The GigaOM Interview: FCC Chairman Julius Genachowski on Mobile, Broadband, iPhone & Innovation

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-1Late last week, a day before the Federal Communications Commission started to investigate the Google Voice App fiasco, I spoke with the new FCC chairman, Julius Genachowski. He managed to carve out a few minutes from what has been a very busy first month on the job. As head of the FCC, Chairman Genachowski hopes to revive the telecom and broadband sectors by focusing on “consumers, competition and innovation.” He replaces a telco-friendly and decidedly consumer-unfriendly FCC chairman, Kevin Martin, so in my books he has very little room to disappoint. He says his strategic priorities are mobile, broadband and innovation.

As we bantered about various topics, the new chairman let me know that the FCC had read our essay, What the New FCC Chairman Must Do, a simple manifesto (and task list) that aligns the FCC with the new Internet reality and more importantly, with us, the people. He went on to note that he wanted to “make sure that the FCC’s processes are as participatory as they can possibly be.” Well, getting the FCC involved in the Google Voice Apps fracas just days after it surfaced is a sign of a new, more citizen-centric FCC. The fact that Genachowski’s an iPhone user couldn’t have hurt, either.

Thanks to his background as an entrepreneur (Genachowski used to run LaunchBox Digital, a Washington, D.C.-based startup accelerator program similar to YCombinator and TechStars), he’s putting together a team that is going to packed with engineers and scientists, as he tries to turn his vision of the 21st century Internet and mobile networks. “There’s a for-hire sign that’s open to innovators and engineers and entrepreneurs who want to be part of the conversation at the FCC,” he said. This and more nuggets follow in this interview with one of the key public figures in our Internet-enabled lives.

Om Malik: Describe the FCC under your watch.

Julius Genachowski: The best I can do is say that this commission will be relentlessly focused on competition, consumers, innovation and investment. Our goal is to have the FCC be a model for excellence in government, a real 21st century agency for the information age.

Om: What’s your game plan to do that?

Genachowski: There are two parts to it. One is being clear and relentless about what the agency’s strategic priorities are. And I’ve spent a lot of time meeting with staff of the FCC in large groups and (in) small groups and talking about strategic priorities, talking about broadband, talking about mobile, talking about innovation. I am doing everything I can to get the full staff of the FCC (it’s about 2,500 people) to focus on these strategic priorities. Many, many people here are enthusiastic about this (at the FCC).

Part of the focus is internal and in connection with that, we’re building a team that will reflect a broad array of backgrounds. I have nothing against lawyers — I used to be a lawyer and the FCC needs lawyers — but I’m convinced that for the agency to succeed it is equally important that the FCC to have great engineers, strong economists and people with entrepreneurial backgrounds to be sitting and talking around the tables at the FCC and talking about the kinds of policies will promote the (FCC) objectives I’ve spoken about so far.

If you look at the kinds of people we’re bringing in, you will see the mix of backgrounds. There’s a for-hire sign that’s open to innovators and engineers and entrepreneurs who want to be part of the conversation at the FCC. One part of the game plan is internal: revitalizing, retooling the FCC, and thinking about personnel. The other part is external. And one piece of that is making sure the FCC’s processes are as participatory as they can possibly be. We’re also going to get out of Washington and spend time with innovators around the country who are starting to use broadband and mobile the way the commission should know about and that can serve as a basis in developing smart policy.

Second, we want to be fact-based and data-driven. If you look at how we’re moving forward on a broadband plan you’ll see steps we’re taking to protect those ends. As we go through the steps of preparing for the broadband stimulus plan, we’re going to be fact-based, data-based. We’re not going to be satisfied with submissions that don’t meet the moment. The other thing we’ve done is we are experimenting in a big way with new processes that are unlike anything we’ve done before. And so with broadband we’ve announced that in the month of August, we’re going to do two dozen open workshops on various pieces of the broadband issue.

Om: It is clear that mobile is one of your big thrusts. What are your views on bringing more wireless spectrum to the market?

Genachowski: On a high level, I think we need, one, to explore ways to get more spectrum into the market. Secondly, we need to identify ways that we can help drive more efficient uses of spectrum (software, cognitive radio). Third, we need to think big about creative uses of spectrum, creative ways to allocate spectrum. We should think very creatively about how we can take this unique public resource (the spectrum) and make sure its potential is being maximized by the great entrepreneurs and innovators who are out there.

Om: But the biggest challenge we have is from incumbents. It’s in their best interests to control bigger and bigger portions of this spectrum. The 700 MHz auctions are a perfect example. The big winner is the largest wireless company. You don’t quite see new players coming into the market like, say, in other countries where there is healthy competition. How do we make sure that the competition revolution happens here?

Genachowski: How to ensure that we have real competition in mobile, how to make sure that the way mobile is used in the U.S. is a real platform for innovation and entrepreneurship…these are real issues the commission has an obligation, that it needs to get its arms around. We need to be fact-based and data-driven. We need to look beyond our borders for benchmarks and great ideas and keep our eye on the goals I’ve tried to outline here. We’ve only been up and running (for) a little bit of time but that’s something the commission will definitely focus on.

We’re all waiting for 4G and to be serious about it, one of the things I think that we’re going to be focusing on is what we can do to accelerate the rollout of 4G. We know our spectrum is such a unique resource and increasingly a shared vision about what can happen if we unleash the spectrum. What can the FCC in general do to unleash spectrum, both licensed and unlicensed, and (also) to really identify everything the government and the FCC can do to have the U.S. lead the world in mobile?

Om: There is a notion, that with a device like an iPhone we’ve started to see shift to U.S. back to the mobile universe. What do you think?

Genachowski: I don’t know I’d link into a particular device…the energy around the iPhone is hard to ignore. In general, just looking at the developments recently, it’s not hard to be enthusiastic about the potential innovation around mobile and I think it is necessary that we have spectrum policies in the U.S. that drive innovation, that drive entrepreneurialism, that drive competition and that focus on consumers. The U.S. used to be global leader when it came to communications policy and we’ve really taken ourselves, over the last eight years, off the stage. I don’t think that makes sense. There’s a lot we can do that’s good by being engaged internationally when it comes to communications policy.

Om: By the way, do you have an iPhone?

Genachowski: I do have an iPhone. I do use it. Now I’ve been a BlackBerry user for a very long time. But now I have a BlackBerry and an iPhone and I’m using both, although I do need a pair of new pants with more pockets.

Om: What’s your primary phone? The BlackBerry?

Genachowski: It has been historically the BlackBerry, but recently I’ve been using my iPhone more. (Editor’s note: I joked with the chairman that thanks to his position, his phone works more often than those owned by the rest of us.)

Om: Phone companies and cable companies are trying to impose bandwidth caps on Internet access. By doing so, I feel (and many agree) that they’re actually limiting the scope of innovation. Maybe in that that case, we should think about the need to separate services (TV, video, etc.) from the pipe. What are your views on metered broadband?

Genachowski: It ties into an important policy decision the FCC will be confronting with how we drive a ubiquitous broadband infrastructure that’s open and robust and delivers on the promise of the Internet for all Americans. To tackle these questions we will be focusing on the real facts around what’s going on and what policies will best promote ubiquitous broadband and innovation. It’ll be an ongoing topic. It’s something that consumers of Internet services pay a lot of attention to and we’ve seen that in reactions to some of the events over the last year.

Om: Given that the cable companies are looking more and more like phone companies, isn’t it time to regulate the cable companies? Your thoughts?

Genachowski: We have a relentless focus on competition, consumers and innovation, and we’ll tackle all the hard questions. There are rules that exist that apply to the cable industry now that the FCC has enforced the neutrality principle for the cable industry. Having said that, you’re raising an important issue about what the regulatory landscape will look like in the 21st century given the changes in the landscape.

In 1996, when Congress passed the Telecommunications Act, the law did not have the word Internet in it. So the governing statute that lays out the regulatory landscape was written just before the Internet really took off. And that regulatory structure is what continues to govern. It has a lot of room in it for the FCC to apply the language of the Communications Act as amended by the 1996 Act to ongoing facts and circumstances. But I think a lot of people would say that the changes in the industry and changes in technology have moved faster than the changes in the regulatory landscape. What sets of rules…what regulatory landscape will best complement competition in the interest of consumers?

I wanted to talk more with the chairman but unfortunately because of time constraints we will have to wait for another day to get his extended thoughts. Perhaps next time (fairly soon) both Stacey and I will spend more time discussing the issues of network neutrality, metered broadband and cable industry’s oversight in addition to plans for fostering broadband competition. . I believe those are the key to Silicon Valley’s role as the cradle of innovation. I’m planning a trip to Washington soon, where I will spend time with various officials at the FCC.

Photo courtesy of the Federal Communications Commission.

57 Comments

Brett Glass

Was the above an interview, or was it lobbying? Given the loaded and leading questions, it certainly seems to have been the latter. You lobbied Julius Genachowski to ban bandwidth caps (never mind that bandwidth costs money!) and impose stifling “network neutrality” regulations that would raise prices and harm consumer choice.

Richard Bennett

Blogotism doesn’t pretend to be impartial, Brett. Time-Warner threatened to raise Stacey’s P2P bill, and the boss is sticking up for her.

Brett Glass

“Blogotism?” Sounds like some sort of disease with truly grotesque symptoms. ;-) In any event, maybe the blatant lobbying was the reason the Chairman cut the interview short.

dalmatan

Yea he talks about hiring engineers but they have’nt hired one that those of us who live in DC can find out about.

Though they have good RF engineers they have’nt have had a IP clueful person as a senior adviser since Dave Farber and Scott Marcus. John Pena the Chief Technologist seems to be isolated though he has a first rate background. Unfortunately he was one of the Harkonnen appointed under Martin who are still presumably under some suspicion.

The had a solicitation 4 months or so ago to reconstitute the Technical Advisory Council to the Commission but no action or appointments. Om dont get sucked in by the rhetoric.

If Julius wants to hire some IP clueful folks around the DC area let me know.

The Apple letter is a good baby step but on balance he has a long long way to go. The Portals is still about 1500 lawyers to 15 engineers.

Bob

Thanks for the great interview and for getting someone from Administration on the record talking about hiring good, smart, innovative and entrepreneurial people to work in the Federal government. Now if the Federal government can start hiring the right contractors for things like Recovery.gov (see http://is.gd/22kfN for more on that).

Michael

He seems like to like the word “relentless” a great deal.

Om Malik

Zing…. point taken. Though I see some entrepreneurial types in the mix which is different from the past for sure. I am not disagreeing with you, though the mix of people does look pretty decent. But yes NO engineers

Mark Sullivan

Om, after the last eight years with Martin, it is entirely appropriate that you asked the questions you asked. We can’t control what these guys do–they must respond to many different and powerful influencers–all we can do is make them respond to the issues and listen for nuances in their answers that suggust new ideas and new approaches.

Chris Guttman-McCabe

Great interview. I wanted to address one issue you raised, and perhaps provide you with some data that may be helpful in the future. You said “you don’t quite see new players coming into the market like, say, in other countries where there is healthy competition. How do we make sure that the competition revolution happens here?” I run the Regulatory Affairs office at CTIA. We have spent the last several months putting together educational filings on the state of competition in the wireless industry. In one filing, submitted in May, we used data from Merrill Lynch to compare the U.S. wireless market to 25 other OECD countries (inluding almost all of Europe, Japan, South Korea, etc.). That data shows that the U.S. is the least concentrated of all of the countries. Of the 26 countries, only the US, the UK and Canada have more than 4 carriers total, and the UK and Canada only have 5. The U.S. also has the lowest price per minute, according to Merrill, of all 26 countries. The US also has the highest minutes of use of all 26 countries (perhaps not surprising since we have the lowest price per minute). What is surprising is that the next closest country, Canada, has about half the minutes of use of the U.S., and the U.S. has more than four times the minutes of use of the European average. I would welcome the opportunity to talk to you about some of these facts.

Anonymous

Hi Chris,

Off course you are the mouth piece of the Wireless carriers and hence you have an obligation to broaden their agenda. Now coming to facts:

In many countries a phone call is not double counted – two sides of the conversation. This fact seems to be conveniently ignored.

Carriers provide free minutes during off-peak hours (nights and weekends) and that is the reason for a greater usage of minutes and not because of low prices.

As far as the post-paid options are concerned, all the four major operators have pretty much similar prices – I am not saying that collude but because of lack of competitiveness they can get away with similar plans.

All the major carriers simultaneously raised the SMS prices not based on any cost increases but purely opportunistic.

So, instead of providing misleading and inaccurate information, please lead the industry in such a way that they provide innovative solutions.

Chris Guttman-McCabe

The Chairman referenced a desire to have discussions based on facts, so I thought it made sense to give some of the facts. These are not mine, I didn’t collect them. If you read the report from Merrill, they specifically do recognize the difference between the provision of service in the U.S. and around the world, and they take that into consideration when they present their data, they do not “double-count,” it is not “conveniently ignored.” As for the increase in minutes of use due to free nights and weekends, I would agree that raises minutes of use. Why would that be a bad thing? It certianly impacts price per minute of use, because a portion of your minutes are free. I also don’t think I have ever heard anyone accusing the industry of having the same prices — in fact, the argument in Washingotn often is that the carriers have so many pricing plans that it is impossible ot compare: pre-paid, post-paid, buckets, pay-as-you-go, plans with data, plans with a certain number of texts, and more. I don’t mind having an honest debate, but let’s start with the facts. I am very encouraged that Chairman Genachowski suggested that is how he will lead the FCC.

Jerry Fleckheimer

He actually said a lot. The idea of “ubiquitous broadband” is a peek into his idea of wireline, cable, satellite, wireless, etc. broadband infrastructures and service providers. This doesn’t boad well for incumbents because they are generally the transport the service providers use to deliver services.

“It has a lot of room in it for the FCC to apply the language of the Communications Act as amended by the 1996 Act to ongoing facts and circumstances.” This is the last think bell heads want to see “CHANGE”. As with much of government, we have to accept the transition from 19th century rules that needs a 21st century update.

Richard Bennett

There are two issues that all of the parties who filed comments on the National Broadband Plan agree on: ubiquitous broadband and expanding the USF to pay for broadband in unserved areas. The carriers are as strongly on-board with these notions as the net neutrality nuts. So the chairman simply echoed that consensus.

Brett Glass

Count me as a commenter who is not in favor of expanding the USF. I am in favor of disbanding it and replacing it with vouchers to be distributed directly to the unserved and underserved. They can then offer them to the carrier of their choice as an incentive to provide service.

Peter Sisson

Thank you Om for continuing to bring this dialog to the forefront on your blog. Two of the issues mentioned, how to “drive ubiquitous broadband infrastructure” and “why don’t you regulate the cable companies” are really key here.

Back in the early days, the US established the highest phone penetration in the world with the Universal Service Fund, which subsidized low-income and rural telephony with income collected from profitable markets. It was a hugely successful program.

Strangely, this program still exists in a crippled form that is still specific to telephony. Yet telephony is now just an “application” running over broadband, much like email or any other web service. To single it out is wrong and out-dated.

IMHO, the FCC should apply this same methodology to broadband in general. This means that every ISP, in whatever form (DSL, Cable, WiMax, etc) would need to contribute to a broadband USF to help fund deployment in rural and low-income areas. It worked before, why not do it again?

John Lile

Terrific that you got the interview.I hope that you are able to follow up as time goes on.

Richard Bennett

He didn’t really say a lot, did he?

Don’t get too excited about bandwidth caps. As more video moves to the Internet, engineering has a choice to make: we can more aggressively manage the priorities of competing services, freaking-out the net neutrality nuts, or we can meter the bandwidth people consume during peak hours, which also freaks them out. Even in Japan, with all that bandwidth, they still have caps and limits.

There’s no magic bullet, and the FCC can’t instantly determine which policy is better.

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