The Real Michael Powell The FCC chairman is Al Gore in Republican clothing.

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: Rafe Scheinblum <rafe () fast net>
Date: Wed, 19 Feb 2003 18:38:15 -0500
To: "'dave () farber net'" <dave () farber net>
Subject: Have you seen this?

http://slate.msn.com/id/2078879/


Interesting article discussing why Powell is less
conservative than people think regarding telecom.

Best Regards,

Rafe

Rafe Scheinblum, EVP Operations
FASTNET - Internet Solutions
610.266.6700, ext. 707
www.fast.net


------ End of Forwarded Message
The Real Michael Powell
The FCC chairman is Al Gore in Republican clothing.
By Kevin Werbach
Posted Wednesday, February 19, 2003, at 12:59 PM PT

When Michael Powell was named chairman of the Federal Communications
Commission two years ago, Washington observers pegged him as an ideological
right-winger. The image has stuck. Yet the real Michael Powell is something
else entirely. He's an earnest technocrat, out of place in the politically
calculating Bush administration. In approach, if not in style or politics,
Powell is the closest thing to Al Gore in official Washington today.

Granted, Powell's views are to the right of his predecessors, Reed Hundt and
Bill Kennard. He talks more about eliminating regulatory requirements than
about promoting fair competition and a diversity of market participants.
(Disclosure: I served as counsel for New Technology Policy at the FCC during
Hundt's and Kennard's terms. Powell was named a commissioner shortly before
I left.) But Powell's not a fire-breathing conservative and shill for big
business. Like Gore, he's a wonk with an abiding interest in policy minutiae
and a deep faith in technology.

Starting Feb. 20, Powell's FCC will adopt a series of rule changes that
could reshape the telephone and media industries. To implement the 1996
Telecommunications Act, Powell's predecessors adopted rules that require
local phone companies to share their networks with competitors. Powell wants
to scrap some of those so-called "unbundling" requirements. As with most
telecom policy battles, the details are obscure, but the winners and losers
are not. "Baby Bell" phone companies like Verizon and SBC want to change the
rules, and new local competitors like AT&T and broadband provider Covad want
to keep them. Billions of dollars, and the fate of dozens of companies, hang
in the balance.

Powell is with the Baby Bells, but he's not really for them. The companies
say they are itching to build wondrous new networks, but that doing so is
counterproductive when their competitors can share the benefits. They
promise that scaling back unbundling will spur new investment and help pull
the telecom sector out of its doldrums.

Contrary to popular belief, Powell doesn't buy this argument. Asked at a
conference two weeks ago how he can trust the Baby Bells' promises, Powell
responded, "I have one rule: I don't trust any companies." He explained that
he was focused on the coming transition to digital broadband networks and on
pushing "facilities-based" competition. In other words, Powell hopes
competitors will build their own networks or employ new platforms such as
wireless, cable, and Internet telephony (used by companies such as Vonage).
He wants to allow the market to move toward the technological transformation
he foresees. The Bells will benefit in the short run, but to Powell that's
incidental.

Powell's efforts hit a snag last week when his fellow Republican FCC
commissioner, Kevin Martin, pushed an alternative plan. Opponents of Powell
and the Baby Bells cheered, but the dust-up reinforces Powell's maverick
status. Martin, who is politically well-connected to the White House, wants
to give state regulators more power to interpret the unbundling rules. It's
a classic conservative states' rights argument. Powell is the one pushing
for an energetic federal policy.

Since taking over at the FCC, Powell has shown that he's not a libertarian
true believer, hell-bent on dismantling regulation. In October, the FCC
blocked the proposed merger of direct broadcast satellite competitors
DirecTV and EchoStar, claiming it would harm competition. It was the first
time the FCC blocked a media deal in 30 years. And Powell did it with gusto,
acting before the Justice Department finished its review.

Rather than push to scale back the agency, Powell has done the thankless
work of reinventing it. He's beefed up the FCC's technical and economic
expertise by instituting training programs and hiring more engineers in the
past 18 months than the FCC hired over the previous 20 years. He pushes FCC
lawyers to craft their analyses to hew closely to judicial and congressional
mandates. 

The unbundling battle shows that Powell isn't protecting monopolies out of a
belief that bigger is always better. He's looking to create a market where
those monopolies will die if they don't respond aggressively to new kinds of
competition. That's cold comfort to the companies who will suffer. And
Powell may be wrong. Absent the current regulatory safeguards, the big
players may indeed stomp out competition and raise prices. Correct or not,
though, Powell is making a dramatic bet on new technology.

He's made similar bets in other areas. A year ago Powell's FCC authorized
ultra-wideband, a radical wireless technology that, because is uses
extremely low power, can coexist with existing services such as cellular
telephony and TV broadcasts. The military, public safety groups, and
broadcasters had delayed its approval for years. Powell also convened a
spectrum task force that recommended major changes in the way the FCC
regulates the airwaves, including greater support for unlicensed wireless
technologies like Wi-Fi.

Michael Powell and Al Gore have one other thing in common besides their
faith in the transforming effects of technology: Both are gadget lovers.
Where Gore had a Blackberry wireless e-mail device, Powell has a Wi-Fi home
wireless access point and TiVo digital video recorder. The latter toy got
him in trouble at this year's Consumer Electronics Show, where Powell
expressed his desire to swap shows with his sister. The major media
companies, who see TiVo and its competitors as threats to their advertising
revenues, were outraged.

The TiVo incident shows one reason why Powell is so misunderstood: He says
what he thinks. In a Washington dominated by message points and poll-driven
agendas, honesty is perplexing. "Deregulation" has become a political code
phrase to excite the faithful, like "tax relief." When Powell points out, as
he often does, that no implementation of the scores of rules set out in the
Telecommunications Act could possibly be considered deregulation, he is met
with blank stares. His supporters hear what they want to hear. They should
listen more closely, or they are in for some surprises. 

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