What to Expect from FCC Under New Obama Chair

Julius Genachowski's Likely Approach to Everything From Decency to Net Neutrality

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NEW YORK (AdAge.com) -- For better or for worse, the Federal Communications Commission has been defined of late by public-decency battles, from Janet Jackson's Super Bowl nipple slip to Bono's F bomb at the Golden Globes to an underage sex party on CBS's "NCIS." It was also in the news for its 18-month review of the merger of two failing satellite-radio companies.

Julius Genachowski
Julius Genachowski
Now, outgoing Republican chairman Kevin Martin is headed to the Aspen Institute, and Julius Genachowski, a close friend of President-elect Barack Obama, is expected to take the helm. Mr. Genachowski is a former executive at Barry Diller's InterActive Corp. who more recently became a venture capitalist and entrepreneur, starting the Washington-based incubator LaunchBox Digital and Rock Creek Ventures. He's advised companies such as Web.com, Ticketmaster, The Motley Fool, Beliefnet (sold to News Corp.), Truveo (sold to AOL) and Rapt (sold to Microsoft).

So, what kind of changes can we expect with the first Democrat at the helm of the FCC in eight years?


Before: Mr. Martin was a decency hawk, levied fines against broadcasters, and seemed to delight in tweaking the entertainment industry. The case of whether broadcasters can be held liable for "fleeting expletives" uttered on air was heard before the Supreme Court in November, and it didn't go well for the broadcasters.

Now: Decency issues won't disappear from the agenda, but they'll take a back seat. Lobbyists such as Brent Bozell and the Parents Television Council will keep the issue alive, and occasionally force the commission's hand, but the FCC won't be trolling for violations or looking to score political points against Hollywood.

Media ownership

Before: Mr. Martin inflamed public-interest groups by proposing a loosening of the cross-ownership rules to help struggling newspapers and TV stations. The commission has handed out waivers to allow media companies to skirt the rules, such as the one that has allowed News Corp. to keep two TV stations in New York, as well as The Wall Street Journal.

Now: Mr. Genachowski doesn't have much of a track record in media, but most observers believe that a further relaxation of the rules is a nonstarter. The No. 2 tenet of Mr. Obama's tech agenda -- written by Mr. Genachowski: "Encourage diversity in the ownership of broadcast media, promote the development of new media outlets for expression of diverse viewpoints and clarify the public-interest obligations of broadcasters who occupy the nation's spectrum."

Net neutrality

Before: Late in his term, Mr. Martin earned some cred from net-neutrality advocates (most forcefully, Google) by taking action against Comcast for attempting to slow down BitTorrent traffic.

Now: While net-neutrality proponents got some of what they wanted under Mr. Martin, they'll be looking for a lot more under Mr. Genachowski, who helped put "Protect the openness of the internet" at the very top of Mr. Obama's stated tech agenda. Specifically: Advocates would like a statute or net-neutrality law that would be enforceable by the FCC. That would be supported vigorously by service providers such as Google, as well as activists, and opposed by cable operators and wireless companies.

Broadband access

Before: Mr. Martin has made open access to broadband networks a priority, including forcing Verizon to open up its network to competing devices and applications as a condition of winning a wireless-spectrum auction.

Now: Expect no big change here except emphasis: broadband is expected to be a core priority of a Genachowski-led FCC and a key economic priority for the administration.

A la carte pricing

Before: Cable isn't regulated for decency, but Mr. Martin used his bully pulpit to push for a la carte pricing to allow families to just subscribe to the channels they want, rather than the packages peddled by cable companies.

Now: Expect this issue to go away. "Cable won't be beaten over the head; they did not fare well under Martin," said former FCC official and Stifel Nicolaus analyst Rebecca Arbogast. Instead, expect a new emphasis on technological controls such as the V-chip and parental controls offered by cable and satellite-TV operators.

Digital-TV transition

Before: On the eve of the transition to digital signals Feb. 17, the switchover is a bit of a mess. The coupon program to subsidize the converter boxes is out of cash, 2.1 million people are on the waiting list, and the Martin-led FCC just awarded the contracts for call centers and support groups to help people with transition.

Now: The House Appropriations Committee recommended another $650 million for the DTV transition, and Sen. Jay Rockefeller (D-W.Va.), incoming chairman of the Committee on Commerce, Science and Transportation, which oversees the FCC, proposed legislation that would delay the switch until June. Still, this will be a mess that Mr. Genachowski will have to clean up, and could take precedence early on over the more ambitious aspects of his agenda.

Management style

Before: Mr. Martin chaired the most secretive FCC in recent memory and was known to micromanage agency decisions.

Now: Expect the FCC to get elevated status during the Obama administration, and look for Mr. Genachowski to open up the decision-making process. Some priorities will be tempered by the economic climate, and the commission likely will be wary of any policy that could chill continued broadband rollout to the rest of the nation.

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