Powell's Market Oriented Approach Gives Democrats Heartburn

7/30. The Senate Commerce Committee's hearing on telecommunications and the Internet on July 30 gave several Democratic Senators the opportunity to criticize Federal Communications Commission (FCC) Chairman Michael Powell's market oriented approach to regulation. Sen. Ernest Hollings (D-SC), the Chairman of the Committee, and Sen. Byron Dorgan (D-ND), a senior member of the Communications Subcommittee, both stated that Powell gave them "heartburn".

	Sen. Byron Dorgan (D-ND)

Sen Dorgan said, "You know, first of all, I like you personally. I voted for your confirmation. But, sometimes I get heartburn when I read the things you say in the newspapers in the speeches. You say ``I believe we should trust that the market will lead to the most beneficial outcomes´´. We are a great believer in the market. I studied economics, and I taught economics, and I am a great believer in the marketplace. I am a firm believer that in many instances you must, MUST, have effective regulation. Or, if you don't have effective regulation, you have a perversion of the market. And, I worry very much that a philosophy that says, well, let me take a break here and watch things for a while."

Sen. Dorgan added that "I hope, Chairman Powell, that you are a tiger on these issues, and you ratchet up an effort to say that on my watch, your watch, you are going to use all of the tools at your disposal to prevent these kinds of things from happening again." He concluded that "my hope is that you will be very aggressive".

FCC Chairman Michael Powell

Chairman Powell responded that "I make no apologies for believing in the importance of market principles of economics, but I also think that this is widely misperceived as not believing that regulation has a place in the operations of economic activity, which, I don't believe I have ever said such a thing. I wouldn't be doing the job I am doing if I were a complete libertarian who believed in laissez faire. Indeed, I think that if you really look at our record, rather than the reportage of it in the trade magazines, you will find that we often employ our regulatory authority quite effectively to protect the interests of consumers."

Powell added that he has called "for more regulatory power to aid in enforcement efforts" and that "under my leadership at the Commission we brought more enforcement actions than any previous Commission".

Sen. Hollings said that Powell gave him "heartburn" too. He said that "You have given me heartburn. And, Sen. Dorgan says that he voted for you. So did I. I have always been admirers of the Powells. Alma and my wife are good friends. The General and I got our honorary degrees together down at Tuskegee."

	Sen. Ernest Hollings (D-SC)

"But, the statements that Sen. Dorgan says. You came on saying that public interest is just too vague. It is hard to really determine. And otherwise, the market forces, the market forces going to operate. I can tell by your statement this morning that, I had an idea that you really didn't know, but I can tell, that's an excellent statement. You are a highly intelligent individual. But what really bothers me is when you make these statements, and this occurred, I have got the quote where you thought it may be the whole matter was the result of too much competition. We believe these markets didn't need to be natural monopolies, and they could be competitive. Nevertheless, Chairman Powell went on to say that the competitors access to the Bell networks may have contributed to the current telecommunications crisis by encouraging an ever proliferation of competitive entrance that together couldn't justify the collective capital investment. Well, that is just bootstrapping the fraud that has been going on in the stock market ..."

Sen. Max Cleland (D-GA) stated that "the marketplace is a wonderful thing, but without the countervailing power of government, it runs amuck."