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Powell in perspective - Broadcasting & Cable

Powell in perspective

Says he is no slam dunk for megamergers and values diversity; First Amendment is no 'get out of jail free' card on indecency
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Despite his support for lighter ownership regulations, FCC Chairman Michael Powell told lawmakers Thursday he doesn't want to preside over radical consolidation of the media industry.

"It troubles me that that's ascribed to me before we've done anything," Powell said during the Senate Commerce Committee's confirmation hearing for FCC nominees.

During the hearing, committee Chairman Sen. John McCain (R-Ariz.) said his panel would vote on the four nominees May 24. Confirmation is expected after June 3, when the full Senate returns from Memorial Day break. The other nominees are Republicans Kathleen Abernathy and Kevin Martin and Democrat Michael Copps. The three new commissioners will join Powell and Democratic Commissioner Gloria Tristani, who will keep her post until year's end.

Powell, nominated for a second term, which would last through 2007, insisted that the government would have sufficient power to block mergers that cause harmful interference even if the FCC relaxes or does away with several broadcast ownership restrictions now under review.

"Many of the scenarios you postulate would violate the antitrust laws of the United States," Powell told Sen. Ron Wyden (D-Ore.), who questioned whether the agency was leading the country to a day when a handful of media companies would own nearly all of the country's stations, cable systems and newspapers.

Wyden also lamented that the 1996 Telecommunications Act already had ushered in a wave of media consolidation. Rules to be under review include the 35% cap on one company's TV-household reach, the 30% cap on national pay-TV share, and the ban on same-market newspaper/TV crossownership. "On your watch, we could have the most radical consolidation of media ownership in our history," he said.

Sen. Max Cleland (D-Ga.) also criticized "quicksilver mergers" in the telecommunications industry.

Powell countered that, while it's healthy to reconsider any rules that are between 25 and 60 years old, the FCC is not taking this action on its own. Congress has ordered the agency to review broadcast ownership rules every two years, and several specific rules have been cast into doubt by court decisions, he said. "We had better commit ourselves to a more rigorous defense of the rules."

Powell agreed with Wyden that the FCC has a role in ensuring diversity of media voices, a duty antitrust enforcers at the Justice Department and FTC don't have. But he stressed that hard-and-fast rules are difficult to craft because few agree on how many separate voices are sufficient for any particular medium or market. "The problem with diversity is that it has a visceral component."

He also insisted that, while Congress should take the lead in crafting restrictions on violent or indecent broadcasts, the FCC is capable of enforcing those rules without trampling on free-speech rights. "I don't believe [the First Amendment] is some cynical 'Get out of jail free' card for broadcasters."

Powell told Sen. Conrad Burns (R-Mont.) there is "a lot we can learn" from an ongoing review of interactive television and the possibility that a cable distributor can interfere with ITV services provided by programmers not affiliated with the system. Powell previously had cautioned, however, that ITV is too new to warrant restrictions now.

Most of the questions faced by Powell and the other nominees surrounded the "e-rate" portion of the telephone universal service fund. All four committed to enforce the fee and help bring broadband services to rural areas.

Abernathy, a longtime telco lobbyist, told reporters after the hearing that, to avoid conflicts of interest, she plans to sell stock she owns in telco companies such as Qwest, Verizon and Vodafone. The stock of her previous employer, BroadBand Office, may be a moot issue: The company filed for bankruptcy last week.

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