The future of internet

Hours after President Obama called for the Federal Communications Commission to pass
tougher regulations on high-speed Internet providers, the agencys Democratic chairman
told a group of business executives that he was moving in a different direction.
Huddled in an FCC conference room Monday with officials from major Web companies,
including Google, Yahoo and Etsy, agency Chairman Tom Wheeler said he preferred a more
nuanced solution. His approach would deliver some of what Obama wants but also would
address the concerns of the companies that provide Internet access to millions of Americans,
such as Comcast, Time Warner Cable and AT&T.
What you want is what everyone wants: an open Internet that doesnt affect your business,
a visibly frustrated Wheeler said at the meeting, according to four people who attended.
What Ive got to figure out is how to split the baby.
The dissonance between Obama and Wheeler has the makings of a major policy fight
affecting multibillion-dollar industries. The president wants clear rules to prevent Internet
service providers from auctioning the fastest speeds to the highest bidders, a scenario that
could favor rich Web firms over start-ups.
Wheeler, a former lobbyist for the cable and telecommunications industry, has floated
proposals that aim to limit the ability of service providers to charge Web companies, such as
Netflix or Google, to reach their customers. But critics have argued that his approach would
give the providers too much leeway to favor some services over others.
Given the high stakes, White House aides had wrestled over whether Obama should publicly
prod the FCC to adopt the strongest rules possible on the net neutrality issue. Ultimately,
aides felt that a public stance would galvanize allies in Congress as well as young, tech-savvy
progressives, a key part of the Democratic base, according to several people familiar with the
matter. The decision to speak out also comes as Democrats are aggressively courting Silicon
Valley in preparation for the 2016 campaigns.

But the move by the White House has put Wheeler in an uncomfortable spotlight. The two
men have long been allies. Wheeler raised hundreds of thousands of dollars for Obamas
campaign and advised the president on his transition into the White House. Obama last year
appointed Wheeler to lead the FCC as it was poised to tackle its biggest issue in years the
rules that govern content on the Web.
A growing source of frustration for White House and congressional Democrats is that they
have three of their own on the five-member commission at the FCC, a majority that should
give them the power to push through a policy of their liking. But if Wheeler charts a different
course, he could bring the other members along with him.
And, as Wheeler reminded participants at his meeting with Web companies Monday, the
FCC does not answer to the Obama administration.
I am an independent agency, Wheeler told them repeatedly, according to several officials.
Both Wheeler and the FCC declined to comment for this story. The White House had no
additional comment beyond the presidents statement Monday, in which he said the FCC is
an independent agency and ultimately this decision is theirs alone.
Obamas statement caught industry observers by surprise, but it was the product of
mounting concern at the White House that Wheeler and the FCC were clouding the issue.
Administration aides worried that Wheelers efforts to strike a compromise between openInternet advocates and telecom firms would result in rules that were murky and ineffective,
according to officials familiar with the thinking, who spoke on the condition of anonymity
because the discussions were private. The FCC has tried to solve the Internet access issue
with a compromise approach, only to have it struck down in court this year under a challenge
from Verizon.
Obama promised during his 2008 campaign that he would seek rules supporting net
neutrality, or the principle that all Internet traffic should be treated the same. Ultimately, the
White House decided that telecom companies probably would challenge any strong FCC

rules in court anyway, so why not fully support calls by the tech lobby for far-reaching rules
protecting an open Internet?
The aides saw a political upside to a strong statement. A key contingent of the presidents
base young, tech-savvy progressives would be energized by the action, and a strong
statement on net neutrality could also help his relationship with congressional Democrats,
according to government and industry officials.
Obama also saw a more immediate opportunity to retake the political high ground from
Republicans, according to a Democratic congressional aide. Should GOP lawmakers vote to
overturn any protections enacted by the FCC, a presidential veto would put Obama on the
side of millions of consumers who have called on the FCC to adopt strong regulations.
I see him almost salivating over a congressional fight, or a fight with the carriers, over this
issue, said the aide, who spoke on the condition of anonymity because he is not authorized
to talk on the record. This is a populist issue he thinks he can win on.
The presidents statement galvanized supporters of net neutrality. Sens. Elizabeth Warren
(D-Mass.), Mark Udall (D-Colo.) and John D. Rockefeller IV (D-W.Va.) quickly issued
statements calling on the FCC to move quickly to implement the presidents plan.
The president set a solid target out there, said Evan Engstrom, policy director for Engine
Advocacy, which represents tech start-ups.
But the move puts Wheeler in an uncomfortable position.
Wheeler worries that the presidents more drastic approach is too simplistic, according to
people familiar with his thinking. With his long experience in the telecommunications
industry, Wheeler is well aware of concerns that ill-considered regulations could stifle
innovation and slow the growth of the countrys broadband infrastructure, those people said.
And he worries that the White House is being naive about the ripple effects of changing how
a major piece of national infrastructure is governed.

One telecom industry lobbyist was sympathetic to Wheelers position: I dont think anybody
goes into the FCC saying, I want to be at the center of drama. But they seem to find
themselves there frequently.
Behind closed doors, Wheeler has fretted about how Republicans on Capitol Hill would react
to far-reaching net neutrality rules, according to people familiar with his deliberations.
Already on Monday, the Senate Republican leadership dismissed Obamas plan as last
centurys rules.
Obama would probably veto an attempt by Republicans to roll back any FCC rules. But
Congress could hamstring the FCC by withholding funding on other, lower-profile issues,
and it could put Wheeler in the hot seat during congressional hearings or as the target of
lengthy investigations.