Senate Commerce Committee Holds Hearing on Powell Nomination

May 17, 2001. The Senate Commerce Committee held a hearing on the nomination of Michael Powell to be Chairman of the FCC. Members of the Committee uniformly praised Powell. They used the occasion to press their views, and to question Powell about his views, on various issues that fall within the jurisdiction or activity of the FCC. Sen. John McCain (R-AZ), the Chairman of the Committee, stated that the Committee would likely vote on the nomination on May 24. See also, opening statement [PDF] of Sen. McCain.

Sen. John

3G Wireless. Sen. McCain discussed the future of Third Generation (3G) wireless services with Powell. McCain asked if the U.S. is falling behind Europe. Powell stated that the U.S. is "strained and constrained" by having spectrum management divided between the FCC (for commercial users) and the Commerce Department (for federal government and military users). He stated that "trying to coordinate coherently spectrum policy across those realms has proven difficult. It has proven difficult within our own agency." He elaborated that spectrum at the FCC is managed by the mass media, wireless, and satellite "realms."

Powell stated that he "has reached out to Secretary Evans and the Commerce Department to look for ways to harmonize our decision ..." Powell then turned to the Europeans. "I believe that Europe may be ahead, but it depends on what they are heading to. This stuff, in my mind, is a lot like a marathon race; sometimes the best place to be is in 3rd slot on the 20th mile, not the first. And we are looking now at European environments that went very fast on Third Generation spectrum. The amount of money paid at auctions is breath taking. And, by some estimates, there are venerable companies that may be facing collapse purely as a consequence of getting ahead of themselves on Third Generation wireless spectrum. British Telecom may face a grim reaper ..." Sen. McCain concurred: "I think the Europeans have gotten too far ahead of themselves."

Spectrum Markets. Sen. Ron Wyden (D-OR) made the case for shifting from the FCC's current system of permanently licensing of spectrum, to a system of trading rights. He stated that "incumbents cling to these licenses like fleas to a dog." Powell stated that the FCC has been moving towards secondary markets for spectrum, and that the FCC has become more aggressive about the return of spectrum. Powell also stated that a spectrum license "ought to be more like a drivers license." That is, once it is issued, the government should only tell the driver what not do with it. Powell concluded that markets should determine what use is made of licensed spectrum.

E-Rate. Several Senators, including Jay Rockefeller (D-WV), Jean Carnahan (D-MO), and Max Cleland (D-GA) expressed their support for the FCC's e-rate program, which subsidizes telecommunications, Internet access, and internal connections for schools and libraries. Powell stated that "the program has been a tremendous success." He added that "my responsibilities are to administer the program as written by the Congress."

Location Privacy. Sen. John Edwards (D-SC) advocated protecting data on individuals' location that is generated by mobile devices with GPS capacity. "My belief is that is information that consumers' should have control over," said Edwards. He added that he and Sen. Byron Dorgan (D-ND) will introduce a bill to protect location privacy. Powell stated that he is not familiar with the bill, and that the FCC now has limited jurisdiction over location privacy issues.


Rural Broadband. Several Senators, including Jay Rockefeller (D-WV), Sam Brownback (R-KS), and Ted Stevens (R-AK) pressed Powell on the importance of deploying broadband Internet access services in rural and underserved areas at prices comparable to urban areas. Powell reviewed proceedings at the FCC relevant to these topics. He also suggested that policies should incent new technologies, such as satellite and terrestrial wireless, for which there will not be a large cost difference between urban and rural areas.

Antitrust Merger Reviews. Sen. Max Cleland (D-GA) questioned Powell about the role of the FCC on mergers. Powell said that the FCC "plays the role that is articulated in the statute, which is, if a merging party owns a license ... and that license will have to be transferred to the new entity ... then that license transfer has to be examined by the Commission, and the Commission has to affirmatively approve, as, in the public interest, the transfer of that license. That is a different standard than that employed by antitrust authorities which administer the standards of the Clayton Act, principally, and the Sherman Antitrust Act. But as a practical matter, more often than not, it also involves, on the part of the Commission, a review of traditional horizontal and vertical merger concentration analysis, in the examination of that merger."

Powell also stated that there have been delays at the FCC in the past. He also suggested that the FCC should ask itself "whether we are value adding as to that ... concentration analysis, or are we simply duplicating the activities of the Federal Trade Commission or the Antitrust Division." He then commented that the FCC can add two requirements based on its public interest analysis that the FTC and DOJ cannot -- diversity, and compliance with FCC rules.

Media Ownership Rules. Sen. Ron Wyden (D-OR) argued against continued concentration of ownership of media companies. Powell stated that he is aware of the antitrust issues involved in concentration of ownership; he added that diversity is an issue in media ownership. He also stated the markets have changed since many of the FCC's media ownership rules were written, and that the First Amendment limits the FCC's power to impose restrictions on media. He also suggested that the greatest threat to limits on media ownership comes from the judiciary, not regulatory agencies.

Interactive TV. Sen. Conrad Burns (R-MT) asked Powell if he supports "continued rule making" in the area of interactive television. Powell responded by noting that he had voted for the FCC's notice of inquiry.

Structural Separation for Bells. Sen. Ernest Hollings (D-SC) asked Powell for his views on structural separation. Hollings stated that "we have got to have some kind of structural separation ... wholesale and retail." Powell stated that "doing it now would be possible", but would also be "complex" and "disrupting to the market." He added that "it would be a very difficult thing to do."

FCC Enforcement Authority. Sen Hollings also raised the issue of the FCC's authority to fine ILECs for violation of the local competition provision of the Telecom Act of 1996. Powell restated his request for legislation that would give the FCC authority to impose fines of up to $10 Million. He stated that "my best judgment is that we don't have enough to provide the deterent value."

Abernathy, Martin and Copps Have Smooth Confirmation Hearing

The Senate Commerce Committee also held a hearing on the nominations Kathleen Abernathy, Kevin Martin, and Michael Copps to be FCC Commissioners. The hearing was quick and without controversy or opposition. They will likely be approved by the Committee at its May 24 mark up meeting, and by the full Senate shortly thereafter.

Sen. Jay Rockefeller (D-WV) sought commitments from all three that they will support (1) the e-rate subsidy program, (2) continued operation of the e-rate as a Section 254 universal service program, (2) continued coverage of telecommunications, Internet access, and internal connections, and (3) continued coverage of private and parochial schools and libraries. All three, like Powell before them, made these commitments. Sen. John Edwards (D-NC) praised the nomination of Kevin Martin, a Republican from North Carolina, who previously was a legal advisor to outgoing Commissioner Harold Furchtgott-Roth. Sen. Ted Stevens (R-AK) praised Abernathy. Sen. Fritz Hollings (D-SC) talked about the importance of the public interest standard. Sen. Conrad Burns (R-MT) said that spectrum management would be a major issue for the three.