McDowell Leaving FCC in Next Few Weeks, Genachowski Expected to Follow

FCC Chairman Julius Genachowski, also expected to leave the commission shortly, did not say anything about his plans during or after Wednesday’s FCC meeting, which McDowell said would likely be his last as a member of the agency. “No news to report and I have nothing to announce,” Genachowski said after the meeting. A McDowell replacement is likely to be paired by the White House with a Democrat replacing Genachowski, to smooth confirmation by the Senate, agency and industry officials say.

McDowell said in an interview Wednesday the FCC is in good hands with Commissioner Ajit Pai, the soon-to-be senior Republican. “Commissioner Pai provides an incredible depth of experience and knowledge and has a judicious and fair free-market philosophy, or limited government philosophy, and will be a terrific voice and will be able to provide a contrast and a different viewpoint with great aplomb,” McDowell said.

McDowell had been widely expected to leave the FCC this year (CD Feb 5 p1), with many observers expecting an announcement as early as the commission’s January meeting. “It really doesn’t change a lot,” said a longtime regulatory lawyer. “The FCC hasn’t been doing a lot. I'm not sure there’s a lot of big things” before the FCC,” the attorney said. “I don’t see it having an immediate effect. Obviously, then the question is how soon does the chairman decide he’s leaving."

"This creates a window for Genachowski to leave while protecting a 2-1 majority and allowing two nominations for replacements to go through confirmation,” said an industry observer. He thinks Genachowski will take this opportunity to bow out sooner rather than later. “The real issue is sooner than what? When he would otherwise have left (which is when)? I think within six weeks.”

House Communications Subcommittee Chairman Greg Walden offered kind words for McDowell during an interview at the Capitol Wednesday: “He has done a really terrific job. He is a sound public servant. He believed in a thorough and open process, he believes in keeping the Internet free, he’s been a great commissioner who really understood the balance you need in a body like that and believed in a more open and transparent process, which is really important for the public. I hate to see him go but he is a true public servant that is not into this for a career and I admire him.” Walden would not say whether he would push for Baum’s nomination as the next FCC commissioner. “I'm going to stay out of that discussion at this point. But certainly Ray is a long time friend and colleague in [the] state legislature, and was chairman of our public utility commission and chaired the joint board. He’s certainly very qualified."

"As we have seen with his recent leadership on efforts to prevent foreign government intervention in the operation and use of the Internet, Rob [McDowell] has been a consistent voice cautioning against unnecessary governmental regulations,” Thune said in a statement. “I hope the president’s nominee to replace him will approach the job with the same passion and energy that Rob exhibited and will be similarly committed to finding market-based solutions to our nation’s communications challenges whenever possible.” Asked about his aide O'Rielly as a candidate, Cornyn didn’t have an immediate comment.

Had Genachowski left with McDowell still seated, that might have made it harder to get things done, one telecom attorney told us. The current Republican commissioners are “pretty well established as deregulators,” while the Democrats “don’t completely share that philosophy,” she said. “It is not beyond the realm of possibility” that the chances of a 2-2 deadlock might have been delaying Genachowski’s decision, she said.

"No commissioner or chairman in the majority wants to leave the commission where the results will be a 2-2 deadlock,” a cable attorney said. “Now that McDowell has said he’s departing, it does free up the chairman -- or any other Democratic commissioner -- to leave and still maintain a democratic majority.” Genachowski “will leave when he wants to leave, but at least now when he leaves he doesn’t have to worry about that issue,” the lawyer said. “That’s one less barrier in terms of his decisionmaking into what his future plans are.” McDowell was a “dissenting voice” when it came to the net neutrality order, and certainly a “leading voice in making clear that government shouldn’t get into the business of regulating broadband,” the attorney said: Although in the minority, he was able to effectively express his counter view. The commission might otherwise have gone “more aggressive” in regulating broadband, as McDowell helped keep broadband regulation to a minimum, the attorney said.

"He was a very consistent conservative voice,” both in the majority and minority, said Blair Levin, Gig. U executive director and former director of the FCC’s National Broadband Plan. “I suspect that the thing that people will remember him most for was his, shall we say, Paul Revere-like role in warning about the dangers of the WCIT [World Conference on International Telecommunications]conference. I suspect he'll continue to play a role in that” from outside the commission, Levin said. “I think that he will continue to raise the alarm of what happens if we change the way the Internet has been governed."

McDowell “definitely towed the party line in terms of supporting de-regulation,” said another telecom attorney. “But he wasn’t a grandstander and, occasionally, he was a moderating influence on the extreme positions advanced by others. His departure now, with a hyper-polarized Congress, creates the risk that only a Republican who is less seasoned and more extreme will be acceptable to the Hill. If the White House can’t accept someone like that or find someone more moderate, his seat could stay open for a while.” But once Genachowski departs, the dynamics will change, the attorney said. At that point, to get the Hill to move on a Genachowski replacement, the administration “may have to settle for someone more ideologically incompatible than they would like,” she said: The Republicans “will want the White House to nominate a package” rather than a “standalone” Democratic nominee to replace only Genachowski. “On the other hand, McDowell can’t be replaced before Julius’ replacement happens or the White House runs the risk of an FCC deadlocked at 2-2,” said the lawyer.

USTelecom, NAB, CEA, CTIA, NCTA, Mobile Future, the Independent Telephone & Telecommunications Alliance, TechFreedom and other groups put out statements applauding McDowell. “My first -- and last -- reaction is that this is a real loss for the Commission,” said Free State Foundation President Randolph May. Seton Motley, president of Less Government, called McDowell “a Titan of freedom and opportunity for every American."

Free Press offered a less-glowing comment. “As he considers his next move, we hope he will reject the revolving door and resist becoming another FCC leader who exploits his public service to cash in at the companies he was supposed to regulate,” Free Press President Craig Aaron said of McDowell. “We urge the President to nominate a Republican successor who is not simply another cheerleader for the biggest businesses and media monopolists, but who recognizes the free market cannot work if companies are allowed to amass and abuse market power. Competition, diversity and the fostering of local voices shouldn’t be partisan issues.” Public Knowledge was more adulatory, stressing McDowell’s advocacy of unlicensed use of the TV white spaces. “Although we often disagreed, working with Commissioner McDowell was a pleasure,” PK said. “His willingness to hear opposing views, the intellectual rigor in his analysis, and his leadership at the WCIT made him someone we enjoyed working with."

"Although the announcement wasn’t a surprise and doesn’t change the balance of power at the FCC, it could implicate the rumored departure plans of Chairman Julius Genachowski as well as the transition to new leadership,” Stifel Nicolaus said in a research note. “With Commissioner McDowell leaving, Chairman Genachowski would be politically freer to leave his post anytime thereafter, as he could do so and still leave a 2-1 Democratic majority, rather than a 2-2 split threatening deadlock on partisan-tinged issues."

"Commissioner McDowell’s contribution to the FCC flowed at least in part from being a stickler on the law … having a firm grasp of complex issues with an appreciation of real-world implications of agency actions; and his public display of collegiality in a town increasingly bereft of constructive and respectful political discourse,” said Jeffrey Silva of Medley Global Advisors. “By this time next year, but most likely even sooner, new FCC regulatory dynamics will be at work without necessarily a marked departure from the agency’s existing broadband-driven policy agenda.” As an analyst, “I particularly appreciate Commissioner McDowell’s understanding of the impact FCC decisions have on the businesses involved, his ability to anticipate consequences, and his desire to minimize unintended consequences by relying on the market as much as possible,” said Anna-Maria Kovacs, visiting senior policy scholar at Georgetown University’s Center for Business and Public Policy.