Michael Powells AOL Connection

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Washington -- Not long after America Online Inc. began its
heavy lobbying of the Federal Communications Commission last summer, Commissioner Michael
Powell decided to have a chat with the agency's ethics czars.

Powell needed to answer this question: Could he continue to
participate in the cable-Internet unbundling debate instigated by AOL now that his father
-- retired Gen. Colin Powell -- was a director on the online company's board?

Even though the whole scenario sounded very
Washington-cozy, the FCC told Powell that yes, he could.

"I think I take ethics more seriously than most people
I know," he said.

"We did a full evaluation to make sure [Powell could
participate]."

In the end, Powell demonstrated little enthusiasm for AOL's
position, saying the FCC should encourage competition for cable's facilities rather than
mandate third-party access.

When the unbundling debate was raging last fall and early
winter, the cable industry never suggested Powell might have a conflict of interest. A
Washington cable lobbyist said the industry's silence was intentional because it knew
Powell had doubts about AOL's views.

Powell even joked that as things turned out, the decision
on AOL was "probably the one that wished I wasn't" involved in.

Cable's silence with regard to Powell stands in contrast to
its comments on Scott Cleland, a prominent Washington telecom analyst who predicted the
FCC would eventually force cable operators to open their networks to unaffiliated Internet
service providers.

Then-NCTA spokeswoman Torie Clarke complained last November
that Cleland, managing director of Legg Mason Precursor Group, failed to mention in his
cable unbundling reports that Legg Mason's mutual funds held about $700 million in
AOL stock.

Cleland responded that his group is walled off from the
mutual fund family and that he had no knowledge of Legg Mason's AOL holdings.

- Ted Hearn

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