News Analysis

Obama Taps Genachowski, and Tunes the FCC In to Broadband


By selecting Julius Genachowski to be chairman of the Federal Communications Commission, Barack Obama is signaling that the nation's chief media and technology regulator will play a much more prominent role than in previous Administrations.

Why is that? For one, Genachowski and Obama have been friends since their days at Harvard Law School. Genachowski, 46, was a trusted adviser during Obama's campaign and a key architect of the strategy to deploy technology and social networking to attract supporters. More important, though, Obama's desire to make greater broadband deployment a key part of his plan to revive the economy will certainly mean the White House will lean on Genachowski's FCC for help.

When you look at recent history, Genachowski is an unusual choice to chair the FCC. Like his predecessors, he is a lawyer, and like other chairmen, he had worked previously at the FCC (as chief counsel to Chairman Reed Hundt in the Clinton years). But unlike other inside-the-Beltway paths to the chairmanship, mostly through working at big D.C. communications law firms, Genachowski was a New York media executive. He served for eight years in various senior roles to Barry Diller at IAC (IACI) during the period when the mogul was remaking himself in new media. Most recently, Genachowski ran his own venture capital firms. His wife, Rachel Goslins, is a documentary filmmaker.

Business Sense

"What Julius will bring to this job is a perspective beyond Washington," says Carol Melton, Time Warner's (TWX) chief D.C. lobbyist, who has known Genachowski since his days at the FCC. "He has not only a policy sense but a business sense. He played an integral role at IAC at a time when Barry wasn't just managing businesses, but creating new ones." Adds Ted Leonsis, vice-chairman emeritus of AOL: "Julius has a broad experience in communications, media, law, government, and technology, and better yet, in the synthesis of it all. This convergence is what will drive the industry over the next decade, and it will be a breath of fresh air to have an exec who has lived in all industries serving in such an important capacity."

Former colleagues and business associates describe his management style as collegial and collaborative and as someone not afraid to take a deep dive into issues. The expression "talking points" drives him crazy, says one former colleague. Robert Hoffman, the top lobbyist for Oracle (ORCL) and the chair of Compete America, the tech lobbying group in Washington, remembers asking him: "How would you like to sit down with a bunch of patent lawyers for a couple of hours? And his response was 'Sure,'" Hoffman said. "Sometimes watching paint dry is more exciting." Some warn not to be misled by his friendly demeanor, that Genachowski can be tough and also fiercely competitive, on all levels. That must be why he still makes his regular Sunday pickup basketball games with old friends from his days clerking at the Supreme Court. And obviously, Genachowski has proved his resilience, having worked for eight years under a taskmaster CEO like Diller.

So what will be Genachowski's challenges? First, he will have to revive a demoralized FCC. Under current Chairman Kevin Martin, the commission saw plenty of talented staff walk out of the door as Martin waged what many saw as ideological wars with programmers over decency standards. Martin chose to work with a small circle of advisers, frequently opting not to tap the expertise of the larger staff, say former FCC staffers. Critics say decision-making at Martin's FCC was often more closed than open. "It will still be political under [Genachowski], but it won't be as toxic," says Gigi Sohn, president and co-founder of Public Knowledge, a consumer group based in Washington that focuses on digital issues. "You'll have a staff that's a lot happier and more empowered. He will leave a lot more of the details up to his staff, where now it's been more of a command-and-control situation."

An immediate and major policy priority for Genachowski will be to ensure the smooth transition from analog broadcast signals to digital TV, which is scheduled to happen on Feb. 17. But Obama has called for delaying it until the summer because of what he believes is a failure to plan properly for the switch. Whether he can avoid the disaster that some are predicting—namely, millions of Americans losing TV signals overnight—should stand as Genachowski's first big test.

Equal Net Access

Also waiting for Genachowski is the debate over net neutrality, the debate about whether to give everyone equal access to the Internet. Both he and Obama are big proponents of net neutrality but it is still not clear whether they would go as far as to push for legislation to mandate it. Earlier this year, the FCC charged Comcast (CMCSA) with violating its Internet policy by blocking peer-to-peer traffic by BitTorrent. One thing is certain: Genachowski will not hesitate to act in a similar way. As one technology lobbyist who knows Genachowski put it, "He would make it clear that the wrath of God will come down on anybody who tries to violate it, and that will be enough."

Of course, the biggest question for Genachowski is how aggressively he aims to tackle broadband policy. The answer could end up defining Genachowski's FCC as the commission looks to redefine itself for the Digital Era and move forward from its telephone regulatory roots. Obama, guided by Genachowski, made it loud and clear that he believes that improving the speed and availability of broadband is crucial for productivity gains and innovation.

Administration officials, though, haven't signaled how they plan to proceed, other than to say that broadband projects will be part of the $1 trillion stimulus plan. That has set off a debate among lobbyists, tech companies, and congressional leaders about whether to push for higher speeds or reaching rural areas, between funding expansions that will create jobs immediately and benefit incumbent players, or trying to implement regulatory rules and create more competition. Some prefer the latter. "I want to see him tackling broadband. Freeing up more spectrum, that's huge," says Public Knowledge's Sohn. "Also freeing up more competitors. Those countries with the most competition are the ones that require open access. I have heard there is no appetite for doing open access, but you at least have to start talking about it. If you want more than wireless and cable you're going to have to get some open-access competition."

Some of the agency's staunchest critics over the years have high expectations.

"We will judge Mr. Genachowski on his ability to do more than play media and telecom industry traffic cop," says Jeff Chester, executive director of the Center for Digital Democracy, a nonprofit group in Washington. "[He'll need to] serve as a voice of conscience for a media system undergoing a crucial transformation."

Lowry is a senior writer for BusinessWeek; Green is an associate editor for BusinessWeek. With Pete Engardio in New York


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