WASHINGTON – When he isn’t chairing the Federal Communications Commission, Julius Genachowski enjoys a seat at a poker table.
And as it turns out, he approaches cards much like he regulates: with great caution.
Quiet, brainy and restrained, the nation’s top telecom cop takes pains to carefully evaluate each hand.
He typically shies away from high-stakes, high-risk rounds. Instead, he’ll stick with Texas Hold ’Em long enough to size up rivals, but not long enough to test his luck – even with a decent hand, according to people who have played with him in the homes of Beltway government officials, journalists and sports pros.
But in a town full of aggressive lobbyists paid to bend the FCC’s positions in their favor, this careful and measured approach can be frustrating. Genachowski has sometimes been seen as a regulatory Hamlet, deliberating over details as powerful companies push impatiently for action.
Those high-stakes battles have reached fever pitch during Genachowski’s four-year term, with the agency at the center of a massive technological transition as communications shift from phone lines and TV broadcasts to the Internet.
Consumers are dumping home phones for smartphones and canceling cable subscriptions for streaming videos. And the industry is undergoing multibillion-dollar mergers as companies scramble to adapt.
Genachowski points to a string of achievements, including outlining a plan for auctions of airwaves that could raise billions for the government and a landmark effort to spread access to broadband Internet in rural America, a priority of President Obama, a law school friend of Genachowski’s.
And the 50-year-old chairman says he’s intentionally held his cards close to the vest, negotiating agreements on controversial issues behind the scenes even as critics said he was too soft and slow to act.
One thing I learned from my predecessors is that people don’t remember the day-to-day battles, but they remember you got it done, Genachowski said.
His term at the agency ends next summer, and while Genachowski hasn’t announced plans for departure, he is widely expected to leave as soon as the administration can arrange for a successor.
After two successive Republican chairmen who had generally been restrained in exercising regulatory authority, Genachowski entered the job with the intent of staking out the government’s claim over the fast-growing Internet industry.
He wound up presiding over a crucial period in which the powerful companies of Silicon Valley had to become players in Washington. Lobbying the FCC has become a major economic franchise. Each day, hundreds of dark-suited lawyers crowd the antiseptic, mid-century-modern agency building.
They are jockeying for the attention of its five commissioners on merger reviews, local media ownership rules and licenses to use satellites. Often those lobbyists are former FCC staff or aides from Congress, hired by companies to influence former government colleagues.
Critics say Genachowski initially struggled to keep up. His term looked in the beginning like it was going to be a disaster because he was in over his head, said Harold Feld, a senior vice president at public interest group Public Knowledge.
But Genachowski was equipped with a rare blend of private sector and government experience. He was a counselor to former FCC Chairman Reed Hundt and clerked for Supreme Court Justices William J. Brennan and David Souter. Obama appointed him as FCC chief after many months running the Obama transition team’s tech policy team and fundraising.
The Harvard Law School graduate and former executive for Barry Diller’s Internet conglomerate IAC/Interactive promised to be data-driven in his role, a sort of compromiser in chief. He often assigns staff to pose as devil’s advocates on policy issues to make sure he covers all perspectives.
Like any regulator, Genachowski has sometimes irritated the industries he oversees – particularly for his deliberate, painstaking approach.
Billionaire Philip Falcone blames Genachowski for getting cold feet with his $3 billion satellite venture LightSquared, a project the chairman once touted but eventually put on ice because it was said to interfere with military technology.
After the agency rejected AT&T’s merger with T-Mobile last January, AT&T chief Randall Stephenson complained that Genachowski’s staff was so slow. Even the smallest and most routine spectrum deals are receiving intense scrutiny from this FCC, often times taking up to a year and sometimes longer for these to be approved, he said to investors.
Charlie Ergen, chairman of television service Dish Network, said the agency delayed his wireless venture by 20 months. If the agency were more responsive, he said, the nation would have had Dish as a rival 4G wireless provider next year. Now, it will be well after 2015 before Verizon and AT&T see more competition.
We are serious about entering the wireless business and are ready to invest another $6 billion into it, Ergen said in a recent interview. But this FCC has relegated us to the sidelines.
Genachowski said the criticism is misplaced, that rather than dictate rules in individual cases he has sought to use the power of his position more broadly to influence the behavior of companies.
When the agency rejected AT&T’s merger with T-Mobile in early 2011, for instance, the action triggered a wave of overseas investment into the industry. Japan’s SoftBank teamed with Sprint Nextel. And T-Mobile’s parent, Deutsche Telekom, put money into smaller rival MetroPCS.
Former FCC Chairman Hundt, a fellow Democrat and longtime friend, said Genachowski’s mission wasn’t to be a strong-armed policymaker. Unlike his own tenure during the mid-1990s, when Hundt had to pave the way for the creation of the satellite TV industry, Genachowski has a more evolutionary mission: extending broadband service to as many Americans as possible.
He had to expedite the evolution instead of start a revolution, Hundt said. And he’s done a superb job of achieving that goal.
Added Andrew Schwartzman, a communications attorney and longtime public media advocate: Unquestionably, his major accomplishment has been to give the commission an intense focus on broadband deployment.
Genachowski concedes that he underestimated the demands of Washington politics. A devotee of strategy games and complex puzzles, Genachowski keeps a Rubik’s cube on the coffee table of his FCC office and a leather backgammon set tucked behind the couch. But the game of politics confounded him.
I am a results-oriented person, so it’s natural to start thinking in terms of compromise, Genachowski said. In today’s Washington, compromise is the wrong frame, like a dirty word.
This was evident in the political theater that erupted in fall 2009, when he set out to create controversial rules ensuring companies have equal access to the Internet, a concept called net neutrality. The policy was intended to prevent Verizon, AT&T and Comcast from charging customers more to use rival services from Skype or Google’s YouTube.
Dozens of lawmakers blasted Genachowski as a heavy-handed regulator who risked killing thousands of telecom jobs just as the country was suffering through a recession. They called for hearings, wrote angry letters to newspapers and protested to the White House.
Senior FCC staff asked Genachowski to proceed anyway, saying the agency had what card players would think of as a sure bet: They had a majority of votes on the five-member commission. And both chambers of Congress were led by Democrats.
Instead, Genachowski postponed voting on the proposal for many months and asked for more meetings with web and telecom firms.
Consumer groups and web firms asked the FCC chief to reclassify web companies as telecommunications carriers, to make it more clear that the agency had jurisdiction over web services.
Wall Street analysts decried the move as a market destroyer. The last thing the chairman wanted was a legacy as a job-killer, senior staff said.
Genachowski’s top legal advisers wrote up the reclassification plan. But after much pondering, he gave in to the pressure and scrapped it, according to former senior staff members.