FCC Chairman Wheeler Plans To Give Special Access Favors To Former Lobbying Clients

Monday, October 26th, 2015

The Federal Communications Commission’s (FCC) new investigation into the “tariff pricing plans” of AT&T T -1.80%, CenturyLink CTL -4.55%, Frontier, and Verizon for data services provided to businesses—commonly known as “special access” services—reeks of special favors for cable companies FCC Chairman Tom Wheeler once represented. The FCC claims “a more systematic inquiry” into telephone companies’ pricing plans is necessary to determine their reasonableness. But the FCC’s framework for this tariff investigation is so sloppy and unsystematic that the outcome appears to have been predetermined.

Photographer: Chris Ratcliffe/Bloomberg

Wheeler wouldn’t have initiated a new tariff investigation if he were uncertain about the outcome. The agency could gather the same information in its ongoing, decade-long rulemaking proceeding examining the market for special access services. The FCC acknowledged that its new investigation is based on the record generated in its existing proceeding “and concerns a set of issues that have been and continue to be a principal focus of that proceeding.” Yet the new tariff investigation “will be conducted as a separate proceeding” that will address “only a subset” of special access services that do not use Internet protocol.

Question: Why would Wheeler decide to use two separate proceedings to resolve special access issues when only one is necessary?

Answer: The tariff investigation gives Wheeler (1) the power to exercise unilateral control over the FCC’s approach to regulating special access  (2) while obscuring the agency’s discriminatory approach to such regulation.

Controlling Special Access Regulation

Wheeler cannot act on the FCC’s ongoing special access proceeding without a voteof his fellow commissioners because rulemaking proceedings must be resolved by the full commission. But the agency’s wireline bureau has delegated authority toissue orders involving tariffs, and the chairman controls the agency’s bureaus. Opening a separate tariff proceeding thus gives Wheeler an opportunity to decideunilaterally the same issue that is the principal focus of the agency’s commission-level rulemaking proceeding.