FCC ‘Cop on the Beat’ More Like a Bully

Published January 26, 2011

Julius Genachowski is the self-proclaimed “cop on the beat” at President Obama’s Federal Communications Commission (FCC). That’s great if the cop is as principled and honorable as Serpico. It’s not so great if he’s more like Mayberry’s bossy, meddling, interfering Barney Fife.

Unfortunately, Mr. Genachowski resembles the latter, not the former. His handling of the joint venture between NBC Universal and Comcast went so far beyond the FCC’s purview over such matters that one would think the commission were a legislative body, not a regulatory agency.

Mr. Genachowski stalled a no-brainer approval of the merger for more than a year. During that period, the uncertainty over whether the FCC would approve the merger enabled Mr. Genachowski to exact concessions from the two parties more ridiculous than anything found in slapstick cinema.

Fresh off his power grab in late December, when he ramrodded network neutrality rules over the Internet by a 3-2 partisan vote, Mr. Genachowski ignored the obvious benefits of vertical integration between content provider NBC Universal and content delivery mechanism Comcast.

Instead, he fussed over unsubstantiated concerns that the joint venture might result in a monopolistic boon for both businesses in terms of profitability and competitiveness. The delay caused untold losses for both entities, impeded the timely hiring of thousands of employees and resulted in unnecessary restrictions on the merging companies.

While Mr. Genachowski held the keys to the door separating NBC Universal and Comcast, rather than simply opening the door, he instead opted to knock down the wall separating the FCC’s regulatory power from the Department of Justice’s antitrust authority. To its credit, Justice, waiting for FCC approval, already had announced its satisfaction that the merger posed no antitrust worries.

Among the concessions strong-armed by Mr. Genachowski are agreements to impose network neutrality rules on content streamed online, add 1,000 hours of news programming and informational programming to specified channels, set aside $20 million for minority programs, provide $9.95 monthly service to low-income customers, institute “fair pricing” for content provided to Comcast’s competitors, provide documentation of content arbitration disputes to other cable companies and guarantee equal transmission of content from other networks.

Comcast and NBC Universal had no choice but to acquiesce to these demands. Lawsuits are costly and time-consuming and would result in further delays.

It’s far past time for Congress to rein in such regulatory abuse, which clearly is anti-business and a job-killer. Nowhere in the FCC’s mandate is the power to force concessions from companies attempting a merger already approved by the Justice Department. The “cop on the beat” has morphed into a bully and is pushing an agenda nowhere near the public’s interest. If Mr. Genachowski continues in this direction, he’ll soon dictate price ceilings, employment compensation and charitable giving for the entire telecom industry – in addition to mandating 24/7 programming choices based on the commissioner’s whims. It may sound far-fetched today, but recent events portray a power-mad bureaucrat intent on imposing his elitist views and woeful misunderstanding of how business works in the real world onto the communications economy.

Barney Fife moved out of town before he could do too much damage. One can only hope Mr. Genachowski does the same before it’s too late. Unfortunately, it looks as if he’s going to need to be pushed.

Bruce Edward Walker is managing editor of the Heartland Institute’s Info-Tech & Telecom News.