The incoming administration may move faster than expected to put a tech team in place, given the unsettled state of the Federal Communications Commission and President-elect Obama’s desire to leverage broadband, wireless and other technologies to advance top priorities such as economic revitalization, health care reform, education and public safety.
Both broadband and wireless are included in a paper circulating around town that appears to be the Obama-Biden economic recovery blueprint. The document states the next administration believes it “can get broadband to every community in America through a combination of reform of the Universal Service Fund, better use of the nation’s wireless spectrum, promotion of next-generation facilities, technologies and applications, and new tax and loan incentives.
Business Week reported the Obama team wants to pump $20 billion to $30 billion into broadband buildout through such tax incentives. However, consumer groups oppose the idea of rewarding telephone and cable TV giants that they claim haven’t done enough to lower prices and increase Internet connection speeds. There is some speculation Obama and congressional Democrats might push for controversial net neutrality provisions in the economic stimulus package in exchange for giving companies broadband tax breaks.
“This will be an administration that understands technology and believes in it,” said William Kennard, a managing director of The Carlyle Group’s global telecommunications and media unit and a former FCC chairman during the Clinton administration. He noted the unprecedented use of cellphone texting and the Internet in the Obama campaign to energize grassroots support through social networking. Wireless and Internet technologies also helped the Obama campaign raise record amounts of money. “Clearly, there is an effort to bring that [technology] sophistication into governing,” Kennard stated. As an aside, Obama remains reluctant to give up his treasured BlackBerry.
Timing of key appointments
The Obama-Biden transition team is loaded with former Democratic telecom policymakers, many from the Clinton-Gore era of the 1990s. Obama just appointed Donald Gips, former chief of the FCC’s International Bureau and a major Obama fund-raiser, as White House director of presidential personnel.
Kennard, also a big Obama fund-raiser who is close to the transition team despite lacking an official title, declined to speculate on when the president-elect would make tech appointments at the FCC, National Telecommunications and Information Administration, State Department and a new office of chief technology officer. At the same time, he underscored the fact that the Obama-Biden transition team has been moving swiftly on cabinet-level and White House appointees.
The pattern to date has been one of Obama making appointments in specialized clusters, such as the introduction of his economic team soon after winning the election in November. Whether he will also announce tech appointments as a group is uncertain.
FCC reform
What is clear is that momentum is growing to enact administrative and organization reforms at the five-member FCC, whose operations under current Chairman Kevin Martin have been sharply criticized by the Democratic-controlled Congress, consumer groups and industry. Martin insists he has run the agency no differently than his Republican and Democratic predecessors, but a House Commerce Committee investigation concluded otherwise. Still, there are agency procedures that existed before Martin became chairman in March 2005 that could be ripe for change. For example, efforts could be undertaken to reduce the clout of industry lobbyists and special-interest groups in policymaking by inviting a broader range of experts and stakeholders to testify at FCC hearings.
The FCC is down to two Republicans and two Democrats as a result of the term-ending departure of Republican Commissioner Deborah Taylor Tate. The FCC could be reduced to three members if Martin chooses to leave FCC altogether after Obama names a new acting or permanent chairman. Martin has the option to remain as a commissioner. Congressional pressure from new Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va) has effectively shut down major decision-making on major wireless issues and other telecom matters at the FCC so that regulators can concentrate on next month’s digital TV transition. Obama wants the Feb. 17 DTV switch postponed because of a host of problems that could entangle the new FCC chairman from the get-go.
The names bandied about most often for the top FCC post are Julius Genachowski and Blair Levin, both Obama-Biden transition team members who were aides to former agency chairman Reed Hundt in the Clinton administration. Genachowski, a Harvard Law School classmate of Obama’s, co-founded Rock Creek Ventures and LaunchBox Digital and has served as special adviser to global equity firm General Atlantic. Levin is on leave as a managing director and tech analyst at Stifel, Nicolaus & Co.
The CTO post has attracted rampant speculation in the news media, though no frontrunners for the position have publicly emerged. In contrast, there has been far less chatter about candidates for NTIA, the Commerce Department unit that advises the president on telecom policy and manages federal government spectrum. The same is largely true for the State Department ambassadorial position of U.S. Coordinator for International Communications and Information Policy. However, the name of former FCC commissioner Susan Ness, a strong political ally of Hillary Rodham Clinton (on track to leave her New York Democratic Senate seat to become secretary of state in the Obama administration), has surfaced for the State Department’s tech policy job.
Though Democrats are more apt than Republicans to favor government regulation, the new White House, Congress and FCC may have to rethink political orthodoxy and restrain their tendencies in light of the economic crisis and unprecedented efforts to turn the situation around. A move to re-regulate wireless and other telecom sectors could keep investment capital parked on the sidelines, an outcome that could help prolong the recession and undermine Obama’s chances of serving a second term.
In fact, one industry expert suggested the Obama FCC could surprise a lot of people.
“The Martin FCC has been engaging rather unsuccessfully in so many regulatory campaigns that it wouldn’t surprise me if the Democrats veer toward the markets,” said Thomas Hazlett, a professor of law and economics at George Mason University.
