Tough Times Expected for Genachowski if Republicans Regain Control of Congress

Polls asking about party preferences released last week showed Republicans with a 13-point edge over Democrats among likely voters in a Washington Post-ABC survey and a nine-point lead according to NBC and The Wall Street Journal. Rasmussen Reports, which does polling mostly for Republicans, said that party leads 48-36 percent. The House is considered more likely to change hands since all seats are subject to election in November.

After Republicans swept to power in 1994 on both sides of the Hill, FCC Chairman Reed Hundt, a Democrat, faced a House in which then-Speaker Newt Gingrich called for abolishing the FCC. In a 2006 interview, Hundt said dealing with the new Congress was like facing a “proctology exam every day.” In 2001, when former Sen. James Jeffords of Vermont switched his affiliation from Republican to Independent, putting Democrats in the majority, Sen. Fritz Hollings, D-S.C., became the Commerce Committee chairman. FCC Chairman Michael Powell, a Republican, found himself making several contentious appearances before the committee, where Hollings peppered him with questions.

Most recently, after Democrats took control of Congress in the 2006 elections, FCC Chairman Kevin Martin, a Republican, found himself the target of a lengthy probe by the House Commerce Committee’s investigations subcommittee. A report that the panel released in December 2008 found “egregious abuses of power, suppression of information and manipulation of data” in Martin’s management of the commission.

A change in congressional leadership can also fundamentally affect the make-up of the FCC. Chairman Dennis Patrick, a Republican, got stuck with a commission divided 2-2 by party during his 1987-1989 term, when a Democratic-led Congress stalled on the nomination of a Republican commissioner. History could repeat, because the term of Commissioner Michael Copps expired June 30 and he must leave by the end of the next congressional session in January 2012. Commissioner Meredith Baker’s term is the next to end, June 30, 2011, but she can stay on through January 2013, meaning the Republicans could force a 2-2 split on the FCC for all of 2012.

Some connected to the FCC noted that on many of the key items before the commission, such as public safety, Universal Service Fund changes and spectrum policy, there is broad bipartisan support for Genachowski’s agenda and that is not likely to change. A Genachowski advisor declined an offer to comment on the story.

"It’s a huge difference,” said a former top FCC official. “Instead of having people who fundamentally want to see you succeed, you have at least one house that fundamentally, politically, would be happy if you failed.” There would be a lot more oversight investigations, the person predicted. “But even more than that, the agenda can be one of opposition: ‘We don’t want you to do X -- don’t do X.’ They don’t have an interest in having you look like you've accomplished anything.” A Republican-controlled Congress could use an appropriations rider to end work on net neutrality or reclassification, the official said. “Short of that, if you have three votes, you have three votes. But it can be a much more excruciating experience in terms of the oversight and being constantly dragged up to the Hill.”

There’s a key difference between a change in the Senate and a change in the House in terms of the impact on the commission, said another ex-FCC official. “The House tends to go the investigation and oversight route, because that’s their handle. They've got appropriations, they've got investigations, they've got oversight.” The House is likely to look at how money is spent, how resources are used, whether there are relationships with specific companies that are unduly close, the person said. “If the Senate changes hands, then Republicans are in the driver’s seat in the control of the confirmation process. That has a little more of a policy or substantive impact, as to who ends up being the next set of commissioners or potentially the next chairman.” It also increases the likelihood that someone from the Senate staff, already known to the senators, will be elevated to the commission when openings occur, the source said.

"Everything the president and his people are doing comes under greater scrutiny” when the House or Senate flips to the opposing party, said lawyer Tom Cohen of Kelley Drye, senior counsel on the Senate Commerce Committee 1981-1990. The House tends to be more aggressive than the Senate, in part because it has an entire committee, and subcommittees in other committees, devoted to oversight, he said. “It can lead to all sorts of investigations and hearings -- any time, any place” and from any of several committees. All of that can suck up commission time and resources, Cohen said. The extra vigilance forces the FCC to tread more carefully in everything it does, he said. That includes conversations with the White House, a popular subject of congressional inquiries, he said. “Everything gets opened up. If you're not used to it, you can trip over yourself.”

"A Republican takeover of either house would certainly create new challenges for the chairman,” said Paul Gallant, analyst at Concept Capital, who was an aide to Powell. “It doesn’t mean he can’t enact his agenda, but it would create headwinds for anything perceived as overly regulatory.”

When different parties control the commission and either congressional chamber, the new majority lawmakers “will be looking for more opportunities to highlight deficient reasoning and inappropriate policy choices,” said Brad Ramsay, general counsel of the National Association of Regulatory Utility Commissioners, citing the Martin investigation. Any increase in scrutiny now may be smaller, since the past two years have been “chock full” of oversight hearings, he said. If the FCC moves forward on Title II reclassification, a Republican-led House or Senate would probably hold more oversight hearings on the matter than a Democratic one would have, Ramsay said.

After the 2006 election, Martin appeared more receptive to Hill Democrats, and occasionally got kind words from Rep. Ed Markey, D-Mass., who led the Telecom Subcommittee, Ramsay said. Martin “made additional efforts to incorporate elements into his agenda that would be favorably viewed” by the lawmakers in charge of his budget,” he said: At oversight hearings, Martin “usually managed to garner one or two compliments, and he always managed to answer” questions “in a non-offensive fashion.”

Genachowski similarly may have to adjust his interactions with Capitol Hill, but he can still move his agenda because he will maintain a majority of commissioners, Ramsay said. “FCC chairmen don’t have huge difficulty going places where the opposition party … doesn’t want them to go.” FCC members “frequently try to be responsive to Congress, but in the end they don’t have to” because “the power is with the chairman,” said a telecom industry official. In 1997, Hundt created the E-Rate program over Republican objections. Hundt would “answer your questions,” but ultimately “would do whatever he wanted to do,” the industry official said.

While “true to a certain extent” that Congress tends to increase oversight of commissions run by the other party, calls for investigation haven’t historically been strictly partisan affairs, noted Tom Wacker, vice president of the National Telecommunications Cooperative Association. When Congress investigated Martin after the 2006 election, for example, House Commerce Committee Ranking Member Joe Barton, R-Texas, was one of the members leading the charge, Wacker said.

Over the years, personality and geography have had more influence than party on members’ positions regarding issues important to rural telecom companies, said Wacker. Those issues tend to be bipartisan, dividing on a rural-versus-urban basis, he said. Some members, like Sen. Byron Dorgan, D-N.D., and the late Alaska GOP Sen. Ted Stevens, have been very vocal on those issues regardless of who’s in power, Wacker said. A party change could have more effect on how Congress and the FCC handle a more politicized issue like net neutrality, he said.

Republicans in Congress have only been “marginally less regulatory than the Democrats, so it is a mistake to think there necessarily will be a sea change if the Republicans gain control,” said Randolph May, president of the Free State Foundation. “Nevertheless, despite the fact that many Democrats have expressed misgivings about Genachowski’s net neutrality rulemaking proposals, Republicans have been more united in their opposition. So I expect that if Republicans take control, congressional opposition to Genachowski’s net neutrality proposals will be heightened even further.” With opposition more firmly entrenched, “there might be a real opportunity for Congress, working with the FCC and interested parties, to develop market-oriented legislation granting the FCC narrowly-circumscribed authority over broadband providers to act on a case-by-case basis to remedy demonstrable consumer harms,” May said.

A change of leadership in Congress would make Genachowski less likely to push forward on controversial net neutrality rules and broadband reclassification, said a longtime regulatory attorney who represents wireless carriers. “Our take is that the recent FCC decision to seek more comment on net neutrality/Third Way reduces the prospect that there will be any significant regulation, or re-regulation, in this area in the foreseeable future,” the lawyer said. “There seem to be too many different constituencies for an industry consensus to emerge, and the inconsistent hands-on then hands-off role the commission is playing reduces the prospects of a deal. The midterm elections are certain to result in a Congress that is less friendly to net neutrality regulations and expanded FCC Title II authority. And the Republicans are sure to use their power to rake Genachowski over the coals if he threatens to proceed since the claim that he is trying to ‘regulate the Internet’ plays pretty well.”