March 2013

President Obama walking into political minefield as he taps new FCC chairman

President Barack Obama is walking into a political minefield as he decides whom to nominate for chairman of the Federal Communications Commission. Industry groups, consumer advocates and Democrats are splintering over the contenders, putting President Obama in a bind as he narrows his short list for the powerful post.

"You're going to offend a whole lot of people no matter which way you go," one communications industry source said. It’s an important choice for President Obama, as the next chairman will face difficult decisions over how to provide enough airwaves for mobile devices, preserve the openness of the Internet and promote competition. Tom Wheeler, a venture capitalist and fundraiser for Obama, was considered the clear favorite for the job just last week. But then a coalition of public interest groups sent a letter to the president bashing him, and 37 senators signed a letter supporting an alternative pick: FCC Commissioner Jessica Rosenworcel. "Wheeler is still the front runner, but it isn't as secure as it was a week or two ago," another industry watcher said.

Looming departures, changes at FCC

After a busy week of announced exits at the Federal Communications Commission, the slow wheels of change are beginning to turn — both at the agency and on Capitol Hill.

The pending departures of Democratic Chairman Julius Genachowski and Republican Commissioner Robert McDowell are catalyzing a natural evolution. The FCC’s next most senior Democrat is among those angling for the driver’s seat, even as the White House eyes other candidates, and conversations are just beginning on Capitol Hill about whom the next Republican commissioner should be. But it’s just the beginning of a potentially lengthy process, one in which the FCC’s congressional overseers could clash with the Obama administration over the telecom agency’s work and its future direction. If anything, the past few months of Senate squabbling at multiple hearings featuring the commissioners may only serve as a preview of what’s to come. It’s almost impossible for Genachowski’s replacement to be confirmed in the few weeks before the sitting chairman officially departs. That only raises the likelihood that one of its sitting Democratic commissioners could take the helm in an interim capacity — a role that could fall to Mignon Clyburn, the next-most senior member.

Departing FCC chairman could have done more for consumers

[Commentary] Julius Genachowski, who will step down as head of the Federal Communications Commission within the next few weeks, leaves behind a mixed bag of accomplishments and disappointments.

He had made expansion of broadband Internet access one of his priorities. We moved forward on that front, but not far enough. He also aimed to expand available wireless spectrum for smartphones and tablets and the like. That hasn't come very far either. As for pushing for cable subscribers to pay only for the channels they want, rather than pay for fat bundles of channels they never watch, Genachowski was largely silent.

What the FCC needs is a leader who is unafraid to challenge the established order, much as Elizabeth Warren stood up to banks and other financial powers. Until then, the US will continue making baby steps on the telecom front, instead of displaying the global leadership Genachowski boasted of. And we'll all be the worse for it.

Groups offer their two cents on who should be next FCC chair

Groups are rushing to give President Barack Obama their two cents on who should be the next chair of the Federal Communications Commission following Julius Genachowski’s announcement that he would step down from the post.

Over 25 organizations wrote to Obama on March 26, urging him to appoint a strong public interest advocate to lead the agency, criticizing Genachowski’s tenure. The Administration, the groups said, “must recognize the severe mismanagement and lack of progress that occurred” under Genachowski’s leadership and urged the president to consider someone without strong ties to industry lobbying groups. “We expect that the Administration will put the FCC back on course to do its job for this country and choose a nominee who will protect the future of communications for all,” wrote the groups, which include the New America Foundation’s Open Technology Institute, Fight for the Future, Free Press Action Fund and Center for Media Justice. Public interest groups are not the only ones weighing in on who should succeed Genachowski.

Senate Democrats back Rosenworcel for FCC chief

Dozens of Senate Democrats are urging President Obama to consider choosing Jessica Rosenworcel to be the next chairwoman of the Federal Communications Commission. If selected, current-FCC Commissioner Rosenworcel would be the first woman to lead the FCC.

Commissioner Rosenworcel has been an FCC commissioner since last May. Before that, she served as an adviser to Sen. Jay Rockefeller (D-W.Va.), the chairman of the Commerce, Science and Transportation Committee, which has jurisdiction over the FCC. She has also served as an aide at the FCC and worked in private practice. But choosing Commissioner Rosenworcel would skip over fellow FCC Commissioner Mignon Clyburn, the more senior Democratic commissioner and daughter of Rep. James Clyburn (D-SC), and could be seen as a snub of Commissioner Clyburn and anger her supporters. As a sitting commissioner, Rosenworcel would not need Senate confirmation to ascend to the chairmanship. The Democrats argued that by choosing Commissioner Rosenworcel, the Administration could avoid delaying critical FCC rule-makings.

Rep Markey: Backing network neutrality is prerequisite for FCC chief

Rep. Edward Markey (D-MA), who is running for the Senate, said that any new chairman of the Federal Communications Commission must support network neutrality regulations.

On a conference call with the Progressive Change Campaign Committee, a liberal advocacy group, Rep Markey said that having an "understanding of net neutrality, an understanding of the non-discriminatory principles that are baked into the Internet from its origin," is a prerequisite for becoming FCC chairman.

Fifth FTC commissioner could face tough confirmation slog

It could be a long time before the Federal Trade Commission has all five commissioners again.

The FTC is currently made up of two Democrats and two Republicans. President Barack Obama has yet to name his choice for the open fifth seat, but Senate Republicans are unlikely to be in any hurry to give Democrats a majority on the commission, no matter who the nominee is. Republican opposition would likely prevent any nominee from even coming up for a vote. The FTC, which handles competition enforcement, consumer protection and privacy issues, needs a majority vote to take action against a company or to adopt new regulations.

Senate rejects bid to end cellphone subsidy

The Senate rejected a proposal to end a federal cellphone subsidy in a mostly party line 46-to-53 vote.

The proposal, offered by Sen. David Vitter (R-LA), would have been an amendment to the budget resolution. The proposal was non-binding, but was an important test of support for the cellphone subsidy, which is managed by the Federal Communications Commission. Sen. Claire McCaskill (D-MO) joined the Republicans in supporting the amendment. The program, called Lifeline, has been derisively referred to as the "Obama phone" program, although it began long before Obama took office. Outgoing Federal Communications Commission Chairman Julius Genachowski fired back at the sponsors of the amendment in a statement: “The Lifeline program has helped some of our most vulnerable citizens connect to emergency services, doctors and family in times of crisis," he said. "It has been a literal lifeline for these Americans -- and in today’s era, with a third of Americans having cut the cord to wireline phone service, it’s appropriate that Lifeline supports wireless service." He touted the commission's efforts to curb waste and abuse in the program. FCC Commissioner Mignon Clyburn, the agency's most vocal defender of Lifeline, said the amendment failed to take into account how important Lifeline is to low-income families.

Senate overwhelmingly endorses states' collection of online sales taxes

The Senate overwhelmingly approved an amendment empowering states to collect taxes for online sales, delivering a huge victory to lawmakers and stakeholders who have devoted more than two years to the effort.

Sens. Mike Enzi (R-WY) and Dick Durbin (D-II) watched their amendment sail through the upper chamber on a 75-24 vote, confirming their hunch that their legislation has the support needed to pass outside the budget process. The lawmakers have been seeking a vote on their Marketplace Fairness legislation since last summer and finally got their answer — that there is plenty support for the change in law that will allow states to collect sales tax on purchases made online by consumers in their states. The legislation would exempt small businesses that earn less than $1 million annually from out-of-state sales.

Amazon’s Tax Dispute May Be Destined for the Supreme Court

One of the less-remembered legacies of Eliot Spitzer’s governorship was the “Amazon tax.” It was his administration that came up with a plan to get Amazon and other out-of-state online retailers to start collecting state and local sales taxes from New York customers. Six years (and two governors) later, New York’s battle with Amazon came to a head on March 28 after the state’s highest court upheld the constitutionality of the tax in a 4-1 ruling. Writing for the majority, Chief Judge Jonathan Lippman concluded: “The bottom line is that if a vendor is paying New York residents to actively solicit business in this State, there is no reason why that vendor should not shoulder the appropriate tax burden.”

Benton

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