WASHINGTON-Despite the Republican sweep in last week’s elections, wholesale changes could be in store at the Federal Communications Commission at a time when the drumbeat is growing louder for an overhaul of the 1996 telecom act.
Until the likely changes shake out, the impact on the wireless industry will remain unclear. At a minimum, a telecom reform bill would provide industry with a powerful vehicle for mobile-phone carriers to seek relief from the rising tide of regulations and taxes at the state level.
But Republicans who owe their retention of the White House, Senate and House to a strong and vocal conservative base may be reluctant to expand federal powers-in the form of pre-emption-at the expense of states’ rights.
Ironically, the biggest shakeup from the Republican’s impressive victory could be at the GOP-controlled FCC.
FCC Chairman Michael Powell, who has championed spectrum reform and disruptive technologies such as Wi-Fi and UWB that potentially threaten established wireless carriers, is expected to move on in the not-too-distant future.
It may not be as soon as some observers speculate, however. Powell, now with even stronger political cover, has more time to complete work on several high-profile telecom initiatives that will help define his legacy.
“He’s staying. It’s full steam ahead,” said a Powell aide.
Still, by all accounts, Powell, who has served at the FCC since 1997, is a short-timer.
Who might replace Powell?
Fellow Republican Commissioner Kevin Martin, who has ties to the White House, is mentioned as a possible successor to Powell. But Martin’s fierce feud with Powell on a high-profile telecom ruling last year pitting Bell telephone companies against long-distance giants and competitive local exchange carriers could complicate matters. If Martin is passed over for the FCC chairmanship, industry insiders predict he will leave the agency.
The term of Commissioner Kathleen Abernathy, a Republican who previously worked in the wireless industry, ended in June. But Abernathy can serve until late next year. However, barring a promotion to the FCC chair, there is strong speculation Abernathy will leave the commission before the end of 2005.
A name commonly bandied about for Powell’s seat is Rebecca Klein, a Gulf War veteran and former chairwoman of the Texas Public Utility Commission. Republicans encouraged politically connected Klein to run against Rep. Lloyd Doggett (D-Texas) in a newly created congressional district, but she was resoundingly defeated.
The former Texas PUC leader is married to Dale Klein, who has served as assistant to the secretary of defense, nuclear and chemical and biological defense programs since November 2001.
Other Republicans mentioned for the top spot at the FCC are Michael Gallagher, director of the National Telecommunications and Information Administration, and Janice Obuchowski, a telecom consultant who previously headed NTIA and served at the FCC. Obuchowski led the U.S. delegation to the 2003 World Radiocommunication Conference, where her team won support for a 5 GHz spectrum allocation for Wi-Fi services.
The future of the FCC’s two Democrats appear dim.
FCC Commissioner Jonathan Adelstein, a term-expired Democrat already on borrowed time, is as good as gone.
The defeat of Senate Minority Leader Tom Daschle (D-S.D.) all but ended any chance Adelstein had for winning reappointment to the FCC. While there has been no indication President Bush intended to re-nominate Adelstein to a full five-year term, Daschle’s political clout in a Senate with a slim GOP majority kept that option alive.
The term of Michael Copps, the other Democrat on the five-member FCC, ends next summer. With the retirement of powerful Sen. Ernest Hollings (D-S.C.), Copp’s chief sponsor on Capitol Hill, the chances of winning a reappointment are diminished, but not dead.
Telecommunications policy has never been partisan, rather views are based more on the geographic location of the key members of Congress. As such, the impact of the election on telecom reform will probably be miniscule.
The first likely focus will be on universal service since Sen. Ted Stevens (R-Alaska) is expected to chair the Senate Commerce Committee. The ranking Democrat on the committee, Sen. Daniel Inouye (D-Hawaii) also cares deeply about universal service.
In a pre-election note, Legg Mason put it this way, “If Congress attempts to overhaul the Communications Act, the center of telecom policy gravity will start to shift from the Federal Communications Commission to the Congress and White House. Several key issues-including intercarrier compensation, universal service, and the digital TV migration and spectrum return-do not fall neatly into partisan/ideological divides. A key battle will be between the rural-orientated Senate that seeks to protect universal service and a House that opposes anything resembling a new tax, including on Internet access.”
With President Bush facing a nearly $500 billion budget deficit entering his second term, the administration could choose to press for spectrum fees as one source of revenue for the government. The hefty budget shortfall could make it difficult for the GOP White House and Congress to repeal the century-old 3-percent federal excise tax on wireless and wireline phone services, given the billions of dollars the tax brings in every year.
So while the faces may change, the issues and the big battles likely will remain the same.
“What we’re going to see is what we’ve been seeing,” said Richard Wiley, a former FCC chairman and influential Republican who heads a major telecom law practice here.
Washington reporter Heather Forsgren Weaver contributed to this report.
