All Shook Up: Martin Remakes FCC

Washington— Two weeks into his new job, chairman Kevin Martin said putting the right people in the right positions at the Federal Communications Commission would be high on his agenda.

“Whenever you are actually getting into a new position, when there is a change in leadership, the first issue is always, actually, personnel,” Martin said at the National Cable & Telecommunications Association’s National Show in San Francisco in April. “It’s most important to try to make sure that you are bringing in people that are going to be working with you on issues you need to address.”

The idea that a staff shakeup might be a priority could seem odd coming from a Republican, who had just replaced another Republican, Michael Powell, the FCC’s chairman since the beginning of the George W. Bush administration in early 2001.

But Martin has kept his word. Since taking the reins in March, he has put his own chiefs atop five of the FCC’s six operating bureaus, which develop and implement regulatory programs in media and communications [see chart]. He has moved less aggressively in finding new people to head the agency’s nine staff offices, which provide support services in engineering, law and the like.

But in bureaus and offices, Martin has quietly removed key people from posts deep in the commission, where vital analyses are performed and legal opinions drafted.

“The truth is that chairmen always want to make sure that the people in key positions are responsive and loyal to them. That is always a motivating concern for a new chairman,” said Washington, D.C., attorney John Nakahata, FCC chief of staff in 1997 and 1998 under chairman William Kennard.

The fallout consists mostly of hurt feelings among FCC staffers, who believe they’ve been pushed into slots inconsistent with their areas of expertise. But Martin’s juggling act also could be delaying the $17.6 billion sale of Adelphia Communications Corp. to Time Warner Inc. and Comcast Corp.

In September, five months into the agency’s review of the cable deal, Martin reassigned Barbara Esbin, the Media Bureau attorney who had been leading the review.

“Why in the world, in the middle of the approval process, would you move out a person who has responsibilities on a major transaction?” said a Washington, D.C., communications lawyer and former FCC official.

Although the scope of staff changes may vary, FCC chairmen tend to insert trusted colleagues into key staff positions, FCC officials said.

Former FCC chairman Richard Wiley, now a Washington, D.C., attorney, said he did not shake up the staff of predecessor Dean Burch when he became chairman under President Nixon in 1974. But any FCC chairman is entitled to do so, he says.

Some FCC personnel uprooted by Martin have not disguised their unhappiness, with some believing their seemingly close ties to Powell have damaged their career prospects under Martin. Powell and Martin had a tense relationship, capped by Martin’s refusal in February 2003 to back Powell’s overhaul of local phone competition rules.

“It’s been a rolling, six-month, weird process. Some people you knew right off the bat were trusted, and the implication was that the rest of us were not,” said one FCC staffer forced to change jobs.

FCC lawyer Peter Tenhula is a Powell confidant dealt a Martin demotion. A legal adviser in Powell’s office from 1997 until 2002, Tenhula left in September 2002 to become co-director of the FCC’s Spectrum Policy Task Force. A year later, Powell named him acting deputy chief of the Wireless Telecommunications Bureau.

Under Martin, Tenhula has been downgraded to a staff attorney in the Consumer & Governmental Affairs Bureau.

“It’s like going from near the top of a bureau to the beginning stage,” an FCC staffer said.

Tenhula’s association with Powell evidently was a handicap in a Martin-run FCC.

“If you are part of the Powell crowd, you are not part of the Kevin crowd,” according to one FCC watcher who asked not to be identified in order to maintain good relations with Martin’s office. Tenhula did not return a reporter’s call.

A former FCC official added, “I would be shocked, if I were Peter, to be told that you are not needed as deputy of the Wireless Bureau where you have all your expertise and years and years of service.”

In other Martin moves:

• Robert Ratcliffe — deputy chief of the Media Bureau, installed by Powell — was reassigned as deputy chief of the Enforcement Bureau. “It’s lateral but involuntary,” one FCC staff member said. In his Media Bureau post, Ratcliffe would have had a hand in re-writing the FCC’s media ownership rules, including the ban on the common ownership of a newspaper and TV station in the same market.
• Mary Beth Richards was moved from deputy chief in the Enforcement Bureau to a staff attorney position in the Consumer & Governmental Affairs Bureau. An FCC veteran, Richards supervised two reorganization plans, including one ordered by Powell in 2001.
• Esbin — associate chief in the Media Bureau, brought in by Powell — was moved to a staff attorney position in the Enforcement Bureau. In the Media Bureau, she was the senior attorney reviewing the Adelphia merger and development of new cable system ownership rules.

Martin aides either did not return phone calls or declined comment. Martin was not available for comment.

Lawyers and lobbyists, some of them former FCC officials, had different takes on Martin personnel matters. Some said the staff grousing was a case of the transition blues that would pass in time. Others said staffing problems were an occupational hazard and far less important than the policy goals Martin would try to achieve.

One former FCC official said Martin’s staffing decisions were simply not groundbreaking events.

“In any organization, you need that relationship between the chief executive and the staff people. The trust kind of works both ways, up and down. A shared vision is very important,” said Robert C. Atkinson, former chief of the FCC’s Common Carrier Bureau from 1999 to 2000, who is now executive director of the Columbia Institute for Tele-Information at Columbia University’s School of Business.

FCC staffers complain about that trust. Not confident to allow their names to be used in this story, they say that Martin has mishandled the way in which his office has told people they were losing their jobs.

“There is a lot of bitching going on. The folks that are being moved are getting summary phone calls from their own administrative people and they are not having the courtesy of being phoned by anybody in the chairman’s office much less a chance to sit down in a sort of non-contentious manner and just discuss why this is being done,” one current FCC official said.

One Martin defender inside the FCC, who also does not want to be identified, said that agency staffers who are complaining are the ones that will get the press attention, but officials who have been promoted by Martin or hired from the outside won’t.

An example of a promotion would be FCC veteran Roy Stewart, former chief of the Mass Media Bureau. Under Powell, the Mass Media Bureau and the Cable Services Bureau were merged to become the Media Bureau, headed by Powell appointee Ken Ferree. Stewart was bypassed, demoted to run the Office of Broadcast License Policy a few rungs below Ferree.

In June, Stewart’s FCC’s prospects brightened when Martin elevated him to senior deputy chief of the Media Bureau, a newly created position one spot below new bureau chief Donna Gregg.

“[Stewart] is definitely in a better position than he was under the last chairman,” an FCC insider said. He’ll likely have a larger role in the development of new cable system and local broadcast ownership rules prepared by Media Bureau staff.

A cable-industry lobbyist argued that Martin, like any FCC chairman, would be judged by his policies, not by the popularity of his personnel moves

“What’s more important — to measure this guy by whether or not there is collegiality among the commissioners and he is getting things done or the extent to which the bureaucracy is grumbling about the organizational chart? It strikes me that that’s a no-brainer,” this lobbyist said.

In his first six months in office, Martin has chalked up two policy victories, even though the commission is split along political lines. In May, he forced so-called interconnected voice-over-Internet protocol (VoIP) providers to outfit their systems with emergency 911 capabilities by Nov. 28.

In August, he wiped away the last vestiges of common-carrier regulation on telephone companies’ digital subscriber line (DSL) services, which provide high-speed access to the Internet.

When Powell left, the FCC became equally divided, with two Republican commissioners (Martin and Kathleen Abernathy) and two Democrats (Michael Copps and Jonathan Adelstein). The White House may have two seats to fill when Abernathy’s term expires, but has not announced any new FCC picks.

“[Martin] continues to reach across the aisle, as far as I can see,” said former FCC chairman Wiley, at whose law firm Martin worked as an associate from 1994 to 1997. “I think he’s done extremely well so far.”

In the weeks ahead, Martin is expected to channel most of his energy on finishing two mergers. In late October or November, the FCC is expected to approve, possibly with some minor conditions, SBC Communications Inc.’s takeover of AT&T Corp., pending since February, and Verizon Communications Inc.’s merger with MCI Inc., pending since March.

Less clear is the fate of the Adelphia merger, which was filed with the FCC in May but has not progressed at the staff level as quickly as past cable mergers. When Comcast sought permission to acquire AT&T Broadband’s cable system in 2002, FCC staff issued a “request for additional information” 72 days after the merger was put out on public notice. Those requests are designed to allow FCC staff to dig beyond the self-serving narratives supplied by merger applicants.

With regard to Adelphia, no request for additional information had gone out in the first 128 days under FCC review. In recent meetings, commission staff have indicated to the cable companies that the requests were imminent. The FCC attempts to complete a merger review within 180 days. The delay in seeking additional information does not mean that the FCC won’t meet the 180-day deadline, which is informal and the agency reserves the right to stop the day counting.

“[Martin] is getting some difficult items done, which is, I think, a testament to him. Which begs the question, why is that [Adelphia] deal languishing?” a cable lobbyist asked.

Esbin was removed from the Adelphia transaction and replaced by Sarah Whitesell, a highly regarded FCC attorney who now needs time to familiarize herself with the intricacies of the three-way cable merger.

One cable lobbyist said another explanation for the Adelphia delay was that Time Warner and Comcast were not being as aggressive as SBC and Verizon in seeking FCC approval while the agency lacked a GOP majority. A Comcast spokesman said the company has not changed its guidance that it expects the merger to close no later than April 2006.

A senior FCC official said Comcast and Time Warner have started to book meetings with FCC commissioners and their staff.

“They are making a big push. They have scheduled meetings in here now,” the FCC official said.