Obama Names Genachowski to Head FCC
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Source: Launchbox Digital
Genachowski's expected priorities include the expansion of broadband service fueled by the recent economic stimulus package and Net neutrality to prevent Internet service providers from giving preference to certain content.
"I think his agenda is largely going to be dictated by the broad contours of what is happening in the marketplace," said Chris Murray, a senior counsel at Consumers Union.
Among the FCC's broad mandates are regulation of telephone and cable companies, oversight of concentration of ownership of radio and television outlets and auctioning public airwaves.
Consumer and industry groups said Genachowski's friendship with Obama would give telecoms policy a higher profile than it had during the Bush administration.
Genachowski was widely expected to be chosen for the FCC chairman position. He was a top aide at the FCC under Democratic president Bill Clinton, a classmate of Obama's at Harvard Law School and an architect of Obama's technology policy positions and use of social networking tools during the presidential campaign.
In the private sector, Genachowski held various jobs at Barry Diller's IAC/InterActiveCorp (NASDAQ: IACI) and more recently co-founded technology investment firm Rock Creek Ventures and was part of the team at LaunchBox Digital.
Genachowski is expected to win Senate confirmation to lead the FCC.
The FCC's biggest immediate challenge is the nationwide conversion to digital television signals, which is now set for June after a delay to give millions of viewers more time to prepare.
Another major task will be helping overseeing billions of dollars in incentives to states and private companies to expand high-speed Internet to rural and underserved areas. The money was included in the $787 billion economic stimulus package approved last month by Congress.
Obama has said expansion of broadband is important for economic development as a countermeasure to the recession.
Financial analysts expect Obama's FCC to cast a more skeptical eye on dominance of heavyweights AT&T (NYSE: T), Verizon Communications (NYSE: VZ) and Comcast (NASDAQ: CMCSA)
"We suspect Mr. Genachowski would seek to spur and protect competition provided by wireless carriers (for example, Sprint Nextel Corp. and Deutsche Telekom's T-Mobile) and others as a counterweight to telco/cable wired broadband dominance," Stifel Nicolaus analysts wrote in an investor note.
Getting it done
Obama has also backed the concept of Net neutrality, which pits open Internet companies like Google (NASDAQ: GOOG) against broadband service providers like AT&T in a debate over control of Internet content.
Advocates of Net neutrality, like Google, say Internet service providers must be barred from blocking or degrading traffic based on content.
Internet providers, like AT&T, say the increasing volume of bandwidth-hogging services like video sharing requires active management of their networks.
Some want legislation ensuring Net neutrality, while others say it can be done with tighter FCC rules and enforcement.
"I think I would characterize Julius in general and this administration in particular as having a 'let's get it done' policy," regardless of method, said Andrew Schwartzman, president of the Media Access Project.
Schwartzman also said he expected Genachowski to consider changes to media ownership rules to promote more diversity.
Under the Bush administration, the FCC liberalized those rules to allow more consolidated ownership across newspapers and television stations. "I think that he is going to take affirmative steps to promote diversity in broadcasting and cable, including minority ownership," Schwartzman said.