Weary Powell Sees Overregulation Trend


Federal Communications Commission Chairman Michael Powell warned telecommunications executives Monday (Aug. 18) that faith in free markets and deregulation is waning in the nation's capital.

"In Washington, I see a rise of a regulatory ethos, a belief that regulators can do it better," Powell said Monday at the Aspen Summit in Colorado. "I find that worrisome. The telecommunications and high-tech industries are at a point where they can ill afford to be lined up with that kind of thinking on policy.

"Innovation, the magic that goes into how an entrepreneur in his garage comes up with something never done before, is really unique and has only flowered in countries committed to free markets and risk-taking," Powell said. "If we micromanage, we will quell innovation in a way that is a threat to it."

'Cumbersome' FCC

Powell expressed concerns that the FCC's structure of five members divided by political party was "cumbersome" and hindered the commission's capacity for "bold, decisive decisions made quickly."

"What worries me even more than our speed is our ability to not be mealy-mouthed," Powell said. "Even after you read the paragraph the fourth time, you're reading it and not sure what it means and what to do, because five people negotiated over what that says.

"I think a lot of businessmen would prefer, right or wrong, for it to be clear. They're thinking, 'Even if you're going to screw me, tell me what the law is, and I'll find another way to do it.' "

One of Powell's fellow Republican commissioners, Kathleen Abernathy, took an optimistic view in a later panel discussion of the FCC's decisions over the past year. She said the agency was "headed in the right direction.

"We're headed in a deregulatory direction, and we've taken heat for heading in this direction," Abernathy said.

She agreed that calls for more regulation have picked up in recent years.

"It's ironic to me that the more the marketplace delivers to consumers, for example wireless telephony media, the more choices we have, the more we see a backlash toward greater regulation," Abernathy said. "The better it gets, the more you want to touch it and make it even better. We have to resist that urge."

Insight Communications Co. vice chairman and CEO Michael Willner echoed Powell's concerns.

"The winds of reregulation are starting to blow again, and I agree with the chairman that those are very dangerous winds," Willner said, speaking during a panel discussion with executives of companies that provide digital-subscriber-line Internet service, wireline and wireless communications and long-distance calling. "Competing with the industries on this dais will be the best regulator of consumer pricing possibly known to mankind."

Willner said cable firms have not urged the federal government to regulate competing companies, like satellite providers, and urged cable's competitors to stop calling for more regulation in their industry.

"When we go into a Tallahassee or a Springfield or other state governments, the infrastructure of the relationship between state regulators and our competitors is overwhelming," Willner said.

"I don't think the message is being delivered in state legislatures that deregulation is a good thing. The sooner we all get the same message out of the same side of our mouths, the better off all of us will be."

His comments were echoed during a later panel discussion by Joseph Waz Jr., Comcast Corp.'s vice president for external affairs.

"The term 'regulatory parity' is a troubling one," Waz said. "What we ought to be aiming for is deregulatory parity. Are we on the same page in terms of trying to reduce regulation across the board? Because if we're not, we're guaranteeing a train wreck somewhere down the line."

USTA agrees

Margaret Greene, chair of the United States Telecom Association, said her organization was "in total agreement" with the cable industry.

"We are not in this to have cable more regulated," she said.

Raymond Gifford, president of the Progress & Freedom Foundation, which hosted the Aspen Summit, asked his panelists whether Congress would have a role in reigning in the states' "ripening" regulatory impulse.

"The federal government has no choice," Willner said. "It's going to have to happen that way if we're going to stay competitive on an international level most countries do not have states rights issues when it come to how they regulate their phone company."

Waz agreed that some pro-regulation voices in Washington were getting louder, and failing to recognize some types of competition that currently exist in the market.

"We're hearing a bit of a rumbling from Capitol Hill calling for retail price regulation of cable," Waz said. "I think those who are calling for that are being heedless of the incredible competition that we have with satellite dishes, DirecTV [Inc.], and companies like Starpower in Washington, D.C.

"People have three and four places to choose for video in these markets. We should stay the course set in 1996, which is pro-competition and deregulation."

States News Service