News

Powell Taps Disney Lobbyist

1/25/2001 9:31 AM Eastern

Federal Communications Commission chairman Michael Powell named Marsha
MacBride as his chief of staff Thursday.

MacBride left Powell's office in June to become a Washington lobbyist for The
Walt Disney Co. in the middle of that company's high-profile battle to impose
tough conditions on the merger between America Online Inc. and Time Warner
Inc.

MacBride, a lawyer and FCC veteran, has worked in several FCC bureaus and in
the office of former commissioner James Quello. As Powell's legal adviser, she
helped to organize the agency's role in addressing the Year 2000 computer
rollover. At Disney, she was vice president of government relations.

As FCC chief of staff, MacBride becomes one of the most powerful officials at
the agency -- perhaps an even more potent force than some commissioners. She
will lay the groundwork for driving Powell's agenda through the 2,000-person
bureaucracy and into concrete rules. President Bush named Powell chairman Jan.
22.

FCC and industry sources said that due to MacBride's association with Disney,
she might have to recuse herself from several FCC proceedings, including the one
just launched on interactive television. Disney lobbied the agency to
investigate cable-operator discrimination against competing interactive-TV
providers.

In approving the AOL-Time Warner merger two weeks ago, Powell indicated
support for the Federal Trade Commission's Internet open-access requirements,
but he disagreed with FCC conditions on advanced instant messaging and on
billing and first-screen arrangements between AOL Time Warner Inc. and
third-party Internet-service providers.

At Dinsey, MacBride was involved in a controversy related to the unauthorized
disclosure of confidential AOL business documents the company submitted to the
FCC as part of the merger-review process.

The disclosure occurred Sept. 22, when outside counsel for Disney summarized
AOL documents in an electronic mail and forwarded it to Preston Padden, Disney's
executive vice president of government relations and MacBride's boss. Padden
transmitted the e-mail to several high-ranking Disney executives in Burbank,
Calif.

MacBride got the same e-mail that was sent to Padden, but neither Padden nor
MacBride was authorized to see AOL confidential documents or e-mail summaries.
However, Disney's outside law firm told the FCC MacBride did not open the
e-mail.

AOL was upset about the disclosure, particularly because Disney waited five
days to confess its error. During the five-day period, Disney lawyers continued
to review AOL documents -- something AOL said it could have blocked had it been
notified immediately of the Sept. 22 breach.

On Oct. 10, the FCC denied Disney further access to AOL records, but the
agency lifted the ban Nov. 22. According to informed sources, the FCC's
investigation into Disney's actions remains open. Administrative sanctions
against Disney's outside lawyers and Disney personnel could result, commission
sources said in November when the access ban was lifted.

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