Kevin Martin's coup in the FCC's controversial telephone-deregulation proceeding last week was a startling defeat for Chairman Michael Powell (see story, page 2). And it suggests that Powell may have trouble delivering on other parts of his deregulatory agenda, including relaxation of the media- ownership rules this spring.
Although sources close to Martin say he will still push to eliminate prohibitions on crossownership of broadcast stations and newspapers in the same market and to lift the 35% cap on one company's TV-household reach, others take nothing for granted.
"Anyone who isn't nervous is crazy," said one network lobbyist.
As a Bush-appointed Republican, Martin is expected to go along with fellow Republicans Powell and Kathleen Abernathy in most instances. Together, they constitute a majority at the five-commissioner agency.
But Martin broke up Powell's bid to eliminate rules that force telephone companies to lease voice lines to competitors by joining with the Democratic minority of Michael Copps and Jonathan Adelstein.
"This decision had a very bizarre coalition. Clearly, this is a fractured FCC," said Precursor Group's Scott Cleland, a former FCC official.
Martin is paying a political price. Deregulatory-minded Billy Tauzin (R-La.) said regulatory reform has been "stabbed in the back." Tauzin, the House Energy and Commerce Committee chairman, called Martin a "renegade Republican" and the "soulmate" and "ideological brother" of previous Democratic chairmen Reed Hundt and William Kennard. Coming from a leading Republican, those aren't compliments.
Antagonism between Powell and Martin has been an open secret in Washington for months but did not boil over until last week's vote at the commission's regular February meeting. There, Powell attacked the ruling he believes is doomed in the courts—with a stream of derisive characterizations, including "molten morass of regulatory activity," "Picasso-esque," and "trivial misuse" of state rights.
In Powell's view, Martin's coup raises the prospect of the one outcome Powell most wants to avoid: federal judges' dismissal of rules enacted under his watch.
Rep. Fred Upton (R-Mich.), who chairs the Telecommunications Subcommittee, said, "The wrangling behind Powell's back was inexcusable. This is a serious matter with American jobs and technology advancement hanging in the balance."
Sen. Sam Brownback (R-Kan.), who chairs Senate Commerce's Science, Technology and Space Subcommittee, suggested that Martin's confirmation was a mistake. "In future considerations of FCC nominees, I will examine carefully their interpretations of current telecommunications law."
Even a Democratic senator who supported the outcome of Martin's revolt fretted that a split FCC will lead to turmoil in the telecommunications industry. "I fear that the commission today has missed an important opportunity to speak with one voice and to provide greater certainty," said Ernest Hollings (D-S.C.), ranking member of the Senate Commerce Committee.
Ever since being sworn in in July 2001, Martin has been a thorn in Powell's side on several important votes: notably, dissent or criticism of decisions requiring nearly all TV sets to have digital tuners by 2007, rejecting EchoStar's two-dish requirement for local TV channels and creating a spectrum task force. None of those complaints threatened a Powell victory, however. (Indeed, Martin sided with other Republicans in eliminating rules requiring telcos to lease facilities to broadband competitors.)
With the Democrats desperate to blunt as much as possible the larger GOP deregulatory agenda, they will be more than willing to deal with Martin on other issues if he is willing.
He has already sent encouraging signals of support for Copps's campaign for more family-oriented programming. As a possible quid pro quo for his support, Martin may insist on backing that would allow him, rather than Powell, to shape such key issues as cable must-carry rules for local digital channels or the network/affiliate relationship.
Martin, according to several Washington sources, has thwarted Powell's effort to dismiss affiliates' petition accusing the big networks' of violating FCC rules governing their relations and has called for the commission to review tentative rules on carriage of broadcasters' electronic program guides and multicast digital channels.
Not since the tenure of Republican Chairman Al Sikes in the early '90s has an FCC chairman faced a persistent threat of being outvoted. He lost two key votes, both media issues, and the potential of additional defeats weakened his negotiating position on other issues. In 1991, he lost a bid to eliminate fin-syn rules. The next year, his bid to block Infinity Broadcasting's purchase of three New York radio stations because of jock shock Howard Stern went down in a 4-1 vote.
Many of Sikes's problems stemmed from his antagonistic relationship with fellow Republican Sherrie Marshall, who had lost a bid for the chairman's seat. Like Powell last week, Sikes also faced legal deadlines that forced him to bring issues to a vote despite not having the votes for his position. In most cases, chairmen have the option of postponing an issue indefinitely if their position won't win.
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