Reed Hundt is best known as the man who helped shape today’s wireless industry. Now he’s applying lessons he learned in the telecom world to his latest mission: getting clean-energy technologies off the ground.
Hundt, who was chairman of the Federal Communications Commission under the Clinton administration, is now CEO of the Coalition for Green Capital, a nonprofit organization he hopes will provide low-interest loans and other investments in clean-energy technologies.
{mosads}Hundt’s law firm, Skadden Arps Slate Meagher, is providing pro bono help to local governments and companies looking to upgrade utilities.
He has a reputation for being a serial policy entrepreneur with a knack for spotting business opportunities in the regulatory process. After spending two decades in the telecom industry as a federal official and private businessman, he got involved in climate change discussions when his childhood friend, Al Gore, asked him to join his Alliance for Climate Change.
President Barack Obama then asked Hundt to lead the transition team responsible for international trade and economics agencies, including the Department of Energy. And his background in regulating the cable, phone and Internet industries has played a crucial role in his clean-energy vision.
The fledgling clean-energy market, he says, is much like the wireless and Internet markets a decade ago. The technology has huge potential, but building the infrastructure requires billions of dollars of private-sector investment.
“If you want green electricity, you have to replace the systems we have with new, clean systems,” he said. “It’s the same thing we did when we replaced copper phone lines with high-speed fiber for broadband. It gets us to a sustainable, independent economy. … Without this we run the risk of falling behind China, just as we’ve fallen behind other countries” with our communications networks.
The time is right, he says, because many coal plants will need to be repaired in the next five years anyway, so it makes sense to spend the money replacing them with cleaner alternatives. Utilities and energy companies should build new lines and facilities to set the stage for more efficient systems — much like big telephone companies did to upgrade their networks in the 1990s.
“AT&T and Verizon borrowed a ton of money in the ’90s to build their faster networks and [cell phone] towers,” Hundt said, adding that Americans spend $350 billion a year on electricity. “It would be possible for the private sector to take a big chunk of that money to replace what they have now with what they need for the future.”
The Coalition for Green Capital is composed of dozens of clean power companies, municipalities and other businesses that are advocating for a “Green Bank” program. The Green Bank would help finance the expensive process of replacing old carbon-based electricity systems with clean-energy sources, like wind and solar plants.
Providing cheaper capital to power companies and green tech innovators will allow them to upgrade their systems more quickly and without as heavy a financial burden.
The Green Bank idea, also known as Clean Energy Development and Deployment (CEDA), was part of the Waxman-Markey climate bill that passed the House last summer. It’s also part of the Bingaman-Murkowski energy bill that passed the Senate Energy and Natural Resources Committee.
But both bills have little chance of hitting the Senate floor this year, despite Hundt’s visits to close to 100 lawmaker offices and countless speeches at clean tech conferences. Even if Congress does pass the measure, it will take several years to work out the regulations and practices.
So Hundt is helping states set up their own green banks. He says he has commitments from several governors and candidates, although he can’t yet share details.
Hundt led the Federal Communications Commission (FCC) from 1993 to 1997, setting up the first spectrum auction, which created a number of new wireless firms. During his tenure, satellite TV companies became major competitors to cable providers. Cable companies started providing telephone and Internet service to compete with the big phone companies, triggering a massive investment — $850 billion in 15 years — in the industry.
With the right policies in place, Hundt predicts it will cost about the same amount to establish renewable-energy solutions.
“He actually witnessed how smart, pro-consumer policies that Congress developed gave a signal to investors and entrepreneurs and innovators and put the tools in place that changed the world in 10 years,” said Gerry Waldron, a partner at Covington & Burling who most recently served as staff director and chief counsel for the House Select Committee on Energy Independence and Global Warming.
“He sees we have an opportunity to signal similar investment in the clean-energy sector that could rival the transformative changes we witnessed in the communications sector,” Waldron said.
Hundt has a history of finding a business niche in Washington. Leading up to the most recent spectrum auction, Hundt co-founded Frontline Wireless, a company that had once hoped to manage airwaves set aside for public safety agencies. The firm ultimately didn’t succeed. Hundt also co-founded communications company Sigma Networks during the height of the optical networking bubble. He’s on the board of directors for Intel.
Blair Levin, who led the FCC task force that produced the National Broadband Plan, said Hundt has a real “entrepreneurial sensibility” about policy.
“Back then he saw what I didn’t see — he saw what was about to happen to wireless and the Internet,” said Levin, who served as Hundt’s chief of staff at the FCC. “He sees patterns very clearly and recognizes what can unlock value.”
Hundt says the energy sector needs a comprehensive strategy like the National Broadband Plan. Levin, who spent a year developing the plan, says Hundt may be more cut out for that job.
“He can simultaneously see the big picture and the details, which I find very difficult,” Levin said. “He can talk to senators about the big macro trends and at the same time talk about the details of financing as if he was an associate at a big Wall Street investment bank.”