The Bush administration ``will be less likely to interfere in mergers that take place,'' said Rep.
David Dreir, R-Covina. ``I think there would be a sense from this administration to provide
consumers with a wide range of choices and less intrusiveness.''
Allen,You are right. /Khan
----------------------------------------------------------------------
Posted at 10:50 a.m. PST Monday, Dec. 25, 2000
Younger Powell likely to chair
FCC
Tech has high hopes for a Powell-led agency
BY HEATHER FLEMING PHILLIPS
Mercury News Washington Bureau
WASHINGTON -- President-elect George W. Bush has outlined a
broad agenda that will benefit corporate America, including ripping
down barriers to trade and freeing industry from the shackles of burdensome regulations. Yet his
most immediate impact is likely to be felt through more subtle actions -- the appointment of senior
officials at federal agencies in Washington.
No post is more important to the high-tech and communications industries than the chairman of the
Federal Communications Commission. And consensus is emerging in Washington that Bush will
tap Michael Powell, the son of retired Gen. Colin Powell, for the job. (The senior Powell was
named last week as Bush's choice for secretary of state.)
Over the next few years, the FCC will play a critical role in setting the rules of the road for
high-speed Internet networks, wireless telephone services and the changing nature of radio and
television. It will also review proposed mergers between telecommunications companies to ensure
they are ``in the public interest.''
The FCC chairman will set the agency's agenda and try to find consensus among the five
commissioners as they wrestle with these policy issues.
The current chairman, William Kennard, was appointed by President Clinton and is expected to
resign from the commission in early 2001.
Michael Powell, 37, is currently one of two Republicans on the FCC, and he has won high marks
from industry leaders and both Republicans and Democrats on Capitol Hill for his intelligence,
fair-mindedness and understanding of highly complex issues.
Like Bush, Powell has an aversion to regulation. He has repeatedly criticized the FCC for
overstepping its authority in merger reviews and for clinging to regulations better suited to the
1950s. ``We must foster competitive markets, unencumbered by intrusions and distortions from
inapt regulations,'' Powell said in a speech earlier this month.
``He's the brightest mind on the commission and the most capable of chairing it,'' said Rep. Billy
Tauzin, a Louisiana Republican. Tauzin is likely to be named chairman of the House Commerce
Committee, which oversees the FCC.
`Smart, young lawyer'
Although Texas Public Utility Commission Chairman Pat Woods has also been mentioned as a
possible FCC chairman, most industry observers say the stars are aligned for Powell's appointment.
Senate Commerce Committee Chairman John McCain, an Arizona Republican, pushed Powell's
appointment to the FCC in 1997. A moderate Republican, Powell had earned a reputation as a
``smart, young lawyer'' as chief of staff in the Democrat-led Justice Department's antitrust division,
explained Mark Buse, staff director of the Senate Commerce Committee. McCain is now strongly
endorsing Powell for the top FCC slot, Buse said.
Powell declined to be interviewed for this article, although his public statements as a commissioner
provide a clear road map for where he would take the agency if named chairman.
Over the past three years, the FCC has been nearly overwhelmed with reviews of
multibillion-dollar communications mergers, including America Online Inc.'s
yet-to-be-consummated purchase of Time Warner Inc., Viacom Inc.'s purchase of CBS, SBC
Communications Inc.'s purchase of Ameritech Corp. and WorldCom Inc.'s failed bid to acquire
Sprint Corp.
The FCC looks at whether such mergers are ``in the public interest'' -- a standard that gives the
agency broad latitude in its review.
The Bush administration ``will be less likely to interfere in mergers that take place,'' said Rep.
David Dreir, R-Covina. ``I think there would be a sense from this administration to provide
consumers with a wide range of choices and less intrusiveness.''
Powell certainly has been critical of the FCC's penchant for imposing conditions on mergers that,
while well-intentioned, have no direct bearing on the deal itself.
For instance, SBC and Ameritech were forced to agree to a set of ``voluntary'' conditions to ensure
that they opened their local phone markets to competition. In a statement about the FCC's approval
of the deal, Powell said, ``I am uncomfortable with a standard that places harms on one side of a
scale and then collects and places any hodgepodge of conditions -- no matter how ill-suited to
remedying the identified infirmities -- on the other side of the scale.''
This past summer at a hearing on the AOL-Time Warner merger, Powell also expressed similar
concerns. ``I would caution that identifying possible problems that result from this merger is not
the same as having a workable regulatory solution,'' he said. ``We should keep squarely in mind
that regulation imposes significant costs on producers and consumers.''
Hands-off the Net
Unlike many in the industry who still cling to the notion that the telephone, cable, satellite, media
and Internet industries are separate industries that warrant differing regulatory regimes, Powell sees
the lines blurring. The convergence between industries warrants a fresh look at decades-old
regulations, he says -- something the FCC has been unwilling to do under Kennard, a Democrat.
At the same time, Powell believes the FCC should take a strict hands-off approach to regulating the
Internet. ``We do not regulate the Internet,'' he said at the AOL-Time Warner hearing. ``While our
authority does extend to much of the infrastructure that affects Internet service, we must react
cautiously and perhaps skeptically to invitations to intervene in matters that involve Internet
content, products and services.''
Reviewing the regulations governing broadcasters is expected to be a high priority for a
Republican-led FCC. Earlier this year, Powell blasted the agency for refusing to even consider
doing away with rules limiting the number of TV stations a single company can own nationally and
for failing to lift a rule that prevents a company from owning both a TV station and a newspaper in
the same city.
Powell was also critical of the FCC's plan to permit new low-power radio stations, arguing that the
agency hadn't adequately looked at the economic impact they'd have on existing small commercial
radio stations. He also raised concerns over signal interference.
Started in the Army
Before joining the Clinton administration's Justice Department in December 1996, Powell was an
attorney with O'Melveny & Myers in Washington, where he was a telecommunications, antitrust
and employment lawyer.
Practicing communications law wasn't always his ambition. He started out following in his father's
footsteps as an Army officer after graduating from the College of William and Mary in
Williamsburg, Va. He was gravely injured in a jeep accident while stationed in Germany and spent
about a year recovering.
His injuries were severe enough to force his premature departure from the military, and Powell
went on to Georgetown University Law Center, where he met a professor who had a profound
impact on the direction of his career: Joel Klein.
President Clinton later named Klein, a Democrat, to be assistant attorney general for antitrust
issues, and Klein tapped Powell as his chief of staff.
Indeed, with his antitrust background, Powell has also been mentioned as a candidate to head the
Bush-era Justice Department's antitrust division. On Friday, Bush chose former Missouri Sen. John
Ashcroft for attorney general, the top job at the Justice Department.
The tech industry has high hopes for a Powell-led FCC. ``As an FCC commissioner, he certainly
gets uniform good marks,'' said Gary Shapiro, president of the Consumer Electronics Association.
Like many others in the industry, Shapiro was a bit skeptical of Powell when he was first
appointed, wary that he got the job simply because of his political connections.
But ever since Shapiro first saw Powell speak as a commissioner, he's been in awe of the man.
``He's terrific and someday he'll be president,'' said Shapiro. ``He's one to watch.'' |
