The industry congratulations came pouring in Tuesday morning on word that President-elect Barack Obama will nominate Julius Genachowski to head the FCC.
The only trouble is, that word comes from media reports, not the Obama transition team, which won’t confirm or deny the speculation. But Washington circles often work this way – leaking accurate information just before an official announcement is made.
If reports are correct, however, Obama has chosen Genachowski over the person many people thought to be a shoe-in: Blair Levin, an FCC chief of staff during the Clinton years and a highly respected telecom analyst who now serves as a tech advisor on Obama’s transition team. Yet Obama also apparently has selected a person with wide tech and business experience to lead an agency that’s been demoralized by a heavy-handed Kevin Martin, and that’s nearly put the Ma Bell monopoly system back together.
In that vein, Genachowski – an Obama Harvard Law classmate and now-Obama tech advisor – is expected to be a friend to competitive and wireless carriers, and even to cable, the industry against which Martin seemed to have a personal vendetta. Genachowski presumably would be more loathe to approve forbearance requests than Martin, and unsupportive of the revocation of special access rules. Telecom analysts for investment bank Stifel Nicolaus added in a client memo Tuesday that Genachowski’s approach to intercarrier compensation and Universal Service Fund reform remains unclear, “but we suspect he would seek a rough compromise that spreads potential pain around.”
Genachowski further would be much more skeptical of relaxed media ownership rules than his soon-to-be predecessor. Martin had no qualms about one entity controlling the media in a single market. Finally, Genachowski is believed to support greater broadband deployment and access, and an open Internet and net neutrality.
“While it remains to be seen how that agenda will play out in specific policies and industry impact, we believe the regulatory initiative is likely to shift some from incumbents – and the Bells in particular – to new entrants and other nontraditional telecom and media players, including Internet application/content providers,” wrote David Kaut and Rebecca Arbogast of Stifel Nicolaus, the company Levin worked for before moving to the Obama team.
Other insiders agreed. Gigi Sohn, president and co-founder of the think tank Public Knowledge, said she has known Genachowski for 15 years and expects him to champion the FCC’s “legal obligation” to protect the public interest.
“Julius also understands that in a democracy, government must be transparent and give the people the tools to participate actively,” Sohn said in a prepared statement. “Thus, I am certain that he will seek to restore public confidence in an agency that has had a long history of opaqueness, industry capture, and a lack of data-driven policymaking. His collegial management style will also help rebuild morale at the agency.”
A collegial management style would be more than welcome at the FCC these days. According to a recent Congressional report on Martin’s FCC, career staffers have suffered humiliating demotions, been instructed to manipulate data to Martin’s liking and driven out of the agency altogether.
“…There is a climate of fear at the FCC,” the report reads. “Employees believe that if they express an opinion, even if based on fact, they may be demoted, reassigned or hounded out of the agency. Most of the current and former employees to whom we spoke did not want to be identified, fearing management retaliation.”
Restoring confidence among employees will be one of Genachowski’s biggest challenges. Yet if his resume and reputation are any indication, he’ll handle the task well. Genachowski has worked at the FCC before; from 1994 to 1997, he held various positions, including chief counsel to Chairman Reed Hundt. He then became a senior executive for an Internet firm before co-founding two successful digital media companies, undertakings that require finesse with people and business acumen. On the whole, Genachowski seems to hold a respectable mix of business savvy and regulatory knowledge.
For now, though, all that Genachowski could contribute to the FCC remains speculation. Obama still must nominate his former classmate, then the Senate must confirm him – a process analysts say could take weeks or months. But that doesn’t mean Martin will stay on as chairman. To the contrary, Obama is expected to ask one of the FCC’s current Democratic commissioners – Michael Copps or Jonathan Adelstein – to serve as interim chairman.