McCain Would Want Transparent FCC, Less Focused on Rules

A 1999 bill that McCain introduced illuminates some of his thinking on a slimmer, nimbler FCC. The bill would have limited FCC review of mergers subject to FTC and Department of Justice review. The FCC’s “exercise of broad authority over telecommunications industry mergers overreaches its intended statutory authority and… produces delay and inconsistency in its decisions,” said the bill, which did not advance. Under it the FCC would have had to review mergers within 60 days.

A 2002 McCain bill would have deregulated consumer broadband services. That measure would have barred federal, state and local regulation of broadband rates or terms of service. “It reduces government interference with market forces that lead to consumer welfare, and looks for ways that government can facilitate, not dictate or control, the development of broadband technologies,” McCain said in his floor speech introducing the bill.

McCain proposed reduction of FCC regulatory authority in a bill he and Sen. John Ensign, R-Nev., proposed in 2005 that would have kept federal, state and local governments from regulating rates, price or terms of service for communication services. It also would have removed special access mandates. The bill drew little support, and did not advance. That year McCain was forced to yield the Senate Commerce Committee gavel to Sen. Ted Stevens, R-Alaska, after having chaired or been ranking member the previous four Congresses.

In 1999 McCain and then-Sen. Conrad Burns, R-Mont., pushed through another deregulatory bill paving the way for competition in the satellite industry. It became law. McCain also sought legislation to shorten broadcast license terms from eight to three years to provide “better public access to broadcasters’ public interest issues… and children’s programming reports.”

“Deregulatory with a consumer bent,” is how one former staffer summarizes McCain’s communications policy. It’s why he voted against the 1996 Telecom Act, one of five senators and the only Republican to do so. “He thought this was supposed to be a deregulatory bill, but in fact it was a regulatory bill,” the staffer said. The law picked winners and losers in the industry, which McCain thought a mistake, the aide said. At passage, McCain predicted prolonged litigation and little consumer benefit.

Six years after passage, McCain told Senate colleagues consumers “had yet to benefit from the bill,” which he said “fundamentally regulated, not deregulated” the telecom industry. “Competition denied by excessive regulation is costly to consumers,” he said.

DTV Transition

Getting broadcasters to speed the digital transition was among McCain’s main telecom emphases -- and one that often brought him into conflict with a powerful industry. Observers said he didn’t fret ruffling feathers. He wanted spectrum returned to the public and believed that without a law setting a deadline, the shift would drag on for years. His concern grew after the Sept. 11 attacks, when he decided public safety needed better tools, including spectrum.

“McCain didn’t worry about upsetting any industry,” said a former staffer. “He just cares about getting the right answers… He would be open to listening, but wanted to do things in a way that made sense.” McCain thought broadcasters would hold analog spectrum as long as possible, and wanted it back out there for public use, a former staffer said. McCain pushed for a law setting a hard transition date. Broadcasters fought it, contending they weren’t ready to make the switch.

“He was always railing on them to make sure the deadline wouldn’t push back,” the staffer said. “He was very critical of the industry.” McCain held hearings in 2000-01 “to make sure they [broadcasters] were moving in the right direction,” said officials who were involved at that time. He sought return of the spectrum, timed to make the most money for the government. McCain “vehemently” opposed a federal bailout of NextWave, a wireless company that defaulted on a spectrum bid. McCain and Hollings joined forces to kill a federal bailout, former staffers said.

As committee chairman, McCain scrutinized FCC operations, sources said. “He was always sitting on top of the FCC; he would send them tons of letters” urging that the agency rule on matters affecting business and criticizing its laggard pace. “He would tell them ‘I don’t care which way you rule, just make a decision.” Irate at bureaucratic logjams, McCain drafted a bill to “reform” the FCC by trimming it to three commissioners, a former staffer said. “He was always skeptical whether the FCC was doing its job in an efficient manner.”

While critical of the FCC, McCain also wanted to give the agency “the respect to allow them to do their work,” sources said. McCain backed Michael Powell to chair the FCC because he thought Powell would understand the issues and exercise strong leadership, they said.

The universal service fund was another McCain target, former staffers said. He offered amendments to try to close what he saw as program loopholes. “I don’t think he was critical of the concept, he just feared it would be this endless program that would continue to cost more and more money,” a former staffer said. “He worried that the bill was very regulatory and would create a huge government bureaucracy.”

Hands-Off Regulation

McCain opposes net neutrality legislation and wants no regulation of the Internet. He wants to see more broadband nationwide, and has sponsored bills to allow municipalities in rural or underserved areas build their own networks. “He believes the Internet should not be regulated,” aides said. If broadband providers engage in discriminatory conduct, the government should pursue them using antitrust law, according to McCain’s reading, they added. McCain thinks Powell’s net neutrality principles offer a framework for setting standards of corporate behavior while protecting consumer rights.

“He thinks the Internet is one of the biggest growth engines for the economy,” a former staffer said. “He would put a lot of emphasis on that in his administration.” McCain likes using technology. “Hefty competition in the delivery of high-speed broadband” would rank high among his priorities, Holtz-Eakin said. McCain would want a “nimble and responsive agency,” and “he’s not going to pick an FCC chairman who doesn’t share those concerns.”

This year marks McCain’s second run at the presidency -- in 2000 he failed to win the Republican nomination. Elected to the House in 1982, McCain won his Senate seat in 1986, and in 2004 was reelected to his fourth term there. He joined the Senate Commerce Committee in 1986, becoming chairman in 2005 when former Sen. Ernst Hollings, D-S.C., was ranking member.

Upon taking the chair, McCain instituted a “24 hour” rule requiring members to submit amendments no later than 24 hours before an executive session. This prevented last- minute avalanches, and allowed time to combine similar amendments. Most committees, including the Judiciary Committee, lack such a rule. After McCain vacated the seat, the rule dissolved, committee sources said. McCain also requested broadcast transmissions of committee executive sessions in addition to hearings, now becoming standard practice for most committees.

McCain’s presidential campaign is the biggest recipient of money from the communications industry, compared with other contenders. He received $49,000 in corporate PAC donations, according to the Jan. 31 filing, the latest available. While largely absent from Congress since he began campaigning, he has introduced telecom bills this Congress, including one on emergency communications (S-744), an effort against online child porn (S-519), and a bill to prevent states from imposing discriminatory taxes on cellphone services (S-166). He voted for S-2248, which would provide retroactive immunity for phone companies alleged to have helped the government with its electronic surveillance program. -- Anne Veigle

(Editor’s Note: Similar reports on the other major presidential candidates are planned.)