Congratulations, Julius Genachowski! And now for some unsolicited advice . . . (Pt. 1 of 2)
OK, OK, I'm a little late on the bandwagon-jumping to congratulate Julius Genachowski. Business Week seemed to know in January that President Obama had selected Mr. Genechowski as the next FCC Chairman. The other FCC Commissioners issued their statements on the day Mr. Genachowski was nominated, March 3rd; but hey, it isn't official until the last person finds out--and that's usually me. So, Congratulations! Mr. Chairman-to-be (is that even a term?)!
For those who don't know, President Obama's nominee for FCC Chairman has an incredibly impressive resume. Future-Chairman Genachowski is clearly an expert on telecom law (Supreme Court clerk and high ranking legal advisor to former Chairman Reed Hundt), plus, he understands the business side of a lot of telecom-related companies (venture investor and senior advisor to Barry Diller of Interactive Corp), and he can walk the walk. Anyone that can demonstrate that they are capable enough to make an impression on a lot of really impressive people (former Chairman Hundt, media mogul Barry Diller, and, of course, President Obama) is obviously the real thing. Enough said.
Notwithstanding Mr. Genachowski's superlative credentials, I think having a blog compels me to act like kind of like my friend from Brooklyn, who whenever we were watching a James Bond movie on TV, would feel compelled to tell everyone what HE would do in James Bond's situation (e.g., "if dis was me heeya, and da helicoptas was shooting at me, I would just roll back the moon roof in my Monte and start whackin' guys"). So, Mr. Chairman-to-be, I'm gonna tell you what I would do if dis was me.
First, before you get sucked into the day-to-day hurly burly of getting officiously fawned -over publicly (and privately criticized) by the DC insider crowd, you need to really ask yourself: do I want to be a good, effective Chairman, or a Great Chairman? You've got the tools to do either, but you have to decide before you start.
Keep this in mind going in--do you want to tackle Everest, or do you want to ski a few mountains in the Alps? There's no shame in the latter--lots of tourists have a lot of fun with it every year, but the former promises "honor and recognition in case of success." Unfortunately, the work is probably as politically-attractive as the work described in Schackleton's purported advertisement for South Pole explorers.
If you want to be Great, I do have a very short, very simple agenda to get you most of the way there. But, before I can offer advice on what to do, let me give you one "must" that you cannot do. Like giving up drinking or smoking, it will sound really simple, but will be really hard to do. Ready? Ignore the future of the Internet and the future of Wireless . . . at least for now.
Did he just say that? Yooo betchya! Here's the deal: as a rule, resist the temptation to divert your attention to the "next big thing." This will be hard. The media, and the paid-issue demagogues, will say you are not progressive unless you focus on "the next big thing"--and usually in as general and abstract a way as possible (this gives everyone the patina of sophistication as they discuss the issue).
But here's the problem: "the next big thing" sucks time--because it's supposed to. Having lawyers, lobbyists, and PR firms fight each other for your attention is certainly profitable for them, and, for you, it must be very flattering, and on some level, even entertaining. But keep this in mind, the "next big thing" is almost always something that private interests are offering up for you to adopt as the "public interest" or your "agenda"--only it's not. If it didn't start in your head, be very leery of engaging in the matter personally. Delegate it, or ignore it. Chances are it will resolve itself. Remember, as the nation's chief communications regulator, if you have goals you want to accomplish, you have to impose your will on those with a vested interest in the status quo.
As an investor, you know you have to resist the false temptation to "create" economic growth with short-term policy tweaks. Many investors over the last 13 years learned that it is bad to be subject to regulatory caprice, and no regulatory regime will match their time horizons. Funds are capitalized with 10-13 year life spans. On the other hand, there is no guarantee that regulations--especially on "hot button" issues--will stay the same for that time span. Simply put, there is no guaranty that policies can influence market behavior in the manner predicted, or at any predicable level of magnitude.
The first wave of investors after the Telecom Act was passed learned this fact the hard way. The basic proposition of the Act was that if the Bell Operating Companies would "open" their traditional regulated-monopoly service territories to competition, then the Bell Companies could sell (the at-the-time-profitable) "long distance" voice service. Investors put money into new facilities and companies at an incredibly inefficient level. At one time, I think there were as many as 14 nationwide, fiber-based long haul networks. This doesn't even include all the different CLECs that were pursuing a variety of strategies (from all facilities to all resale) to serve a slightly different set of customers. Could the traffic from new services support that many networks?
Of course not! So we went from raging "boom" to abject "bust" in a short matter of 6 years. Was it worth it? Who knows? The Telecom Act was a radical proposition, and--after all the bankruptcies--may have ended up creating a lot of value for the public. But, without a mandate from Congress, would anyone want to go through that same level of economic dislocation and volatility right now? I doubt it.
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Stay tuned for the thrilling conclusion . . .