Bloomberg News

FCC Chairman Genachowski Leaving U.S. Agency Leaderless

March 22, 2013

FCC Chairman Julius Genachowski

Julius Genachowski, chairman of the U.S. Federal Communications Commission (FCC). Genachowski’s focus on expanding access to high-speed wireless Internet service, or mobile broadband, broke with some priorities of his predecessors. Photographer: Andrew Harrer/Bloomberg

Federal Communications Commission Chairman Julius Genachowski said he’s resigning in the coming weeks, opening a second vacancy on the five-member U.S. agency that regulates telephone, cable and broadcast companies.

Genachowski, a Democrat in the post since 2009, announced his departure today at an employee meeting in Washington.

“Over the past four years, we’ve focused the FCC on broadband, wired and wireless, working to drive economic growth and improve the lives of all Americans,” Genachowski said. To replace him, President Barack Obama could elevate either of the agency’s two Democrats or name a chairman as one of two new members. Both will need Senate confirmation.

Genachowski, 50, can depart without leaving behind a 2-2 partisan tie because Republican Robert McDowell on March 20 announced that he’ll resign in coming weeks. The changes will leave Mignon Clyburn and Jessica Rosenworcel as the FCC’s Democrats, and Ajit Pai as its sole Republican.

With two seats open on the FCC, the administration can advance a Republican and a Democratic nominee simultaneously, making it easier for both to win confirmation from the Senate, Andrew Lipman, a Washington-based partner at the Bingham McCutchen LLP law firm, said in an interview.

Wireless Focus

Genachowski’s focus on expanding access to high-speed wireless Internet service, or mobile broadband, broke with some priorities of his predecessors. His FCC levied no fines for broadcast indecency, after a flurry of penalties under Republican chairmen from 2003 to 2008, and he didn’t complete his proposed loosening of media-ownership rules.

Innovation became the agency’s focus under Genachowski, Obama said today in a statement.

“Because of his leadership, we have expanded high-speed Internet access, fueled growth in the mobile sector, and continued to protect the open Internet as a platform for entrepreneurship and free speech,” Obama said.

Genachowski in 2010 led the agency to a 3-2 party-line vote approving Internet rules that bar telecommunications carriers from interfering with subscribers’ Web service. Carriers are challenging the rules in court, and congressional Republicans have criticized the regulations as unnecessary.

Senator Chuck Grassley, an Iowa Republican, faulted Genachowski’s FCC stewardship, alleging that the agency’s “stonewalling” when asked to turn over information on bankrupt satellite-service provider LightSquared Inc. was “one of the worst instances I’ve seen in 30 years of dealing with federal agencies.”

Freeing Airwaves

The FCC acted “like a privileged organization that didn’t have to answer basic questions about its decision-making process,” Grassley said.

Genachowski, in correspondence in 2011, told Grassley the FCC had “proceeded in an open, thorough, and fair way” where LightSquared was concerned.

Tasks that await the agency’s new leader include auctioning airwaves for use by high-speed wireless Internet services, or mobile broadband. The sale may take place next year for parts of the spectrum voluntarily given up by television broadcasters, paying them for their frequencies.

Freeing airwaves is one way to relieve a shortage that Genachowski made a touchstone of his chairmanship. In a 2009 speech he warned of a “looming spectrum crisis” and he repeatedly drew attention to the need for more airwaves to help handle increasing wireless traffic as Americans move toward mobile computing using smartphones and tablets.

WiFi Services

Policy questions include whether to restrict participation in the auction by the largest U.S. wireless carrier, Verizon Wireless, and No. 2 AT&T Inc. (T:US) to ensure smaller companies can win enough spectrum to remain competitive. The FCC also must decide how much to reserve for WiFi-like services that provide Internet access without using a traditional wireless carrier.

The auction may offer 120 megahertz of airwaves for wireless use, according to the National Broadband Plan Genachowski guided to completion in 2010. That amount is almost a quarter of Obama’s goal to make 500 megahertz available.

In 2011, Genachowski and the Obama administration opposed AT&T’s bid for No. 4 U.S. mobile carrier T-Mobile USA Inc., saying it would curb competition, and AT&T under pressure abandoned the $39 billion deal.

Blocking the deal helped spur wireless competition by preserving T-Mobile as an alternative and by protecting the third-largest carrier, Sprint Nextel Corp. (S:US), from being overwhelmed by a new behemoth, Reed Hundt, a former FCC chairman, said in an interview. Tokyo-based mobile carrier Softbank Corp. (9984) is seeking to buy Sprint, which wouldn’t have otherwise happened, Hundt said.

On March 13, the FCC approved T-Mobile’s combination with fifth-largest carrier MetroPCS Communications Inc. (PCS:US) Genachowski on March 20 said the agency’s review of Softbank’s $20 billion bid for Sprint was on track for completion by late May.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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