Obama to Pick Wheeler for FCC, Watt for FHFA

President Barack Obama
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President Barack Obama

President Barack Obama will nominate venture capitalist and former wireless and cable lobbyist Tom Wheeler on Wednesday to head the Federal Communications Commission, and Rep. Melvin Watt to head the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.

The planned nominations were disclosed by a White House official.

After decades in and around Washington telecom circles, Wheeler would take the reins of the FCC as the industry prepares for a major reshuffling of ownership of radio airwaves and as the agency tries to catch up to rapidly changing technology.

He has the rare support of both industry groups and a number of consumer advocates.

Wheeler has served as an informal adviser to Obama in recent years and has been a big fundraiser for his political campaigns. He went into the venture investing business after years at the helm of the National Cable Television Association and then the wireless industry group CTIA.

Wheeler did not respond to a request for comment. He will succeed current FCC Chairman Julius Genachowski, who plans to leave for the Aspen Institute think tank in coming weeks.

"Tom Wheeler is an experienced leader in the communications technology field who shares the president's commitment to protecting consumers, promoting innovation, enhancing competition and encouraging investment," the White House official, who spoke on condition of anonymity, said on Tuesday in disclosing Wheeler's nomination.

Commissioner Mignon Clyburn, a Democrat, will take over as acting chairwoman until the Senate confirms the nomination, the official said. She will preside over a commission that includes one other Democrat and one Republican because Obama has yet to fill another open Republican seat on the usually five-member commission.

Wheeler's lobbying past has concerned some public interest groups as well as Senate Commerce Committee Chairman Jay Rockefeller, a Democrat who wanted his former staffer and now junior FCC Commissioner Jessica Rosenworcel to get the post.

But overall, consumer advocates have embraced Wheeler's candidacy, noting that he joined both trade groups while the industries they represented were young and competing against established technologies.

"He's interested in competition and promoting new technologies," said Andrew Schwartzman, a prominent Washington public interest advocate, who said Wheeler understands the need to challenge market leaders. "His mind-set is of somebody who favors the little guy."

At the same time, many in the telecommunications industry have touted Wheeler's private-sector experience, noting that he founded and invested in many tech-based companies and expressing hope that his lobbying experience will make him more sympathetic to letting markets, not the government, set the industry's pace.

In a 2011 blog, Wheeler hinted that he favored a controversial and ultimately shelved merger deal between AT&T and T-Mobile, sparking speculation that he may be open to more consolidation in the wireless industry.

However, the blog post also suggested the FCC would have been able to levy heavier regulation over the newly merged company because of monopoly concerns.

On Tuesday, few industry groups or companies commented on Wheeler's upcoming nomination before it was formally announced.

The National Association of Broadcasters, whose relationship with the FCC has cooled as Genachowski shifted the agency's focus to expanding broadband access, simply said Wheeler had "the experience and temperament to serve the agency with distinction."

Watt's nomination for the FHFA also was expected to be announced Wednesday.

If confirmed by the Senate, the 20-year veteran of the House would replace Edward DeMarco, an appointee of President George W. Bush who has been a target of housing advocates, liberal groups and Democratic lawmakers.

The North Carolina Democrat's nomination comes at a crucial time for Fannie Mae and Freddie Mac, two government sponsored mortgage-finance enterprises that the government rescued at the height of the financial crisis in September 2008 as they teetered neared collapse from losses on soured mortgage loans.

Taxpayers have spent about $170 billion to rescue the companies. So far, they have repaid a combined $55.2 billion.

Fannie and Freddie together own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans. Those loans are worth more than $5 trillion. Along with other federal agencies, they back roughly 90 percent of new mortgages.

The nomination also comes as the housing industry is making a comeback. Home prices are up, foreclosures are down and housing construction is on the rise. Moreover, Fannie Mae had its biggest yearly profit last year, earning $17.2 billion.

Watt, a senior member of the House Financial Services Committee and former chairman of the Congressional Black Caucus, played an influential role in the passage of a financial regulatory overhaul in 2010. That legislation, however, did not address the fate of the major mortgage lenders, an issue likely to come up during Obama's second term.

Watt represents the Charlotte area, home base of behemoth Bank of America. He becomes yet another high-profile African-American and the second North Carolinian nominated by Obama in three days to a top government post. On Monday, Obama nominated Anthony Foxx, mayor of Charlotte, to head the Transportation Department.

Watt, who has a consistently liberal voting record, is expected to face Republican opposition to his confirmation. The White House was already lining up supporters who might hold some sway with GOP senators.