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Straight telcom talk - Broadcasting & Cable

Straight telcom talk

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Senate Commerce Committee Chairman and former presidential candidate John McCain may no longer be making stump speeches, but he still has plenty to say about telecommunications. The FCC? "Out of sync" and in need of reforming. Its commissioners' renominations? Forget about it. Time for some new blood (though that doesn't stop him from suggesting that a Bush administration could do worse than bumping Michael Powell up to chairman). The NAB? A monolith cracking under the strains of internal divisions. Mega-mergers? I told you so. TV ratings and codes? He's for them, but he won't force them. VP? "I don't want to be considered." A cabinet post? He wants to stay in the Senate but won't rule it out. The senator weighs in on these topics and more in this exclusive interview with Broadcasting & Cable Assistant Editor Paige Albiniak. An edited transcript follows.

Someone said to us that, when you came back to the Senate from your grand tour, it was like Elvis was back in the building. We were wondering how it felt to you to come back to your role as committee chairman after having become a national figure?

I was very pleased to have the chairmanship of the committee because I really needed something to get back into. That was the ideal way of pursuing an active agenda. So, I was very grateful to have that kind of environment to jump back into.

What specific telcom issues are you focusing on for the Commerce Committee going forward?

Well, for the next Congress, we need to begin with the reauthorization of the FCC.

It is abundantly clear to people like [Reps.] John Dingell [D-Mich.], Billy Tauzin [R-La.], Fritz Hollings [D-S.C.] and John McCain that the FCC is simply neither philosophically nor organizationally geared to handle the new challenges of telecommunications or the new challenges of the information technology that is leading America's economy, whether it be on broadband access, the digital divide, mergers and consolidations-all of those things.

Literally, it's a new issue every few months, and the FCC is completely out of sync with this pace of change. The FCC took 700 days to decide whether to grant approval of the sale of a low-power television station. I wrote them a letter telling them to make a decision, and the chairman of the FCC was harshly critical of me during the presidential campaign. That's how out of step these people are.

You don't seem to think they're out of step on low-power radio, though.

I believe that was a proper move by the FCC, and I'm glad they're doing it. But where are they on streamlining regulations? Where are they on broadband access? Where are they on spectrum for wireless Internet services? Where are they on mergers and consolidations? They seem to feel that the longer you delay, the issue will disappear, when in fact the opposite is true.

Let me give you one small example. We have seen no initiative or leadership whatsoever from the FCC on what seems to be one of the most critical issues, and that is the rights of the individual to privacy. So I'm glad that we're doing low-power FM, but I've got to tell you that compared to the privacy issue, it is really not very impactful.

Broadcasters seem to think it is. They complain that low-power FM will cause interference. Do you think it will?

I don't know, but I think they ought to be allowed to broadcast. And if they cause interference, we should shut them down. It's just another power move on the part of the broadcasters, and they'll probably win, unfortunately, at the expense of small-business owners, churches, minorities and others. The reason why I say that is, I haven't seen the broadcasters lose one yet.

You mentioned the privacy issue. What would you like to see the FCC do? Congress hasn't really done anything but introduce a lot of bills.

I think they can play a very important role. They have thousands of employees. We think that they might at least bend their minds to it. The FTC has a major role, but, clearly, the FCC is going to have a role to play because of the convergence of all of this technology.

Let's talk about mergers and consolidations. There have been a ton of them since the Telecommunications Act.

Which I predicted.

What do you think is the ultimate result of those mergers? Good for consumers? Good for competition?

First, of all, I predicted that there would be mergers and consolidations rather than competition as a result of the '96 Act, because the people that wrote it had the most to gain from mergers and consolidations. But I think that technology is prevailing. With the development of new technology and capability, we see new entries into the business. Napster is a classic example.

Is that a good example?

It's a classic example of somebody finding technology that they can exploit for profit. Whether they should be operating that way is something for the courts and the regulators to decide, but I doubt seriously if AT & T would come up with that technology.

One thing you complained about when you first took over the chairmanship is not enough competition to cable. Since then, you've passed the satellite TV reform act.

Four years later, after consumers have paid additional billions of dollars in costs. There was just one clause in that [satellite bill] that was a classic example of the power of the cable people: that if you wanted to switch from cable to satellite, you had to wait 90 days. That's obscene on its face. If I want to switch phone companies, do I have to wait 90 days before I can start getting Sprint or MCI? I mean it was a marvelous example of the compelling need for campaign-finance reform.

Let's talk about campaign reform. You used to have campaign-finance reform linked to free airtime, but that sort of disappeared from legislation you and Sen. [Russell] Feingold [D-Wis.] have offered.

It went away because it couldn't win any votes because the broadcasters were so powerful. But we still had good, decent people out there like Walter Cronkite and Paul Taylor, who are spending huge amounts of time and energy on behalf of free airtime for candidates.

Do you ever see free airtime for candidates coming to pass?

I see very few things coming to pass that are opposed by the broadcasters. However, there is hope. Because of diversification of interest and priorities, we are seeing a break in the monolith that was once the National Association of Broadcasters. The affiliates have an agenda; networks have an agenda; and even different networks have different agendas. So we may be seeing some diminution of the power of the broadcasters, just because they're not as monolithic as they were.

Does that make it easier to do things like change the ownership rules, over which broadcasters are split?

I think what it will do is just give much more of a level playing field to all of these issues. I favor relaxation of the ownership rules, because I think there is increasing competition.

But you talk about broadcasters' already being so powerful. Doesn't it make them more powerful if you lift the cap?

No, because I think there is more competition despite their efforts. There are Slate, Salon, all of the different, diversified sources of information that there were not before. Fifteen years ago, there were three major networks, period. Now, I think we have a dramatic, marvelous diversification of sources of information.

Does all this diversity call into question the scarcity rationale for the public-interest standard? Michael Powell seems to think so, and to suggest that perhaps the public-interest standard does not need to be as high for broadcasters as it once was. Do you agree?

I think the public-interest standard in some respects should be [lower], but I think the public-interest standard, as for providing some ventilation for candidates views as to the direction that we should run the country, is still there.

So you're saying the standard should include airtime for candidates, but what about the public interest with regard to TV ratings or a code of conduct that you have proposed?

We might see those things done voluntarily, but I can't envision supporting legislation that would force them. I don't think it's appropriate for legislation to be enacted on those issues.

But if you make it voluntary, what are the chances they will do it?

You can put public pressure on them, so we have hearings and credible people come before us who are concerned, parental organizations and people like that. You can put a lot of pressure, because they're dependent on the goodwill of the public, and so, therefore, they want to respond as favorably as possible.

That said, why do you think they are so resistant?

Because they feel like they can get away with it. And they feel like that because they are in a highly competitive [situation] where every minute of time must be devoted to revenue. The major networks, their ratings continue to decline, and there is great concern out there.

Have you heard about some broadcasters' plan to lease some of their digital spectrum to parties for wireless services?

I knew that, when they got their $70 billion worth [of spectrum], they would find ways to make enormous revenues out of it, and I said at the time they would never give back the analog, and they won't do that either.

How do you feel about their leasing out their spectrum for data services and not using it all themselves? And maybe not for HDTV?

Actually, if they did that, it would be in direct contradiction to the commitments that they made when they got the spectrum. But then, who's watching? Certainly not the FCC.

Let's talk a little about the composition of the FCC. With regard to [Commissioner] Susan Ness, you've said that one term is enough. Is there any reason besides 'one term is enough'?

I opposed the renomination of Ms. [Rachelle] Chong and also of Mr. [James] Quello on the basis that I thought one term was enough, one five-year term was enough. You always need new, fresh ideas in bureaucracies. And I would argue that the FCC is probably the most important bureaucracy in the world today. So I just felt that one term was enough, and I felt that's true for Commissioner Ness.

True for Commissioner [Harold] Furchtgott-Roth, whose term just expired?

Yes.

Michael Powell?

Same with Michael Powell.

What if George Bush should win?

I think Michael Powell would make an outstanding public servant just about wherever he went. I would hope that he would stay involved in many of these telecommunications issues.

You don't want to suggest any positions for him?

I think he would make an excellent [FCC] chairman.

The press seems to like to keep alive this rumor that you might accept the VP spot on the ticket? Any chance?

When I met with Governor Bush in Pittsburgh, I asked that I not be placed in consideration, and he very graciously agreed to that. I continue to hold the position, and I don't want to be considered.

Why?

I can serve the country in a more effective fashion as a senator and chairman of the Commerce Committee.

Aren't there term limits on committee chairs in the Senate?

I have two more years.

You spent a lot of time with the press while you were running for president, and the way you handled that relationship worked to your advantage. Was there anything you learned from that experience?

Well, the worst, of course, was the trade press [laughs]. The only thing that I had reaffirmed to me is that most members of the press are professional journalists. They want to report the story completely and exactly and as soon as possible. By giving them access, I was able to have my views and ideas accurately and fairly reported. And that includes times when I said things that I regretted saying. So, when people talk about, quote, media bias, unquote, that may exist, but the members of the press I dealt with, virtually all of them, were first and foremost professionals.

Were you surprised with how well your media strategy worked?

I had no idea. Because it was sort of accidental. We were on this bus. Reporters were in the back, and [I] just walked in, sat down and started talking. It evolved. It was never a planned kind of operation.

If George Bush wins, would you be interested in taking a position in his administration?

I don't think so, but for me to say I don't want to consider anything would border on arrogant. But, again, my preference is to stay in the Senate.

You mentioned earlier that you would like to work with Tauzin and Dingell on FCC reform. Any specific ideas on how you would like to see the agency reformed?

First of all, they've got to get in tune with this rapidly evolving technology. I think they still think that Mr. Marconi is driving the situation. They've got to understand this technology in its broadest sense. All too often, they get involved in the trees and fail to see the forest. When you are making policy decisions that effect the economy of the world, you've got to think in macro trends rather than micro.

Is that the commissioners' fault, or is that the way the agency is structured?

I think it's both. When you look at the state of communications in America when the FCC was first brought into being, it's like the Neanderthal period vs. the 21st century. I don't think that I have seen congressional relations as poor as they are between the commission and Congress. When I see members on both sides of the aisle and both sides of the Capitol voicing the harsh criticism that I do, there's something wrong.

Last question. You've set up Straight Talk America. How does your role as Senate Commerce Committee chairman work with that, and do you have time for both of these big, broad endeavors?

Well, Straight Talk America is to pursue the agenda of reform and obviously reform of the FCC, and the relationship between the government and information technology is a very important and fundamental reform.

Do you plan to keep Straight Talk America running for the next four years?

Yes.

And then use it as a jumping off platform for 2004?

I expect to be campaigning for President George W. Bush's re-election in the year 2004.

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