WASHINGTON - Disclosing one of the capital's worst-kept secrets, President Bush used his first working day in office last week to name Federal Communications Commission member Michael Powell as the agency's new Republican chairman.
Powell, a lawyer and son of Secretary of State Colin Powell, will lead an FCC controlled by two Republicans and two Democrats. A third FCC Republican needs to be confirmed to give Powell a GOP majority to pass his agenda.
"I am deeply honored and privileged to have received President Bush's designation to be chairman of the Federal Communications Commission," Powell said in a prepared statement. "I look forward to working with the new administration, Congress, my fellow commissioners and the very talented FCC staff on the important and challenging communications issues facing our nation."
House Commerce Committee chairman Rep. Billy Tauzin (R-La.)-who lobbied on Powell's behalf-issued a statement hailing Bush's decision.
"In my opinion, this is one of President Bush's best-and most exciting-selections for his new administration," Tauzin said. "For years, watching the FCC work has been like watching an old black-and-white movie. But now, with Michael Powell in charge, get ready for an FCC broadcast in HDTV."
Tauzin hopes Powell will trim the FCC's role in reviewing mergers and will remove regulations that needlessly hamstring competitors.
Paul Glenchur, a cable analyst with Schwab Washington Research Group, said he expects Powell to allow TV stations to reach more than 35 percent of households and allow for greater common ownership of TV stations and newspapers within the same market.
"You could see a greater willingness to acknowledge that changes in technology and other changes in the video-distribution marketplace justify a serious re-examination, if not the ultimate elimination, of many of the broadcast-ownership restrictions that are in the rules today," Glehcnur said.
Powell, 37, was appointed to the FCC by President Clinton in 1997. His current term expires in June 2002.
He replaced Democrat William Kennard, who resigned the chairmanship on Jan. 19 to take a temporary position with the Aspen Institute.
Over the last three years, Powell has been an articulate spokesman for letting market forces prevail and for a more relaxed FCC role in deciding the scope of merger conditions and general regulations designed to protect the public interest.
But at the same time, he has defended enforcement of antitrust laws to block mergers from tipping markets toward monopoly.
James Glassman, a resident scholar at the American Enterprise Institute, said that after reviewing many of Powell's public statements, he has concerns about whether Powell is truly committed to reform and deregulation at the FCC.
"That's the direction Powell wants to go in, yes, but I am not convinced that Powell is going to do that," said Glassman, host of Web site techcentralstation.com. "He frequently talks a good game, but I do have my doubts."
Glassman said Powell would allay his fears if he were to say from the outset that he will not regulate the Internet, will approve all license transfers in a perfunctory manner and will ask Congress to repeal the $2 billion annual program to wire schools and libraries to the Internet.
"If he does all three of those things, then I will know he is serious," Glassman added.
National Cable Television Association president Robert Sachs applauded Powell's selection: "Michael Powell brings to the position a firm command of issues before the FCC. He has been an outstanding commissioner, and will make an excellent chairman."
Powell named his former legal adviser, Marsha MacBride, as chief of staff. Susan Eid, a former lobbyist for MediaOne Group Inc., will serve as Powell's cable adviser.
MacBride left Powell's office in June to become a Washington lobbyist for The Walt Disney Co. At that time, the company was in the middle of a high-profile battle to impose tough conditions on the merger between America Online Inc. and Time Warner Inc.
MacBride, a lawyer and FCC veteran, has worked in several FCC bureaus and in the office of former commissioner James Quello. As Powell's legal adviser, she helped to organize the agency's role in addressing the Year 2000 computer rollover. At Disney, she was vice president of government relations.
As FCC chief of staff, MacBride becomes one of the most powerful officials at the agency -- perhaps an even more potent force than some commissioners. She will lay the groundwork for driving Powell's agenda through the 2,000-person bureaucracy and into concrete rules.
FCC and industry sources said that due to MacBride's association with Disney, she might have to recuse herself from several FCC proceedings, including the one just launched on interactive television. Disney lobbied the agency to investigate potential cable-operator discrimination against competing interactive-TV providers.
In approving the AOL-Time Warner merger two weeks ago, Powell indicated support for the Federal Trade Commission's Internet open-access requirements, but he disagreed with FCC conditions on advanced instant messaging and on billing and first-screen arrangements between AOL Time Warner Inc. and third-party Internet-service providers.
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