FCC's Powell Won't Stay, Some Speculate

[David Farber <dave () farber net>]

http://www.latimes.com/business/la-fi-powell29jun29.story

FCC's Powell Won't Stay, Some Speculate


The agency chief denies plans to depart after the election, but the  
media and telecom industries are lobbying as if he will.
By Jube Shiver Jr.
Times Staff Writer

June 29, 2004

WASHINGTON — Convinced that Federal Communications Commission Chairman  
Michael K. Powell will step down this winter, lobbyists for media and  
telecommunications companies are rushing to put their pet issues on the  
agency's agenda.

At least two other commissioners are pondering leaving the FCC. And  
that could significantly alter the political makeup of the five-member  
commission that regulates the nation's broadcasting and  
telecommunications industries.

The 41-year-old Powell denied that he had any immediate plans to leave.  
But the former Army officer and antitrust lawyer recently prepared a  
six-month strategy for resolving the controversial media ownership,  
indecency and telephone competition issues that have become hallmarks  
of his tenure.

Tom Tauke, the top lobbyist for Verizon Communications Inc., said the  
company was pressing to have telephone competition rules rewritten this  
year, fearing that a new lineup of FCC commissioners might take a  
tougher stance against the companies that own most of the country's  
local telephone lines.

John Nakahata, a Washington lawyer who represents telephone as well as  
cable clients, said he also was moving fast. "If there's only four  
people there, it's harder to get to three votes," he said.

Another Washington lawyer, who represents television station owners and  
who asked not to be identified, said he had begun advising clients to  
wrap up any deals that might require FCC approval.

"During any election year, most FCC watchers are engaged in a game of  
'Who will end up at the FCC?' " said James Bradford Ramsey, general  
counsel for the National Assn. of Regulatory Utility Commissioners, a  
Washington trade group. "I've never believed the rumors of Powell's  
impending departure before. But these I believe."

Washington has been whispering about Powell leaving the FCC since  
February 2003, when the soft-spoken but strong-willed bureaucrat  
suffered an embarrassing defeat over telephone competition rules. He  
lost a 3-2 vote on the rules, which were thrown out by a federal  
appeals court in March. And last week a federal appeals court sent the  
FCC's media ownership rules back for revisions.

Powell, the son of Secretary of State Colin L. Powell, declined to  
comment for this article.

FCC Chief of Staff Bryan Tramont said Powell "has no plans to leave  
after the president's reelection," disputing that the chairman would  
want to depart after a Bush victory. Tramont acknowledged, though, that  
Powell had done some thinking about wrapping things up in the event of  
a win by the presumed Democratic nominee, Sen. John F. Kerry of  
Massachusetts.

FCC spokesman David Fiske said that "at some point after three years as  
a commissioner and four years as chairman, it's time to move on. But I  
don't want to create the impression that anything's imminent. We'll see  
what happens after the election."

The less-than-adamant denials from his chief of staff and agency  
spokesman, observers say, is an indication that Powell has had enough  
of the FCC. But Powell's advisors insist that he has made no firm plans  
to leave.

Some political observers say Powell doesn't want to be viewed as a lame  
duck or have talk of his departure damage his chances of being  
appointed to another post in the Bush administration.

It is not known what post Powell is interested in, but there has long  
been talk of Powell becoming Commerce Department secretary or being  
appointed to the U.S. Court of Appeals in Washington. Some say Powell  
might join a technology investment group.

Powell was appointed to the commission in 1997 by former President  
Clinton. In 2001, President Bush named him chairman.

It may require some deft footwork for Powell to walk out the door,  
given that both of his fellow Republicans at the FCC — Kevin J. Martin  
and Kathleen Q. Abernathy — are also eyeing the exits. And the term of  
Jonathan S. Adelstein, one of the commission's two Democrats, is set to  
expire at the end of the year.

Abernathy, a former telephone industry lobbyist, wants to return to the  
private sector, where she could substantially increase her salary,  
people familiar with her thinking say. Abernathy's senior legal  
advisor, Matt Brill, said that "the commissioner hasn't indicated she  
will leave. She has said she will wait until after the election to  
assess whether she wants another term or not."

Martin, meanwhile, is happy at the FCC but might leave if he isn't  
appointed chairman, people close to him say. That is an appointment  
Powell opposes.

"My plan is just to be right here," Martin said. Asked if he wanted to  
be chairman, Martin said, "I'm just trying to survive being  
commissioner."

Powell and Martin clashed last year after Powell criticized Martin for  
joining with the commission's two Democrats at the agency to oppose  
Powell's bid to overhaul telephone rules. Those rules require the Baby  
Bell local phone companies to lease their lines and equipment at  
regulated wholesale rates to rivals such as AT&T Corp.

The regulations have helped the long-distance giant and others wrest 19  
million lines from the Bells. Powell, however, called the rules  
"fatally flawed" and warned that they would lead to endless litigation.  
A federal appeals court agreed with Powell and overturned the rules.  
Then, the U.S. solicitor general and Martin separately agreed not to  
contest the appeals court's decision, a victory for Powell.

In the wake of that triumph, Powell has turned his focus to completing  
the unfinished parts of his telecommunications agenda. Powell's aides  
say the chairman wants to draft new telephone competition rules before  
the end of the year. He also is said to want to conclude work on  
regulations for Internet telephony and the digital TV transition, among  
other things.

Powell is not actively exploring opportunities outside the FCC. Still,  
rumors of possible vacancies at the agency have drawn the attention of  
the Senate and the White House.

For instance, Adelstein is trying to work out a deal to extend his FCC  
stay. Sens. Tom Daschle (D-S.D.) and Byron L. Dorgan (D-N.D.) have  
recently written to Bush on Adelstein's behalf and have been working  
behind the scenes to find Republican candidates acceptable to the GOP  
to package with him for appointment to the FCC, another agency or the  
judiciary, sources say.

Even if a deal is brokered, however, Powell might not leave if  
Abernathy departed and Martin stayed, because two open Republican slots  
would make it almost certain that Martin would become FCC chairman in a  
second Bush administration.

No more than three FCC commissioners can be from the same political  
party. Commissioners are appointed to five-year terms by the president  
and confirmed by the Senate.

The political makeup of the FCC will influence the tone and direction  
of key regulations governing the $720-billion-a-year communications  
industry. Last week both Bush and Kerry outlined their importance to  
the economy.

Kerry said he would accelerate the transition to digital TV by giving  
subsidies so that the poor could buy equipment that would give their  
standard TVs the sharper pictures and crisper sound of digital  
technology. Kerry also said he would provide tax credits for  
investments in high-speed Internet access and reward small businesses  
that invest in high technology.

Bush reiterated his administration's commitment to universal deployment  
of high-speed Internet access by 2007 and also called for a continued  
ban on Internet taxes.

Whoever wins in November, experts said the communications industry  
would rather deal with known policymakers than wrestle with a new  
lineup. Said former FCC Chairman Reed Hundt: "No matter who's the  
president, there is likely to be enough turnover at the FCC early next  
year to reshuffle the voting power on every issue."


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Copyright 2004 Los Angeles Times

<http://www.latimes.com/business/la-fi- 
powell29jun29,1,5811105,print.story>

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