FCC in Transition – What will it Mean for Your Company?

Published in the January 2009 issue of Tele-Tech Updates:

the nation moves forward under the new leadership of President Barack Obama, the shift in power may be particularly evident at the Federal Communications Commission. With the Chairmanship and up to two of the four commissioners’ positions soon to be filled with Obama appointees, the face of national telecom regulatory policy will undergo a significant change in 2009.

The new, Democratic-led Commission is expected to favor Internet companies like Google and eBay, in contrast to the past eight years of Republican leadership which many thought benefited big telecom companies like AT&T and Verizon.

A look at the FCC’s recent history shows the contrast between Commissions lead by Democrats and Republicans. The FCC under President Clinton focused on bringing about competition through regulation, which gave a boost to competitive local exchange carriers. The current Bush FCC acted to end some of the rules put into place during the Clinton era, preferring to allow market forces to encourage competition. Will the Obama FCC take a more controlled approach to ensuring competition in communications? Only time will tell, because the Commission will first need to handle the conversion to digital television, and then focus on issues strongly supported by President Obama, in particular, universal broadband availability.

Making broadband Internet access available to all Americans is a prime element of Obama’s Economic Recovery Plan. Building the infrastructure to spread high speed Internet nationwide may be the 21st century’s version of the massive public works projects that helped end the Great Depression. The Obama team cites the U.S.’s 15th place ranking in broadband penetration as unacceptable, and expects a nationwide broadband build-out to create jobs and help small businesses compete globally.

Due to the President's broadband push, the new FCC will surely be tasked early with instituting regulations that help bring broadband to under-served areas. In order to entice service providers into these unprofitable areas, government intervention such as loans, grants, tax credits, or perhaps a reform to the universal service fund will be required. Obama even cites “reforming a weak and outdated regulatory system” as part of his plan. Look for regulations toward that end as Congress and the President mandate action from the FCC to set and enforce rules supporting the broadband deployment.

Before naming the replacement for Republican-appointed Commissioner Debra Tate, who left the commission at the end of her term in early January, Obama will likely appoint the new Chairman. That appointee is expected to be the President's long-time friend and Harvard Law classmate, Julius Genachowski. Genachowski was the FCC’s Chief Counsel under Chairman Reed Hundt and is currently helping develop Obama’s technology agenda.

There are also reports that Democratic Commissioner Jonathan Adelstein may be given a different position in the new administration. That would leave another vacant seat at the FCC, and give the Obama administration another opportunity to shape the future of communications in the U.S.