>> president obama has nominated tom wheeler to be the next chair of federal communications commission. tom wheeleres managing director of core carpol partners, his venture capital firm, and has been the ceo of two industry groups based here in washington. the cable association and the wireless association as well. joining us to discuss this, justin hille, a and blair levin, who served several stints at the fcc. blair, if we can start with you, do now know tom wheeler, and what should people who follow these issues know.tom wheeler?

>> well, i do know tom wheeler. everyone in this business knows tom wheeler. he was a very successful head of the tray association and a very successful investor both between the trade associations and after he left the wireless industry. the two things i would say that people should understand is he has a breadth of experience on both the policy side and investment side that is extremely valuable. the second thing that is often overlooked, he has actually managed some large organizations, and coming into the fcc, there's part of -- part of the job is to manning -- manage 2,000 people to work together, to develop policy, implement policy, analyze things, and i think he will be very good at that. >> justin? >> i know time at bit as well. i don't know him as well as blair. he was at that time the head ouakari tia. he is a very, very sharp guy.

one saying that comes to mind, tom knows where the bids are buried in terms of getting an agenda done, getting things through the commission, which conclude complicated. a lot of different interests intersect, and particularly as congress finds is increasingly hard to legislate in this area, a lot of the power has gravitated to the commission. so there are a lot of land mines, and tom this kind of guy, going to know what he wants to do and know how to get it done. >> as a republican, are you supportive of this nomination? >> well, look, it's not whether i support it or not doesn't matter. i think tom is clearly qualified for this job. he has earned the trust of the president and earned the trust of a lot of other groups and individual in this town. i don't think there's any doubt he is qualified. he has in big challenges ahead of him. i think probably one of the most complicates things the

commission will do within the long-term, the upcoming broadcast television auctions and when we get into 2017 and look back on tom's tenure, assuming probably one term, whether at it judged a scores failure will be determined by whether or not the auctions are a success or failure. they're going to be very complicated. there's a lot of land mines and very thorny issues to figure out, and tom's clearly got the skills and relationships and know-how to get that done but it's a monumental challenge, probably the challenge blair and his former boss faced when the enacted the telecom act. this rivals that in terms of complexity, and there's a lot of interests to watch. the public safety community, you have congress, which is very

depen dent and very interested to make shower the -- sure the auctions to well you have broadcasters are who interest, and you have the wireless community, which is very interested because of their need for more spectrum for mobile broadband. >> well, joining us to look at the issues that tom wheeler and the fcc will be face eggs paul kirby, senior editor of telecommunications reports. >> i want to get blair's reaction. the fcc's goal is to adopt rules this year for the action. and hold the auctions next year. >> yes. >> is that realistic? we just heard a lot of issues still to be decided and some of the key leaders could leave with they change in chairmanship. >> that's correct. if we were vetting i would say the auction would be in 2015. but having kind of helped manage that agency, i think it's goh good to hold people's feet to the fire to have calendar. if it slips because of a change

in leadership or issues that come up, so bee it. about of you machine on it for 2015, it will be 2016. i think they have a terrific staff. great expertise, being applied to this auction. i certainly agree with justin. i think this is an issue, where if the auction fails, it's going to be difficult for the wheeler chairmanship to be seen as a success. if it's a success, it doesn't mean that the chairmanship will be a success because there are other thing that can intervening but it's the compulsory event he has to do well in. >> justin, is 2014 realiics to hold the auction? >> i don't know. i think what -- the current chairman, genachowski, put that marker out there to focus people, and i guess that's what they were thinking in doing that. i think it is a challenge to get it done in 2014. there's so many complexities to the thing. so many issues they have to figure out before the auction,

just setting up the rules, and then the whole issue, what's going to be the nature of the economy? that's one of the issues, the wireless community, which has to raise the money to bid at auction. that is going to be one of the big unknowns, and that's an issue the commission cannot control. so, i think 2014 is definitely ambitious. would i rule it out? . no but at the same time i'm not sure i'd bet a lot of money on it. >> you were the architect of the national broadband plan. fcc people no longer talk about a total. i want to get pretickses from you about how much spectrum from the auction? >> again, if we were betting i would be in the 80 to 100. i think they ought to shoot for 120, and they should try to get it. and every bit of spectrum that goes into the wireless broadband is an accelerator of job growth,

sufficiency and a lot of other things, base we're going to be living in a bandwidth delivered economy. having said that there are lot of different things, other potential changes in the broadcast industry that could affect. so, you have to have an aspiration, i think -- if they don't meet it, doesn't mean it wasn't a success. what is a success -- what i think is really interesting is that before we came up with this idea in the plan, there was no idea about how we get more spectrum in the marketplace. so i think it's a really important thing the commission is doing. >> predictions? >> i agreement think at it an important as separation but i think it's going to be very complicated. one, you have border issues, international issues, which could have the effect of taking some off the top from 120 megahertz because of the neighboring stations in canada and mexico, and, two, the

commission can't control what the nate tour of the economy is going to be, and dictating the willingness of the wireless industry to participate in the auction. the commission can't dictate the broadcasters' willingness to participate. this is a voluntary auction. it won't voluntary how it's repacked but whether they want to participate in part or full is voluntary, and that's hard thing for the commission to control i hear different things. i hear they think -- even if they don't get 120, they'll get enough to have a robust auction. a couple thing go into that. the smaller group owners may be more willing to participate, and the knopp commercial stations are an unknown that could help drive higher yield of spectrum. but again, it's an unnon. i think it's one of the big unknowns that tom is going to face going forward. >> a couple of the key issue friday the auction is, do you limit eligible of verizon and

at&t and that's part of a different proceeding, and then unlicensed. the house republicans are very concerned the fcc will actually violate the spectrum act by making them too big. blair, i want to get your quick views on those two. >> well, think you have identified the two most potent political issues. a lot of technical issues but those are the two that you'll read the most about. as to the first this has always been a tradition that there are limitations on what any singer buyer can buy in an auction, and i expect the commission to do that again. whether at&t and verizon think those are the right rules, i think that it would be a mistake, and i think most people -- most of the experts think it would be a mistake to have an auction in which an at&t or verizon can buy everything. but how you do that, i think, will be a lot of debate. as to be unlicensed, the law allows and inteed seems to me in

some ways requires the fcc to do some level of up -- unlicensed. and what we we have seen with the greg of wi-fi is unlicensed provides a tremendous economic value in terms of the spectrum, and i suspect the commission will do something to utilize this opportunity to repack, to create new opportunities for the unlicensed type of approach. >> justin. >> i think that's right. this are the two most thorny political issues in advance of a technical issues how to structure the auction. and i think this is -- i think one thing that is interesting, if i'm tom wheeler and i'm thinking as i go into my tenure here, we're on the second term of an administration, and he is has confronting a situation where one of the chambers of congress is in control of the opposite party of the house, being the republicans. this tens to be the period where people start to get very ornery.

the hill gets very ornery with the agencies, and republicans have signaled to the obama fcc they have very strong views on this. and definitely -- never know what happens but most analysts think the republicans well hold on to the house through the next mid-term elections. so tom is going into an environment where he has the republicans and in addition maybe the issue of net neutrality. these they feel very strongly about. and these are the kind of things where you can clash. if you clash on policy matters congress can make your life very difficult in other ways. how are these issues going to shake out? i don't know. but i think tom is going to find that he spends a lot of time on these two issues in particular, precisely because congressional republicans feel very strongly about them. >> i say, if tom were sitting here, the republicans are going to try to make his life

miserable no matter what. i have to say tom is one of the most gifted people dealing with the hill i've ever met so he will effectively do it. about certainly wouldn't approach that by saying, i'm going appease these folks, but you. i think tom -- he will be maybe the oldest person to become chair. i think he ising too this because he wants to serve the public and is going to be looking to history and what is going to make the best auction and create a come prettive, vibrant market place, rather than pleasing house republicans. >> gentlemen, stop the cap, has come out against the nomination and they say. our view remains the country and the obama administration can do a far better -- could do far better than choosing someone to lead the fcc that has not a made a career lob using for big fable and phone company is. the most likely outcome of a wheeler nomination, he will be

quickly approved, maintain the agency's relatively low profile, and avoid rocking the boat too much. even he doubts the power of the fcc to regulate -- to effect regulatory change unless the regulate volunteer to submit to more regulation. the industry remains in a driving seat. >> well, that's interesting. in hearing or read about tom's nomination, i read a piece that he recently wrote in -- not recently but during the pendency of the at&t/t-mobile deal. he wrote that might be inclined to approve the merger but with fair number of regulatory behavioral conditions that would, in his view, limit the reach and dominance of at&t. i don't know what that group would think of what tom suggested in there. but that indicates to me i think that tom -- tom probably knows this is a -- an extremely

delicate task and there's a number of sensitivities that he is going to have to address as the head of the obama fcc. i think he -- there's no question that tom's experience in this area gives him the ability to sort of work with these groups, probably in ways in which someone who doesn't have the same background. but i don't -- i'm not so sure where tom will netly end up on these detailed regulatory issues. i think a lot of people end up surprising people in this town, and maybe they end up feeling differently at the end of his tenure. i don't know. >> two things. with both have is they were not the industries they are today. they are actually the any entrants. i remember working with tom to figure out how to wireless, and he has a little bit of that sense and is -- so i think those people would be pleasantly surprised by his openness and his understanding of the need

for competition. but the second thing is, they do raise an important point, which is the agency will face a dilemma. the open internet order and you have what you might think of as the death of the social contract that built the telephone industry and the cable industry. that is to say both of those were fundamentally built on the premise we give you a monopoly, we have universal service, other requirements. as we move to an all-data world, the economic foundations of those contracts are crumbling. so the auction is the singing most important thing. the second most important thing that is on the plate is what is called the transition to i.t., and that's kind of like, how too we do this, and it's in the backdrop, and there's a court case that will challenge the -- effectively challenging the fccs ability to regulate at all. so the agency very much has to address this question, and i might also note that every

chair, about sometime between three to six months in, faces a different question. everything that got them the job is not what helps them do the job. and the second is, why are they really there? where can they make a difference? where they're reflecking the forces that would happen anyway and where can they permanently make a difference? and that's the interesting question about what tom will be grappling with. but i don't share the same concerns. >> and it she bed noded sone has put off a press release, i have known tom for years and i believe will be an independent, pro-active chairman, who will not allow the fcc to become irresult as broadband becomes the dominant mode of communication in this country. tom will have an open door and open mind, even though she has no doubt that public knowledge will disagree with tom. next question.

topic -- >> you mentioned the all i.p. transition. how difficult for the fcc, for tom, to manage some sort of regulatory structure? already very early in that argument your have competitors saying, look, this is just a ruse to say you -- there's no obligation for interconnection, and basically they're going to get cut off. any predictions how he will manage that? >> well, i think that actually his understanding of the industry and its technology will serve him and the commission very well. it's a very complicated proceeding. one of the common thing -- few things are very complicated but having said that, interconnection will be one of the most important issues. i think that at the end of it, we will serve the country well by making sure that industry knows the date certain at which they no longer have to invest in old network.

but i also think that we have to strive to make sure that we are continuing a competitive dynamic, we are continuing to serve certain values like making sheer with hey a zillion networks for public safety and consumers are protected. but on a high level there's a fair amount of practice. at it where the details come in you have disagreement and tom will be a fair and open-minded manager of the process. i think as part of the process we also have to continue to drive innovation, and i think one of the great opportunities for him -- and you see this with some things senator rockefeller said, and commissioner rosenworcel talk about. 80% of teachers think already the adequacy of band width in the courtroom is not there to take advantage. but those are the kind of things that are part of the agenda in terms of making sure we not

just -- we don't just have good bandwidth but the that grows communications and health care, et cetera. >> afree there's broad consensus that everything should be going all itch p. -- all i. p. i think it's going to take a very long time, though, and i don't think the commission will be making -- will be compelled to make the kinds of decision they have to make in the brave incentive auction, other auctions coming up. transactions coming before the commission. 0so i think it's on a slower burn. at&t have a petition penning with the commission for some trials. my guess is, if tom is probably going to be spending a lot of time on other issues inch addition to broadcast incentive auction, there's a decent possibility that net neutrality

comes back to the commission. i think the dc circuit will probably hear oral argument on the fc c's net neutrality rules, and i think' in the fall they're expecting. so earliest we be a ruling out of the dc circuit enof this year, good evening of next year, and if the court were to vacate the rule order remand the rules, that's going to raise a very important question, which is partly legal and partly political. and that is, does the obama administration appeal to the supreme court or send it back to the commission? tom will have a front-row seat in that decision in conjunction with the white house. that going to be a very sensitive decision. of course there's always the possibility that the rules are upheld, and there's less probably to decide at that point, although industry may decide to appeal to the supreme court. i think the really interesting question will be, if the dc certificate does throw out to the rules, what do they do? and what is tom's role in that?

and what is the rest of the administration's role in that. >> if it goes back to the commission does tom try to pursue title 2? >> that's the $64 million question. it's not clear to me what other avenues they'll have left. this is virtually the second time the commission tries a different support of authority, title 1. and depending hundred the court writes it, it would be difficult to try a third time. >> that's a really gig question, d really big question, and prior to what the commission did last time, under title i, the general counsel published a document that said they effectively have to do title ii. they chose not to but that was a legal opinion. didn't show the politics. that's a very tricky thing. i think there's a fair amount of consensus about the kind of internet we want, but once you get below that consensus,

there's a lot of different points of view about what the government role in making sure we achieve that is. >> and tom wheeler has maintained a blog over the years. you can read his writings at mobile musings.net. the current chair of the house energy economy commitey put out a statement: we congratulate tom wheeler on his nomination to the fcc but we're concerned by mr. wheel ever's views on merger conditions thattening be used to affect industries. >> you think senators will try to bring that up. sunset republicans do not get involved in the confirmation process. will they bring um his blog postings about at&t and t-mobile? >> i think they will. this is like some o the issue wes talked about, net neutrality. this is a sore spot with congressional republicans, and i think blair and i specifically squared off on this issue in our

former lives. this is the kind of thing where congressional republicans get very troubled by the idea the commission is making policies by permission to merge. so if you have strongly held views on this or that issue, then do it through rulemaking, and i think they have got 'very worried about the increasing tendency for the commission to not only condition a merger but now you have on top of that, where the parties to a deal will voluntarily make conditions to a deal. >> they always say, voluntarily, with a gun their head. >> correct. this is the tension between congressional republicans and the fcc for i think about ten or 15 years now. because i think a lot of times the commission does have trouble getting these things dub through rulemaking, and parts are eager to get a deal done, and it's not unusual for the parties to work out their own, arrangement with the commission.

congressional republicans do not lick this. congressional democrats have a different view, and this how you serve the public interest. my guesses this will probably couple in tom's confirmation hearing. >> i believe it will come up -- there's no point to debate what the right policy but that is one of the historical tensions, and a lot of consecutive republican think tanks have suggested taking merger authority away from the fcc. >> between now and when -- fifth men and is confirmed, do you have any views whether she will try to get some items through or be more of a care taker chair until toms in? >> she knows the issue and will continue to do certain things, particularly on the auction of the need to be done in or the to meet the timetable. there are some other things i

think she carries about, such as prescribe -- prison phone rates, but i don't anticipate it will be that terribly long a period. certainly there's no kind of pressing need to start proceedings. though there are some that she could start that tom would be perfectly happy to have her start. she doesn't want to do anything that boxes him in, but i don't think she would do thatful there's already a full alleged. >> justin lilley, any inkling who the president may nominate to replace commissioner mcdowell? >> that a pretty good parlor game right now in town. i think by tradition, back to clinton-dole years, the leader of the opposition in the senate gets to make a quote-unquote recommendation to the white house as to who the white house should nominate from the opposing party. my guess is, senator mcconnell is playing that. he is and his staff are playing that close to the investigation.

i think probably get a name, my guess is in the next month or so. tom has not been officially nominated. he is just the president's announced to intentionally nominate him but the official nomination will be ready soon, and they will pair -- congress -- the senate will pair the two of them to move them together, and so my guess is that requires senator mcconnell and his staff to be thinking about who they would like to recommend, and my guess is we'll see a name soon. >> predictions? >> several hill people have been named. >> any predictions? you just learned just now -- >> justin i thought -- it's perfectly consistent with what other republicans have told me as well. generally you would give the nod to the senate -- i will say that the house person being mentioned is very knowledgeable, former state puc commissioner,

well-respected on the hill and throughout the states, but mitch mcconnell isn't going to call me up and i'm perfectly comfort able with that. >> we only have a couple minutes left. you seem to know each other pretty well. is the telecommunications community in washington tight-it knit? do you all know each other? >> incestuous? >> the been telecom bar is a small crowd. a lot of bipartisanship. the chairman used to say to men we we would sit down and talk about these issues and i'd get a little wrapped around the axle and he would say, justin, don't worry about. it's just the rich fighting the wealthy, and to a certain extent that's true about this industry, and so that doesn't lend -- these issues typically don't lend themselves to sharp

partisan differences, although you see some of that on the more high profoil issues. but i would say it's a fairly small community by relative standards. >> i also think that the 96 act was a bipartisan act, and the implex addition of it was one on a bipartisan basis, and we disagreed but the people, look justin and i, who kim out of that and the original spectrum auctions, have an enormous amount of respect for each other and have always gotten along well. >> is tom wheeler the type of chair that would relish a new telecommunications act? >> you know, that's a good question. because often times you do need -- you clearly need the buy-in of the administration anytime you're going to do a big reform bill, and tom would clearly be in addition to whoever the head of the ntia is, would be the spokesperson for that and from the administration evangelizing the idea and encouraging congress to do it.

just my sense is right now, the current landscape ills that the stars are not aligned for major reform bill. there's been talk about reforming the video marketplace. it's been a long time since congress really got it hands back into the video marketplace, the '92 cable act is now over 20 years old. so, i think it depends. that is one way to sort of leave your mark, is to sort of be seen as sort of central to getting dong agree on major reform bill. >> i would just say very quickly, i think tom would be great and would relish it, except for the fact it probably wouldn't get done during his time and would soak up all the energy and also soak up a lot of capital. people will stop doing things, stop investing in certain markets, for fear of or while waiting for something else to happen and i think he would -- view that as not a good thing. >> that's the last word. blair levin, former chief of

staff at the fcc, justin lilley, a former republican counsel to the house commerce committee, and one of our regulars here on the program, paul kirby. thank you. >> thank you. c-span, brought to you as a public service by your television provider. >> next, the pentagon briefs reporters on their annual report to congress on the chinese military's capabilities. the report reveals that china's military budget is increasing as it continues to pursue its long-term military modernization program. this is 30 minutes.