FCC Chair Genachowski Calls It Quits

Julius Genachowski said Friday that he is stepping down as chairman of the Federal Communications Commission, a post he has held since 2009. During his tenure, Genachowski faced a number of important issues, including media consolidation, cable and telecom industry competition and cooperation — and, most notably, a sharp debate over broadband spectrum.

Genachowski’s announcement comes just days after FCC Commissioner Robert McDowell made public his plans to leave the agency. President Obama will make appointments to fill both vacancies.

Shake Up or Shake Out

Genachowski, who attended Harvard Law School with Obama, was an executive with media mogul Barry Diller’s IAC prior to taking the helm at the FCC. During his time with the agency, he oversaw a number of decisions that have been questioned by some public interest groups, including the approval of Comcast’s purchase of NBCUnviersal.

However, Genachowski has also received credit for guiding the FCC during a time of tremendous change within the mobile industry.

“During his chairmanship, the FCC has done something few agencies or politicians can do: more or less keep pace with a rapidly changing and growing industry, specifically wireless broadband,” said Stephen A. Blum of Tellus Ventures Associates.

“That includes the FCC’s adoption of shot-clock rules for local approval of new cell towers and antennas, and pre-emption of local regulation of reasonable modifications to existing wireless sites, and a bulldozer approach to clearing spectrum — regulated and unregulated — for wireless broadband use,” Blum told the E-Commerce Times.

“Genachowski is an out-front advocate for fast broadband, pushing for the construction of new fiber optic networks and greater adoption of the services that ride on those networks,” he said. “His chairmanship has been transformative — definitively changing the FCC’s focus from regulating and subsidizing plain old copper-wire telephone service to building fiber-optic broadband infrastructure, and trying to stay ahead of growth in the wireless sector.”

Broadband Strokes

Spectrum crowding remains an issue, as more and more carriers opt to deliver higher-speed services to consumers hungry for content streamed to their mobile devices. However, Genachowski can be credited with doing his part to ensure that the infrastructure could grow.

“Carriers are investing billions of dollars in wireless spectrum, infrastructure and services because they have confidence in the regulatory environment. That’s rare these days, and Genachowski deserves a lot of the credit,” said Blum.

“The FCC’s subsidy programs — particularly the Universal Service Fund — have been redirected toward broadband growth, and that will make a huge difference going forward,” he added.

“The telecommunications environment of 2050 will be as different from 1950 as 1950 was from 1850, Blum predicted. “In the last four years, the FCC has made the shift from 1950s telephone thinking to a 21st-century broadband mindset. They got it right.”

Keys to the Communication Kingdom

Given that McDowell is also exiting, there will soon be two new commissioners influencing the direction the agency takes next.

“Chairman Genachowski’s resignation gives the president the opportunity to set the agenda for the next four years,” said Roger Entner, principal analyst at Recon Analytics.

Obama “has quite a few candidates to choose from,” Entner noted, “and will signal how he wants to take the telecom and media industry further and where his focus will be.”

Commissioner McDowell’s replacement will be nominated by the Republicans in Congress, Entner added.

“Likely candidates are Tom Wheeler, Larry Strickling and Karen Kornbluh,” Entner told the E-Commerce Times.

“Some say Blair Levin is also in the running. Wheeler and Strickling are probably most wireless-focused followed by Levin and then Kornbluh, who has the most experience in mass media,” he pointed out. “The most industry-friendly would be Wheeler, and Kornbluh probably the most distant. There is also quite a bit of drumming for the president to appoint the first woman to be FCC Chair.”

Kornbluh isn’t the only woman that might be considered for the job, however.

“One person mentioned as Genachowski’s possible replacement is Catherine Sandoval, a member of the California Public Utilities Commission and a law professor, currently teaching at Berkeley,” noted Tellus Ventures’ Blum.

“She’s taken up the telecoms portfolio on the CPUC and understands the industry from a West Coast perspective,” he said.

“The FCC would greatly benefit from someone like her, who isn’t locked into a Beltway mindset,” Blum added.

“Sandoval would do a great job. The question, though, is whether she has enough traction in Washington to get it. The FCC chairmanship is a plum appointment, and this is probably the last shot at it for the well-connected in the Obama administration,” he pointed out. “The competition will be intense, and insiders will have an advantage.”

Connections and Connectivity

Genachowski’s departure is not entirely unexpected, as it is common for cabinet members and agency heads to vacate during an administration’s second term. Thus potential replacements are already crowding the wings.

“It has been a name game for me,” said Jeffrey S. Silva, senior policy director of telecommunications, media and t technology at Medley Global Advisors. “The vetting of individuals will take time. It is a parlor game as we’re watching what names are floated, and they’re likely to pair a Republican with a Democrat to help with the process.”

However it plays out, there will be a lot of work ahead.

“The marketplace is changing,” said telecommunications analyst Jeff Kagan. “It requires the FCC to stay up to speed not only on new technologies and competitors, but also on where the industry is heading. That is tough but necessary in selecting a new chairman and commissioners as time goes by.

“FCC chairmen never last forever. This was expected,” he added. “There will be changes. The technology industry is transforming telephone and television. It is crucial we get the right people in place to guide this industry in the right direction for innovation and growth.”

Given the changing market — along with lighting-speed technological developments, ongoing spectrum issues and possible mergers — that vetting process will be all the more important this time.

“In some ways, [McDowell’s] replacement will be even more critical than Genachowski’s,” said Blum.

“The FCC needs someone with practical private sector telecommunications experience to balance out the theoretical policy orientation of those who’ve worked their way up through the Washington ranks,” he emphasized. “We can hope his replacement will be someone who really made their career outside the Beltway.”