Powell Resigns From FCC

UPDATED: Federal Communications Commission (FCC) Chairman Michael K. Powell announced
today he is leaving the powerful independent agency in March. In his
resignation letter to President Bush, Powell said he was stepping down with
a “mixture of pride and regret.”

“Having completed a bold and aggressive agenda, it is time for me to pursue
other opportunities and let someone else take the reins of the agency,”
Powell stated in the letter. “The seeds of our policies are taking firm root
in the marketplace and are starting to blossom.

“During my tenure, we worked to get the law right in order to stimulate
innovative technology that puts more power in the hands of the American
people, giving them greater choices that enrich their lives,” Powell continued in his letter.
“Evidence of our success can be seen increasingly in the offices,
the automobiles and the living rooms of the American consumer.”

He gave no indication of his future plans other than spending some time
with his family. In addition to opportunities in the private sector, Powell
has been mentioned as a possible Virginia gubernatorial candidate.

Michael K. Powell

Source: FCC.gov

Powell was appointed to a Republican seat on the FCC by President Clinton in
1997, only one year after Congress passed the landmark 1996
Telecommunications Act. President Bush selected him as chairman in 2001,
replacing Democrat William Kennard.

Powell and the Republican majority that gained control of the FCC following
Bush’s 2000 election brought a different and often controversial approach to
telecommunications and the Internet. Powell aggressively supported moving
voice, video and data transmissions away from the copper legacy networks of
the Bells to a variety of minimally regulated broadband platforms.

Often accused by consumer groups of serving the Bells’ interests, Powell
said competition, particularly in the then nascent broadband industry, was
better served by multiple platforms providing bundled packages than the
Kennard approach to mandating that the Bells provide open access at
government-mandated prices to all competitors. The courts repeatedly sided
with Powell.

Word of Powell’s resignation spread quickly throughout Washington Friday
morning and brought a flurry of both positive and negative statements on his
four-year tenure as chairman.

“For four years, Chairman Powell fought hard to promote competition and
deregulation in key parts of the telecommunications arena,” U.S. Rep. Cliff
Stearns, a member of the House Subcommittee on Telecommunications and the
Internet, said in his statement. “It was a difficult job that often made him
a target for criticism, but I believe [his] leadership on many of these
issues will serve the industry and American consumers very well in the years
to come.”

Steve Largent, president and CEO of the Wireless Association, heaped similar
praise on Powell.

“When Michael Powell assumed the role of chairman on January 22, 2001, there
were roughly 130 million wireless subscribers in America. Today, there are
nearly 175 million — more than half of the entire country,” Largent said.
“Consumers were always Michael’s top priority, and he knew instinctively that
they were best served when free and competitive markets were permitted to
function. Michael did not allow the flawed policies of the past to burden
our future, and for that he should be congratulated.”

Harris Miller, president of the Information Technology Association of
America, said the Powell legacy would be marked by “diminishing choices” for
both the IT industry and consumers.

“Though Chairman Powell has been an advocate for allowing new technologies
to come to market, he leaves a far more consolidated communications
marketplace than when he began,” Miller stated. “Business users and
consumers have fewer alternatives because of his policies. Assuring
affordable access to innovative services and applications over the resulting
bottleneck networks will be a significant challenge.”

Under Powell the FCC passed
rules classifying broadband via cable modem as an information service and not
subject to the same heavy regulatory burdens of the Bells. The decision
freed the cable industry from regulations that typically are applied to
telecommunications services, including making access to their lines
available to competing ISPs.

The Bells, ISPs and consumer groups almost immediately challenged the FCC
ruling as giving preferential treatment to one competitor over another. The
case is now pending before
the U.S. Supreme Court.

A year later, the FCC gave the Bells a
deal similar to
the cable broadband break, granting the incumbent telephone companies
regulatory relief from their sharing high-speed fiber broadband lines with
competitors. The FCC, against Powell’s wishes, also said the Bells had to
continue to lease their copper lines to ISPs at discounted rates for at
least another three years.

Powell wanted to eliminate both the local service and broadband competition
requirements on the Bells, a position also favored by fellow Republican
Kathleen Abernathy. But Kevin Martin, also a Republican, denied Powell a
majority on the five-person FCC when he convinced Democrats Michael Copps
and Jonathan Adelstein to support his plan to give the state public utility
commissions the power to make deregulatory decisions about the Bells’ local
service requirements.

The courts ultimately rejected the line-sharing provisions of the decision,
leaving the agency with its current task of bringing the incumbents and its
competitors together to negotiate a new deal.

By 2004, Powell moved the FCC to clear regulatory hurdles to provide
broadband platforms to compete against telephone and cable companies, approving
rules for the commercial deployment of broadband over power lines (BPL) and
making additional spectrum available for wireless broadband.

“We talk so often about competition,” Powell said after the decision. “Well
here it is. All economists will tell you that magic happens when you find a
third way. Just a few short years ago, critics argued that competition for
the ‘last mile’ would never become a reality, because no one could duplicate
or bypass the telephone line that ran from the curb into the home. BPL
provides us with a potential new competitor in the broadband market.”

Powell has also been a champion of shielding IP-based services such as Voice
over IP from traditional state and federal regulations. In November
2004, the FCC ruled VoIP an
interstate service exempt from traditional state rules and tariffs.