Posted By: Nicholas Miller, Founding Partner, Miller & Van Eaton
Close attention is warranted as the new Obama Administration Transition Team identifies individuals responsible for Telecommunications Policy, and moves toward filling key posts in the Executive branch and Regulatory agencies.
As of this writing, the hard news on telecommunications policy is limited. Today, the Transition announced the appointment of Julius Genachowski to help vet appointments to the new Administration. Genachowski is a veteran of the Reed Hundt FCC and more recently worked with Barry Diller’s internet business, IAC/InterActiveCorp. We also know that Obama campaign had a strong technology platform which focused on media concentration, infrastructure deployment, open networks, and use of technology to achieve other, social goals. That platform can be found here: http://www.barackobama.com/issues/technology/
As perhaps might be expected the policy papers do not offer many specific prescriptions. Communications policy issues remain largely the same from administration to administration. And they fall into predictable categories: Where is competition possible? What should government do where competition is not possible? Should government subsidize high-cost service areas to assure “universal connectivity”? And should government extract “public interest commitments” from favored licensees who receive government largesse in the form of radio licenses or right-of-way use?
Unfortunately, most communications industries (telephone, cable television, cellular) continue to display the characteristics of natural monopolies, meaning only one or at most a few platform providers will survive. So government is left contemplating what level of economic and social regulation is appropriate to restrain the platform owners from using their economic power to distort both economic activity and political/social comment.
Positions on these issues fall predictably along lines of investors/owners on one side, and consumers/users/potential competitors on the other.
Silicon Valley, Los Angeles media investors, and internet entrepreneurs were numerous and big supporters of the Obama campaign. Their nemeses–the telephone and cable television industries—were much less visible in the Obama campaign. However the telephone industry unions, the Communications Workers of America (CWA) and International Brotherhood of Electrical Workers (IBEW) provided extensive volunteer forces. And both unions strongly support Att and Verizon deployments because those are unionized jobs. Both Time Warner and Comcast have many senior executives closely tied to the Democratic Party. And cable and telephone players have strong, deep support on both sides of the aisle in Congress.
So it appears the forces that favor “net neutrality”—that is, new regulation of the wireline companies to assure content providers are treated equally and without “filtering” by telephone and cable television internet platforms—will have the early upper hand. In this industry versus industry debate, Obama administration support may make the difference. However, most administrations usually learn quickly that a fight against the media moguls of the nation can spend large quantities of political capital as the media outlets turn their editorial guns “to defend the First Amendment against the narrow interests of elected politicians.”
An early prediction–and an important potential development for local governments—the Obama Administration may avoid direct confrontation with the media/telecommunications industries and turn instead to “infrastructure” development. Whether the new administration will see public safety wireless, digital divide, and “internet for the masses” as worthy infrastructure projects remains to be seen.
For now, all eyes are focused on Genachowski and the rumor that the administration may create a new Chief Technology Officer (CTO) on the White House staff. Not since the Ford/Carter era has a White House office existed with the specific mandate of telecommunications and technology policy. Such an office would co-exist with the Federal Communications Commission, an independent regulatory agency with specific statutory responsibilities for administering civil uses of the radio spectrum and regulating telecommunications and broadcast industries.
Again, in the rumor category, several potential names have surfaced for the CTO position—and all have strong ties to the computer and information industries. If a Silicon Valley player emerges as the new Obama CTO, the Transition Team will be signaling likely Obama support for “net neutrality”.
At the FCC, the hot job will be the new Chair of the FCC. Appointment to the FCC requires Senate confirmation. However, designation as Chair is a Presidential prerogative. There will be 2 vacancies at the FCC at the end of the calendar year, with a third possible if Chairman Martin resigns. The new administration is likely to designate Commissioner Copps as Chair, while moving to nominate a new Commissioner intended to assume the Chair once confirmed. It is too early to tell whether a serious leading candidate for permanent FCC Chair has emerged. It is unlikely the Obama Transition will focus on a final choice for several weeks. Until then, multiple names will surface as various candidates seek to persuade observers that they are serious contenders for the job.
As appointments are rumored, it is important to remember the following web site posting by the Obama Transition Team. No political appointees in the new administration will be permitted to work on “regulations or contracts directly and substantially related to their prior employer for two years” and that no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration.