We expect the Obama Administration to focus on media, telecommunications and technology issues at a much higher level and with a more proactive, coordinated approach than the Bush Administration, particularly in promoting its open government, open Internet, broadband deployment, and media diversity goals.
Although the first days of the Obama Administration are likely to be dominated by a focus on the global economic crisis and the wars in Iraq and Afghanistan, we expect the new Administration to highlight telecom and technology issues relatively early. This increased emphasis stems from Obama's vision of technology and telecommunications as engines for economic growth and drivers of increased efficiency in the delivery of health care and other important social services. Not surprisingly, many individuals named to high level positions on the Obama transition team for economics and international trade, science and technology, as well as the Commerce and the Federal Communications Commission (FCC) review teams, have years of experience and strong credentials in the media and telecommunications industries. Moreover, Obama has announced the planned creation of a new Cabinet-level position of Chief Technology Officer, signaling his interest in a coordinated, interagency effort in this area, including new initiatives to use the Internet and technology to reform and open government.
Broadband deployment and network neutrality appear to be key policy priorities for the new Administration and FCC, although the upcoming digital TV transition, scheduled for February 2009, may be one of the first issues addressed by the Obama FCC. During the presidential campaign, Obama and his telecom and media policy surrogates, citing widely quoted OECD figures, often lamented the current level of broadband penetration in the United States as compared to other developed countries. In an effort to increase broadband penetration in the United States, Obama recently proposed to include significant funds for broadband network deployment in his economic stimulus plan. He also committed to use econmic stimulus funds to equip hospitals, schools and libraries with state of the art computers and to ensure that they have high capacity connections to the Internet. We are also likely to see the FCC and other agencies focus on expanding the current universal service system to include the subsidization of broadband networks in rural, high cost and poor areas, as well as improving the use of wireless spectrum and exploring new tax and loan incentives to spur broadband deployment.
We are also likely to see the Obama FCC address concerns raised by consumer groups and application and content developers regarding the ability of broadband network providers to discriminate against certain broadband traffic. In addition to possible legislative activity on Capitol Hill, we would expect the FCC under Obama to initiate a proceeding to consider whether to impose rules to prevent such discrimination. (See below the article from David Sieradzki and Winston Maxwell regarding the Comcast case, reflecting the current FCC's efforts to balance the need to allow legitimate network maintenance and management controls with ensuring that practices that stifle competition and innovation do not occur.)
We also expect the Obama FCC and other agencies to be more suspicious of media and telecom mergers. We predict that such mergers will be scrutinized more carefully for anti-competitive effects, and in the media context we expect that more attention will be paid to issues such as localism and diversity of viewpoint. At the same time, we expect that some mergers will be approved if it can be demonstrated that they would result in stronger, more formidable competitors in certain sectors, such as broadband and multichannel video, where competition may not be as extensive.
In addition, we expect the Obama FCC to review existing spectrum allocation, auction and assignment policies to consider whether any changes are needed to reduce concentration in the holdings of valuable spectrum assets. There may also be a renewed focus on international telecommunications issues and policies, and more emphasis on the global impact of telecom and technology initiatives across government agencies.