IP: FCC Chief Powell, Senate's Hollings Clash In Hearing

[Dave Farber <dave () farber net>]

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From: Dewayne Hendricks <dewayne () warpspeed com>

March 7, 2002
FCC Chief Powell, Senate's Hollings Clash In Hearing
By MARK WIGFIELD
    Of DOW JONES NEWSWIRES

WASHINGTON -- Sen. Ernest Hollings, D-S.C., sharply criticized the
deregulatory tendencies of Federal Communications Commission Chairman
Michael Powell during a congressional hearing Thursday.

Barraging Powell with a series of Powell's quotes from newspaper
interviews, Hollings said the FCC chief appears to be abandoning his
responsibilities as regulator to the marketplace. Hollings cited one
Powell quote in which the chairman is purported to have said "my
religion is the market."
"You don't care about the regulations," said Hollings. Hollings
chairs the appropriations subcommittee that controls the FCC's budget
and chairs the full Commerce Committee that sets telecommunications
policy.
"You don't care about the law. You say the public interest is an
'empty vessel.' That's the misgivings I have about your
administration," Hollings said.
"I think you'd be a good executive vice president of the Chamber of
Commerce, not the chairman of a regulatory agency. Are you happy with
your job?"
"Extremely," Powell answered.

The hearing marked a departure for Hollings from what appeared in the
past to be a cooler, wait-and-see attitude toward Powell, who assumed
his leadership  post when the Bush White House took office last year.
Hollings has taken a high-profile role in derailing a settlement
brokered by Powell of the long-running $16 billion NextWave Telecom
Inc. wireless spectrum dispute. While Powell saw the settlement as
the quickest way to get the spectrum into use, Hollings saw the $6
billion NextWave would have received  as a disturbing giveaway to a
bankrupt company that never provided wireless service but instead
acted like a law firm bent on bending FCC rules.
Hollings is also the man trying to write the death sentence in the
Senate for the House's so-called Tauzin-Dingell bill that would
deregulate broadband services offered by the Baby Bell telephone
companies. Hollings charged that Powell is trying to accomplish such
deregulation with the FCC.
Powell told Hollings he couldn't recall the "market is my religion"
quote. He said there are "fundamental differences" between the FCC's
broadband proceedings and the Tauzin-Dingell bill.

And he denied that he was trying to confer upon NextWave any private
ownership rights for the spectrum. Indeed, Powell noted that he
pushed for and won on Monday a Supreme Court review of the NextWave
case. The case could clarify that NextWave's spectrum licenses are
not private assets subject to the  protections of a bankruptcy
filing, but are a regulatory tool properly overseen by the FCC.
"But you were heading in both directions," Hollings said.
"That's not accurate," Powell countered. "There was nothing in the
settlement that would have undercut the Supreme Court case."
"We have a fundamental difference of opinion," Hollings said. He
proceeded to read a scathing op-ed column by William Safire in
Thursday's New York Times,  which portrayed a "roundheeled Michael
Powell steering the Federal Communications Commission toward terminal
fecklessness ..."
Hollings also announced that the Commerce Committee will hold a
hearing on  local telephone competition on March 20. Among those
testifying will be an author of the Tauzin-Dingell bill, Rep. Billy
Tauzin, R-La., who chairs the House Commerce Committee.

Powell got gentler treatment from two Republicans at Thursdays
hearing. The difference in tone showed how telecommunications
politics could be changed  by the November elections, where party
control of the Senate and its powerful  chairmanships hang in the
balance.
Under questioning from Sen. Judd Gregg, R-N.H., who would chair the
Appropriations subcommittee if the Senate changed hands, Powell said
the FCC's  broadband proceeding is considering ways to continue
protecting access to telephone lines for competitive Internet
services even if deregulated, something that critics of
Tauzin-Dingell say that bill fails to do.
Any new regulations "will focus on the service being offered, not the
nature of the technology," Powell said. Broadband services are
provided over both cable and telephone lines, which are regulated
differently.
Gregg pressed Powell for the status of a long-running proceeding that
could open new competition to satellite television providers EchoStar
Communications Inc. (DISH) and Hughes Electronics Corp. 's (GMH)
DirecTV. Developed by a company called Northpoint Technology Ltd.,
the system would share satellite spectrum used by EchoStar and Hughes
to beam terrestrial signals carrying television programming and
broadband services.

"I had hoped the FCC would have been done by now," Powell said. "We
have failed to do so."
While he declined to provide details on the proceeding, he said he
had already cast his vote and is "awaiting the votes of my
colleagues."
"I continue to hope for a decision," Powell said. "I'd like to think
it  is imminent."

Sen. Ted Stevens, R-Ak., asked Powell whether any further
congressional action is needed to resolve the NextWave case. He noted
that Congress came close to passing legislation last year that would
have ratified the NextWave settlement.
Powell said a need remains for legislation that would clarify that
communications law trumps bankruptcy law when it comes to spectrum
licenses. The only other option is to clarify that question through
the courts -- an option that could still take years.

Hollings made no comment on the prospects for such legislation. But
he has  said that communications law is clear that there is no
private ownership right to public spectrum.
Hollings viewed the NextWave settlement as a repudiation of that
policy. It would have turned spectrum ownership rights over to the
private sector, as well as cost taxpayers billions of dollars, he has
said.

-By Mark Wigfield, Dow Jones Newswires; 202-828-3397;
mark.wigfield () dowjones com
Updated March 7, 2002 1:26 p.m. EST



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