News

Changes Loom at FCC

11/07/2004 7:00 PM Eastern

Washington— President Bush’s re-election victory last Tuesday set the stage for a personnel shake-up at the Federal Communications Commission in the weeks ahead — a time when chairman Michael Powell is expected to put the final touches on his largely deregulatory legacy.

Powell’s future is unclear because he has been quoted dropping hints that he plans to leave the agency, while suggesting at other times that he might be interested in remaining in the job.

A Clinton appointee, Powell joined the FCC in 1997 and was named chairman by Bush in January 2001. His current term expires in 2007.

POWELL QUIET

Responding to a press question after Bush’s Democratic rival, Sen. John Kerry (D-Mass.), conceded the presidential race last Wednesday morning, FCC spokesman David Fiske said Powell would not comment on his future plans.

It’s “business as usual,” Fiske said in an e-mail response.

For the cable industry, Powell’s tenure resulted in keeping cable-modem service deregulated and in blocking TV broadcasters from flooding cable systems with digital-multicast services.

But Powell voted to retain until 2007 rules that force cable operators to sell their satellite-delivered programming networks to direct-broadcast satellite competitors.

In recent months, Powell’s FCC has adopted policies designed to remove broadband regulations that apply to the Baby Bells in an effort to create regulatory parity with cable — moves the cable industry has not vocally opposed.

A LA CARTE REPORT

Later this month, the FCC is expected to release a study for Congress on the a la carte retail sale of cable networks.

Agency sources have said the five commissioners might send the report to Capitol Hill with no official endorsement by the agency’s leadership.

The agency is expected to complete work soon on another Powell priority: Imposing a Dec. 31, 2008 deadline on the DTV transition.

But it’s unclear whether the FCC will require cable companies to provide millions of consumers with set-tops boxes, or to carry every programming service that local DTV stations can pack into their signals.

Powell’s biggest setback came in June, when a federal court tossed out FCC rules relaxing TV- and radio-station ownership rules.

The FCC has until Dec. 3 to file an appeal with the U.S. Supreme Court. If that fails, the agency would need to craft new rules consistent with the lower court’s directives.

“On the media-ownership side, I suspect there will be a reluctance to make dramatic changes. The politics are very difficult,” said Paul Gallant, a media analyst with Schwab Washington Research Group, who was a senior member of the agency’s media-ownership working group.

The first change to occur is the expected departure of Jonathan Adelstein, a Democrat and former aide to Sen. Tom Daschle (D-S.D.), who lost his Senate seat last Tuesday by about 7,000 votes to Republican challenger John Thune.

Adelstein’s term expired many months ago, but he was allowed to remain at the FCC until the 108th Congress adjourned. Congress is returning for a lame-duck session next week, meaning Adelstein’s departure appears to be just a few weeks away. He is unlikely to be reappointed in the wake of Daschle’s defeat.

'NOT POLITICAL ENOUGH’

The term of Kathleen Abernathy, a Republican, has also expired, but she can remain at the FCC until Congress adjourns next year unless a Bush nominee is confirmed to replace her before then.

Abernathy, appointed by Bush in 2001, indicated last week that she doesn’t expect to be named chairman if Powell exits.

“I’m not political enough,” Abernathy told a reporter on her way out of a Washington, D.C., hotel where she met with a group of cable-industry executives.

Abernathy also said she wasn’t sure whether the White House would re-nominate her for a five-year term — or whether she even wanted to be reappointed.

Kevin Martin, a Republican FCC member with close ties to the White House, is considered a prime candidate to replace Powell. His term won’t expire until 2006.

CANDIDATE LIST

In a report last Monday, Legg Mason Wood Walker Inc. analyst Blair Levin floated several names for FCC chairman, including:

  • Becky Armendariz Klein, former chairwoman of the Texas Public Utility Commission. The Texan ran for a House seat last Tuesday but lost to incumbent Rep. Lloyd Doggett (D-Texas);

  • Michael Gallagher, an assistant Commerce Secretary and head of the National Telecommunications and Information Administration (NTIA);

  • Janice Obuchowski, a telecommunications consultant. She headed the NTIA under the first President Bush; and

  • Earl Comstock, a former aide to Sen. Ted Stevens (R-Alaska) and Washington, D.C., outside counsel to EarthLink Inc., an Internet-service provider that has demanded from the FCC regulated access to cable’s high-speed data network

October