WASHINGTON-Sweeping reforms at the Federal Communications Commission promised by new Chairman Michael Powell and trumpeted by GOP lawmakers, owing to likely Democratic resistance and legal constraints, could fall far short of the dramatic agency shakeup envisioned by Republicans.
Powell will outline proposed FCC reforms in testimony before the House telecommunications subcommittee on Thursday.
But even before he utters a word, Powell already has signaled-in words and deeds-what he believes are the possibilities and limitations of FCC reform specifically and telecom deregulation generally.
Those limitations flow in part from the 1996 telecom act-which in Powell’s words “left unchanged the balkanized regulatory treatment of different technologies and industries”-and from fundamental differences between Republicans and Democrats in regulatory philosophy as epitomized in the debate over the what `public-interest’ standard means.
Powell and fellow GOP FCC Commissioner Harold Furchtgott-Roth have questioned the legal reach of the public-interest standard as it has been applied to merger reviews and regulatory proceedings with social overtones.
As such, the Powell revolution at the FCC is more likely to be internal than external.
The legal-regulatory paradigm that hangs over the telecom industry inherently may prevent a wholesale restructuring of the agency. Some observers believe FCC reform will manifest in key statutory changes to 1996 telecom law. On the other hand, no one has shown any inclination to re-open the telecom act.
Others, like Andy Levin, an aide to House Commerce Committee member John Dingell (D-Mich.), said he believes the FCC could be overhauled and made more efficient without a lot of new laws. But, he added, Dingell is open to supporting legislative changes proposed by Powell.
Whatever restraints exist are not apt to stop Powell, likely to be joined by four new, Bush-appointed FCC commissioners by year’s end, from streamlining merger reviews, exercising regulatory forbearance, stepping up enforcement and expediting the processing of license applications.
“The oppressor here is regulation,” said Powell in a speech last December to the libertarian-bent Progress & Freedom Foundation. “Providers are desperately looking for ways to escape regulatory burden, or use it to their advantage.”
Indeed, the new FCC chairman embraces deregulation, innovation and free-market economics. Powell, who has Department of Justice antitrust experience, appears quite content to defer antitrust scrutiny to DoJ and the Federal Trade Commission.
Powell’s hands-off approach, a stark contrast to what some consider regulatory activism in the previous two Democratic-led FCCs, appears driven in part by the humbled belief that government regulators are simply ill-equipped to dictate terms to rapidly evolving technological and marketplace changes in the New Economy.
“We need to go to school to learn the technological underpinnings that affect policy,” said Powell in the same December speech. “Moreover, we need a greater understanding of innovation theory and economic incentives. This includes a deeper understanding of capital markets and capital formation. It includes greater depth in antitrust doctrine and market economics, particularly the literature on network effects and the unique attributes of information industries.”
So far, the Powell doctrine appears right in sync with a wireless industry agenda that is laser focussed on repealing the spectrum cap and improving long-range spectrum management. But it does not appear all Democrats are buying what they’ve seen of the new FCC chairman to date.
In recent decisions affecting telecom sectors other than wireless, Powell has made good on his word to make the FCC more efficient, less regulatory and more responsive to high-tech America. But, some ask, at what price?
On March 12, the FCC-at Powell’s urging-approved a huge backlog of radio station applications that had been put on hold by staffers because of market concentration concerns. Then, on March 16, the Powell-led FCC suspended enforcement of a key divestiture condition attached to the approval of the AT&T-Media One merger.
In both cases, FCC Commissioner Gloria Tristani-a strong consumer advocate-dissented because of her belief that the agency had ignored its public-interest obligations. “The commission’s actions once again send the signal that it cares more about the interests of large corporations that it does about maintaining a vibrant and diverse marketplace of ideas,” said Tristani.
“The goal of government is not to be efficient; it is to fulfill certain tasks,” said Colin Crowell, an adviser to Rep. Edward Markey (D-Mass.). Markey is the ranking Democrat on the House telecom subcommittee. “Nobody wants bureaucracy for its own sake. … The onus is on Powell. He’s the one who says he has reform proposals,” said Crowell.
