FCC Pick Draws Kudos, Concerns

The White House last week made formal its intent to nominate Julius Genachowski as the next chairman of the Federal Communications Commission, citing his "unparalleled experience in communications and technology."

The selection of Genachowski, who served as chief counsel to former FCC Chairman Reed Hundt, was hailed by the NCTA as "excellent" and by the American Cable Association as a "good choice." But the undercurrent in the industry seems to be that anyone is better for cable than outgoing Chairman Kevin Martin.

Martin pushed for dual must-carry and was "insistent to the point of obsession" on the concept of a la carte pricing, said Thomas Hazlett, professor of law and economics at George Mason University and former FCC chief economist.

"It is not in the consumers’ interest or in the systems’ interest," Hazlett said. "It carries a lot of inefficiencies when the alternative is to offer a bundle of channels and let people watch the ones they want to watch."

"None of these got passed, but not for want of trying," said Rick Joyce, chair of Venable’s communications group. "A brave new day has dawned at the FCC – not just for cable, but for a lot of folks."

Great expectations?

Genachowski comes to the chairmanship from LaunchBox Digital, an early stage investment firm, which he co-founded and where he served as managing director.  Prior to that position, he was a senior executive at IAC/InterActive.

"I think in general people have to be happy with the fact that he seems eminently qualified to be FCC chairman," Joyce said. "There is no particular trail of comments to suggest that he is going to come in and aggressively regulate one sector." Joyce noted, however, that Genachowski did help write the White House’s policy on Net neutrality, which is one of the planks in the new administration’s telecom platform.

Broadband deployment also stands to be a big issue during the next few years. "The cable industry could very easily reach out and become friends with the new chairman in a hurry by talking about ways the cable industry could deploy broadband to areas it isn’t already deployed," Joyce said.

There could be work done on inter-carrier compensation, an area of some concern for cable, but it would have a more direct impact on telecom carriers and pure-VoIP players, Joyce said.

"(In addition, the) FCC might be used as a bully pulpit for promoting a variety of social causes that we might not have heard about under the previous administration," Joyce said. Net neutrality and broadband deployment have social connotations, as do content regulation, environmental issues, and diversity of ownership.

– Monta Monaco Hernon

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