Directional Shift

New signals may come from FCC

For players in the communications revolution, Michael Powell could be either a liberator or a prophet of doom.

As the newly inaugurated George W. Bush administration organizes its file cabinets, Powell is expected to loosen the reins on growing high-speed networks after his anticipated promotion to chairman of the Federal Communications Commission.

Nervously pacing the sidelines, the industries that have been guided, impeded and protected by federal regulation are watching closely for new signals from the Republican-chaired FCC. For competitive local exchange carriers, any shift favoring the regional Bells could be fatal, said John D. Windhausen Jr., president of the Association for Local Telecommunications Services.

"This coming year is a pivotal year for local communications policy," Windhausen said. "Our companies dont have strong enough roots to survive an economic downturn, and dont have strong enough roots to survive a policy change. If the Bush administration turns back to a pro-monopoly policy, we could be dead as an industry."

In the opposite camp, the U.S. Telecom Association is hoping the Powell-led FCC unyokes the regional Bells, moves more quickly on policy and merger decisions, and begins treating cable operators and phone companies equally.

As an FCC commissioner, Powell has called for speedier decisions and a more global view of the communications industry. He has also expressed the belief that the FCC should be concerned about consumer protection, but not frozen by it.

"We would look forward to his chairmanship, in a word," said Gary R. Lytle, interim president of the U.S. Telecom Association, which represents the regional Bells.

Lytle also takes exception to some of the social programs that outgoing Chairman William Kennard considered his major accomplishments — raising fees and taxes to support Internet access to the schools, and crossing the "Digital Divide" into poor, rural or underserved regions.

Powell, the son of secretary of state designee Colin Powell, shares a bit of his fathers Army background and boasts a résumé deep in legal and regulatory experience.

While Democrat Kennard prided himself on his restraint in regulating the cable industry and allowing the Internet to develop relatively unfettered, the Republican Powell is expected to take an even more hands-off approach.

"I think youll see Michael Powell take a different view," said Randolph May, director of communications policy studies at the Progress & Freedom Foundation. "My advice has been that the FCC chairman has to try and steer the commission away from" Kennards micromanagement.

Powells chief concern with the FCCs recent conditions on the America Online-Time Warner merger was that it augured the dawn of Internet regulation. He also expressed concern about forcing the Time Warner cable operation to open access to rival Internet providers, a condition imposed by the Federal Trade Commission.

In general, Powell views the Internet age as one of historys great migrations, kicking up clouds of dust and changing the landscape.

Kennard, for his part, saw the FCC as an important agent of change. Imagining historys view of his era, Kennard hopes "they will say that late in the 20th century, a sleepy, backwater agency called the Federal Communications Commission, described by some as a New Deal dinosaur from the 1930s, came to life, reinvented itself, engaged the future and helped to launch our nation into the Broadband Internet Age."