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Continuing a Conversation About the FCC’s Merger Review Process

Posted March 17th, 2011 by Jonathan Baker - Chief Economist

Six weeks after the FCC completed its high profile review of the Comcast/NBCU transaction, Commissioner Meredith Baker (no relation) suggested that the agency’s transaction review process should be overhauled.  I have been involved in merger reviews on both sides of the table for most of my career – working with private parties advocating or questioning deals, and at the Federal Trade Commission and Department of Justice as well as the FCC – putting me in a unique position to address some of the issues that Commissioner Baker raised.

    To provide context, I want to begin with what the FCC accomplished in terms of process during its Comcast/NBCU review: 

  • Fact-based and data driven analysis.  As the Commission’s order shows, its conclusions were based upon a well-developed record about the industry, the applicants, and the potential implications of the transaction.
  • Development of a model legal and economic analysis.  The FCC set forth a roadmap for antitrust tribunals reviewing the exclusionary impacts of vertical integration in future cases.
  • Detailed findings and reasons.  The Commission provided a detailed opinion explaining the reasons for the order’s provisions. 
  • Close coordination with the Department of Justice.  The FCC and DOJ worked together to share insights and to assure an efficient process and consistent outcomes.  By most accounts, this was the most successful transaction-related collaboration ever between these agencies.
  • Avoided unnecessary burdens.  The FCC worked with the applicants and other parties to craft an order that protects the public interest without restricting the applicants’ ability to accomplish their legitimate business objectives.  Comcast Executive Vice President David Cohen concurred, saying publicly after the FCC issued its order, “I don’t think any of the conditions is particularly restrictive.”

    The success of the FCC’s review process is particularly striking given that the transaction presented a wide range of important and complex issues, including novel and difficult competitive questions raised by the deal’s potential impact on nascent competition in online video distribution.

    Against this backdrop, let’s look at Commissioner Baker’s concerns.  The first is with the statutory mandate for the FCC and the antitrust enforcement agencies to review competition concurrently.  Comcast/NBCU highlights the advantages of Congress’ design.  Working together, the FCC and DOJ are often more effective in addressing competition issues than either would be working alone.  The FCC brings industry expertise and a greater practical ability to review and address concerns about a merger’s impact on potential competition.  Through collaboration, moreover, both agencies were able to conduct an extensive, careful, and cooperative review of that transaction without delaying the process.  Not surprisingly, the two agencies addressed competition problems by imposing similar conditions.

    In addition, Commissioner Baker raises concerns with the costs of a long merger review process.  Yet she also recognizes the need for careful review.  The FCC should not hold up the consummation of mergers that are in the public interest or allow merger reviews to languish, but, equally, it cannot cut corners when undertaking those reviews.  No responsible agency can simply assume that every communications merger proposed in the free market is in all respects beneficial to the public.  Nor can the FCC compromise on the procedural protections that administrative law confers on interested parties.  Based on my experience working at both antitrust agencies as well as the FCC, I would say that the length of a merger review is determined primarily by the complexity of the competitive issues, not whether the reviewing agency is the FCC, FTC or DOJ.  (Other major vertical mergers reviewed recently by DOJ, such as Ticketmaster/Live Nation, have taken as long as Comcast/NBCU to reach a consent settlement.)

    Commissioner Baker also questions whether the FCC at times goes too far afield when imposing conditions to assure that mergers serve the public interest, leading it to impose some conditions that may be unrelated to the transaction.  The wide range of conditions in the typical merger order is easy to explain:  it is the natural and foreseeable result of the statutory “public interest” charge to the agency.   In furtherance of that mandate, the FCC takes on competition concerns – in the Comcast/NBCU order, two-thirds of the pages on conditions sought to protect or foster competition – but it also addresses other public interest issues that Congress has put front and center in the Communications Act, such as diversity of viewpoints, localism, and deployment of advanced telecommunications services.  My sense is that most disputes over whether specific conditions are “transaction-related” are not mainly about the integrity of the merger review process but are really about a basic policy question – whether the Commission should continue to pursue the longstanding public interest goals identified by Congress in the Act.  If so, process reforms are unlikely to stop the criticism.

    Even a successful process can be improved.  It is possible, for example, that the FCC could do better in developing and testing evidence by introducing more adversarial elements into its administrative merger review process.  (A similar issue comes up in comparing the antitrust review of mergers in the US and Europe.)   The FCC experimented with one such procedural innovation in Comcast/NBCU:  the staff conducted an economic workshop, bringing together economists for the parties to the transaction and third parties for a structured discussion placed on the adjudicative record.  In future reviews, the FCC staff could also consider deposing merging firm executives as the antitrust agencies often do; this process may, for example, help the FCC staff evaluate merging firm documents.  

    In Comcast/NBCU, Chairman Genachowski was determined to ensure a model transaction review process – and through the dedicated effort of the transaction team led by John Flynn and staffed from throughout the agency, particularly the Media Bureau, the Office of General Counsel, and the Office of Strategic Planning and Policy Analysis, he succeeded.  I had little exposure to FCC merger review in the past.  But after working on Comcast/NBCU and other transactions during my time at the FCC, I think of the agency’s merger review process more as a source of pride than as a source of concern.

Posted in Media Bureau Office Of Chairman Office Of Strategic Planning And Policy Analysis

Chairman Genachowski: The Clock is Ticking

Posted March 16th, 2011 by George Krebs

This morning Chairman Genachowski spoke on spectrum, consumers and America’s small businesses, delivering the keynote address as part of the Mobile Future Forum. He called attention to the growth of broadband in America, the looming spectrum crisis and our solution of voluntary, market-based incentive auctions to free up that spectrum. He emphasized that “we must act” to set the pace for 21st century technology and said, “there’s no other choice than for the U.S. to lead.”

Given the theme, the event was held at Voxiva, a mobile based information solutions firm recently named one of the most innovative companies in the world. Peter Rysavy of Rysavy Research released a report prior to the Chairman’s talk entitled The Spectrum Imperative: Mobile Broadband Spectrum and its impacts for U.S. Consumers and the Economy. Here's an excerpt from the Chairman's speech.

To some, it was a surprise that the Broadband Plan included major sections on mobile broadband.  At the time, many assumed that broadband was what you got when you connected your computer to the modem plugged into your wall.

…Mobile broadband is being adopted faster than any computing platform in history.  The number of smartphones and tablets being sold now exceeds the number of PCs.

The Mobile Future report released this morning puts a fine point on this.  According to their report, quote, “The clock is ticking, with rising demand rapidly closing the gap with existing supply.  The consequences of inaction are severe, widespread and wholly negative for consumers and the U.S. economy.”

The point deserves emphasis:  the clock is ticking on our mobile future. Demand for spectrum is rapidly outstripping supply.  The networks we have today won’t be able to handle consumer and business needs. 

Read the rest of the Chairman’s speech The Clock is Ticking.

Posted in Events Wireless Office Of Chairman Mobile Usf

Modernizing and Streamlining the Universal Service Fund

Posted February 7th, 2011 by Haley Van Dÿck - FCC New Media

This morning, Chairman Genachowski laid out a proposal to get broadband to rural America while cutting waste and inefficiency in two of the Commission’s largest programs.

Universal service has been core to the FCC’s mission since the Communications Act of 1934 created the agency and committed our nation to making vital communications services accessible to all.  The Universal Service Fund helped connect virtually every American to our 20th century communications grid.  But this program, along with Commission’s closely related Intercarrier Compensation rules, have become riddled with waste and inefficiency and are not up to our nation’s broadband challenge. Today, up to 24 million Americans have no access to broadband—fixed or mobile.
At tomorrow’s meeting, the Commission will vote on the proposal to transform the Universal Service Fund and Intercarrier Compensation rules from programs designed to support 20th Century voice networks to a force for expansion of 21st century fixed and mobile broadband and voice networks, while eliminating waste and inefficiency.

Posted in Open Meetings Office Of Chairman
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Announcing Generation Mobile, Featuring Jane Lynch

Posted December 9th, 2010 by George Krebs

(Photo credit: LG Text Ed)

You can find them in the most innocent settings. The dinner table, the classroom, during evening homework hour or an otherwise quiet family walk. Clicking, clacking, beeping, buzzing and whirring. This maneuvering marauder? Mobile phones equipped with text messaging. These devices are exploding in use among the current generation and teens seem programmed to use them constantly.

A happy medium exists. Commonsense and responsible use of technology is within reach. To many parents the mobile culture is unfamiliar. We’re hosting a Generation Mobile forum next Tuesday bringing together teens, parents, educators and experts. During this event we’ll do our best to help parents navigate these challenging issues.

We’ll discuss cyberbullying, sexting, over use, privacy, and texting-while-driving. The Pew Internet and American Life project will present their findings from a landmark study, “Kids and Mobile Phones.”

For the Gleeks in the audience we’re pleased that actress and comedienne Jane Lynch, of LG’s Text Ed campaign, will be joining us remotely. Rosalind Wiseman, author of Queen Bees and Wannabes the book upon which the movie Mean Girls was based, will join FCC Chairman Julius Genachowski in hosting the first panel “Generation Mobile Speaks” featuring teens, parents and educators. The second panel, “Ask the Experts About Generation Mobile” will feature experts from SafetyWeb, Facebook, Sprint and other major mobile and technology players. A full list of panelists and speakers is below.

This event is about you. We’ve lined up an impressive slate of experts for our sessions on kids, teens and mobile phones. What do you want to know when they take the stage Tuesday? We’ve filled in a couple of starter questions to stimulate ideas. Far more importantly we want to hear from you. Type in your question, wait for User Voice to generate and then click “Create New Idea” below the box. Ask your questions now.

We’re honored to be hosted by DC’s own, cutting edge McKinley Technology High School (151 T Street Northeast). The event will take place on Tuesday December 14th from 10am to 1pm ET. If you’re able to join us – free of charge – please RVSP to generationmobile [at] fcc [dot] gov. Since most of you are outside of the DC area we’ll be live streaming this exciting event online at fcc.gov/live. Participate through Twitter using #genmobile.

Stay tuned. We’ll post updates to the agenda and the speaker list as they become available.

Speakers and Panelists Include:

  • Julius Genachowski, FCC Chairman
  • Jane Lynch, Emmy Winning Actress and Spokesperson for the LG Text Ed Council
  • Rosalind Wiseman, Author of Queen Bees and Wannabes, basis for Mean Girls the movie
  • Tim Sparapani, Director of Public Policy, Facebook
  • Parry Aftab, Kids Technology Expert and Creator of Stopcyberbullying.org
  • Amanda Lenhart, Senior Research Specialist, Pew Research Center
  • Marsali Hancock, President, Internet Keep Safe Coalition
  • Michael Clark, Co-Founder, SafetyWeb
  • Dr. Michael Levine, Executive Director, Joan Ganz Cooney Center
  • Maureen Cooney, Privacy Officer, Sprint
  • Stephen Balkam, CEO, Family Online Safety Institute
  • K. Dane Snowden, Vice President, CTIA
  • Alan Simpson, Vice President, Common Sense Media
  • Lanita Preston, Author and mother of Frank Preston
  • Stacey A. Kopnitsky, Assistant Principal, Cabin John Middle School
  • Dwan Jordon, Principal, Sousa Middle School, Washington, DC
  • And we’ll hear from a panel of teens about how they use mobile technology

Update 12/13 1:26pm ET: Final Agenda for Generation Mobile Program

10:00 a.m.       Welcome, Opening Remarks, Live Chat with Jane Lynch

  • Welcome by David Pinder, Principal, McKinley Technology High School
  • Remarks by Julius Genachowski, Chairman, FCC
  • Live Video Chat with Actress Jane Lynch, LG Text Ed Council 
  • Presentation by Amanda Lenhart, Senior Researcher, Pew Internet Project

10:40 a.m.       Panel I:  Generation Mobile Speaks

  • Rosalind Wiseman, Author and Teen Expert, Member LG Text Ed Council
  • Julius Genachowski, Chairman, FCC


  • Tori Dugger, Senior, McKinley Technology High School
  • Jonathan Harris II, Senior, Dr. Henry A. Wise High School, Upper Marlboro, Md.
  • Erin Maines, Sophomore, Falls Church High School, Falls Church, Va.
  • Frank Preston, Junior, Howard High School, Ellicott City, Md.
  • Lanita Preston, Author and Mother of Frank Preston
  • Stacey A. Kopnitsky, Assistant Principal, Cabin John Middle School, Rockville, Md.
  • Parry Aftab, Executive Director, WiredSafety.org
  • Dwan Jordon, Principal, Sousa Middle School, Washington, D.C.

11:40 a.m.       Panel II: Ask the Experts About Generation Mobile

  • Josh Gottheimer, Senior Counselor to the Chairman, FCC


  • Marsali Hancock, President, Internet Keep Safe Coalition
  • Dr. Michael Levine, Executive Director, Joan Ganz Cooney Center 
  • Maureen Cooney, Privacy Officer, Sprint 
  • Michael Clark, Co-Founder, SafetyWeb
  • Dane Snowden, Vice President, External & State Affairs, CTIA
  • Tim Sparapani, Director of Public Policy, Facebook
  • Alan Simpson, Vice President for Policy, Common Sense Media
  • Stephen Balkam, CEO, Family Online Safety Institute

1:00 p.m.         Program Concludes

(Cross posted on Blogband.)

Posted in Events Consumers Office Of Chairman Parents Mobile

Preserving Openness to Protect Jobs

Posted December 7th, 2010 by Julius Genachowski - Chairman, Federal Communications Commission.

The impact that Internet entrepreneurs have made on the world is unquestioned.

These businesses push the limits of innovation and move America's economy forward, bound only by their imagination as they grow and expand their reach. This free spirit of creativity doesn’t just make new tech, it also helps create new jobs.

Small businesses and start-ups have accounted for more than 22 million new American jobs over the last 15 years. And broadband has played a central part, enabling small business to lower their costs and reach new customers in new markets around the country and, indeed, the globe.

As these businesses grow stronger, they make room for new jobs that help America compete in the global technology marketplace. Take eBay, for example, which in its short history has been a force multiplier for economic production, facilitating 60 billion dollars a year in economic activity.

The animating force behind all of these efforts is a shared appreciation for the Internet’s wondrous contributions to our economy and our way of life. Over the past generation we’ve seen American-made Internet innovations connect people across the globe. Social networking tools, online video services, and other new tech haven’t just changed the way we stay in touch -- they’ve helped create a booming sector of unbound creativity and economic opportunity.

I’ve learned a key lesson from these entrepreneurs and their businesses. Their spectacular growth is powered by a core value, one shared by the founders of our nation and the architects of the Internet: restrictions on freedom shackle the human spirit, and constrain the promise of bold, new ventures.

The success of these businesses has made America’s tech economy the envy of the world. These businesses are proof that the Internet’s open principles have helped clear the way for unfettered growth. Changing those principles, or regulating this growing market in a way that disfavors innovation, is unacceptable.

This founding principle -- the openness of the Internet -- is at issue today. Interfering with this growth threatens jobs at a time when Americans can hardly afford the risk.  

This is not just a plan to protect a free and open Internet -- this is a plan to protect jobs, now and in America’s future. It is my responsibility to make sure that the economic and legal environment that allowed these jobs to grow remains just as healthy and competitive for future generations.

I’m proud to oversee the FCC at a moment of unprecedented technological advancement. It’s my responsibility to act as a just steward for America’s technology economy and protect these valuable jobs. I’ve seen what works from some of the most dazzling entrepreneurs America has ever known. It’s my responsibility to fight to uphold the free and open principles that have brought us to where we are -- and I am committed to this goal.

(This is cross-posted on the Open Internet blog. Please leave comments there.)

Posted in From The Chairman Office Of Chairman

Preserving a Free and Open Internet [video]

Posted December 2nd, 2010 by George Krebs

In his clarion call yesterday morning Chairman Julius Genachowski laid out a proposal for basic rules of the road to preserve the open Internet as a platform for innovation, investment, job creation, competition, and free expression.

These rules rest on three basic tenets:
1) Americans have the freedom to access lawful content on the Internet, without discrimination
2) Consumers have the right to basic information about your broadband service
3) The Internet will remain a level playing field.

This proposal is deeply rooted in history. The grounding ideas were first articulated by Republican Chairmen Powell and Martin and, in 2005, endorsed in a unanimous FCC policy statement. Chairman Genachowski cited the many months of hard work leading up to this moment – hard work across government, industry and broadband providers – and the substantial response received from the engaged public.

Watch the HD video below
(This is cross-posted on the Open Internet Blog. Please leave comments there.)

Posted in Office Of Chairman

9-1-1's Next Frontier

Posted November 23rd, 2010 by George Krebs

This morning Chairman Genachowski, Public Safety Bureau Chief Jamie Barnett and a collection of FCC staff visited a state-of-the-art response facility at the Arlington County Emergency Communications Center in Arlington, Virginia. Following the vision laid out in the National Broadband Plan, the event marks the announcement of steps to revolutionize America’s 9-1-1 system by harnessing the potential of text, photo, and video in emergencies.

Our communications needs are increasingly reliant on mobile devices. In fact, 70% of 9-1-1 calls originate from mobile phones and users rely regularly on texts and multimedia messages. While a subsequent evolution of our 9-1-1 system seems a natural -- and obvious -- step for digitally aware citizen, our current 9-1-1 system doesn’t utilize the superb, possibly life-saving potential within our existing mobile devices. With videos, pictures, texts -- and other untold mobile innovations surely on the horrizon -- next-generation 9-1-1 will position public safety officials a step ahead with critical real-time, on-the-ground information.

After a tour of the high-tech operations room, Chairman Genachowski and Admiral Barnett spoke to the promise of next-generation 9-1-1. Here's an excerpt from Chairman Genachowski's speech.

"Even though mobile phones are the device of choice for most 9-1-1 callers, and we primarily use our phones to text, right now, you can’t text 9-1-1. Let me reiterate that point. If you find yourself in an emergency situation and want to send a text for help, you can pretty much text anyone EXCEPT a 9-1-1 call center.

"...It’s time to bring 9-1-1 into the digital age."

Read the rest of the Chairmans’s speech, view more photos and see the benefits of Next Generation 9-1-1 after the jump.

(This is cross-posted on Blogband. Please leave comments there.)

Posted in Events Public Safety and Homeland Security Bureau National Broadband Plan Office Of Chairman

Our Innovation Infrastructure: Opportunities and Challenges

Posted November 15th, 2010 by George Krebs

Earlier today, Chairman Genachowski spoke at the annaul meeting of the National Association of Regulatory Utility Commissioners in Atlanta. In concert with the conference's "Keeping the Focus" theme, the Chairman spoke to the primary focus of the FCC: the economy and jobs. We're serving this mission through harnessing the opportunities of communications technology and putting an emphasis on innovation.

Read Chairman Genachowski's full speech.

(This is cross-posted on Blogband. Please leave comments there.)

Posted in Events National Broadband Plan Office Of Chairman
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Seeking Nominations for the Chairman’s AAA

Posted November 9th, 2010 by Pam Gregory

 At the July 19th event celebrating the anniversary of the ADA, Chairman Genachowski launched the Accessibility and Innovation Initiative and announced the establishment of the Chairman’s Awards for Advancement of Accessibility (or Chairman’s AAA).  The Chairman’s speech, "Empowering Americans with Disabilities Through Technology" was presented at the FCC’s Americans with Disabilities Act 20th Anniversary Celebration. The A&I Initiative and the Chairman’s AAA are based on recommendations in the National Broadband Plan.

The AAA Awards will be given to pioneers in accessibility and innovations.  Contenders could be individuals or organizations, public and/or private entities, academics, students, application developers, and represent mainstream or assistive technology industries.  In addition to recognizing the development of individual mainstream or assistive technologies introduced into the marketplace, the awards could also recognize other accessibility advancements, such as the development of standards or best practices that foster accessibility, or the development of a new consumer clearinghouse of disability-related products and services.  We also believe that teaching modules and tools that could help students learn universal design and other accessibility practices could be worthy of recognition.

The Chairman’s AAA is open to any individual or entity in the public or private sector.  This year, the product, service, technology, or practice must be available and promoted publicly until May 1, 2011.  In the future, we will consider available and publicly promoted advancements that occur during a 12 month period prior to the award’s announcement. 

We encourage individuals and entities to contact us with ideas and nominations, which can be self-nominations or for others.  We will be accepting guest blog posts and guest v-logs on this topic, and parties can also file nominations in CG Docket 10-100.  We will be forming an internal cross-bureau advisory group to review the nominations and advise the Chairman on the awards. Employees of the Commission and their families are not eligible for this competition.  For more information please contact me at AccessInfo [at] fcc [dot] gov.  The Chairman looks forward to hearing from you!

(This is cross-posted on Blogband. Please leave comments there.)

Posted in Office Of Chairman Accessibility
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Good for Jobs, Good for Our National Purposes

Posted November 1st, 2010 by Phoebe Yang - Senior Advisor to the Chairman on Broadband

(Part of the ongoing WISENET Series)

Most of the time, when commentators talk about the benefits of broadband, they focus on its impact on economic development, and for good reason. Jobs are a central concern for almost anyone in American public life today, and high-speed broadband can bring real benefits.

Consider Chattanooga, Tennessee’s recent announcement that it will offer 1 Gbps service to all 170,000 customers in its service area by the end of this year. Companies are saying that having access to a high-performance fiber network is a significant factor in their decisions to expand in the area, and Chattanooga is already seeing large business expansion and small business relocation.

But doctors, teachers and engineers are also showing that broadband can benefit our ability to achieve national priorities like improving health outcomes, educating our children and making our electric grid smarter. High-speed connectivity is allowing doctors to practice telemedicine, treating patients hundreds of miles away who would otherwise have little access to advanced care. It’s enabling educators to extend learning beyond mere words – from describing historic events like the first women to fly or enter space, to – at the click of a mouse – showing actual video and audio footage of events like Amelia Earhart's flight across the Atlantic or the launch of Challenger. And, it’s helping electric utilities manage energy use and reduce bills for their customers.

In short, broadband is the foundation both for economic opportunity and social prosperity in the 21st century.  Like electricity or telephones in prior generations, it is hard to imagine an enabling technology more vital to our future.

Posted in Office Of Chairman Wisenet