January 13, 2009 / 3:25 AM / 11 years ago

Obama's FCC choice faces long list of issues

WASHINGTON (Reuters) - President-elect Barack Obama’s choice to lead the Federal Communications Commission faces issues ranging from promoting wireless carrier competition to the problem-plagued shift to digital television, if approved by the U.S. Senate as expected.

Obama has selected Julius Genachowski, a technology executive and former classmate from Harvard Law School, to lead the FCC, a Democratic source said late on Monday.

Genachowski, who had been considered the front-runner for the job, was praised on Tuesday for his knowledge of technology issues gained from experience in Washington and as an investor.

“From Wall Street’s standpoint, it’s hugely positive because of his extensive background in technology and funding technology companies,” said analyst Jessica Zufolo of Medley Global Advisors, which advises investors. “He has a keen and sophisticated grasp on how the markets work.”

Genachowski was chief counsel for Reed Hundt, an FCC chairman under former President Bill Clinton. He also worked at Internet search and media company IAC/InterActiveCorp and several firms investing in technology, including Rock Creek Ventures and LaunchBox Digital.

Among the FCC’s responsibilities are the regulation of telephone and cable companies, overseeing the concentration of radio and television station ownership, and auctioning public airwaves.

Analysts say they expect Obama’s FCC to cast a more critical eye on the dominance of heavyweights AT&T Inc and Verizon Communications.

“We suspect Mr. Genachowski would seek to spur and protect competition from wireless carriers (including Sprint Nextel Corp and Deutsche Telekom AG’s T-Mobile) and others as a counterweight to telco/cable wired broadband dominance,” Stifel Nicolaus analyst Rebecca Arbogast said.

Sen. John Rockefeller, the top Democrat on the Senate’s Commerce Committee which weigh the nomination, called Genachowski’s resume “brilliant.”

Among those counting the days until Genachowski takes over is the U.S. cable industry. Current FCC Chairman Kevin Martin, a Republican, is seen as an ardent cable industry foe who has sought to force cable companies to sell channels separately instead of requiring consumers to buy packages of programing.

Martin has not announced his plans, although he has the option to remain an FCC commissioner with far less power. There is also a vacant Republican seat on the five-member panel.

DTV, SPECTRUM AND MORE

The FCC’s immediate headache is ensuring a congressionally mandated shift to digital television on February 17 goes smoothly, a switch affecting some 20 million consumers. Owners of older TV sets receiving over-the-air signals must buy a converter box, replace it with a digital TV, or subscribe to satellite or digital cable service.

The government ran out of money for coupons to subsidize converter boxes with 1.8 million people on a waiting list. An Obama aide asked Congress to postpone the deadline but many Republicans oppose the idea.

Companies involved in the transition are split on the issue.

CTIA, a wireless industry group, said a delay may “decrease confidence in the auction model for spectrum allocation.” AT&T and Verizon paid a combined $16 billion at an FCC auction last year to sell the spectrum used by analog television.

Verizon opposes a delay, but AT&T said it could accept a short one.

Broadcasters, on the other hand, are worried about angry consumers who will lose analog TV if the deadline remains.

Other hot topics at the FCC include an attempt by public interest groups, Google Inc and Microsoft Corp to bar Internet service providers (ISPs) from favoring certain traffic over others. Comcast Corp and other ISPs, mainly big phone and cable companies that manage Internet traffic, have been accused of interfering with some file-sharing programs.

The FCC also has a controversial spectrum auction coming.

T-Mobile and wireless carriers oppose a proposal to auction off a portion of spectrum with a mandate that some of it be set aside for free Internet. The companies say such a requirement is unrealistic and that the plan would create interference with nearby spectrum. T-Mobile paid $4.2 billion for an adjacent piece of spectrum.

Consumer groups praised the nomination of Genachowski, saying he and the Obama administration would bring a new era of consumer-oriented policies.

Obama, whose savvy use of the Internet and Facebook raised millions of campaign dollars, wants broadband technology incentives included in a $800 billion economic stimulus package that Congress is preparing.

Genachowski sits on the boards of several technology and media related groups including the Motley Fool Inc., a multimedia financial services company, and Common Sense Media, a consumer group that gives ratings on media and entertainment to aid child development.

Editing by Lisa Von Ahn and Tim Dobbyn

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