Copps Blames Powell for Market Turmoil

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Washington -- Federal Communications Commission member Michael Copps
blamed some of the telecommunications-sector meltdown on chairman Michael
Powell's attempt to rewrite high-speed-data competition policies.

In a speech here, Copps argued that the FCC's decision to even look at
revising the rules -- apart from whether it actually ends up adopting new rules
-- was itself a market negative.

'The point is that the uncertainty created by even initiating these
proceedings is yet another destabilizing factor in a situation that doesn't need
another drop of volatility added to it,' Copps said in a luncheon address to the
Media Institute.

Powell and two other Republicans control the FCC. Copps is the agency's lone
Democrat.

In recent months, the FCC has declared cable-modem service an information
service and tentatively concluded the same thing for digital-subscriber-line
service, with the net result possibly being that neither cable operators nor
phone companies need share their high-speed-data lines with competitors.

Although he didn't mention Powell by name, Copps clearly linked Powell's
decision to overhaul broadband policies to telecommunications-market turmoil. At
one point, Copps said the commission was not 'entirely blameless' for the
sector's woes.

'Part of the market's problem is uncertainty about the direction of
commission policy,' he added.

Copps' comments came one day after long-distance giant WorldCom Inc. said it
hid almost $4 billion in expenses over the past two years.

President Bush said he was deeply concerned about the disclosure, calling the
WorldCom concealment 'outrageous,' according to wire reports from Bush's visit
to Alberta.

'I am deeply concerned by the WorldCom developments and the impact they could
have on consumers and other providers in the industry,' Powell said in a
prepared statement.

'To better assess the continuing troubles in the telecommunications industry,
I will travel to New York Friday to meet with a variety of telephone-industry
officials, analysts and debt-rating agencies to gain a first-hand understanding
of the recent developments that continue to challenge the telecom industry,' he
added.

'Through this exchange, I hope to assure the financial markets that the FCC
is committed to doing whatever it can to assist in the recovery of the sector
and to strengthen the public trust in this vital segment of our economy,' Powell
said.

In his speech, Copps predicted a rebound in the telecommunications sector,
depending on how quickly it can shake the accounting scandals.

'It won't be tomorrow, but I think it is going to be
sooner than many of the pundits predict,' he said. 'Driving the market and the
sector's decline now are corporate-governance problems and depredations of
accounting and a fundamental disconnect between the stock market and the basic
good health of the American economy.'

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