FCC Faces Busy Few Months Leading to Start of Obama Administration

One of the two FCC Democrats -- Copps or Adelstein -- is expected to be named acting chairman in January. In the past, the new president often has not designated a full-time chairman until the summer. Industry sources who have been active in the Obama campaign said they expect him to move more quickly. But that could prove difficult. Once nominees are selected, the FBI clearance process usually takes 90 days to complete. A candidate picked now wouldn’t be ready until February.

The transition process is already under way. The transition team is made up of dozens of insiders who supported the new president, according to those familiar with the process. Most do lower level work, such as evaluating the Commerce Department, writing briefing books for various nominees who have to go before the Senate and evaluating the biggest decisions that need to be made early in the administration. Decisions on commissioner nominees are usually made at the highest levels, by a few key advisors to the president-elect. Eight years ago, Martin was a member of the legal transition team, which played a role in vetting candidates for key posts including the FCC.

Industry and FCC sources caution that the nominee is often a surprise to everyone outside the new president’s inner circle. Reed Hundt, a litigator who was a close friend of Vice President Al Gore, was unknown in the communications industry when picked by President Clinton as his first FCC chief. Mark Fowler also was a relatively unknown communications attorney when tapped by President Reagan. President Bush designated a sitting commissioner Michael Powell as chairman, but that has not been the choice of most presidents.

Among those widely mentioned as potential chairmen are Copps, Adelstein and Scott Harris, an early, active Obama supporter and prominent Washington attorney. Blair Levin, analyst and former chief of staff for Hundt, is also a rumored candidate, as are former FCC officials Larry Strickland and Don Gips, who is on the transition team. Julius Genachowski, a top Obama advisor, could probably have the job if he wanted it but is likely seeking a cabinet level post, since Obama wants to appoint a federal chief technology officer.

“We always end up being surprised with who gets appointed,” said a wireless industry official. “It’s not the folks that everybody knows.” An FCC official said “my guess is none of the above.”

If Copps and Adelstein stay on, the third Democrat named to the FCC will be key, industry sources agreed. “People may have thought that the Republicans would be fully in synch, but they really haven’t been,” said a wireless industry attorney. “It’s always hard to predict these things and where the alliances will form given the different issues and personalities. . . . If you have Copps and Adelstein generally in synch on most issues, the third Democrat could be a wild card.”

The likely themes between now and next summer, the earliest a full new FCC will be in place, are compromise and addressing items where the commission is already close to a decision, agency and industry officials said Wednesday. One agency official said McDowell and the Democrats should be able to find areas of agreement during the months when there are only three commissioners.

The DTV transition will dominate FCC attention in early 2009, as it has this year, agency and industry sources predict. The biggest wireline item pending this year is proposed changes to intercarrier compensation and universal service fund rules. The other four commissioners made clear this week they will be prepared to vote on further changes at the December meeting, if they are proposed by Martin, agency officials noted. Also pending, possibly at the December meeting, are final rules for the 700 MHz D-block, setting up an auction most likely in mid-2009.

Martin has reached out to Copps and Adelstein on a number of issues and sometimes found himself aligned with them against his fellow Republicans. But Stanford Group said in a report Wednesday the new FCC likely will be very different than the Martin commission on key telecom and media policies. The firm predicted that the Obama FCC will strengthen the hand of competitive carriers and small wireless carriers by “reexamining key deregulatory approaches of the Bush FCC that emphasized inter-modal competition (competition between phone, cable and wireless) over intra- modal competition (CLEC v. ILEC).” The report predicted that cable will see an improved regulatory environment with less pressure to unbundle channels, that antitrust enforcement will be more rigorous and that AT&T and Verizon face a “more difficult regulatory environment.”

One industry official said broadband clearly will in the new FCC’s cross-hairs early on. “No presidential candidate talks about an issue every day the week before an election unless he intends to do something about it,” the small carrier official said. “For the entire last week, Obama has had broadband in his stump speech. He is serious and he is going to do something to bring broadband to rural America.”

Martin has shown no signs of backing away from tough issues late in his chairmanship, as evidenced by his push for intercarrier comp changes and focus on revising cable rules, communications lawyers and others said. “The chairman does not seem to be slowing down at all in terms of pushing his agenda,” said broadcast lawyer Henry Rivera, a commissioner from 1981 to 1985. “If past is prologue, I think that would bode for his continuing to push his agenda.” As interim chairman, Copps or Adelstein will “have their hands full with the DTV transition” and may act as a “caretaker” until a permanent FCC chief is named, added Rivera. Martin, though, seems unlikely to seek a vote on a comprehensive broadcast localism order, lawyers said.

The chairman seems keen to continue working towards a wholesale programming unbundling item, said Media Access Project President Andrew Schwartzman. “That’s the thing that I would see him pointing toward,” among potential media items, he said. “I would expect nothing less of Chairman Martin. I would expect that he’s going to go full bore to the last moment.” Martin seems poised to continue to pursue his agenda even as that becomes harder with a new administration slated to take over, said a telecom lawyer. “My sense is the chairman is not giving up.”