Divided Senate Panel Quizzes FCC

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New rules that could expand the power of incumbent local phone companies and
media conglomerates highlighted a Senate hearing Tuesday that came just a few
weeks before the Federal Communications Commission is to begin rolling out
decisions.

FCC chairman Michael Powell, joined by the other four commissioners, fenced
for nearly three hours with Senate Commerce Committee Republicans and Democrats
who voiced concerns that the agency is about to set in motion a process that
will lead to more consolidation and less competition in phone and media
markets.

In a hearing room crammed with lobbyists with a lot riding on the FCC's
decisions, Powell said new local phone rules were necessary because courts
refused to uphold the old ones.

Facing pointed questions from Sens. Fritz Hollings (D-S.C.) and Byron Dorgan
(D-N.D.), Powell said federal law did not hand new entrants a right to unlimited
and indefinite access to Baby Bell phone networks.

"I think it's faithful to the statute," Powell said of his reading of the
Telecommunications Act of 1996.

Regarding media-ownership limits, he said the FCC had lost four cases in
which the agency tried to defend restrictions that predated the arrival of cable
television.

Nevertheless, Sens. Kay Bailey Hutchison (R-Texas) and Ron Wyden (D-Ore.)
were two lawmakers who cautioned Powell on media ownership, with Hutchison
expressing support for current limits on TV-station ownership.

Sens. John Breaux (D-La.) and Sam Brownback (R-Kan.) backed FCC efforts to
create regulatory parity between cable and phone companies that provide
high-speed data.

Precursor Group media and telecommunications analyst Scott Cleland said
Powell did not have to worry about much political fallout in the Senate because
the committee's appeared divided on the key issues.

"There was no clear consensus out of this committee. The game is at the FCC,"
Cleland said.

Matthew J. Flanigan, president of the Telecommunications Industry
Association, a group favoring broadband deregulation for the Baby Bell phone
companies, agreed that Powell's efforts to cut back on data regulation would not
be sidetracked by powerful senators.

"There are certain senators who have a strong feeling one way or another, but
I think the FCC is set in its ways," Flanigan said after the
hearing.

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