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Pastimes : The New Qualcomm - write what you like thread. -- Ignore unavailable to you. Want to Upgrade?

To: A.J. Mullen who wrote (5113)	8/15/2002 2:12:52 PM
From: jackmore	Read Replies (1) \| Respond to of 12247

Is Powell Fiddling While Telecom Melts? The FCC chairman's hands-off approach may no longer be the appropriate one for the battered sector No industry has been more battered by financial woes and corporate scandal than telecom. Companies like WorldCom and Global Crossing have come to symbolize high-tech high jinks and accounting gimmicks. But while regulators such as Securities & Exchange Commission Chairman Harvey L. Pitt and Federal Energy Regulatory Commission boss Patrick H. Wood III morph from corporate puppies to aggressive watchdogs, Federal Communications Commission Chairman Michael K. Powell seems to be sticking with the kinder, gentler approach. In the midst of a $2 trillion meltdown in telecommunications, Powell has not deviated from the hands-off course he charted at the beginning of his tenure two years ago. Arguing that telecom's woes are caused by market forces outside the FCC's control, he still pursues his original agenda: spurring broadband by deregulating the Baby Bells and relaxing rules limiting concentration of media ownership. "PROFOUND" PROBLEMS. Now, Powell's single-mindedness has begun to attract critics. Democrats such as Senators Ron Wyden (D-Ore.) and Byron L. Dorgan (D-N.D.) accuse him of doing little to protect consumers and failing to develop a plan to revive the battered industry. "The problems...are more profound than soothing words from one leader can solve," says Powell. "I'm not going to solve a $34 billion debt problem of a major carrier just because I express optimism in its future." Still, a growing number of business reps say he hasn't been vocal enough in reassuring panicked investors. "This was the largest growth sector of our economy," says one. "He should use his political capital to restore confidence." Local phone companies such as Verizon Communications (VZ ) and SBC Communications (SBC ) claim Powell hasn't addressed the possible domino effect on the industry if WorldCom can't pay for connections to local networks. "The chairman needs to move from proposing to disposing," says Walter B. McCormick Jr., president and CEO of the U.S. Telecom Assn., which represents local phone carriers. "Nothing can be fixed by having the FCC sit on its hands." Another lobbyist calls Powell "the Herbert Hoover of telecom." EXPANDING AUDITS. The FCC boss got a taste of the changed mood at a July 30 Senate Commerce Committee hearing. "The current climate requires a very different regulatory approach," lectured Wyden. One request from Dems: The FCC should step up oversight by expanding industry audits. Powell says he's considering that, but audits to assess phone company costs and help set rates may not root out financial fraud. Separately, he issued public assurances to WorldCom customers that their service would not be shut off without notice only after prodding by Representative Edward J. Markey (D-Mass.). The FCC says it already had been working privately with WorldCom to protect anxious consumers. Indeed, Powell says the FCC is doing "virtually everything in our authority that we can do." After WorldCom disclosed its $3.8 billion accounting error on June 26, he made a quick trip to Wall Street to meet with investors and lenders such as Bank of America (BAC ). And as a member of the President's Corporate Fraud Task Force, he's providing expertise to Justice Dept. and SEC investigators building cases against alleged wrongdoers. SUPPORTERS. Up until now, Powell--son of Secretary of State Colin Powell--could count on friends in high places to shield him. Unlike Pitt, he has developed a network of supporters, including Senate Commerce Committee ranking member John McCain (R-Ariz.) and House Commerce Committee leaders W.J. "Billy" Tauzin (R-La.) and John D. Dingell (D-Mich.). "He has more political capital on the Hill than any Bush appointee," says Precursor Group telecom analyst Scott C. Cleland. But if the telecom blowups continue, Powell may find that his powerful backers can't keep deflecting the heat. By Catherine Yang Edited by Richard S. Dunham businessweek.com.