January 21, 2005 9:45 AM PST

Mixed legacy for FCC's Powell

The unrepentant, hands-off views on broadband of outgoing FCC Chairman Michael Powell have set in motion a high-stakes battle over the future of the U.S. telecommunications industry that will continue long after his departure.


Powell, appointed chairman of the Federal Communications Commission by President Bush in January 2001, leaves behind a booming, substantially deregulated marketplace that has embraced high-speed Internet connections, wireless and voice over Internet Protocol (VoIP) in ways that were nearly unimaginable in the 1990s.

"We worked to get the law right in order to stimulate innovative technology that puts more power in the hands of the American people," Powell said in a statement, summarizing his sometimes controversial reign over the agency. "Evidence of our success can be seen increasingly in the offices, the automobiles and the living rooms of the American consumer." Powell said he plans to depart in March.

During his tenure, Powell consistently advocated a free-market approach to broadband and VoIP, which often put him at odds with the two Democratic commissioners and sometimes Kevin Martin, a fellow Republican. Powell argued for greater competition between cable and DSL rather than continuing predecessor William Kennard's approach of forcing telephone companies to accommodate rivals on their networks by signing money-losing deals.

Those generally laissez-faire views led to a series of crucial rulings from the FCC, including one in March 2002 that immunized cable modems from the stack of 20th-century rules and fees that apply to "telecommunications services," and another in February 2003 that let former Bell companies run fiber-optic lines to American homes without being required to make the links available to competitors.

It may be too early, though, to judge Powell's legacy. While Bush has not signaled his choice for a new chairman, the more regulatory-minded Martin is one likely candidate. In addition, lawsuits challenging some of the Powell-backed rules are bubbling through the court system--including one that's now before the U.S. Supreme Court--and Congress is itching to revisit the nation's telecommunications laws this year.

Congressional tinkering could imperil the current protected status of VoIP, which Powell has aggressively shielded from intrusive government regulation and taxation. The FCC Republicans ruled last February that Internet-only VoIP services were not subject to FCC oversight and expanded that view in November to protect VoIP from state regulators. In August, Powell and his colleagues took a major step toward imposing wiretapping rules on VoIP, but stopped short of giving the FBI and other federal police agencies everything they wanted.

Powell may be best known for his efforts to relax rules against media ownership and his crusade against broadcast indecency, which targeted prominent figures including Janet Jackson--after her breast-baring incident--and talk show host Howard Stern. On one memorable occasion, Stern phoned a radio show that had invited the FCC chairman as a guest and challenged Powell to a debate over censorship.

"Powell's plan for mass media consolidation, which I continue to believe is the single worst decision in the FCC's history, would permit a single person in one community to own three TV stations, eight radio stations, the only newspaper in town, the cable system, and all the Internet portals for such entities," longtime enemy Rep. Ed Markey, D-Mass. said on Friday. "This terrible decision galvanized a bipartisan backlash against such a sweeping plan."

But technology companies were generally more positive. Microsoft chief technology officer Craig Mundie said his company looks "forward to future commissions following through on (Powell's) agenda and we are hopeful it becomes a roadmap for the rest of the world."

"He let us go out and build this new thing without knowing all the issues beforehand," said Jeff Citron, chief executive of Vonage, the largest U.S. provider of Internet telephone services. "He helped the telephone industry transition from the old to the new world."

Many of Powell's deregulatory victories were won by the narrowest of margins, with the chairman marshaling the other two Republican commissioners against the two Democrats who found themselves in the minority. His most strident opposition typically came from Commissioner Michael Copps, a Democrat who has urged stiffer regulations on cable modems and VoIP services. Last November, for instance, Copps said he would "withhold" his approval of VoIP deregulation because the decision could "erode our partnership with the states."

"I think the free market really has lost a friend in Michael Powell," said Adam Thierer, a telecommunications analyst at the Cato Institute. "This was a man who really did believe in the superiority of markets over Band-Aids. It didn't always translate well. But make no doubt about it, this was a man with a clear vision that generally stressed the benefits of capitalism over central planning."

The number of cell phones in the United States increased from 130 million to 175 million with Powell at the helm. "Consumers were always Michael's top priority, and he knew instinctively that they were best served when free and competitive markets were permitted to function," Steve Largent, president of cell phone lobbying group CTIA-The Wireless Association, said in a statement.

Powell's tenure was not without controversy: His free-market approach to media ownership estranged him from the White House, which

CONTINUED:
Page 1 | 2

10 comments

Join the conversation!
Add your comment
Excuse me...
...it's time for dancin' in the halls!

Could this finally be the end of broadband's cost & competition spiral in the U.S.?
Posted by (22 comments )
Reply Link Flag
Excuse me...
...it's time for dancin' in the halls!

Could this finally be the end of broadband's cost & competition spiral in the U.S.?
Posted by (22 comments )
Reply Link Flag
Wait for the replacment
His replacement hasn't been named yet. Things can get a lot worse! Last fall there was a lot of talk about it going to Becky Armendriz Klein, former chair of the Texas PUC. She makes Powell look like a real liberal pro-competition guy. (Sort of like making Rumsfeld look like a dove.)
Posted by fgoldstein (144 comments )
Reply Link Flag
Wait for the replacment
His replacement hasn't been named yet. Things can get a lot worse! Last fall there was a lot of talk about it going to Becky Armendriz Klein, former chair of the Texas PUC. She makes Powell look like a real liberal pro-competition guy. (Sort of like making Rumsfeld look like a dove.)
Posted by fgoldstein (144 comments )
Reply Link Flag
Telecom Oligolopy
As Mr. Powell's reign comes to a close, here's his record:

1) Fewer cell phone carriers, poor connection quality

2) Rise of mega-carriers

3) Move to lock customers into 2 year term contracts

4) Bundling of services to further lock customers in

Take a look at carriers like SBC. They now bundle local phone service, long distance, broadband (DSL & dish), and cell. This is the kind of bundling that landed IBM in court for anti-trust. That was back when governemnt actually thought trusts were bad. Nowdays, the government never saw a trust they didn't like.

The choices for broadband are few, and the price is high. After the teaser rates, it's between $40-$60 a month. My "choices" consist of SBC, Comcast, or Dish.

Where is the new competition? With advancing technology we should be seeing more new players, not fewer. The mega-players have a lock on the last mile. I cannot circumvent them to get broadband or cell. I have lots of choices for content, but not for the delivery of the content. Which results in continuing upward price pressure, complicated contracts, and high termination penalties. This is NOT progress.
Posted by Stating (869 comments )
Reply Link Flag
Telecom Oligolopy
As Mr. Powell's reign comes to a close, here's his record:

1) Fewer cell phone carriers, poor connection quality

2) Rise of mega-carriers

3) Move to lock customers into 2 year term contracts

4) Bundling of services to further lock customers in

Take a look at carriers like SBC. They now bundle local phone service, long distance, broadband (DSL & dish), and cell. This is the kind of bundling that landed IBM in court for anti-trust. That was back when governemnt actually thought trusts were bad. Nowdays, the government never saw a trust they didn't like.

The choices for broadband are few, and the price is high. After the teaser rates, it's between $40-$60 a month. My "choices" consist of SBC, Comcast, or Dish.

Where is the new competition? With advancing technology we should be seeing more new players, not fewer. The mega-players have a lock on the last mile. I cannot circumvent them to get broadband or cell. I have lots of choices for content, but not for the delivery of the content. Which results in continuing upward price pressure, complicated contracts, and high termination penalties. This is NOT progress.
Posted by Stating (869 comments )
Reply Link Flag
Is he leaving the administration because of the resignation of his dad?
I wonder If anybody has heard about this being the main reason for him leaving
Posted by topio (22 comments )
Reply Link Flag
I've got to believe that has something to do with it.
My understanding is that the elder Powell was starting to lose status with our current administration.
Posted by (3 comments )
Link Flag
Is he leaving the administration because of the resignation of his dad?
I wonder If anybody has heard about this being the main reason for him leaving
Posted by topio (22 comments )
Reply Link Flag
I've got to believe that has something to do with it.
My understanding is that the elder Powell was starting to lose status with our current administration.
Posted by (3 comments )
Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.