens, I'm talking to Miss Fiber here being about that what happens is when they decide to build, it's just amazing. The cable company decides to go faster and expand their service. It's just incredible. I love this thing called competition.
Susan Crawford Private citizen Tom Wheeler, the legislatures of Missouri and Virginia just introduced new snarling bills along these lines. What would you tell a sincere earnest State legislature today about those bills? What would your two talking points be to that legislature?
Tom Wheeler First of all, that the people do have a right to come together and say, "I want something better for my city." The second political point that I would make is it's not really the Chattanooga’s where this is a big challenge. It's the Wilson, North Carolinas, and it's the areas where the people who voted for Donald Trump do not have access to the Internet and are not getting access by the existing companies. They're the ones who were fed up with the system, and I voted to that they were fed up. You need to be responsive to that.
Susan Crawford They voted your way. They have to.
Tom Wheeler I would hope they want to.
Susan Crawford We're still wrestling with this in such a big way that you're 10 times more likely not to have access to reasonable high speed Internet access in a rural area than in an urban area. If we add together wires and wireless, you're just not going to get it in rural areas at all. We have a lot, a lot of progress, I understand.
Tom Wheeler This is the idea. I think that one of the messages that people were voting for in this campaign is, "I want power back to me. I want decisions." The whole thing about draining the swamp is to get the power back. If the government closest to the people is saying our people would like to have better broadband, then who's to say no?
Susan Crawford I talked to you about the vision of the FCC because now we're going to go through the crossroads. I love looking back. Let's walk on. The design of it as FDR’s agency was to be an expert agency insulated from politics. Is that true?
Tom Wheeler Of course not.
Susan Crawford Many of the staffers, people who are working at the FCC, there's a lot of flow back and forth: people who have been staffers end up as commissioners, lobbyists end up as staffers. There's a big circle here. What do we do about all of that?
Tom Wheeler Let me give a, you deserve a better response ...
Susan Crawford Thank you.
Tom Wheeler Than the smart ass response, I guess. Look. One of my aha moments was how special and independent the agency is. I'll tell you a story. Early in my tenure we said that, for technology reasons, it was no longer necessary to turn off your cellphone on an airplane for fear of interfering with the grounding stations, which is the only reason that rule existed. You own the hubbub of, "Oh my god, we're gonna be 35,000 feet and people are gonna be, the guy next to me is gonna be yacking away." I didn't want that either. We were just doing that technical issue.
Anthony Foxx, the Secretary of Transportation, and I are on the phone because he has the responsibility for the FAA of how consumers behave on the plane. I was just doing the technology. You don't need, without interfering the work of, say, what’s also on the plane. He says, "Well, this is cool. We can work this all out." He said, "You take the technology. I'll take the consumer. We'll solve it." I said, "That's fabulous." I said, "I'm testifying tomorrow in Congress at 10 o'clock and they're going to ask about this. Let's make sure that we've got our language down. That's exactly what you and I just agreed to." He says, "There are staffs at work on that. That's great."
About an hour later, somebody comes in, one of my staff folks comes in and says, "You just got a call from General Council at the Department of Transportation. They can't do it." Why? It was overruled by the White House. Now making a very long story short, there was somebody in the communication shop at the White House that didn't like this idea. The White House ended up approving it. I went and testified when the things moved forward.
The point of the matter is that I made the decision looking at the guy in the mirror in the morning, and the Cabinet Secretary had to run it through, and as a former White House staffer he know how that works. The ability to have an independent agency to be an expert agency and to make independent judgments is really important. That does not mean that there's any political agency, to answer your question, and in particular having an agency that, for the vast majority of my term, was dealing with a Republican Congress that didn't like what we were doing. That helped politicize the activities at the commission.
It is an independent agency, but of course, the commissioners read the newspapers like the Lyman Supreme Court, Grand Supreme Court reads the election. They respond to letters from Congress.
Susan Crawford It's an agency made up historically of one agency being glued together with memories of another agency essentially. Now people are talking about taking it apart. Modernizing the FCC is the lingo being used. What's your thought about that?
Tom Wheeler It's a fraud.
Susan Crawford Keep talking.
Tom Wheeler It's interesting. Actually, I was going through some papers this weekend and I ran across a September 2013 article in the Washington Post, the headline of which was something to the effect: "Here's how the networks plan to defang the FCC." It quoted all of the cable and telephone company Washington office heads saying that really the consumer protection and competition work of the FCC should be transferred to the FTC, the Federal Trade Commission. It's no surprise where they want to transfer.
The FTC doesn't have rule-making authority. They've got enforcement authority, and their enforcement authority is whether or not something is unfair or deceptive. First, the only regulation that they would be subject to would be an adjudicatory finding that it's unfair or deceptive, one. Two, you got this agency over here, the FCC, that is constantly worrying about all things in telecom. The FTC has to worry about everything from computer chips to bleach labeling. Of course, you'd want to get lost in that morass. We're, "Okay. We will get to that. We got to get bleach labeling taken care of first." This was the strategy all along.
What surprises me, no, what doesn't surprise me is that, then the Trump transition team, which is basically folks from the American Enterprise Institute who were folks who were ...
Susan Crawford True. It's not even funny. It's just true.
Tom Wheeler Who were long time supporters of this concept, come in and say, "Oh, we oughta, we oughta do away with this." The story gets even more interesting. First of all, it makes no sense to get rid of an expert agency and to throw it over here to an agency with no rule-making that has to compete with everything else that's going on in the economy and can only deal with unfair or deceptive because we're talking about one-sixth of the economy, but more importantly, we're dealing with the network that connects six-sixths of the economy.
Here's what's really bizarre and how the story really gets interesting. We in the FTC brought an action against AT&T and the FTC using their unfair or deceptive standard, us using our broader capabilities. AT&T took the FTC to court and said, "You don't have authority." The FTC statute says that common carriers are exempt from the jurisdiction of the FTC. Now this is the same company that was previously in this Washington Post article, the head of their Washington office arguing how it should only be the FTC that has jurisdiction over their issues.
The court said, "Yes, you are right. And not only are you right about the FTC not having jurisdiction over common carriers, the FTC doesn't have jurisdiction over the non-common carrier activities of common carriers." Now, we have a situation where the carriers and their supporters at the AEI and inside the commission are saying, "We should transfer everything to the FTC,” which is a result of a Ninth Circuit decision on a case brought by the same people that are arguing it should be moved, doesn't have authority. Go figure. That's not modernization.
Susan Crawford No. It is ...
Tom Wheeler That's just hiding the …
Susan Crawford It's like escape velocity, no coverage at all. You may not have heard, but there's a new chairman of the FCC.
Tom Wheeler Really?
Susan Crawford Yeah.
Tom Wheeler No.
Susan Crawford It just came out. It's news. Ajit Pai. I can't tell who he is because I got these press releases, and they seemed to be talking about two different guys, so from NCTA which used to be called The Cable Association, now called The Internet and Television Association. Michael Powell saying, "During his tenure on the Commission, Chairman Pai has consistently demonstrated a commonsense philosophy that consumers are best served by a robust market place that encourages investment, innovation, and competition. We stand ready to assist Chairman Pai to ensure that America remains a global Internet communications entertainment leader." That's one Ajit Pai.
The other Ajit Pai, according to Free Press, "He's been on the wrong side of just about every major issue that has come before the FCC during his tenure. He’s never met a merger he didn’t like or a public safeguard he didn’t try to undermine. He’s been an opponent of Net Neutrality, expanded broadband access for low-income families, privacy, all kinds of issues. And he's been an obstructionist who," get this, "Has always been eager to push out what the new presidential administration might call alternative facts, in defense of the corporate interest he used to represent in the private sector."
I listened to a radio interview of you just a couple of days ago, when you said that commissioner Pai canceled all the meetings that you set with him.
Tom Wheeler True. When I came in, we're a five-person commission, and the chairman sets the agenda, and the chairman is a CEO, but there are four other commissioners that are important to relate to, and it takes three votes to do anything. I set up that with every commissioner every other week. We had a date on our calendar that was an hour for the two us just to sit without staff and talk about, if you talk about baseball, they would have talked about baseball, but talk about the issues of the day and other concerns and how do we work our way through a series of problems.
Commissioner Pai and I had early on a lot of those meetings, but for the last 18-24 months he's canceled every meeting. The only point I was making on Marketplace was that it's hard to work for consensus when you won't sit down with each other.
Susan Crawford Yeah. Time will tell I suppose, or the next step. I think it's coming up right away, the AT&T-Time Warner merger. There are two Donald Trumps on this one too. There's the Donald Trump in October who said, "This is, you know, distraction of democracy." Then there's the Donald Trump of last week who said, after meeting with AT&T, "I got to get some more facts. We'll see." Do you have any guesses for us about what's likely to happen with that merger?
Tom Wheeler AT&T has now designed the merger to avoid the FCC. I think the commission probably still has some jurisdiction, but I don't make those decisions anymore. Somebody said to me the other day, "I have lost the Windex to my crystal ball."
Susan Crawford Good line. I have determined that you have something in common with Donald Trump. You're maybe surprised to hear this. It is the exclamation point because of your first book, Take Command!: Leadership Lessons From the Civil War. This is the Harvard Leadership School. You may think it's the Harvard Law School. It's actually the Harvard Leadership School. I wanted to get your reflections on leadership in this role because I want everybody to understand what it takes to run an agency with a $388 million budget and 1,700 employees.
I thought I could tie this again back to the Civil War and have you talk to us about Ulysses Grant. You don't have to talk about yourself but you could talk about Gen. Grant because that must be a model leadership for you.
Tom Wheeler Gen. Grant is my hero and not just because he was from Ohio. The first chapter in the book that you said is called Dare to Fail. I think that's the first rule of leadership, that what the book says is that if you prepare for failure, you will no doubt succeed. One of the things that was so great about Grant was that he was dogged in his, "I just won't fail, I'll get this done," and so he's always been my hero.
I got a little consulting company that I had before the Commission that I just reopened, and it's called Shiloh Group. Why is it called Shiloh Group? It's called Shiloh Group because it was probably the definitive battle of Grant's career, and he lost on the first day. He got creamed. Everybody expected, the rebels expected him to retreat away, but he didn't. He brought more troops up. The OK man saved the day. That night, William Tecumseh Sherman finds Grant sitting under a tree whittling, working at his frustrations on a piece of wood. He says, "Well, Grant. We've had the devil's day." Grant looks up, "We’ll lick 'em tomorrow," and he did.
Susan Crawford He sure did.
Tom Wheeler Persistence is the key, and Ulysses Grant was a great model of persistence.
Susan Crawford Gen. Lee and Gen. Grant, I mean, keep going with this. Both went to West Point. Gen. Lee graduates top of his class, no demerits. Gen. Grant, number 21 out of 39, plenty of demerits. Comment.
Tom Wheeler You're asking a guy who barely got out of Ohio State.
Susan Crawford There you go. Moral courage.
Tom Wheeler You can't criticize me. You can criticize him for being on the wrong side, but you can't criticize him for being a great leader. That's a really good question. Look. I think the bottom line is this. It is what you make of things. Let's go back, and let's take Ulysses Grant after he left West Point. He distinguished himself from the Mexican War.
Susan Crawford He met Lee there.
Tom Wheeler He met Lee, but Lee didn't remember. Lee was a hotshot. He was a quartermaster. Lee was a hotshot engineer because he graduated first in his class. He didn't get posted to various remote posts, particularly out west where Julia, his wife, can't come with him and he starts drinking. He drank himself out of the army. He came back to St. Louis where his wife Julia lived with her parents were and tried to take up farming. That really didn't work.
He was reduced to selling firewood on the streets of St. Louis, wearing his old army greatcoat selling firewood. He finally went back to work for his father in Galena, he and his father never really got along that well, to be a clerk in the tannery. He was passed over for early leadership roles in the Civil War. McClellan was one of the guys who passed him over. Failure, failure, failure, failure, and then all of a sudden, and so the point is, okay, so he failed. Move on. That's the great leadership lesson of Ulysses Grant.
Susan Crawford Another part of this is that Ulysses Grant wrote to his wife Julia everyday when he was away from her. They were both invited to see My American Cousin by President Lincoln the night of April 14th. Julia got spooked so they left. Speaking of leading Washington, my segue here, as you walk away from the portals, what's that like to be the chairman, to walk out and no longer be the chairman? What does that feel like?
Tom Wheeler First of all, you get a long time, you get 77 days to work up to it.
Susan Crawford That's true.
Tom Wheeler It's not a big surprise. You walk away with just an incredible gratitude for the fact that at a time of such incredible change in how Americans communicate that you got to be the guy who sat there and dealt with how Americans relate to those changes. Because the people who say the problem is government are so wrong, and the government is the people. It's where we come together to solve our common problems. It is a messy process, and it's a painful process, but if we can’t work things out there, we're in a whole hell a lot of trouble.
The fact that I got to sit at the head of that agency in these incredibly changing times and to say, "How do you look at these changes in technology, economics, how people connect and make sure that public interest is represented?" was a terrific privilege. I walk away from there proud that I could do it with the people that I did it with. How fortunate can you be?
Susan Crawford Last question as this is about to turn to a Q & A here, but what are you most worried about? There are millions of people who marched over the weekend, and if they knew it, they would be marching about telecom as well. What should they be doing? What should people worried about the concentrated market, the high prices, that inadequate service, all of that, be doing in America?
Tom Wheeler The most powerful asset of the 21st Century is the networks that connect us; networks have always been important. The railroads ruled the industrial revolution. Networks have always been crucial, and the network will define the 21st Century. These are broadband networks. As I said, we had jurisdiction over one-sixth of the economy but six-sixths of the economy using those networks. I've always used this phrase that how we connect defines who we are both commercially and culturally. That connection and whether or not it is going to be controlled on a gateway basis by essentially four companies is an existential question for American commerce and culture. I am worried about what that future looks like.
What is amazing to me is how the Commission and seemingly the Congress want to do things on behalf of these four companies that will have an impact on tens of thousands of other companies and millions of consumers. I just don't think the debate has gotten to the point where people recognize we're talking about fewer than half a dozen companies here and how should you make policy. That's my concern.
Susan Crawford It's the public education moment of huge opportunity. What do you want to ask Chairman Wheeler? Yes. A mic is flying through the air towards you. It's coming.
If you today have been replaced, what about the people who are working under the Civil Rights Commission jobs. What percentage of people in the FCC ...
Tom Wheeler You mean the Civil Service.
Susan Crawford Civil Service.
Our government employees, and does Trump think that he can just change everybody?
Tom Wheeler I'm the last guy to ask what Trump thinks.
Susan Crawford You can have that exclamation point.
Tom Wheeler The reality is you're absolutely correct that the vast majority of the employees of the FCC are civil servants. I imagine that the new chairman will bring in, as I did, a new top tier, and that they will be the ones managing those civil servants.
Susan Crawford Yes.
Tom Wheeler They have to follow the directions.
What do we, the American people including the people in this room, need to do to protect net neutrality?
Tom Wheeler Thank you for asking the question, first of all. I think that there are two things. One, we need to be heard but, two, we need to be heard in different ways than before. Susan says 3.7 million emails and comments to the Commission. They were pushing on a door that was already open. The door is locked, latched, bolted, and welded right now.
I think the battering ram is, to paraphrase here, Madison had this great line in Federalist 10 where he said that ambition must be made to counteract ambition. This was the whole concept of how the government was set up. Economic ambition is what is driving this handful of companies. There must be economic ambition that counters them. What we need is we need to hear the voices of those that'll be affected. Yes, the small startups but also the big companies. GE, GM, if there are, so let's just go through a couple of things.
Artificial intelligence and machine learning, what is it? It is the connectivity of all kinds of database resources. If that connectivity has to worry about gatekeepers, what happens to AI, the Internet of Things? The Internet of Things is going to change the whole economics of the Internet I believe from a push environment to a pull economics. We can talk about that later if you want. Who will be deciding which things get connected and on which terms?
If one of the caregivers says, "Wait a minute. I like my things better, and I'm gonna price differently to them, that I am this competitive provider of this service." What does it mean? We see they already do that because we are waiting on video. This is not a hypothetical. We need to be making sure that the companies that are affected are delivering the message because I think that's what the Congress would be most responsive to.
Tom Wheeler This is great. We answered every question in the room.
Susan Crawford I'm just looking for …
Tom Wheeler Here she is, over here in the corner.
Susan Crawford There in the back.
I think my colleague probably asked this question better than I can, but I'm just going to do it. We work at some rural community access television. I wanted to know a couple of things. One is what is the role, like how can community access television play an important role? What do you think? What do you predict? Can you predict? I know our Windex isn't working anymore, but what the new chairman, what his perspectives are on public access, and how we might stay protected?
Tom Wheeler Great questions. When I was at NCTA, I was a great supporter of PEG, Public, Educational, and Governmental Access. We actually got it codified for cable ad. Things have changed a lot since ‘84. There had been some intervening legislations and rulings by the Commission. I don't know where Ajit Pai is on that issue. We never had an occasion to discuss it so I'm sorry, but good for you for what you're doing. The diversity of voices is, so the beauty of technology is that it has created the opportunity for a diversity of voices. That is also the vein of the technology because if you're not using things like PEG to express yourself, there are others who are using the opportunities for diversity of voices to do that.
The other thing is that we need to begin to become our own editors where we used to outsource the editorial function to NBC or CBS or New York Times. Now, anybody with web access has as much reach as any of those, and it's going to force consumers to be better consumers of information. I think we'll get there but we're certainly going through a rough period right now.
Susan Crawford Over here, yep.
Tom Wheeler Wait a minute.
Susan Crawford Mic.
FirstNet is Congress's effort to create a fifth cellular network for public safety. We got three million price-sensitive picky cops and firefighters, maybe 12 if we expect it for the second responders but to break even for network is about 40 million users. In Britain, they said priority preemption and quality of service had to be provided by carriers. I can't see a way through the success for FirstNet and this network in the country given the vision of how this will end up.
Tom Wheeler FirstNet has been controversial since the day that Congress made the decision made by Congress championed by Senator Rockefeller in particular, and it has evolved to a point now where they're going to be buying services from an existing wireless provider and will be getting the kind of priority service that you are referencing is available elsewhere in other countries. It's going to be interesting. Let's see what happened.
We had three jobs with regard to FirstNet. One was to make the spectrum available. We did that. Two was to make sure that they had $7 billion to start the process. We did that out of auction revenues. Three was, in the coming year, there is the option of states to opt out of FirstNet, and we were to be the judge as to whether a state should be allowed to opt out, and that's a decision that the Pai Commission is now going to have to make. That's going to be key because, for instance, if New York opts out or California opts out or Illinois opts out or Texas opts out, the nationwide network collapses. That's something we have to live through. I don't know how it's going to end up.
Susan Crawford Last question, anybody? Yes.
Question around wireless spectrum, when one looks on one side, the public benefit revenue from auctions are being able to just type communication and the other side the rights of spectrum holders. There's been a lot of controversy in this area with bankruptcy, spectrums that never used. Do you have any thoughts on do we have the optimal model for how we license or sell and look at the whole life cycle of spectrum management over long periods of time and also take in account innovation that occurs?
Tom Wheeler We could be here a while, it's so well past dinner time. Let me go through a couple of things. One, spectrum allocation was originally done based on analog physics. A TV signal is a six megahertz waveform, so you need a six megahertz spectrum to put out a TV station. When you go digital, the efficiencies of digitization allow you to get four or five channels into that same spectrum but the problem is that everything that, not everything, the vast majority of the spectrum allocation tables were decided using analog physics, and we're now in a digital time. You can get a lot more out of the spectrum except that it's my spectrum. You can't have my spectrum.
Susan Crawford They'd rather give up their babies than give their spectrum.
Tom Wheeler My cold dead fingers, take my spectrum. This is true internationally. I mean we have troubles in a big international conference allocating spectrum just last year, two years ago I guess. The world is not as sensitive to this as we are. That's kind of issue one. We're operating under old rules that support, "It's mine. I don't wanna leave it."
One of the great things that the national broadband plan came up with, Blair Levin led a team under my predecessor Julius Genachowski to develop a national broadband plan, you had a large hand in that, was to say there ought to be a spectrum auction where we would re-purpose spectrum by having an auction to buy it back and then resell it. The broadcast spectrum was the key there because go back to my ...
Why do you need six megahertz if you can get a bunch of channels in there, get them in there and then sell off the others for wireless applications both licensed and unlicensed by the way? Just literally, my next to the last day on the job, that auction which everybody said, "Oh, it will never work. It will never work."
That auction hit what was called the final stage rule where, in fact, we have created a market where broadcasters have agreed to sell 84 megahertz of spectrum and the wireless carriers have agreed the necessary price to buy that. For the next 39 months, there will be a whole process across the country of reallocating spectrum re-banding and making this spectrum of available. The challenge with spectrum is, A, they're not making any more, and B, is the physics that describe the chart, the spectrum allocation chart or analog physics in a digital era.
Susan Crawford Here's a shared challenge I think we have, that for you this is blood and guts entertaining fascinating stuff and for me frankly. How do we reach more people with what are ultimately extraordinarily personal issues? People's phones are very close to their hearts. They would give up a food before they give up a cell phone. What thoughts as you give us a benediction here as you pass into private life? How do we get the resistance going to focus on these issues in a more dramatic way?
Tom Wheeler You don't ask easy questions.
Susan Crawford No. This is important.
Tom Wheeler I've just sat here and given you a wonk's eye view of telecommunications policy. I love my wife dearly, and she loves me, but I can't hold her interest across the dinner table on these topics. How in the world do we get ahold the interests of the vast majority? We need to get out of discussing this kind of, we need to get out of our technocrat mode and into our mode of Susan's point about how it's the Trump voter who has the worst Internet experience and the key to getting an education to be able to do your homework, the key to being able to get a job, the key to be able to interact with the world around you, is to have broadband, and these people have been denied it.
Why? Because we built things around, again, four companies and we need to be getting the story out that let's talk not about the networks but let us talk about the network effects that the effects are the ability to do your homework, the effects are the ability to get a job. The effects are job creation.
Let me tell you great story, and then I'll shut up. This is a story that more people need to hear. Hal Rogers, who is the chairman of the House Appropriations Committee, represents Eastern Kentucky, which is coal country and which is just as you know economically devastated, and Trump made a big play in coal country. Hal Rodgers has said, "Connectivity is key." It kept bringing me back to the district to pump the importance of fiber connectivity, Ms. Fiber.
I’ll tell you two stories. I was in McKee, Kentucky, one stoplight, 900 people, fiber to every home, and business as a result of the Obama stimulus. There are more people employed today in McKee than there were three years ago. Who's getting employed? It's not just the folks who got let go from the coal mines or those who were selling goods and services to them, but it's the disabled. I mean one of the things that we haven't talked about that I'm most proud about is what we did to make technology available for individuals who are disabled, the people who can't get out and about are now working for U-Haul, Avis, and folks like this being online from McKee to West Virginia.
You go down the road to Pikesville where I met with a bunch of ex-coalminers. You shake hands with these guys and you know who are now coding for Apple and others because there's fiber in the Pikesville, the community college has fiber, was teaching coding. These guys who had the gumption to go way underground and go to the coal face had the gumption to say, "I'm going to take charge of my life in the new economy because I can, because there is a fiber connection allowing me to do it." Those are the kinds of stories that we have to be telling because how we connect defines who we are.
Susan Crawford Thank you for helping keep America being the Pottersville of the Internet. We appreciate that. Thank you for your leadership. Thank you for your character and for the many, many hours you put in on our behalf. We really appreciate it.