Time for Genachowski to Make Tough Net Neutrality Calls, Two Ex-Chairmen Say

"One of the things you hope and pray when you take that seat, which ultimately proves futile, is that somehow, through your gifts, you're going to constantly bring a collective consensus around difficult issues and you're going to lead a group happily to the right result,” Powell said. “The reality is this is an intensely fought industry with billion-dollar players on every conceivable side. … It’s not a job you can have if you're looking for universal acclaim on anything.”

Powell said Genachowski faces a “tough problem” on net neutrality. Powell said that as chairman he had a reputation for staking out his positions in clear terms. “You have to invest your capital and take the risks,” he said. “You're going to have to go out there and get dirty.” Powell’s advice to Genachowski: “Go out there and invest yourself, make clear to all the players what are your bottom lines, what are the kinds of things that you'll accept and not accept.” Powell said the FCC needs to move forward as well. “The place has to keep moving or it drowns,” he said.

Martin was less direct but said Hundt gave him crucial advice when he became chairman. “You had to be deliberate in your decision-making but that you needed to make sure you move forward with what you thought was the right thing to end up doing, irrespective of the noise that was created either on the left or on the right around you."

Hundt said Genachowski has done a good job. “The FCC chair, in a sense, is the steward of the information and communications technology sector of the economy,” Hundt said. “He doesn’t control it. He doesn’t regulate all of it. He or she doesn’t want to regulate all of it. … It is important that he not break it, and if there are problems in the sector they need to be fixed.” Hundt noted that when President Barack Obama took office, the country was in the worst recession since the Great Depression. “We've seen the tech companies come back faster that any other companies,” he said. “We've seen continued capital expenditure. We've seen the wireless companies moving to 4G.”

Hundt said Genachowski has fundamentally changed the dialogue in the communications industry. “It is now widely accepted that universal service ought to be about broadband,” he said. “It was never that before. It is widely accepted we need more spectrum in commercial hands, everyone agrees about that. It’s widely understood that we need to have the United States be a leader in advocating for Internet freedom and market access for public Internet in every country in the world."

The three former chairmen also discussed more broadly net neutrality and broadband reclassification, issues that have dominated Genachowski’s tenure. Hundt turned to Martin to joke, “Now you caused this problem. … So I feel that you should explain how the jurisdictional thing has all come about and how it will get resolved.” Martin replied, “I get blamed for causing lots of problems.”

Hundt continued that there is broad agreement on several points that can provide a start. “Every single person who connects to the public Internet ought to have a way to publish on that public network … in the zone of lawful speech,” he said. “Number two, we ought to have universal service apply to broadband and not to voice. … Number three, everyone agrees that in order for everyone in America to get connected there ought to an affordable price, there ought to be kind of a baseline service, a vanilla service that everyone can subscribe to.”

Hundt said the debate has gotten sidetracked by discussions of worst-case scenarios. “All of the discussion, ‘Oh what if something much more dramatic were to occur?” he said. “That isn’t a tempest in a teapot. That’s a hurricane in a thimble.” Martin said forging agreement won’t be easy. “While the highest level principles I think are generally agreed to, when you talk about how you put them into effect … that is where the debate begins to break down,” he said. “I think it’s one of the reasons why the commission should be very thoughtful as they're approaching this issue to make sure that there aren’t any unintended consequences."

There was “a relatively stabile consensus both in the market and among advocates” on net neutrality, Powell said. “Suddenly, the hornet’s nest has gotten shaken up again.” Any proposals to reclassify broadband, even if limited in scope, shouldn’t be viewed as return to regulation as it was before changes made during the 1990s, he said. Reclassification is “a radical departure from the way it was before,” Powell said. Companies have made investments for most of a decade under an assumption they will be classified under Title I of the Communications Act. “Reclassification completely turns that back,” Powell said. “There’s a lot of nasty stuff hiding in the world of Title II.”

Powell said the FCC doesn’t have a responsibility to shore up its own powers to regulate the Internet and it should turn to Congress. “The FCC is not the Congress,” he said. “It’s a regulatory agency and any power it has it only has by the grace of delegated authority from the Congress.” He added, “At some point you have to say this is Congress’s responsibility. … No one should let them off the hook.”

Comcast’s plan to buy control of NBC Universal, one of the thorniest media issues at the FCC, also was discussed on the show. “I was an antitrust lawyer for nearly 20 years before I got the FCC, so I guess I'm old school on this,” Hundt said. “Vertical mergers don’t pose the kinds of risks to competition that can be presented in some horizontal mergers. This is a vertical merger. I've never thought that it raised any serious issues.”

Martin turned the tables on Hundt, who had challenged him on reclassification. “I'm sorry, when SBC talked about purchasing AT&T, I think that was described as a vertical merger that at the time you said was unthinkable,” Martin said. He represents some of the media companies opposing the deal. Hundt replied that he made a “poorly read but well delivered” speech at the Brookings Institute on the topic. “I described all the horizontal dimensions of that merger,” he said. “It was the horizontal dimensions that were the reasons that I said that it was unthinkable."

Comcast-NBC Universal “raises certain kinds of concerns,” Martin said, “as any merger does for some of their competitors and the power that a cable operator might have to favor a certain kind of content over others.” Public interest concerns should give regulators pause, he said. “The fact that you … have the largest cable operator in the country that would also be owning one of their competitors in the business news space, for example, I think certainly raises concerns."

Powell said the debate over the deal points to a bigger issue for the FCC. “If you looked at every sector of communications regulation, there is no more incoherent collections of rules than the media ownership rules,” he said. “They are rooted in a market that is decades gone. They are … drafted exclusively for broadcasting, ignoring, willfully, the arrival of competitive alternatives. These rules don’t even take into account whether cable exists. They don’t take into account whether the Internet exists,” he said. “They act as if broadcasting lives in a market completely unto itself.” The C-SPAN telecast can be viewed at www.c-span.org/series/communicators.aspx.