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Incoming Ex-Lobbyist FCC Chairman Tom Wheeler Selling $1 Million in Personal AT&T, Verizon Stock

Phillip Dampier May 17, 2013 AT&T, Consumer News, Editorial & Site News, Public Policy & Gov't, Verizon, Video 4 Comments
Phillip "I don't have $1 million in AT&T and Verizon stock" Dampier

Phillip “I don’t have $1 million in AT&T and Verizon stock” Dampier

Before Tom Wheeler, President Obama’s pick to head the Federal Communications Commission, can find his seat at the federal agency overseeing the nation’s telecommunications industry, he will need time to sever the extensive ties he maintains as an ex-lobbyist and investor in the companies he will soon oversee.

To avoid an even bigger appearance of a conflict of interest, Wheeler has agreed to dump at least $1 million in personal stock in AT&T and Verizon, as well as divest himself of holdings in 76 other media and tech companies including Time Warner, Comcast, Google, Sprint, Deutsche Telekom and News Corp.

Wheeler is also submitting his resignation from the board of Earthlink, an Internet Service Provider, and will also sell off his shares in that company. He will also have to step down from Core Capital, a venture capitalist investor firm with extensive holdings in the telecom industry.

In our view, Wheeler has shown he couldn’t be more of a telecom industry insider unless he also served on the board of AT&T. Wheeler’s extensive holdings depict someone who has maintained a direct financial interest in the industry for years, even after ending his leadership at the National Cable Television Association and leading the nation’s biggest wireless industry lobbying group, the CTIA.

These kinds of deep industry ties are a serious concern for the average consumer. As we’ve reported before, Tom Wheeler has said almost nothing on his blog about consumer interests, writing views from the perspective of an industry lobbyist and investor. Watching him disgorge well over a million dollars in direct investments in AT&T and Verizon — companies he’d oversee in his new role — does not ease our concern he remains a consummate insider. He is well-positioned to move back through the D.C. revolving door at the end of the Obama Administration to reinvest in the companies his tenure at the FCC could potentially make or break.

Wheeler’s appointment represents another broken promise from the Obama Administration:

“No political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years. And no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration.”

Not allowing Wheeler to oversee regulations or contracts with the companies who helped pay his salary and earn him a fortune from his investments would leave the new FCC chairman little to do beyond opening the mail. But of course, that campaign promise from the Obama-Biden campaign has long since been broken and forgotten by most.

Despite the clear conflicts of interest, President Obama remains fully behind his new FCC chairman pick.

“Tom knows this stuff inside and out,” Obama said.

No doubt.

Former FCC commissioner Nicholas Johnson blasts the nomination of Tom Wheeler, an ex-industry lobbyist and insider, for the role of new chairman of the FCC. (From: TheRealNews) (16 minutes)

Currently there are 4 comments on this Article:

  1. Danny Lampley says:

    “As we’ve reported before, Tom Wheeler has said almost nothing on his blog about consumer interests . . . .”

    Expecting a bit much aren’t we? After all, he’s not likely to be consuming much of the things, and in the same way, as most of the rest of us consumers. You can hope but nothing changes.

  2. Phil, first, suggest 3 people you think are more qualified and we’ll do an objective analysis.

    Second, are you aware of the personal expense Mr. Wheeler is undergoing to accept this position? Unloading all that stock and leaving so many boards and commitments is a massive disruption to anyone’s tax and financial planning as well as expected income streams. So when you look at the math, what additional direct gain would someone of his wealth, experience and range of relationships expect to achieve by this appointment?

    Thirdly, I find it disingenuous to highlight a former FCC Commissioner who belies his distinguished career with the disrespectful way in which he refers to Mr. Wheeler who too has had a distinguished career and provided a ton of stimulus to the American economy through his actions. Cable (video and broadband) and competitive wireless were the economic engines that in large part revived America’s global socio-economic stature.

    Where was Mr. Johnson, while MaBell lorded over his FCC? He appears to support its legacy and provenance with the comments from 1970 contained herein: https://uiowa.edu/~cyberlaw/cpsr/year2000.txt. In fact, I would go so far as to say we would NOT have had the internet had it been left to Commissioner Johnson’s devices and ignorance of network theory and service provider business models.

    Mr. Wheeler on the other hand has a superlative grasp of these concepts and understands the huge issues confronting historically silo-ed and vertically integrated monopolies and regulatory regimes as they confront a tsunami of horizontally scaled digital information models. He’s advised, invested, built, owned and guided. Not a bad track record versus someone whose has never had for profit experience.

    Simply put, we need a leader who understands policy, academia, businesses and the capital markets simultaneously. Please provide me with your list of nominees and we’ll have an objective debate using those measures and any others that you suggest.

    • My nomination list is a wasted effort since neither you or I have any power to change the current one.

      I’d say in general, the benefits that accrue from moving between private and public service (and back again) are well-documented, particularly by the likes of Jack Abramoff, who made it quite clear the K Street crowd places high value on anyone who establishes credentials both in lobbying and public service.

      Tom Wheeler is not just a private businessman and investor. He has decades of lobbying experience for the very companies he will now oversee in his regulatory role. I’ve watched him in hearings during the early 1980s when he was the nation’s most important cable lobbyist. He represented his clients well – reflexively defending industry practices that resulted in massive rate increases and deteriorating customer service. At the CTIA, he railed against anything that resembled consumer protection and fiercely opposed any oversight by regulators.

      At the end of his tenure at the FCC, Wheeler will have more than bolstered his resume and will be the latest high demand revolving door traveler with experience and contacts in both the private and public sector. Abramoff called people in Wheeler’s position the Holy Grail of insider DC — able to write their own six and seven figure paychecks as a high-powered consultant or lobbyist. That is where the serious money is made in Washington these days. If he chooses not to pursue a return to lobbying, he can use his experience at the Commission to help guide him in his investments. It’s a win-win for him either way. For consumers? I don’t see the evidence.

      Out of 200+ million Americans, Tom Wheeler, ex-lobbyist and telecom investor is the best choice to represent the interests of the American people? I noted in your reply you mentioned he was well positioned to understand policy, academia, businesses and the capital markets, but you left out a big group: consumers.

      The FCC is not an industry trade group or policy institute. It is a regulator of the public airwaves, providing limited checks and balances on an increasingly concentrated and deregulated industry.

      Are Big Telecom companies concerned with Tom Wheeler? Judging from their gushing approval, I think not. Many consumer groups are not happy, which should tell you something. This is the DC Business as Usual textbook in action — the book the Obama Administration promised to throw out.

      I don’t think Tom Wheeler’s crystal ball is much better than Mr. Johnson’s considering the times. In the 1960s, splitting up AT&T and the Bell System was hardly on the radar, much less the Internet. Hilariously, AT&T’s CEO in the 1960s and 70s roared against deregulation and breaking up the Bell System. The Phone Company as we knew it did not even want anyone attaching third party modems to their phone lines, so regulators were hardly the primary impediment to the Internet’s development.

      Tom Wheeler has not done that much better picking tech winners and losers when he wrote he thought WiMAX would be the wireless technology of the future. Not so much. The rest of his blog is written from the perspective of an investor and former industry insider. He has written almost nothing from the perspective of a customer or consumer. It is all about what works best for the companies and the industry, not for the average American who doesn’t own stock in these companies. That makes him an excellent choice for investors and to help represent corporate interests. But his experience as a regulator working in the public interest is thin to zero.

      Back when I was a teenager and went to EPCOT Center in Florida, AT&T/Bell was still trying to sell the notion of the revolutionary videophone they had been peddling as the future since the 1970s. It never really went as far as they predicted because they didn’t bother to ask what the consumer actually wanted or would be willing to pay. Not listening to consumers or considering their interests remains a fatal flaw.

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