Sen. Brian Schatz (D-Hawaii), in early comments at Monday's annual State of the Net conference in Washington, presaged a discussion later in the day about whether and how federal support to build broadband facilities should be part of the Trump administration's proposals for upgrading the nation's infrastructure of roads and bridges.

That dialog sparked an examination, suitable to the venue and referred to throughout the day as part of the "kinetic versus cyber" ecosystem, of telecommunications' importance vis-à-vis tangible products.

"The more we can do in the broadband space, the  better," Schatz said in his remarks at the conference. "We can get bipartisan support," but he proposed that "we should do little things" rather than go for sweeping telecom reform.

Schatz also addressed the continuing controversy about net neutrality, insisting that, "reversing the Open Internet order is not so easy." He said that "right now it is just too polarized" to legislate on that issue, although he thinks Congress should do so.

"I'm open to legislating but only if it's not a Trojan horse for undermining the authority that is already in place," said Schatz, who sits on the Senate Committee on Commerce, Science and Transportation.

He also said he "believes Jessica should be back on the FCC," a reference to former Democratic FCC commissioner Jessica Rosenworcel, whose term ended after an ill-fated, politically laced attempt to reappoint her in late December.

Schatz's remarks included his views on privacy and the Internet of Things, which were major topics throughout the SOTN annual conference.

"IoT is one of the spaces where we need rules of the road; also artificial intelligence as it relates to law enforcement," Schatz said. "I don't think this is apocryphal sci-fi stuff. We have to have this conversation, ideally private-sector driven." 

He did not offer any suggestions on how Congress would become involved in these rapidly developing tech/telecom sectors.

At a subsequent session on IoT, Dr. Ron Ross, a fellow at the National Institute of Standards and Technology, characterized cybersecurity intrusions as "the greatest national security problem," emphasizing that communications and utility operators are not adequately prepared for attacks, such as "exfiltration" of customer information. He said building the infrastructure to defend against cyberattacks "is incredibly complex."

The panel also addressed looming issues such as liability and how IoT systems can be built that enable consumers to keep control over their own data.

Reassigning Spectrum, Funding Broadband Deployment
A session on "Rethinking the Future of Communications Policy" spanned a terrain from spectrum allocation to FCC staffing.

After declaring the current broadcast incentive auction a success (despite its lower-than-expected revenue results), the panel said it expects further efforts to retrieve airwaves for new digital applications. In particular, the panel focused on government agency controlled airwaves, which it called "the low hanging fruit for more spectrum."

Larry Downes, project director of the Georgetown University Center for Business and Public Policy, cited the opportunity for the new administration "to incentivize federal agencies with underused spectrum to give it up or share it for commercial use.   

Although the Defense Department is unlikely to relinquish its massive spectrum holdings, according to panelists, airwaves controlled by aviation and other agencies may be diverted to commercial use.  No one offered specifics regarding timetable or how the transfer would be accomplished.

Broadband will be part of the Trump administration's national infrastructure construction plan, said Markham Erickson, a partner at Steptoe & Johnson law firm, who represents telecom and internet clients. He expects the primary federal actions will be created by providing tax incentives and subsidies for private investment, "some mechanism to get broadband out to rural places."

Erickson also said he expects that the FCC will retain "extensive regulations" over some telecom sectors, although he did not cite specific topics.

With FCC transition team member Mark Jamison (pictured above) on the panel, discussion also touched on the extent of the FCC reorganization agenda. Jamison, who is director of the Public Utility Research Center at the University of Florida, was a member of the Trump transition team working on the FCC.

Jamison said that the "basic goal" was to "elevate the role of technical analysis."

"It's easier to hire lawyers than economists or engineers," he said. "I think the commissioners and public will be better served" with more technical expertise.

Gigi Sohn, a former advisor to former FCC chairman Tom Wheeler, concurred, noting that it was "very frustrating to bring engineers and economists" from telecom and media companies and count on their information. "As a result, we're reliant on industry input," Sohn said, lapsing, as she frequently did on the panel, to using "we" when discussing a job she left three weeks ago, a very common gaffe among recently quondam public servants. She joked about the ex post facto “we” that crept into her comments.

The panel agreed that FCC reorganization should reflect greater overlap of activities that affect multiple bureaus.

"The FCC should recognize the convergence of all kinds of Internet Protocol technologies," said Downes. "There is no need to separate bureaus based on [legacy] structures."

Sohn also used the platform to predict that Trump appointees will adopt the mantra "Consolidation, consolidation, consolidation," in counterpoint to Wheeler's "Competition" mantra. She predicted that the FCC will have no role in upcoming merger considerations, with those functions going to the Federal Trade Commission and Justice Department.

Erickson pointed out that there are similar rules at various bureaus and agencies, noting as an example that the Justice Department may be better equipped to take "a bigger view of intermodal and intramodal competition."  

In his closing keynote,  Sen. John Thune (R-S.D.) avoided any indication that an omnibus Telecommunications Act reform is in the works.

Comcast was the only "Platinum Sponsor" of the annual event;  AT&T, Verizon and Google were among the "Gold Sponsors."

WASHINGTON — President-elect Donald Trump has added some populist pop to his Federal Communications Commission “landing” team as he prepares to remake the agency come Inauguration Day (Jan. 20).

Trump will get to pick a new chairman, and, if he chooses one of the agency’s two current Republicans for that post, one new GOP and one Democratic commissioner as well.

The newest, fourth member of the FCC transition team is David Morken, the co-founder and CEO of Republic Wireless parent company Bandwidth.com. Last month, Roslyn Layton, a visiting fellow at the American Enterprise Institute, joined fellow conservative think tank alumni Jeff Eisenach and Mark Jamison on the team providing input on new FCC leadership.

Bandwidth.com built its wireless business on the theory that WiFi could serve as the primary network and a cellular network, specifically Sprint’s, as backup, which would allow it to charge less — $19 per month with no contract.

Morken combines several life experiences that appear to hold a lot of weight with the incoming president and could apply to the tenor of the new commission. He is a former member of the U.S. military (a Marine) and an entrepreneur/disruptor who built an “overnight success” through a decade of hard work growing a business.

Morken clearly has a populist streak, or at least a consumer-empowering marketing approach to challenging the big carriers.

“The cellular emperor has no clothes — smart consumers have been clamoring for someone to unlock the value of our home and office networks for years,” he said when launching the hybrid WiFi/cellular approach in 2011.

The Trump transition team has not responded to requests for information on when the President-elect will chose a new chairman, though one of the sitting Republican commissioners — either Ajit Pai or Michael O’Rielly — will almost certainly preside at least as interim chair following the inauguration.

The FCC last week moved the public meeting to Jan. 31 to give Republicans more time to plan for it.

WASHINGTON — Chairman Tom Wheeler declined to predict the FCC’s future under a new administration, pointing out that he doesn’t have a crystal ball.

Perhaps, but the makeup of the agency, the Federal Communications Commission, got clearer with his announcement that he had tendered his resignation to the president effective Inauguration Day, Jan. 20. The signals are clear that Republicans want to undo much of Wheeler’s legacy.

With Democratic commissioner Jessica Rosenworcel failing to get a Senate floor vote on her renomination, barring some miracle, she will be leaving by the end of the year or briefly thereafter. Lack of clarity about Wheeler’s exit was cited for Rosenworcel’s failure to get that vote. But Wheeler insisted he had made it clear he would hold with tradition and leave by Inauguration Day. He suggested it was because the commission would initially be 2-2 with Rosenworcel reinstalled that Republicans balked at voting her renomination, particularly since he had said last week he would leave the same day she got voted.

WHEN WHEELER MET TRUMP TEAM

Wheeler confirmed he had met at least twice with Donald Trump’s FCC transition team and promised to help with a smooth transition, pointing out he knew something about that process — he led the FCC transition team for the Obama administration.

As of Jan. 20, the Republicans will have a 2-1 majority (with Mignon Clyburn the remaining Democrat) and President Trump will get to pick two new commissioners, a Democrat and a Republican. Clyburn could slow things down in the interim by not showing up to public meetings. The FCC needs a quorum to vote, but the chairman could vote items on circulation, which would not need her vote.

Traditionally, the Democratic pick would be deferred to the Senate minority leader (Chuck Schumer of New York in the new Congress), but President-elect Trump ran on running roughshod over standard operating procedure in D.C., so that is hardly a given.

Ajit Pai is the leading candidate to be interim (and perhaps non-interim) chair. A possible pick for the Republican to fill out Wheeler’s commissioner term — chairmen are also commissioners — is Brandt Hershman, the Indiana state senator with a telecom deregulatory bent. He is said to be a suggestion from VP-elect and former Indiana congressman and governor Mike Pence, who is heading the transition team. That puts Hershman in the chairman conversation as well.

Although Wheeler was not saying what a Trump FCC should do, he was advising on what it should not do, which is throw out regulations in service of anti-government rhetoric that he branded dangerous.

In his final press conference, the chairman said that far too often what goes on in Washington is demeaned. If Wheeler’s mantra was competition, competition, competition (it was), Trump’s arguably has been “drain the swamp, drain the swamp, drain the swamp.”

Wheeler said it was tough to make decisions in the common good as opposed to making decisions in self-interest.

“If we don’t use government to argue these issues out, it doesn’t mean decisions won’t be made,” said Wheeler. “It just means that decisions will be made without the input of the people. The cry for a laissez-faire government that walks away from oversight is also highly dangerous to consumers and those who operate in the marketplace.”

That was clearly a shot across the bow at his Republican successors.

Internet-service providers operating in that marketplace were cordial in their goodbyes to Wheeler, who branded Internet access providers as a virtual monopoly on the conduit to the consumer, with the incentive and ability to discriminate in those companies’ self-interest.

The FCC’s name for ISPs in official documents was even something of an outside joke in the Wheeler regime: broadband Internet-access service providers, or BIAS.

Wheeler’s legacy will be mixed. He was drawing praise from public-interest groups for his effort to spur set-top box competition, but that ran into pushback from his own party. He ran out of time on a business data services proposal that cable operators and other ISPs pushed back on. He was being praised for advancing the spectrum auction, but so far that is in its fourth stage as the spectrum the FCC can reclaim for broadband continues to drop. And the Title II reclassification of ISPs that was arguably the centerpiece of his tenure will likely be rolled back, as well as the broadband privacy regulations that are connected with it.

Wheeler appeared to have a clear sense of his mission, which was to make sure that broadband, the transformative technology of this century, was available to all — which he combined with a distrust of the marketplace gained from experience as a lobbyist.

He said last week those lobbyists were good people, but pushing self-interest rather than the public interest.

Wheeler is a famed student of history, which includes the struggles to get electricity to the farm wives still beating clothes on rocks well into the last century.

BIAS TOWARD THE EDGE?

Some can fault — and many in the industry do — how he chose to accomplish his task. But it is hard to argue against trying to get broadband to everyone.

ISPs argue that is what they have already been doing, and that the best thing the FCC can do is provide regulatory certainty, preferably the certainty of a light regulatory hand, in a climate conducive to investment and innovation. They took issue with the FCC’s continued suggestion under Wheeler that broadband was not being deployed in a reasonable and timely manner, a stance used to justify new regulations.

Wheeler signaled from day one that he viewed the FCC as a consumer-focused agency and consumers, not industry, were his constituency. But again, media companies argue that they serve consumers too and could serve them better freed from some of the rules Wheeler imposed or refused to unimpose.

The outgoing chairman also made clear that he viewed edge providers like Google and Facebook as creative forces for good that need to be protected against ISPs and their monopoly conduits into the home.

That approach is likely to change under new management.

“Perhaps the primary legacy of the Wheeler era is the relative primacy of companies at the ‘edge’ of the Internet, such as Netflix or Google, over Internet access providers like Comcast or Verizon,” communications attorney Robert Cooper, a partner in Boies, Schiller & Flexner, said. “While telecom regulation need not be a zero sum game, I would expect the pendulum to move in another direction in a post-Wheeler FCC.”

FCC chairman Tom Wheeler has twice met with Donald Trump's transition team for the agency, Wheeler said Thursday (Dec. 15) at his post-meeting press conference.

Wheeler said he had met once individually with team leader Jeff Eisenach, and with all three members, including Mark Jamison and Roslyn Layton, on a second occasion.

He called them good meetings, and said he made it clear that if there were any issues that came up, "I was the guy to call first to solve those."

Related:Transition Team’s Mark Jamison Asks, Do We Need an FCC?

Wheeler, who had announced earlier in the day that he would leave the FCC on Inauguration Day, has experience in transitions, having served as the Obama administration's FCC team leader back in 2008.

The Federal Communications Commission chairmanship is not usually among the first posts filled in a new administration. It can sometimes take months after the inauguration for a new chair to be installed, with a sitting commissioner — in this case either of two Republicans, Ajit Pai or Michael O’Rielly — serving as interim chairman in the, well, interim.

But a lot of names and scenarios have been bubbling up for the new chairman of the agency, particularly since it is hard to predict if the Trump administration will follow form or blaze new paths to various nominations.

Here is the current laundry list (with background input from various sources), with the caveat that someone could come out of left field to be named the FCC’s starting pitcher, as it were:

Pai: Senior sitting Republican. The last two Republican chairs — Kevin Martin and Michael Powell — were plucked from the ranks of sitting commissioners, though Powell had big name recognition as the son of Secretary of State Colin Powell, and Martin had been a lawyer in Florida representing President George W. Bush in the 2000 recount court battle. Still, Pai has Senate connections: He once worked with Attorney General nominee Sen. Jeff Sessions (R-Ala.).

O’Rielly: A dark horse, but multiple sources said his name is in the mix, given his Senate connections as a former Hill staffer.

Jeff Eisenach/Mark Jamison/Roslyn Layton: They are the deregulatory think tankers leading the FCC transition team. Wheeler was an Obama technology and FCC transition team leader and got the big chair, as was former Republican FCC chairman Mark Fowler. Fowler confirmed for the Wire that he “was in charge of supervising the transition teams of all major regulatory agencies, including the FCC” back in the Reagan years, so there is precedent for the pickers becoming the picked.

David Fellows: A telecommunications industry vet spanning engineering and operations, he’s the co-founder and chief technology officer of Layer3 TV, the Denver-based, self-described “next-generation cable operator,” and is also serving as chief scientist of the cable-focused Energy 2020 initiative. Fellows has deep experience in various facets of the telecom and tech sectors, including past key roles at MSOs (Comcast and AT&T Broadband), major suppliers (Scientific Atlanta, now part of Cisco Systems), telecom (GTE) and as a venture capitalist (Genovation Capital and Pilot House Ventures).

Rep. Kevin Cramer (R-N.D.): He is a member of the House Communications Subcommittee, though he does not have a high profile there. Cramer was also an early Trump supporter, which appears to count a lot with the President-elect.

Brandt Hershman: An Indiana state senator with telecom deregulation chops and a degree from Harvard, he is said to be a suggestion from VP-elect and former Indiana congressman and governor Mike Pence, who is leading the transition. “I wouldn’t be surprised if the next chairman had connections with Indiana,” said one FCC transition watcher.

Rep. Marsha Blackburn: The Tennessee Republican is another early, and vocal, Trump supporter who is a member of the transition team executive committee, though she may be looking for a bigger post. She is vice chair of the House Energy & Commerce Committee and has been very active on communications issues.

Ann Coulter: OK, that’s a long, long shot. But the conservative commentator was another early (and late) Trump supporter and last summer all but campaigned for the FCC post, telling Business Insider she would take aim at big media companies she said had “just gotten very powerful and very unfair,” something Trump echoed in criticisms of the proposed AT&T-Time Warner and approved Comcast-NBCUniversal deals and his attacks on media news outlets in general.

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One World Sports, Facing Reported Woes, Looks to ‘Bright Future’

One World Sports, the niche sports network that has been the go-to channel for distributors locked into, or looking for alternatives to, onerous carriage contracts, is having some money problems of its own, according to sources last week.

Sports news website Awful Announcing first reported the channel had furloughed workers in an effort to cut costs, and in fact had considered bankruptcy and failed to pay employees and vendors for months. Sources said last week the network — with access to 43 million homes but mostly carried on lightly penetrated sports tiers — had lined up an investor that backed out at the last minute, prompting the need to take quick action.

One World CEO Sandy Brown said some of the reported signs of financial distress weren’t accurate but didn’t give specifics. He said talks were ongoing with a potential investor and he was optimistic a deal would be reached. “We’re very excited about where the network is headed,” Brown told The Wire. “We’ve got a very bright future and we’ve just got to get through this.”

The channel is owned by One Media Corp., a Dallas investment firm headed by Seamus O’Brien. He’s also the owner of the New York Cosmos of the North American Soccer League, and Cosmos games air on One World Sports. That team and the league itself are in financial difficulties, according to reports. OWS also airs international hockey, basketball and golf matches, along with table tennis and badminton competitions. It’s landed several deals with distributors that were otherwise locking horns with pricier networks.

— Mike Farrell

In staffing his FCC transition team, President-elect Donald Trump has tapped a pair of American Enterprise Institute (AEI) vets and free-market deregulators in Jeffrey Eisenach and Mark Jamison.

While it is tough to predict which Trump will set the tone for the FCC -- the merger-threatening populist who has said he opposes the AT&T-Time Warner deal and would unwind Comcast-NBCU or the regulation-threatening candidate who said he wants two regulations axed for each new one added -- the choice of the transition team leadership could be instructive.

Eisenach and Jamison are linked at the communications deregulatory hip by AEI, a free-market think tank. Eisenach is director of AEI's Center for Internet, Communications and Technology Policy, while Jamison is a visiting fellow there. Eisenach is executive editor of AEI's TechPolicyDaily.com, while Jamison is a writer for the site.

While Eisenach has gotten attention, as a key overall transition team member, for his deregulatory views, in issues including net neutrality, Jamison's appointment adds some new deregulatory punch. "Regulation is about disappointing people at a rate that they can endure," Jamison has written. He is clearly out to "disappoint" people less.

He is the director of the Public Utility Research Center (PURC) at the University of Florida and has written extensively on telecom issues.

Among the recent headlines of his posts on TechPolicyDaily are:

"Restoring Effective Leadership at the FCC" (he concluded that the FCC under chairman Tom Wheeler has been politicized, less than analytical and lackeding transparency); "Why Secretary Clinton's Broadband Policies Will Fail" (Jamison said broadband subsidies are inefficient) and even "Do We Need the FCC?"

His enigmatic answer to the latter: "No, but yes."

Jamison said in the post that most of the reasons for having an FCC have "gone away," in part because there are few telecom network monopolies, and ISPs are rarely among those few. That is quite different from the Wheeler FCC's emphasis on ISP gatekeepers to justify various regulatory approaches, including net neutrality and broadband privacy rules, both of which are likely to get a second look under a Republican chair.

Jamison also said Web content is a competitor to broadcasting --  and sufficiently so that it would seem to "eliminate any need for FCC oversight of broadcasters."

Broadcasters have been arguing for years that the FCC was wrong not to include Web content as a competitor when it looks at its media ownership rules.

Jamison conceded there might be need for rules for the airwaves during times of emergency, but said that does not require regulating the content providers themselves.

He srgued that the reasons the FCC still exists have more to do with inertia -- an aircraft carrier is tough to stop once it gets going -- and the fact that it benefits businesses and special interests, sounding a populist note that resonates with the Trump mantra.

"The recent work on net neutrality, business data services and set-top boxes are bestowing benefits to some segments of the industry at the expense of other segments," he said, "and at the expense of customers, who ultimately bear the brunt of regulatory rent-seeking. The FCC’s universal service subsidies have, for example, delivered profits to numerous telephone companies over the years. And the cottage industries formed in support of net neutrality, set-top box regulation and universal service policies employ a large number of people.

So, what is the "yes" in Jamison's answer to whether an FCC is needed? He said it "appears" to be "important to keep radio spectrum allocation independent of day-to-day political pressures." Traditionally, even deregulatory Republicans have conceded that some spectrum cop is needed on the beat.

While Jamison has plenty of criticisms of Wheeler, he is a fan of several former chairs, including Republican Michael Powell, currently head of NCTA: The Internet & Television Association, as well as two Democrats, Reed Hundt and Bill Kennard, both chairs under President Bill Clinton).

Jamison said Hundt provided lessons in how to build a staff free of political concerns. Kennard got props for giving the agency a larger purpose, with such initiatives as providing pro-competitive models for regulators in other countries and setting an example of independence as an agency. Powell got credit for "decreases in backlogs, improved communications and morale, and a stronger esprit de corps"; he "built deep commitment, ownership, personal worth and shared success within the staff."

"Strong leadership at the FCC is needed regardless of the new administration’s regulatory agenda," Jamison wrote. "If the FCC’s work remains largely unchanged, the rebuilding is needed to ensure that the agency is strong enough to provide substantive decision-making and to withstand future politically-oriented chairmen. If the administration follows the other extreme and moves to largely disband the agency, effecting the change will require strong leadership."