FCC chair: U.S. faces 'innovators' dilemma'

SAN FRANCISCO--Most of the big-ticket speakers at the Web 2.0 Summit this week gave talks that were carefully guarded, offering little deep insight into the tumultuous state of the fast-evolving tech industry out of necessary trade-secrecy. Not FCC Chairman Julius Genachowski, who wasn't too subtle about implying that he's got a lot on his plate and it's tough to digest.

Part of this is good, of course. The flurry of extreme innovation in Silicon Valley and necessary shaking-up of decades-old telecom-industry norms has led to a road map that's difficult for regulators to augur. The rise of the "apps economy," for example, Genachowski said simply didn't exist a few years ago and really came out of nowhere. "I don't think we want government to say in advance, 'Hey, we know exactly where the danger points are,' that we have more of an ability to see the future than we actually do," he insisted.

The problem is that if regulators don't do some guesswork, the U.S. risks falling behind in innovation and business advantages, not only because it needs to make advances, but also toss out antiquated systems. He calls it an "innovators' dilemma," and something that a developing market doesn't encounter because the old infrastructure often isn't there to hold it back.

Because of "our success in the 20th century, a couple of important areas around communication are creating obstacles for us to do what we need to do in the 21st century," Genachowski said. "Other countries that are competing with us are able to just go to a whiteboard and say, 'Hey, what do we want our digital infrastructure to look like?'"

This involves broadband penetration ("We're not where we should be as a country when it comes to broadband") as well as the need to deal with the rise in mobile devices that will put a significantly heavier demand on existing infrastructure. "We know exactly the wall that we're going to run into if we don't do something about it," Genachowski said. "As people go to smartphones and tablets, the devices put demands on the spectrum that's not just a little bit more than the previous improvements in phones, that's 30x, 40x, 50 times more."

Then there's Net neutrality, a complicated issue which Genachowski said was hindered not only with unfavorable court decisions but also with a recent agreement between Google and Verizon that supports Net neutrality only in certain corners of the market.

"I would have preferred if they didn't do exactly what they did when they did, and I think that can have an effect of slowing down some other processes that could have led to a resolution," he admitted. "But there we are with that."

He was less opinionated about how the results of the recent midterm election and subsequent Republican takeover of the House of Representatives might hold back Net neutrality and other difficult FCC projects.

"The kinds of issues we're working on shouldn't be partisan, (like) global competitiveness," he said. "I think we've gotten a lot done and I think we have a lot more to do, and we will for a long time."