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January 14, 2009

New FCC Chairman Presents Risk

In big news for media and telecom, major media outlets are reporting that President-elect Obama will nominate Julius Genachowski to head the Federal Communications Commission (FCC). Genachowski was technology adviser to Obama during the campaign. According to the Wall Street Journal, he put together detailed plans for Obama "that expressed support for open Internet or "net neutrality" protections; media-ownership rules that encourage more diversity; and expansion of affordable broadband access across the country."

Business interests may be concerned if early reaction from political and creative communities are an indication. Free Press, a media reform group, likes the appointment. So does The American Association of Independent Music, a group representing the interests of indie musicians.

Net neutrality is the big issue. Major networks owners including cable and telcos would are quietly against net neutrality because they want to price access to their networks based on usage. Google and other major online companies are leaders in the fight for net neutrality.

Media consolidation is another big issue. Media companies would prefer an FCC that is willing to allow consolidation. An Obama FCC is not going to go that route but Genachowski may be viewed as worse than average on this issue. Then again, credit markets remain closed and media companies have been penalized for acquisitions even when they were fundable.

Although, I am about as far politically as possible from Karl Rove, one quote of his I always liked was "elections have consequences." A changing of the guard at the FCC leading to policies that are considered more consumer friendly is just one of the consequences that many business interests may not like.

Posted by Steve Birenberg at January 14, 2009 07:47 AM in Telephone