Subject: [NEXTEL-1] FCC's Powell Won't Stay, Some Speculate

From: NEXTEL-1
Date: Wed, 30 Jun 2004 0:02:12 -0400

FCC's Powell Won't Stay, Some Speculate

The agency chief denies plans to depart after the
election, but the media and telecom industries are
lobbying as if he will

By Jube Shiver Jr.,
Times Staff Writer
June 29, 2004

WASHINGTON
Convinced that Federal Communications Commission Chairman Michael K. Powell will step down this winter, lobbyists for media and telecommunications companies are rushing to put their pet issues on the agency's agenda.

At least two other commissioners are pondering leaving the FCC. And that could significantly alter the political makeup of the five-member commission that regulates the nation's broadcasting and telecommunications industries.
The 41-year-old Powell denied that he had any immediate plans to leave. But the former Army officer and antitrust lawyer recently prepared a six-month strategy for resolving the controversial media ownership, indecency and telephone competition issues that have become hallmarks of his tenure.

Tom Tauke, the top lobbyist for Verizon Communications Inc., said the company was pressing to have telephone competition rules rewritten this year, fearing that a new lineup of FCC commissioners might take a tougher stance against the companies that own most of the country's local telephone lines.

John Nakahata, a Washington lawyer who represents telephone as well as cable clients, said he also was moving fast. "If there's only four people there, it's harder to get to three votes," he said.

Another Washington lawyer, who represents television station owners and who asked not to be identified, said he had begun advising clients to wrap up any deals that might require FCC approval.

"During any election year, most FCC watchers are engaged in a game of 'Who will end up at the FCC?' " said James Bradford Ramsey, general counsel for the National Assn. of Regulatory Utility Commissioners, a Washington trade group. "I've never believed the rumors of Powell's impending departure before. But these I believe."

Washington has been whispering about Powell leaving the FCC since February 2003, when the soft-spoken but strong-willed bureaucrat suffered an embarrassing defeat over telephone competition rules. He lost a 3-2 vote on the rules, which were thrown out by a federal appeals court in March. And last week a federal appeals court sent the FCC's media ownership rules back for revisions.
Powell, the son of Secretary of State Colin L. Powell, declined to comment for this article.

FCC Chief of Staff Bryan Tramont said Powell "has no plans to leave after the president's reelection," disputing that the chairman would want to depart after a Bush victory. Tramont acknowledged, though, that Powell had done some thinking about wrapping things up in the event of a win by the presumed Democratic nominee, Sen. John F. Kerry of Massachusetts.

FCC spokesman David Fiske said that "at some point after three years as a commissioner and four years as chairman, it's time to move on. But I don't want to create the impression that anything's imminent. We'll see what happens after the election."

The less-than-adamant denials from his chief of staff and agency spokesman, observers say, is an indication that Powell has had enough of the FCC. But Powell's advisors insist that he has made no firm plans to leave.
Some political observers say Powell doesn't want to be viewed as a lame duck or have talk of his departure damage his chances of being appointed to another post in the Bush administration.

It is not known what post Powell is interested in, but there has long been talk of Powell becoming Commerce Department secretary or being appointed to the U.S. Court of Appeals in Washington. Some say Powell might join a technology investment group.

Powell was appointed to the commission in 1997 by former President Clinton.
In 2001, President Bush named him chairman.

It may require some deft footwork for Powell to walk out the door, given that both of his fellow Republicans at the FCC - Kevin J. Martin and Kathleen Q. Abernathy - are also eyeing the exits. And the term of Jonathan S. Adelstein, one of the commission's two Democrats, is set to expire at the end of the year.
Abernathy, a former telephone industry lobbyist, wants to return to the private sector, where she could substantially increase her salary, people familiar with her thinking say. Abernathy's senior legal advisor, Matt Brill, said that "the commissioner hasn't indicated she will leave. She has said she will wait until after the election to assess whether she wants another term or not."
Martin, meanwhile, is happy at the FCC but might leave if he isn't appointed chairman, people close to him say. That is an appointment Powell opposes.
"My plan is just to be right here," Martin said. Asked if he wanted to be chairman, Martin said, "I'm just trying to survive being commissioner."

Powell and Martin clashed last year after Powell criticized Martin for joining with the commission's two Democrats at the agency to oppose Powell's bid to overhaul telephone rules. Those rules require the Baby Bell local phone companies to lease their lines and equipment at regulated wholesale rates to rivals such as AT&T Corp.

The regulations have helped the long-distance giant and others wrest 19 million lines from the Bells. Powell, however, called the rules "fatally flawed" and warned that they would lead to endless litigation. A federal appeals court agreed with Powell and overturned the rules. Then, the U.S.  solicitor general and Martin separately agreed not to contest the appeals court's decision, a victory for Powell.

In the wake of that triumph, Powell has turned his focus to completing the unfinished parts of his telecommunications agenda. Powell's aides say the chairman wants to draft new telephone competition rules before the end of the year. He also is said to want to conclude work on regulations for Internet telephony and the digital TV transition, among other things.
Powell is not actively exploring opportunities outside the FCC. Still, rumors of possible vacancies at the agency have drawn the attention of the Senate and the White House.

For instance, Adelstein is trying to work out a deal to extend his FCC stay. Sens. Tom Daschle (D-S.D.) and Byron L. Dorgan (D-N.D.) have recently written to Bush on Adelstein's behalf and have been working behind the scenes to find Republican candidates acceptable to the GOP to package with him for appointment to the FCC, another agency or the judiciary, sources say.

Even if a deal is brokered, however, Powell might not leave if Abernathy departed and Martin stayed, because two open Republican slots would make it almost certain that Martin would become FCC chairman in a second Bush administration.

No more than three FCC commissioners can be from the same political party.  Commissioners are appointed to five-year terms by the president and confirmed by the Senate.

The political makeup of the FCC will influence the tone and direction of key regulations governing the $720-billion-a-year communications industry.  Last week both Bush and Kerry outlined their importance to the economy.
Kerry said he would accelerate the transition to digital TV by giving subsidies so that the poor could buy equipment that would give their standard TVs the sharper pictures and crisper sound of digital technology.  Kerry also said he would provide tax credits for investments in high-speed Internet access and reward small businesses that invest in high technology.

Bush reiterated his administration's commitment to universal deployment of high-speed Internet access by 2007 and also called for a continued ban on Internet taxes.

Whoever wins in November, experts said the communications industry would rather deal with known policymakers than wrestle with a new lineup. Said former FCC Chairman Reed Hundt: "No matter who's the president, there is likely to be enough turnover at the FCC early next year to reshuffle the voting power on every issue."

http://www.latimes.com/business/la-fi-powell29jun29,1,6935323.story?coll=la-headlines-business

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