FCC Vote On Phone Competition Delayed Colleagues Line Up Against Powell Plan

[Dave Farber <dave () farber net>]

http://www.washingtonpost.com/wp-dyn/articles/A54167-2003Feb10.html

FCC Vote On Phone Competition Delayed
Colleagues Line Up Against Powell Plan


Federal Communications Commission Chairman Michael K. Powell's deregulatory
agenda has run into stiff opposition from his own colleagues that yesterday
forced him to postpone a long-awaited vote on issues critical to the future
of the telecommunications industry.

FCC staffers, under direction from Powell, crafted a proposal last fall that
would have effectively forced AT&T Corp., WorldCom Inc. and other companies
to abandon their plans to enter the local telephone business by leasing
lines from companies such as Verizon Communications Inc. and BellSouth Corp.
In addition, the staff proposal would have rolled back the ability of
fledgling competitors to provide high-speed Internet service over the local
phone network. 

But a rival proposal put forward by commissioner Kevin J. Martin derailed
the staff recommendation after it attracted the support of the agency's two
Democratic commissioners, Michael J. Copps and Jonathan S. Adelstein.

In a last-minute attempt to derail Martin's proposal, Powell decided to
postpone a final vote, originally scheduled for Thursday. The vote will be
put off for a week or more, a move intended to put more pressure on Martin
or one of the Democratic commissioners to change their position.

Martin's compromise proposal would give state regulators the power to write
the rules governing how much of the local telephone network must be made
available to competitors. It would also require that local telephone
companies provide their rivals with the ability to deliver Internet service
to their customers at speeds equivalent to 1.5 megabits per second -- about
10 times as fast as a dial-up modem.

Powell's delay of the vote is another indication of the growing influence of
Martin, a former FCC staffer who was appointed commissioner by President
Bush in 2001. Although Martin and Powell are both Republicans, they are
increasingly viewed as rivals who each have their own vision for leading the
agency. 

Their inability to work together has frustrated some members of Congress,
who would like the three Republicans on the five-member commission to begin
taking advantage of their majority. "Powell and Mr. Martin have had problems
from Day One," said W.J. "Billy" Tauzin (R-La.), chairman of the House
Energy and Commerce Committee. "I don't know if it's personal or what. I
don't care." 

Martin declined to be interviewed yesterday, but he issued a statement in
response to a request from a reporter. "I look forward to working with my
colleagues to provide regulatory relief for broadband and new investment,
preserve existing competition for local telephone service, and protect
states rights in this area," the statement said. Martin's supporters said he
has no personal interest in opposing Powell and is merely standing up for
his own views. 

Sources said Martin's support for state regulators reflects his close ties
to the White House. Bush, a former governor of Texas, has often voiced his
antipathy for federal regulations that usurp the authority of local
officials. 

During the 2000 presidential election, Martin worked for the Bush legal team
that successfully argued before the Supreme Court in favor of upholding the
election results amid a controversial vote count in Florida. Martin's wife,
Catherine, is the spokeswoman for Vice President Cheney.

Powell also has ties to the White House through his father, Secretary of
State Colin L. Powell, but is not viewed as politically savvy as Martin, who
spent the past several months quietly building bridges with the agency's two
Democrats. The result is that Martin now controls a three-vote majority at
the FCC that usually belongs to the chairman.

Martin's ability is particularly frustrating to Tauzin, one of the local
phone companies' key allies in Congress. "If he continues to work with the
two Democrats, he has created a new majority and that's pretty tragic if
that happens," Tauzin said.

In the meantime, Powell's lone supporter is Republican commissioner Kathleen
Q. Abernathy. 

By postponing the vote, Powell effectively threw open the agency's doors to
lobbyists who had been banned from discussing the issues with FCC staffers
and commissioners since the vote was officially put on the agenda last
Thursday. 

But lobbyists and lawyers who have spent the past several months petitioning
the agency say there is little chance that Martin will be swayed, given the
support he has from the White House. One source said the Bush administration
views Martin as a moderating influence on Powell, who has been openly
critical of rules that allowed competitors to sign up 10 million customers
in the past three years. "My guess is that he represents the political
interests of the White House," the source said.

Tom Hazlett, a former chief economist for the FCC who supports Powell's
deregulatory efforts, said a decision to delay the vote is a sign that
Powell is struggling in his role as chairman. "This does say something about
Powell and his ability to overcome the natural political inertia that
accompanies every big decision at the FCC," he said.

Powell has often cited Feb. 20 as the deadline for deciding the issue,
because a federal court found that flaws in the rules must be addressed by
that date. But industry sources say the deadline could pass without
significant impact because many of the current network leasing agreements
are governed by long-term contracts.

Staff writer Jonathan Krim contributed to this report. 

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