Powell promises 'deregulatory' tack

Competitive local exchange carriers and independent ISPs looking for guaranteed access to big local phone and cable networks may soon start finding a chilly reception at the Federal Communications Commission.

In his initial press conference last week, newly appointed Republican FCC Chairman Michael Powell said he will take a more purely "deregulatory" approach than his Democratic predecessors. He indicated a preference for letting capital markets sort out winners and losers.

Powell was careful not to announce his vote on pending matters such as the FCC's inquiry on cable "open access." He prefaced his remarks on several issues by noting that it was a "hard question" and saying he wants to reform the FCC's internal structure to enable quicker decision making.

But Powell did say he doesn't fault the Telecommunications Act of 1996 for failing to bring mass-market competition among "Bell look-alikes." Rather, he said the statute's main achievement was to "unleash broadband."

The resulting move by AT&T to buy cable companies forced Bell companies to "bring DSL out of the closet," Powell said. The ensuing competition among phone, cable and now wireless companies is more important to users than "the third Bell look-alike in the market."

An FCC commissioner since 1997, Powell was recently designated chairman by President Bush. He replaced Democrat William Kennard, who championed a more activist approach.

Powell said the CLECs' problems in the capital markets are largely "an overreaction to the dot-com problem." But in the competition between Bells and independent DSL providers, Powell said there were some "poor implementations" and "poor execution." He pointedly declined to identify whether he was referring to the Bells or CLECs, or both.

"A lot of people show up to gold rushes," Powell added. "Not everybody comes home with the gold."

Powell also questioned whether it was a given that ISP "open access" to cable networks owned by giants including AT&T and AOL Time Warner was desirable.

"Openness is not always good," Powell said. "A market works when both consumers and producers have value to exchange . . . I don't like the knee-jerk assumption that it is discriminatory for a provider to maintain certain advantages."

On carrier mergers, Powell stopped short of agreeing to what have been repeated congressional calls for a fixed timetable for FCC review, such as 90 to 180 days. But he could accept specified intervals for making intermediate decisions on mergers to speed the process.

In other issues, Powell:

 Issued a broad hint to Bell companies to speed up submissions of long-distance applications, indicating the FCC won't add new barriers. Deregulation is not just a "dessert" to be handed out "after people have eaten all their vegetables," he said.

 Appeared unlikely to review or overturn last-minute actions by Kennard's FCC, such as a start on regulating instant messaging, despite a recent White House memo asking agency chiefs to review actions in the last days of the Clinton administration.

 Gave lukewarm support to the E-rate program for providing subsidized Internet access and telecom services at schools and libraries.

Powell said he would support and administer levels of funding directed by Congress and the Bush administration but would not champion the program, unlike Kennard, who made school Internet access his signature issue.