FCC Front-Runner Powell Has Some Ardent Fans

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WASHINGTON -FCC commissioner Michael K. Powell can dodge a bullet with the best of them. After wrapping up a speech here recently, Powell sidled no more than a few paces from the podium before a wall of reporters blocked his escape.

Reporter: "I have never heard anybody ask you this question."

Powell: "Uh, oh."

Reporter: "Do you want to be FCC chairman?"

Powell: "That's because I won't answer that. I'm happy what I am doing at the moment."

Powell-the son of retired U.S. Army Gen. Colin Powell, who headed the Gulf War-era Joint Chiefs of Staff-is believed to be the front-runner for Federal Communications Commission chairman. That job would make him the five-star field marshal of the digital revolution, deciding the fate of America's media and telecommunications empires.

While Reed Hundt and William Kennard clawed for the job through access to Clinton Administration insiders, Powell has decided to remain aloof, refusing to look like a needy spoils-seeker.

That pose, it appears, is strictly for public consumption. As Powell must surely know, if he won't seek the job, it's likely to seek him.

The 37-year-old Powell has at least one rival with close ties to President-elect George W. Bush: Pat Wood, head of the Texas Public Utility Commission.

But Wood is reportedly more interested in energy than communications policy and might land as Bush's choice to lead the Federal Energy Regulatory Commission.

Front-runners don't always wind up on top. Toni Cook Bush, a former aide to Sen. Daniel K. Inouye (D-Hawaii), was anointed Clinton's first FCC chairman on the front page of The New York Times. But the little-known Hundt elbowed her aside after interceding with Roy Neel, a longtime aide to then-Vice President-elect Al Gore.

When Hundt left in late 1997, Kennard's name was in the mix with several candidates, including former FCC Common Carrier Bureau chief Kathleen Wallman and phone industry lobbyist Ralph Everett. Kennard ended up with the job, reportedly with ample assistance from Clinton confidant Vernon Jordan.

"[Powell] is the front-runner. Historically, it's usually the third, fourth or fifth name that gets it," noted David Bolger, spokesman for the United States Telecom Association, the Washington, D.C., lobbying arm of the Baby Bells.

Until someone can name a few more "behind-runners," it appears the FCC chairmanship is Powell's job to lose, even if by default.

In his three years at the FCC, toiling in the Republican minority underground with the more detached Harold Furchtgott-Roth, Powell has collected such a string of glowing admirers it would hardly be a surprise if the Senate confirmed him without a hearing.

People describe him as a brilliant, inquisitive grinder who does his own research.

"He's engaged, while others delegate to their legal advisers," an FCC source said. "He wants to know things. He wants to be informed."

Powell shines best in one-on-one sessions at which he can demonstrate the range of his eclectic mind, lucid reasoning and powerful verbal skills. Last year, at the National Cable Television Convention in New Orleans, many cable-industry leaders who attended such a forum came away deeply impressed with his forceful presentation in response to questions tossed up by Catherine Crier of Courtroom Television Network.

His speeches, by contrast, can be deadly dull, replete with polysyllabic references to recondite economic theories and legal paradigms. Very interesting stuff, most of it, especially if you're in charge of research and development at Intel Corp.

But Powell's apparent notion that anybody who hears him should be as smart as he is hasn't cut into his fame. Powell is so well-regarded, he could win a popularity contest against Santa Claus.

"He is, in my opinion, the brightest light on the commission," said Rep. Billy Tauzin (R-La.), who wants to be the next chairman of the House Commerce Committee. "I am just speaking for me. I think he would be a great choice and I hope Mr. Bush wants him."

A cable-industry leader, not speaking for attribution, recently described Powell as without question the smartest, most able public official in Washington.

Where Powell would take the FCC over the next few years is unclear. People who know him well could not name a single rule or regulation that he would seek to eliminate.

Lobbyists are pressing for the agency to eliminate the bans on common newspaper/TV-station and cable-system/TV-station ownership. The "Big Four" TV networks want to eliminate the rule that caps their household reach at 35 percent.

Would Powell touch any of these? He'd promise to look at them, and that's about it.

In terms of FCC reform, Powell believes the agency takes too long to approve mergers and often fails to closely tailor merger conditions to the recited harms.

"I think everyone agrees there needs to be FCC reform in this Internet time," an FCC source said.

But Powell isn't an agency basher who believes the only way to reform a bureaucracy is to eliminate it. Instead, Powell sees the FCC as trapped by a law that regulates industries by line of business, calling it regulatory balkanization.

With cable operators, for example, offering voice, video and data, the FCC is left to decide whether cable should be regulated like a phone company or left alone.

"Our greatest challenges today at the FCC are definitional," he said in a Dec. 8 speech at the Progress & Freedom Foundation. "A clear example is the continuing uncertainty over how to treat the multitude of services that can be bundled over high-speed cable plant."

For years, Tauzin has wanted to teach the FCC the lesson that Congress is the agency's master. He has complained that under Democratic rule, the commission has strayed from the four corners of the Communications Act to fulfill White House social policy and has used merger approvals to expose companies to shakedowns by FCC-connected fixers that Tauzin won't name.

Over the years, Tauzin tried but failed to reform the FCC through legislative proposals. With Powell in command, he thinks legislation won't be necessary.

GUILT BY ASSOCIATION?

"I think he wants to take the FCC in the direction I'd like to take it," Tauzin said. "I think he wants to reform it internally and I think he wants to make it a more aggressive agent for deregulation."

Powell's one handicap could be the fact that he's held government posts in the Clinton Administration and has worked for other Democrats, causing some to question his GOP credentials and his desire to reform the FCC bureaucracy. Some might even view him as a "big-government Republican" loath to erase any nanny-state excesses of his immediate predecessors.

Before Clinton named him to the FCC in 1997, Powell was chief of staff in the Justice Department anti trust division headed by Joel Klein. That office banned cable operators from participating in the direct-broadcast satellite industry and scoured Microsoft Corp's business practices. That led to the landmark court order breaking up Microsoft and causing-in the view of technology columnist James Glassman-the Wall Street implosion of Internet stocks.

After graduating from Georgetown University Law Center, Powell was a clerk for Judge Harry T. Edwards, a Carter appointee to the U.S. Court of Appeals for the District of Columbia Circuit. His first job as a lawyer was with O'Melveny & Myers, home of such Democratic luminaries as Warren Christoper, Clinton's first secretary of state.

For his rapid career rise, Powell can clearly thank Democrats more than Republicans, although Senate Commerce Committee chairman John McCain (R-Ariz.) was an early Powell booster for his current FCC job.

Tauzin indicated that Powell might not pay too high a price if, as FCC chairman, he wanders from GOP orthodoxy on agency reform and industry deregulation.

"I don't always agree with Michael but he always has an extraordinarily clear reason for what he says and what he does, and I love that in people," Tauzin said.

With the contested election putting pressure on Bush to cast a wide net in filling key jobs, Powell's ascent in government under Democrats might turn out to be a plus.

As FCC chairman, Powell will have the power to decide some key cable-industry issues. He seems reluctant to force cable operators to open their networks to competing Internet-service providers.

But after the Federal Trade Commission's access mandate on America Online Inc. and Time Warner Inc., the FCC's job is likely more a matter of deciding when open-access rules are adopted across the industry, rather than whether such regulations ought to be adopted.

The consumer-electronics industry wants the FCC to require cable operators to stop their deployment of integrated digital set-top boxes in 2002 instead of 2005. Powell never agreed with the 2005 deadline in the first place, and said cable should be able to provide consumers with the most cost-effective technology.

Next year, the FCC has to begin to decide whether cable operators should continue to be required to sell their satellite-delivered networks to DBS competitors. Cable wants the law to sunset in 2002, while the satellite industry not only wants it extended, but expanded to include unaffiliated networks. Cable hopes a GOP-controlled FCC will allow the market to determine program sale practices.

Powell may have to referee cable's growing annoyance with retransmission consent. Some MSOs believe The Walt Disney Co. is abusing its power by linking the carriage of ABC owned-and-operated TV stations to a welter of Disney-owned cable networks, both old and new, valuable and untested.

In recent comments, Powell didn't seem too sympathetic to MSO anxieties.

On the contrary, he said operators' unwillingness to pay cash to local TV stations may have precipitated the TV networks' move to demand payment in the form of cable-network carriage.

NOT A 'MITIGATOR'

After the passage of the 1992 Cable Act, Powell said cable operators refused to pay cash and instead cut deals to launch new broadcaster-affiliated cable networks or expand carriage of incumbent networks.

That decision, he continued, likely emboldened the major networks to demand carriage for multiple cable networks, leading to hard feelings by operators and independent cable networks who felt the process squeezed them off the cable dial.

"So in some ways, I am not so sure the operators themselves [didn't invite] the mess that they claim to be a victim of," Powell said.

When cable operators complain to him about Disney, Powell said his typical response is that MSOs can drop the TV stations.

"That's what markets mean-if you don't like the terms, don't agree to them," Powell said.

But, he added, operators usually respond that such a move produces only a public-relations black eye. The FCC's role was not to "mitigate the public-relations dangers" associated with business negotiations, Powell said.

"Just say no? I saw what he said," said Comcast Corp. president Steve Burke, who has his own raging battle with Disney. Comcast, he said, would not anger its customers to prove a point in negotiations.

"I think it's very, very difficult to take programming away from consumers," he said. "All along in our discussion with Disney, we have said we will never take ABC off the air."

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