SENATE COMMERCE COMMITTEE GRILLS POWELL, 3 FCC NOMINEES
Senate Commerce Committee grilled FCC Chmn. Powell Thurs. about everything from agency’s administration of E-rate program to his views on broadcast ownership concentration and structural separation for Bells. Questioning took place at confirmation hearing for Powell and 3 other nominees to Commission, although most of time was spent with Powell as senators used session to delve into variety of FCC issues. Powell is undergoing confirmation for his recent 5-year nomination as chairman. Those nominated for new FCC posts are Kathleen Abernathy, former Bell company executive; Michael Copps, ex-asst. secy. of Commerce for trade development; and Kevin Martin, ex-aide to FCC Comr. Harold Furchtgott-Roth. Committee leaders said they tentatively planned to vote on confirmations May 24.
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Sen. Rockefeller (D-W.Va.) closely questioned all of them about their views on E-rate program, saying he wanted to put them “on the record.” He apologized for asking such detailed questions but said it was important to get their views on supporting program because Bush Administration had proposed changes. Rockefeller asked them if they supported current system of providing E-rate support through discounted services, would maintain current list of services supported by E-rate program and supported way E-rate was funded. All of them said “yes,” although the one Democratic nominee, Copps, appeared to be most enthusiastic and direct in his responses.
Sen. Wyden (D-Ore.) questioned Powell’s views on easing cross-ownership rules, saying chairman could end up with “most radical concentration of media ownership in this country” during his tenure at FCC. Powell responded that his public statements had only committed to what Congress required -- to have biennial reviews of whether existing regulations, such as ownership rules, still were needed. FCC is obligated to review regulations and “I also believe it is healthy to do so,” Powell said: “A good many of these rules date back to 70s and some to the 40s. No one could rationally argue that the market hasn’t changed. If a rule continues to serve a purpose, it should be maintained.” Pressed by Wyden on whether deregulation could result in “one outfit owning nearly everything,” Powell said “it troubles me” that result was being described “before we've done anything.” He said if Wyden’s “radical concentration” were threatened, he would hope antitrust enforcers would step in ahead of time. Bottom line, he said, is that FCC has to examine necessity of rules.
Asked by Sen. Hollings (D-S.C.) for his views on structural separation for Bells, Powell said he thought it would cause “great disruption” to telecom marketplace. Maybe it would work but it would take many years, just as original AT&T divestiture did, Powell said. Hollings questioned Powell’s recent statement that higher fines could enable him to “hurt you and hurt you bad” if Bell company violated Telecom Act’s procompetition rules. He said some of Bells already were paying multimillion-dollar penalties and it hadn’t changed anything. “No way are you going to hurt them with fines.” Asked by Committee Chmn. McCain (R-Ariz.) for his views on Europe’s head start on 3rd generation wireless buildout, Powell said he agreed somewhat that U.S. was behind, if for no other reason than that it was hard to coordinate spectrum when so many different parts of govt. were involved. However, he said companies such as British Telecom “may face the grime reaper” on that issue because they might have moved too fast.
Asked by Sen. Brownback (R-Kan.) what FCC could do about TV violence, Powell said that as father of 2 he sometimes was upset as he watched TV but then says to himself, “okay hot shot, write the rule.” It’s extremely difficult issue, he said. Because of First Amendment limits, it has to be approached “at a higher level,” he said. Powell said he was “uncomfortable” about FCC acting on issue, which would reflect “value judgments” of only 5 people -- FCC commissioners. It’s better for Congress to do it so broader range of people “through their elected representatives” can express that value judgment.
Sen. Burns, (R-Mont.), Telecom Subcommittee chmn., revealed that he, joined by Sen. Hollings and Sen. Kerry (D-Mass.), had asked General Accounting Office (GAO) Wed. to conduct “top-down review of all aspects of spectrum allocation policy” (see separate item, this issue). He said they asked GAO to determine whether “a more coordinated approach for addressing the needs of both federal and commercial stakeholders would be more efficient than the current patchwork system.”
Based on their written disclosures, Abernathy appeared to be only one with potential conflicts of interest because of her ownership of telecom stock. She owns stock in Qwest, Verizon and Vodafone, mainly. She told committee in her written material that she would divest some of her holdings and in other cases would disqualify herself from any proceeding that might affect companies whose stock she retained.