January 13, 2009 / 4:38 PM / 11 years ago

Obama's FCC choice praised, seen easily confirmed

WASHINGTON, Jan 13 (Reuters) - Consumer and public interest groups heaped praise on U.S. President-elect Barack Obama’s choice to head the Federal Communications Commission on Tuesday, and they predicted smooth confirmation by the Senate.

Obama has selected Julius Genachowski, a technology executive and former classmate from Harvard Law School, to lead the FCC, a Democratic source said late on Monday.

Genachowski was chief counsel for Reed Hundt, an FCC chairman under former President Bill Clinton. He also held various positions at Internet search and media company IAC/InterActiveCorp IACI.O and several firms investing in technology, including Rock Creek Ventures and LaunchBox Digital.

Among the FCC’s mandates are regulation of telephone and cable companies, oversight of concentration of ownership of radio and television outlets, and auctioning public airwaves.

Genachowski, who had been considered the front-runner for the job, received praised for his knowledge of technology issues, gained from his experience in Washington and as an investor.

“From Wall Street’s standpoint, it’s hugely positive because of his extensive background in technology and funding technology companies,” said analyst Jessica Zufolo of Medley Global Advisors, which advises investors.

Analysts say they expect Obama’s FCC to cast a more skeptical eye on dominance of heavyweights AT&T Inc (T.N) and Verizon Communications (VZ.N).

“We suspect Mr. Genachowski would seek to spur and protect competition from wireless carriers (including Sprint Nextel Corp (S.N) and Deutsche Telekom AG’s (DTEGn.DE) T-Mobile) and others as a counterweight to telco/cable wired broadband dominance,” Stifel Nicolaus analyst Rebecca Arbogast said.

Consumer and media groups also praised the nomination. In addition to Obama’s savvy use of the Internet and Facebook to raise millions of dollars, many are excited about his faith in technology as a tool of economic development.

Obama has called for broadband technology to be included in a roughly $800 billion economic stimulus package that Congress is preparing.


Genachowski will have a full plate from the start.

The FCC’s biggest headache is ensuring that a congressionally mandated conversion to digital television on Feb. 17 goes smoothly, a switch affecting some 20 million consumers who don’t already use the technology.

Owners of older television sets receiving over-the-air signals must buy a converter box, replace their TV with a digital TV, or subscribe to satellite or digital cable service.

Experts do not expect a flawless transition.

The government ran out of funding for coupons to subsidize converter boxes last week, and about 1.8 million people are on a waiting list.

Obama weighed in last week, asking lawmakers to extend the deadline. Several lawmakers are working on a bill for a delay, but many Republicans oppose it.

Companies that have invested millions in the conversion are split on the issue.

CTIA, a wireless trade association, said last week that a delay could “decrease confidence in the auction model for spectrum allocation.”

AT&T and Verizon won a collective $16 billion worth of spectrum in a government auction last year that needs to be vacated for them to use.

Broadcasters, on the other hand, are seen as receptive to a delay since they want to avoid the ire of consumers who lose television signals. (Editing by Lisa Von Ahn)

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