Election of Trump Seen as Presaging Overturn of Reclassification, ISP Privacy Rules
The election of Donald Trump likely means that several of the big items approved under Chairman Tom Wheeler on 3-2 votes will be reversed by the next commission. Wheeler could withdraw a few remaining items, especially rules on business data services (BDS) and set-top boxes, FCC and industry officials said. If Wheeler pushes them through, the Trump commission could reject them on reconsideration, the officials said. The 2015 decision to reclassify broadband under Title II of the Communications Act and the recent ISP privacy rules are likely targets for reversal, one analyst said. The agency declined to comment.
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Most observers now expect Wheeler to leave at the end of the Obama's administration and Democrat Jessica Rosenworcel to not get a second term, leaving a three-member commission in February -- with Ajit Pai, Mike O’Rielly and lone Democrat Mignon Clyburn. Who Trump will name as chairman is unclear, though presidential transition teams usually make those kinds of second-tier decisions by mid-December, after picking a cabinet, said industry officials involved with prior transition teams.
Pai is seen as likely to be named acting chairman, if not designated as full-time chair. He is the senior FCC Republican. The transition team will have little time to waste with only 73 days between the election and Jan. 20 when the president-elect will take office. Numerous industry officials mentioned Jeffrey Eisenach, a visiting scholar at the American Enterprise Institute who is leading Trump tech transition efforts, as a potential Republican commissioner if not chairman.
All the Wheeler FCC can do now is tee up items to be decided after the inauguration, a former FCC official said: “That’s good government. It’s respectful of the majority. It’s the right thing to do.”
“Trump’s victory should spell the end of Wheeler’s ability to make any enduring policy changes in the twilight of his chairmanship and likely will mark a return to a more hands-off approach at the FCC,” said Fred Campbell, director of Tech Knowledge. “The Republican’s retention of its majority in the Senate also raises legislative possibilities, including FCC reform, returning comprehensive privacy jurisdiction to the FTC, statutory reclassification of broadband, or even a Communications Act rewrite.” Campbell was Wireless Bureau chief during the end of George W. Bush presidency.
Pundits were wrong the entire election season, said Harold Feld, senior vice president at Public Knowledge. “It's completely unclear at this point how Trump plans to reconcile his economic populism, such as his statement that he would block the AT&T/[Time Warner] deal, his pledge to invest in infrastructure, and his apparent embrace of traditional Republican deregulation. Nor do we know what his FCC will look like or how long it will take his administration to name someone” as chairman.
The key question is who will run the FCC under Trump, Jennifer Fritzsche, analyst at Wells Fargo, said in a note to investors. "If the rhetoric of those surrounding Trump's campaign rings true, we can expect a Republican FCC to make a big push to roll back some of the regulations put in place under President Obama such as the Title II/Net Neutrality rules,” she said, noting that the privacy rules are also likely in the crosshairs. “It's unclear whether Chairman Wheeler will be able to act on the open items related to Business Data Services or set-top box reform before he departs and if he does … some suggest a Republican FCC will reverse course on these two items.”
“As a Democrat and law school classmate of Hillary Clinton, it was a really sad night for me, but the commission does its business through one administration or another and I’m positive that the Wheeler team will continue to move the different processes forward, especially those that should be finally decided by the new Republican majority effective Jan. 21 and thereafter,” said Reed Hundt, chairman of the FCC under President Bill Clinton.
“Clearly this election changes everything in Washington,” said former FCC Commissioner Robert McDowell, now at Cooley. “All of the conventional wisdom is now thrown out the window. Everyone’s plans have to start with a blank sheet of paper.” Trump’s “policy posture” was more pro-business and deregulatory than what has been seen for the last eight years, he said. “We don’t know for sure but you can look to some of the folks on the transition to get a flavor of what kind of recommendations will be made to the incoming administration.”
A review of all the 3-2 votes over the past eight years offers a list of the orders that might get repealed or modified, McDowell said. “Clearly, Title II classification of internet services will be at the top of the list of consideration, the expansion of the FCC’s privacy rules and the regulation of joint service agreements with broadcasters, as well as maybe some media ownership rules.” Republicans have learned over the last eight years they need to act quickly “and with a strong sense of priority and decision,” he said.
Trump's FCC policy is hard to predict because he’s not a traditional Republican, said Daniel Lyons, associate professor at Boston College Law School. “I would expect a Trump FCC would roll back some of Chairman Wheeler's initiatives, particularly high-profile 3-2 decisions like reclassification and ISP privacy regulations,” Lyons said. “But he quickly and loudly denounced the proposed AT&T/Time Warner merger, for example, in terms that one usually associates with consumer advocacy groups on the left.” As a former TV star as host of The Apprentice, Trump has firsthand knowledge of the broadcast industry, Lyons noted.
Based on Wheeler's track record, Free State Foundation President Randolph May said he expects the chairman to still push through BDS and set-top orders. “After all, that’s what the 'midnight regulation' phenomenon is all about.” May said that “Wheeler has been anything but modest in the way he views his authority to push through new regulatory initiatives without any pretense to seek compromise. He tries to run the FCC on the same ‘I’ve got a pen and a phone’ model that Barack Obama ran his presidency when he wanted to go around Congress. But the shelf life of any such midnight regulations surviving in the form adopted is likely to be pretty short.”
“I am concerned that every gain made at the FCC for people’s communications rights, ever, let alone in the last 8 years, is in peril,” emailed Matt Wood, Free Press policy director.
“In all likelihood, the new FCC is going to turn back quite a few of the regulations,” Roger Entner, analyst at Recon Analytics, said in an interview. “Anything that Wheeler would try to pass now the new FCC would reverse on reconsideration.” Reclassification will likely be reversed and the future of net neutrality is in doubt, Entner said. “I think it shows a little bit the danger of overreaching.”
“If there is a lesson in watching Wheeler’s legacy go up in smoke, it’s that going for the maximum win, the short-term ideological triumph, does not necessarily secure long-term gains for any agenda,” said Doug Brake, telecom policy analyst at the Information Technology and Innovation Foundation. “Now, Republicans will have an opportunity for their own 3-2 votes. I hope smart leadership moderates and strives for lasting, reasonable compromises that offer real certainty for long-term investment and innovation.”
“Typically, a president-elect either has someone in mind or has received a meaningful recommendation for the FCC chair slot,” said a former FCC spectrum official. “Michael Powell and Julius Genachowski come immediately to mind. Here, however, we have no indication that either the FCC or the lead post is significant to President-elect Trump.”