Sep 1 2001

Their Man in Washington

Big media have an ally in new FCC chair Michael Powell

When a regulator’s appointment is hosannaed by the corporations he is supposed to be regulating, the public should be concerned.

When the person charged with defending the public interest in telecommunications acknowledges that he has “no idea” (Columbia Journalism Review, 7-8/01) what the public interest is, telegraphs his willingness to eliminate virtually every remaining check on media concentration, and “jokes” that the digital divide is the misguided complaint of whining have-nots, we ought to be worried indeed.

Such a man is Michael Powell, since January the chair of the Federal Communications Commission, the federal agency that regulates telecommunication. Powell’s salient quality as head of the agency is his apparent belief that it need not exist, since it’s better to “let markets pick winners and losers” (, 6/5/01). “The oppressor here is regulation,” Powell says (Washington Post, 1/23/01).

No wonder his appointment was hailed as “an outstanding choice,” by National Association of Broadcasters president Eddie Fritts (Communications Daily, 1/23/01).

Powell’s ascendance will mean “more of a free-market approach, perhaps less attention to consumer groups and more of letting companies do more of what they want,” an industry analyst told the Chicago Tribune (in an article unironically headlined “More Media Freedoms Seen Under New FCC Chairman”–1/24/01). “President Bush has been in office for less than a month,” declared the Boston Herald (2/2/01), “but he already has made one segment of the population ecstatically happy: radio and television owners and management.”

Yet when asked about his universally recognized propensity to support policies favored by big media corporations, Powell rankled (Broadcasting & Cable, 5/21/01): “It troubles me that that’s ascribed to me before we’ve done anything.”

“Openness isn’t always good”

It’s easy to see why reporters, analysts and media executives confidently ascribe staunchly pro-industry, anti-consumer views to Michael Powell.

There’s his record as FCC commissioner, a job he’s held since 1997. Powell has often criticized rules restricting concentration, and specifically questioned the agency’s authority to place public interest conditions on mergers. Most recently, he resisted the idea of requiring AOL and Time Warner to give rival companies open access to their cable TV systems as a condition of their merger. He expounded on that decision at his first press conference as chairman (Broadcasting & Cable, 2/12/01): “Some say, ‘Openness is always good. Why are you fighting?’ You know why? Because openness isn’t always good. If openness were always good, nobody would be fighting over copyright protection.”

The AOL/Time Warner deal also showcased Powell’s nonchalant approach to personal conflicts of interest; he took part in the merger decision despite the fact that his father, Secretary of State Colin Powell, was one of AOL’s directors, with lucrative stock options in the company. (The New York Times‘ Stephen Labaton has also noted [1/23/01] that since Michael Powell joined the FCC, “the National Association of Broadcasters has been a generous contributor to the foundation started by his father, America’s Promise: the Alliance for Youth.”)

Then there’s the fact that Powell is championed by Republicans like Sen. John McCain (R.Ariz.), who has the distinction of being the senator who has received the most money from the media industry in the last eight years (Village Voice, 7/31/01), and Rep. Billy Tauzin (R.La.), former chair of the House telecommunications subcommittee, also known to avail himself unhesitatingly of corporate media “gifts,” including an infamous six-day, $18,910 trip to Paris paid for by Time Warner and Reuters.

Tauzin routinely calls for eviscerating the FCC, which he has called an “agent of corruption” (Multichannel News, 1/31/00); now chair of the House Energy and Commerce Committee, he has said he’ll again push legislation to curb the agency’s authority (Dallas Morning News, 1/31/01). His take on Michael Powell? “The more he does,” Tauzin told the New York Times (1/23/01), “the less we have to do through the House and Senate process. When a guy agrees with you a lot, you really do like him.”

Beyond Challenge

But there’s no need to search for clues; Powell reaffirms that he’s industry man every time he opens his mouth. His speech is shot through with neoliberal slogans like “We must foster competitive markets, unencumbered by intrusions” (Newsday, 1/25/01) which become no less doctrinaire when elaborated. Addressing the Federal Communications Bar Association (6/21/01), Powell professed to be “always a little puzzled” by the idea that a laissez-faire approach might hurt consumers, “for the premise of it has been so thoroughly discredited in this nation and in countries around the world that it should be beyond challenge.”

Constructing a straw argument that would be familiar to viewers of John Stossel, Powell contended that commitment to the public interest

should not stand for the conviction that markets are consumer unfriendly and cannot be trusted; assuming that they go to excess, that they always fail, that there are too many needs and services they cannot deliver and that the risks and the human and social costs are too high and the potential for abuse too great. Experience teaches us otherwise.

He pit market policies’ “winning record” against something he called “the consumer record of government central economic planning,” to conclude rousingly: “Thus, if you are truly committed to serving the public interest, bet on a winner and bet on market policy.”

The trouble is, such nuance-free free-market rhetoric is particularly inadequate to describe the super-concentrated, capital-intensive U.S. media industry, in which radio, TV and cable outlets do not flourish like lemonade stands; rather, the government grants private broadcasters incredibly lucrative monopolies on frequencies that rightfully belong to the public, while cable companies get exclusive franchises that allow them to block out rivals and their programming. These powerful companies then assiduously lobby lawmakers (and use their ability to shape public opinion) to eliminate any checks whatsoever on their profit-making. As media scholar Robert McChesney puts it (Newsday, 1/25/01), “When the government awards licenses for these services, it isn’t setting the terms of competition–it is picking the winners.”

But for Michael Powell, critics of the consolidation of media power are mushy thinkers, whose concerns about, say, limiting the proportion of the country’s households that a single company can reach are “romantic” and “emotional.” “As an institution of government, we have to be able to justify on more than just a sentiment the continuation of a regulatory intervention,” he explains (New York Times, 2/7/01).

See no evil

But while his mantra is that every FCC rule must be “vindicated or eliminated,” Powell gives no indication of what evidence might actually serve as vindication, and no suggestion that he is looking for any.

Would, for example, consumer cable fees, which have risen three times as fast as inflation, be a sign that deregulation in that industry was bad for consumers? Nah, the increase doesn’t bother him, says Powell (Broadcasting & Cable, 2/12/01): “Look, Americans like TV, and they like multichannel TV, and there are mechanisms for them to express their preferences in terms of what they are willing to pay.”

What about galloping consolidation of ownership, such as occurred in radio as a result of the deregulatory Telecommunications Act of 1996? One of Powell’s first acts as chairman was to approve 62 pending radio station acquisitions, handing still more outlets to two of the country’s largest and grabbiest conglomerates, Clear Channel and Cumulus Media. His rationale: “I do not believe the public interest is served by inaction” (Broadcasting & Cable, 3/19/01). Evidently public interest regulations must be rigorously proved to be “achieving their stated purposes” (FCBA speech, 6/21/01) or they’ll be thrown out, but deregulatory moves need meet no such standard. What’s more, the approvals summarily reversed existing FCC policy that red-flagged for public comment any deals that result in one market’s ad revenue being dominated by just one or two owners–apparently allowing time for the public to be informed and heard would cause more dreaded “inaction.”

Is there anything wrong with the lack of diversity in media ownership? “The problem with diversity is that it has a visceral component,” Powell complains (Broadcasting & Cable, 5/21/01). As for the attempt to encourage diversity with, for example, a rule that a single TV company may not own stations reaching more than 35 percent of U.S. households, Powell says, “there is something offensive to First Amendment values about that limitation” because it restricts the number of people one company can talk to (AP, 4/24/01).

Unfortunately, Powell’s dedication to freedom of expression would seem to be limited to that of corporations; it does not extend, for example, to support for low-power radio broadcasters–Powell opposed the opening of the bandwidth to new microradio voices on grounds that it might dilute audience share (and ad revenue) for commercial stations. Nor has it led him to comment audibly on the large-scale layoffs racking the country’s newsrooms as media companies race to meet the ever-higher profit targets stockholders define as staying “competitive”.

And Powell’s love for the First Amendment was nowhere in sight when the FCC slapped $7,000 fines for “indecency” on a Portland, Oregon radio station for playing a feminist hip hop song, and a Denver station for airing a cleaned-up version of Eminem’s “The Real Slim Shady.” (See Extra! Update, 8/01.)

How about allowing the same company to control a community’s TV station and its newspaper, so that citizens have nowhere to go for alternative views, and journalists seeking independence nowhere to work? Why not, asks Powell. “I don’t know why there’s something inherent about a newspaper and something inherent about a broadcaster that means they can’t be combined” (Communications Daily, 4/6/01).

And don’t get him started on inequities of access. Asked about the “digital divide,” a term used to describe people of color, poor and rural communities’ relative lack of technological access, Powell retorted, “You know, I think there’s a Mercedes divide. I’d like to have one; I can’t afford one” (Chicago Tribune, 2/7/01).

Powell complained that critics took this quote out of context (Washington Post, 6/18/01), but the sentiment is not in fact salvaged when read with his entire statement. Powell led into the remark with the charge that the phrase “digital divide” is “dangerous in the sense that it suggests that the minute a new and innovative technology is introduced in the market, there is a divide unless it is equitably distributed among every part of society, and that is just an unreal understanding of an American capitalistic system.” And he followed it with: “I’m not meaning to be completely flip about this–I think it’s an important social issue–but it shouldn’t be used to justify the notion of, essentially, the socialization of deployment of the infrastructure” (Washington Post, 6/18/01).

The implication that advocates of equitable access are demanding that government issue Palm Pilots to every urban teen is specious, of course. The idea that access to computer technology is a luxury to which the poor ought not aspire, rather than a fairly basic requirement for participation in the economy, is patently offensive. Ahistorical too, since it conveniently ignores that the internet was in fact developed by government in the first place.

But it all somehow fits the image of a man who claims to have “set out in search of the true meaning of the public interest” (American Bar Association speech, 4/5/98), only to find himself “an enlightened wise man without a clue. The best that I can discern is that the public interest standard is a bit like modern art, people see in it what they want to see.” And some aren’t even looking.


Foxes Approve of New Henhouse Guard

Michael Powell looks ready to preside over the erasure of the last hint of official recognition of such a thing as the public interest in media policy–the interest not just of “consumers” but of citizens, separate from and potentially at odds with media owners’ drive to maximize profits. But corporate-owned media is not the place to look for a healthy, open debate on the subject.

Some commercial media openly embrace Powell’s vision. A Washington Post editorial (2/12/01) lauded Powell’s “distinctive view” of the “big questions before him,” agreeing that the digital divide “shouldn’t be invoked to compel producers of new technology to supply everybody, because that may drive them not to supply anyone at all”; that open access “sounds appealing, but you can go too far in pressing for it”; and that “there is no proof that you need a diversity of TV companies to have a diversity of programs.”

The Post was especially impressed with Powell’s “smart impatience with woolly slogans of all kinds,” suggesting they’d never heard him say “you have to not think out of the box, but get out of the box” (, 1/7/01) much less that “we all can prosper in this brave new world, but we must remember that, as it has always been, freedom also brings with it new challenges–we will have the freedom to fail” (New York Times, 1/23/01).

The Post forgot to disclose its own interests, which include a parent company that owns cable companies and TV stations and an online tutoring service, Kaplan Inc., that has AOL as a partner (Nation, 3/5/01)– all good reasons to curry favor with the new FCC chair.

The Chicago Tribune (2/9/01) did acknowledge (parenthetically) that Tribune Co. is one of the corporations lobbying the FCC to remove the 35 percent market penetration cap; but that was after heralding the “Powell Doctrine at the FCC”– a “refreshing change” which aims to “foster competition through deregulation rather than government manipulation.”

Media are not wholly uncritical to be sure, but even when expressing skepticism about one or another of Powell’s claims, most mainstream reporting simply doesn’t frame telecommunications matters from the public’s point of view. So a New York Times article on the possible Comcast takeover of AT&T (7/10/01) can be headlined, “If Comcast Buys AT&T Cable, Efficiency Is Likely to Improve,” with a subhead just underneath that says, “But consumers probably won’t see lower prices.” You don’t have to be a telecom expert to think there’s something amiss there. The article went on to claim that the newly created cable TV giant might, in theory, benefit consumers who “could also gain access to a wider variety of programming, albeit at Comcast‘s choosing”–another bizarre construction that suggests something’s wrong with this picture. But the conflict–why isn’t real benefit to consumers a primary issue in a merger deal?–is more hinted at than explored.

Business and trade reporting more often speak unguardedly of the self-interest of media companies’ maneuvers, like the segment on CNNfn‘s The Biz that discussed Disney‘s purchase of News Corp.‘s Fox Family Network (7/23/01): “What do you think Disney is going to do with it?” anchor Susan Lisovicz asked Jill Krutick, an industry analyst. “Is it going to take a lot of its original programming, say, from ABC and put it on this channel?”

“Yes,” Krutick replied. “Certainly Disney has a very deep library of movies and other programming that they can now foist on to this network without very much in the way of additional programming cost.”

It’s true: Deregulation has been sold as a way to generate new channels and more diverse offerings, but in fact big companies often just use new outlets to recycle their same old programming and “foist” it in a new way. But such assertions, made frankly on a business show, are routinely bracketed as what “critics say” in A-section telecom policy reporting. The most cogent, and increasingly urgent, comments from public interest advocates are presented as marginal dissenting notes, rather than the closest thing to the voice of the public that will bear the brunt of the decisions being made.



Lobbyists Dominate the Powell Team

The new FCC chair wants to further deregulate media industries that have already seen an historic wave of deregulation in the past eight years. Will he get much resistance from other commissioners, several of whom are former media industry lobbyists?

  • Kathleen Abernathy (Republican): A “longtime telco lobbyist” (Broadcasting & Cable, 5/21/01) as well as an assistant to former FCC Commissioner James Quello, Abernathy has pitched for the now bankrupt telecom startup BroadBand Office, Inc. and Airtouch Communications, and was vice-president of U.S. West (now Qwest Communications). She pledged in May to sell her stock in companies including Qwest, Vodafone and Verizon (Broadcasting & Cable, 5/21/01). An ideological ally of Powell, she says things like, “I will always prefer a private industry solution to a government solution” (Industry Standard, 6/25/01).
  • Michael J. Copps (Democrat): A former lobbyist for the American Meat Institute and for Collins & Aikman, a Fortune 500 plastics company, Copps also pushed for permanent normal trade relations with China as assistant secretary of trade development at the Department of Commerce. Nominated by George W. Bush, he was for years chief of staff for Ernest Hollings (D.-S.C.), who has recently criticized media deregulation.
  • Kevin Martin (Republican): Former legal advisor to Harold Furchgott-Roth, the only commissioner to fully oppose low power FM, Martin was deputy general counsel for George W. Bush’s election campaign. FCC-watchers call him a “solid deregulatory vote” (Industry Standard, 4/23/01) and an “appropriate replacement” ( for Furchgott-Roth, who left the FCC early this year with the declaration, “there comes a time when every free-market advocate in government must fulfill his dream of returning to the private sector” (Multichannel News, 2/5/01).
  • Gloria Tristani (Democrat): The commission’s most vocal critic of consolidation, Tristani objected to the agency’s green light for Fox to buy Chris-Craft, a deal that transgresses both the 35 percent ownership cap and TV-newspaper cross-ownership restrictions, saying it “shows the lengths the commission will go to avoid standing in the way of media mergers.” (Michael Powell called her charge “not only offensive but absurd,” [Variety, 7/30/01]). Tristani is retiring at the end of the year, possibly to run for Senate.

Powell has also surrounded himself with aides who share his deregulatory zeal, including chief of staff Marsha Macbride, most recently a Disney lobbyist, and special assistant Paul Jackson, who lobbied for former construction giant Morrison Knudsen Corporation. Legal adviser Susan Eid, a former lobbyist for MediaOne Group, has already denounced the TV-newspaper cross-ownership rule, suggesting that having one company control both could “increase not only the amount but the quality of journalism in a market by letting the owner spread costs across a greater base” (Columbia Journalism Review, 7-8/01).