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The New FCC and a Small Reality Check

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Federal Communications Commission Chairman Julius Genachowski came to our office today to talk about broadband (check it out), and during both the event itself and the conversations I had with people before and after, it became clear to me how optimistic many of us should be about the New FCC.

It’s not all sunshine and roses, because the agency can only do so much without Congress taking action, and there are still areas such as competition where even the FCC feels stymied, but below are a few tidbits I picked up that entrepreneurs and those of us who care about broadband should feel good about.

The New FCC Is Curious: Genachowski said during the event that he asks his staff to test-drive the new technology the agency is trying to regulate, so they play with new handsets, text each other and download applications on a regular basis. He also mentioned that he’d like to create a lending library of devices for the FCC staff to try since most people don’t carry three smartphones and can’t always afford such tech on government salaries. Afterward he said he’s trying to figure out how to stock any library without running afoul of government ethics considerations. Could we soon see tax-deductible device donations?

The New FCC Sees Value in Unlicensed Spectrum, Too: When addressing the potential for a spectrum shortage, Genachowski said the agency was looking at the how to use existing spectrum more efficiently — even unlicensed spectrum such as the frequencies over which Wi-Fi signals travel.

I asked a staffer when the event was over if bringing more unlicensed spectrum on board was politically feasible. Because spectrum is a government resource that private companies will pay dearly for (the 700 MHz auction generated more than $19 billion), Congress may be loathe to give up that source of revenue. The staffer said he thinks getting more unlicensed spectrum is likely and hopes that any unlicensed spectrum could be offered in a single chunk rather than split up in small chunks such as the current spectrum set aside for white spaces broadband.

The New FCC Views Broadband As the Platform for Basic Services: Genachowski pointed out that from telemedicine to improving our energy infrastructure and education, broadband will be an integral part of that effort.

The New FCC Is Paying Attention: From pre-emptively offering an opinion about the retransmission fights between the recent cable and content companies or asking hard questions as to why Google Voice was blocked on the iPhone, this FCC isn’t afraid to involve itself in some of the fights brewing around the convergence of telephony, television and the web.

These are a few reasons to be optimistic, but there’s still plenty to keep an eye on. When asked about the duopoly in the communications world, Genachowski admitted that determining policy for an industry when there are few competitors and a high barrier to entry isn’t simple. Seeing as the lack of competition can be partially blamed for higher broadband prices, slower speeds in some areas and even tiered pricing efforts with punitive tiers, this is a key challenge facing the FCC.

And these discussions are taking place in the slow-moving world of Washington, D.C. For example, the National Broadband Plan coming on Feb. 17 isn’t the end of the process; it’s the beginning of multiple hearings whereby those proposals will be set into regulations that will likely then be litigated. There’s also Congress, which will have to appropriate money and could even block regulations they or their lobbyists aren’t fans of. Unlike technology, policy is a morass, but at least this FCC isn’t asleep at the wheel.

18 Responses to “The New FCC and a Small Reality Check”

  1. Brett Glass

    You write:

    “When asked about the duopoly in the communications world,”

    You asked a loaded and misleading question. There is no duopoly in the communications world. There are thousands of players. Starting with the assumption that there is a duopoly — and, especially, making policy with that assumption — harms those players.

    “Genachowski admitted that determining policy for an industry when there are few competitors and a high barrier to entry isn’t simple.”

    It simply is not true that there are “few” competitors. And the only significant barriers to entry are created by Federal regulations and/or failure to stop anticompetitive behavior.

    “Seeing as the lack of competition can be partially blamed for higher broadband prices, slower speeds in some areas and even tiered pricing efforts with punitive tiers, this is a key challenge facing the FCC.”

    Again, there is competition. I am one of more than 4,000 competitive ISPs in the US alone. However, if you would like to see more, look to the FCC. The Commission itself is responsible for the fact that there is not more, because it has failed to enable — and, in many cases, has disabled — competition. It has, for example, created an auction system for radio spectrum that locks out newcomers. It has also failed to stop anticompetitive practices (e.g. anticompetitive pricing of “special access” lines). Then, instead of addressing these key problems, it has gone off on a tangent, pushing for “network neutrality” regulation that addresses a problem which does not exist — and ABSOLUTELY could never exist if there were even more competition.

    Ready, fire, aim.

  2. While a few tersely-worded letters have been useful to nudge carriers using the threat of regulation as incentive to change, there hasn’t been much actual change (Google Voice still isn’t on iPhone, Verizon’s still doubling their ETF).

    I’ve seen lots and lots of talking from this FCC, but virtually no policy action that indicates they really want to rattle the status quo and help solve one of the broadband industry’s biggest problems: a lack of competition, and the influence the biggest and wealthiest carriers have on policy.

    Consumer advocates and industry watchers are so far entirely underwhelmed with the broadband plan, which touches on plenty of safe issues (accessibility, more spectrum please), but does absolutely nothing that’s particularly bold or visionary…

    • Karl

      Great points. I think the process when it has a lot of transparency can appear to be slow. I think we should judge them exactly a year after being in the job. After that the report card needs to speak for itself.

      • Karl, I am with you, although sometimes government interest does affect change or at least force telecoms to think hard before taking certain actions. Unfortunately the wheels of political action are slow. I’d actually give it 18 months to two years. That whole time I will be cursing my slow TWC web connection though.

  3. I first interviewed for a job (an internship actually) with the FCC in about 1995 – I think it was – and the FCC still had rotary phones on the desks. The FCC had repeatedly asked congress for funding to upgrade to “new technology” (touch tone phones) but Congress refused. Ch. Hundt used auction funds to upgrade the FCC’s telephone and computer technology to state of the art tech. Ch. Hundt and Ch. Kennard advanced, at the time, cutting edge egov services including the FCC’s website (developed at least in part by Kevin Werbach). It is incredibly right-minded of Ch Genachoski to put into the hands of FCC staff the technology which is at the center of policy consideration – something that has been resisted in the past.

    • Why is OK for Google to block competitors and bias search results in its
      favor, while publicly saying they don’t, but not OK for Apple to aid a
      competitor, when they’ve never said they would? What’s so special about Google that exempts them from moral equivalence?

      And, when did Congress give the FCC authority to handle antitust issues? About all they could do in the case of GV is refer the matter to DOJ of they believed there was wrongdoing (anyone correct me if I’m mistaken)

  4. In my view, Genachowsk making a pit stop at the GigaOm office more than anything he said shows it’s not business as usual at the FCC.

    But I have to quibble with the comment that he’s “trying to figure out how to stock any library without running afoul of government ethics considerations.”

    Am I missing something here?

    What happened to the concept of securing a budget to purchase products which in turn could be checked out (a la library).

    Perhaps the FCC could redirect the money allocated to police bloggers on disclosing the acceptance of swag to the cause.