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FCC's Genachowski to step down; some hope for tougher successor

The chairman focused the FCC on expanding high-speed Internet access and helped stop AT&T from buying T-Mobile. Some groups say Genachowski could have done more for consumers.

March 22, 2013|By Jim Puzzanghera, Los Angeles Times
  • Julius Genachowski says he will step down as chairman of the Federal Communications Commission in the coming weeks. President Obama, fellow commissioners and industry groups praised his accomplishments.
Julius Genachowski says he will step down as chairman of the Federal Communications… (Chip Somodevilla, Getty…)

WASHINGTON — The departure of Julius Genachowski as chairman of the Federal Communications Commission has some public interest groups hoping his successor will fight harder for consumers against the growing clout of telecommunications giants.

On Friday, Genachowski, a former venture capitalist and technology executive, said he would step down in the coming weeks after nearly four years on the job.

He said his biggest accomplishment was focusing the agency on expanding high-speed Internet access. For example, he pushed the FCC to make more public airwaves available to deliver the Internet over smartphones and other mobile devices.

"Three years ago, the U.S. mobile market was on the doorstep of duopoly. It would have been bad for the American innovation economy and bad for consumers," said Genachowski, who helped derail AT&T Inc.'s proposed $39-billion purchase of T-Mobile USA Inc. in 2011.

"Today we're seeing revitalized competitors and stronger competition in the sector," he said.

Consumer advocates acknowledged that Genachowski deserved credit for helping block the AT&T-T-Mobile deal. But some leading public interest groups said the FCC under Genachowski approved other mergers that have reduced competition.

In the end, he didn't fulfill their hopes for a tough regulator when he was appointed the first Democratic FCC chairman in eight years. And he will leave without resolving such major issues as the limits of media ownership in major markets.

"He didn't use the power of the office to really challenge the biggest companies," said Craig Aaron, president of the group Free Press. "He sort of saw himself as a referee to just negotiate between them."

Still, Genachowski worked on some longtime thorny issues that didn't get widespread attention.

For instance, he engineered the FCC's 2011 overhaul of the $8-billion Universal Service Fund. The fund, paid for by fees on consumer phone bills, provided subsidies for phone service to rural and low-income households. The FCC refocused the fund on providing subsidies for high-speed Internet service.

Genachowski drew praise from President Obama, fellow commissioners and industry groups.

Obama said Genachowski, who was a former Harvard Law School classmate and served as an advisor and fundraiser in his 2008 presidential campaign, had given the FCC "a clear focus on spurring innovation, helping our businesses compete in a global economy and helping our country attract the industries and jobs of tomorrow."

David Kaut, a telecommunications regulatory analyst at brokerage Stifel, Nicolaus & Co., said Genachowski has been "a huge believer in wireless."

Kaut noted the FCC's push to encourage broadcasters to give up some of their airwaves in exchange for some of the proceeds from government auctions of spectrum use to telecom companies. The first such auctions could take place next year, freeing up more airwaves for mobile Internet access.

Genachowski also made a "gutsy" move in helping keep T-Mobile alive as a competitor to wireless giants AT&T and Verizon Wireless, Kaut said.

"Cleary the wireless industry has boomed over the last few years," he said. "I think there will be a lot of debate about how much of that was because of the FCC."

Some public interest groups, such as Free Press, were not very impressed with Genachowski's tenure. Genachowski should have pushed for tougher "net neutrality" rules to preserve open Internet access, Aaron said.

Aaron also criticized the outgoing chairman for trying to advance a plan for loosening of ownership restrictions on major market media outlets similar to proposals that Republican chairmen pushed.

Those rules, which appeared on a fast track late last year, have been stalled by opposition from public interest and minority groups. Genachowski would not say whether he would try to push them through before he leaves office.

Public Knowledge, a public interest group that has pushed for more protections for consumers against large telecommunications companies, said Genachowski's tenure was a missed opportunity. The group urged Obama to appoint an FCC chair "who will put the public interest first."

But Mark Cooper, director of research at the Consumer Federation of America, said Genachowski did a good job balancing the needs of consumers without squelching innovation.

"Some people want the FCC to regulate the bejesus out of everything," Cooper said. "That works for railroads, electricity.... It doesn't work for the digital economy."

Speculation about Genachowski's replacement has included many names.

Among them so far are Democratic FCC Commissioners Mignon Clyburn and Jessica Rosenworcel; Catherine J.K. Sandoval, a member of the California Public Utilities Commission; Karen Kornbluh, the U.S. ambassador to the international Organization for Economic Cooperation and Development; Lawrence Strickling, head of the Commerce Department's National Telecommunications and Information Administration; and Washington, D.C., venture capitalist Tom Wheeler.

Clyburn told reporters Friday that Genachowski had "done remarkable things." Asked about her interest in the job, Clyburn said she would continue to serve in "any capacity" that Obama chooses.

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