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Chairman Powell on hot seat - Broadcasting & Cable

Chairman Powell on hot seat

A deregulatory stance may sound good at election time, but does it suit the industry?
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It's gut-check time for Michael Powell. After a little over a year in office, the FCC chairman has a problem: He's a deregulatory guy, but some powerful lawmakers are pressuring him not to deregulate, often encouraged by well-heeled lobbies with fickle interest in deregulation.

The result is a budding reputation as a do-nothing chairman. "This is a chairman who is very lofty and erudite," said one industry executive. "He's very gifted as a speaker. And he hasn't done a goddamn thing." Said another, "He's running the risk of being all hat, no cattle. In a Texas administration, that's dangerous."

Judging by his own rhetoric, Powell should be leading the charge to raise the 35% national TV-station ownership cap, to lift the ban on owning both newspapers and broadcast-TV stations, to loosen small-market TV duopolies, and to allow cable and phone companies to compete head-to-head in the broadband arena.

But the pressure is on the chairman to hold the line. Some lobbies would prefer that Powell let things alone. Representing TV-station groups that fear the power of the networks, the National Association of Broadcasters is working to preserve the 35% cap. And AT&T doesn't want to see the regional phone companies offering deregulated broadband services anytime soon.

Two weeks ago, Senate Minority Leader Trent Lott (R-Miss.) let Powell have it for being too deregulatory. And last week, at a hearing on Capitol Hill, Senate Commerce Committee Chairman Fritz Hollings (D-S.C.) followed suit. Even The New York Times
took a swipe at Powell for doing nothing to stop media consolidation.

It all makes industry representatives wonder whether Powell is going to get caught up in politics and lose the heart—or the power—to address their causes. "I have not been terribly impressed with Powell's courage of conviction," said one observer. "How many of those bold statements has he made good on?" So the question is: Can Powell stay the course? He says yes.

"My commitment to my agency and to my country is that we're not going to sit here for two years. We're going to keep going, and we're going to get stuff done. I know that will produce concerns, but we'll take those concerns into account. I think our approach is fairly balanced and fair."

But if getting "stuff done" means deregulation, Hollings made clear he would prefer that Powell not get it done. "All you need to do as chairman of the FCC is take care of the law that we passed. You have that responsibility. Instead, you seem to abandon that responsibility and leave it to the market," Hollings told Powell during a hearing before the Senate Appropriations Subcommittee that Hollings also chairs and that oversees the FCC's budget.

"I think the law recognizes," Powell responded, "that the use of market forces can be concomitant with the public interest."

From old-school Democrat Hollings, the criticism of Bush-appointed Powell is expected. But what isn't is criticism from top Republican Lott, who told a gathering of broadcasters the FCC "distorts" the law. Like Hollings, Lott wants the 35% cap to stay in place and dislikes the initial FCC approach on broadband deregulation.

Explaining Lott's hostility to Powell, one lobbyist said, "Lott's always been a small-state guy": Media consolidation and local control of media are important to him.

Still, Hollings remains Congress's most outspoken lawmaker regarding Powell himself, telling him Thursday that he is better-suited to be the "executive vice president of the U.S. Chamber of Commerce," presumably defending corporate interests, "than the chairman of a regulatory agency."

"Are you happy with your job?" Hollings asked. "Extremely" was Powell's edgy response.

Hollings found some extra ammunition when conservative New York Times
columnist William Safire—never a friend to big media—called Michael Powell "roundheeled," meaning a pushover, in his op-ed column. Safire said Powell is "steering the [FCC] toward terminal fecklessness."

"I'm not going to get into what the newspaper said today or what it didn't say," Powell told reporters in response to the harsh words. "I'm going to keep doing what I get paid to do. And I hope that, at the end of my five years, someone will look at the record and judge me any way they want to."

Hollings is also unhappy with Powell on wireless company Next Wave's bankruptcy and FCC handling of that case. But it's Powell's market-based approach to regulation that bugs Hollings most. The senator cited two reports in which Powell was quoted as saying, "my religion is the market." Powell replied he didn't recall saying that but agreed that the market is often able to regulate business matters better than regulators.

All the pressure may be slowing Powell down. But some lobbyists say those who believe Powell would quickly opt for sweeping changes misread the man. He's no Mark Fowler, the Reagan-appointee who championed radical deregulation in the early 1980s, they say. "He's stated that he's deregulatory," says one, "but not revolutionary."

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