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Few federal agencies are as important to the New Economy as the Federal Communications Commission. Under a sweeping deregulation measure approved by Congress in 1996, the FCC is charged with fostering competition among telecommunications players and charting a new regulatory roadmap for access to the Internet.
So what changes are in store at the FCC under the Administration of George W. Bush? After eight years of Clinton-style activism, look for a freer hand on mergers and faster deployment of high-speed Internet services, say lobbyists, activists, and FCC watchers.
The FCC will be more laissez-faire -- in part because of the rise of Michael Powell, son of Secretary of State Colin Powell. A current Republican commissioner, he was named by Bush as the new chairman on Monday, Jan. 22, to succeed William Kennard, who left the post on Jan. 19. "In recent years, we've seen less emphasis on deregulation," says Richard Wiley, lobbyist, former FCC chairman, and Republican eminence grise on all things telecom. "We may see more of it, now."
CONSERVATIVE CORE. One key difference between Powell and the two Democrats who headed the commission during the Clinton Administration is likely to be his take on competition. While Powell has yet to say how he might differ from his predecessors, there are some hints: A conservative to his core, Powell already has come out strongly against forcing companies to do things that aren't directly related to the issues before the commission.
During negotiations over the AOL-Time Warner merger, for instance, neither he nor fellow Republican Harold Furchtgott-Roth pressed AOL to open its instant-messaging system to rivals as a precondition of the merger. The majority Democrats forced the concession.
Powell has taken a go-slow attitude on most other forms of regulation, too. In December, 1999, he voted with the majority in supporting a project to examine how much public-interest programming broadcasters should have to present in exchange for their newly granted rights to digital-TV spectrum. At the same time, he chided the commission for rushing to judgment on a medium that barely exists at this point. "The wiser course would have been to initiate this inquiry at a time when we understand more about the proposed, or likely, applications of digital television," he said at the time.
"VERY, VERY POWERFUL." Powell has "compassionate conservative" streak, too. Along with the rest of the commission, he has backed efforts to increase telephone use on Native American reservations. At the same time, he has criticized colleagues for not examining the efficiency of those programs before increasing their funding.
Powell will likely steer a center-right course that's bound to win favor with the Republican Congress, predicts Andy Schwartzman, president of the liberal Media Access Project in Washington, D.C. Powell is neither an ideologue nor given to fighting for its own sake, says Schwartzman, who adds: "The critical thing is that Michael Powell is going to be very, very powerful."
Over the next four years, the Baby Bells will continue to push for permission to offer long-distance services within their own territories. To do that, they must first show that they've opened their markets to competition for local-phone service. But few expect that Powell will be as tough on applicants as Kennard and his predecessor, Reed Hundt, were.
GIVE AND TAKE. Powell also seems eager to work with Congress on giving the Baby Bells a free hand in high-speed data services. Lobbyists and Capitol Hill staffers predict that Congress will pass legislation this year freeing the phone companies to roll out high-speed Internet services nationwide, regardless of how much -- or how little -- competition they face in local-phone markets. In exchange, the Bells will pledge to give other Internet service providers a chance to sell their services to consumers.
"The [new FCC] will tend to defer more to what they perceive to be a marketplace solution," says Glenn Manishin, a telecom lobbyist and lawyer who represents the Bell companies' competitors in local markets. After eight years of Clintonian activism, marketplace solutions will be the new regime's calling card.
By Will Rodger in Washington Edited by Thane Peterson
Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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