The race to reform a slow FCC

The new chairman of the House Energy and Commerce Committee, Billy Tauzin of Louisiana, and the Federal Communications Commission's new chairman, Michael Powell, both have said that FCC reform is on top of their agenda for this year. Powell formally begins his work Thursday, at his first monthly meeting as FCC chairman.

They each make the claim that slow bureaucratic rules and outdated regulations are inhibiting innovation and denying consumers the latest in technology and services. But they differ when it comes to whether the reform should originate in Congress or at the FCC.

"It's time to restructure the FCC to optimize it, so the bureaus can better reflect convergence," Powell said, vowing that such reform could be led by him at the commission. For example, as it stands now, Bells have their DSL service regulated under phone rules, meaning they must open their networks, while cable companies' cable modem offerings are regulated as a cable service, meaning they're not obligated to allow competitors to use their pipes.

Despite Powell's claims to the contrary, some of the changes he's discussed would require a rewrite of statutes, a congressional role. In the last Congress, Tauzin and Rep. Chip Pickering, R-Miss., sought to restrict the length of time the FCC had to review a merger. That legislation is expected to return, and Tauzin said recently that it would be coming from his successor as chairman of the Telecommunications and the Internet subcommittee of the House Energy and Commerce Committee, Rep. Fred Upton, R-Mich. However, Upton himself has yet to promise such legislation.

A precarious alliance
Tauzin was Powell's most vocal backer for the chairman post, and Powell has said he welcomes Tauzin's interest in FCC reform. Tauzin has been frustrated in past efforts to reform the agency under the chairmanships of Reed Hundt and William Kennard, but in vowing to redesign the FCC now he said "we've got a chairman to do it in Michael Powell."

Tauzin told a group of high-tech lobbyists recently that without the interference he has received from the agency in the past, he'd be able to tackle the FCC's "vestiges from the 1930s of what communications is supposed to be."

Powell welcomes the support he receives from Tauzin, but he has said both before and after being named chairman that most if not all of the reforms he'd like to do could be done internally, without the help of Congress.

He told reporters last week his first mission as chairman will be to construct a new FCC that offers "an efficient, decisive organization" that can respond quickly to industry trends by "recognizing that markets work on Internet time." This would stand in contrast to the FCC that has been ridiculed in the past. A study conducted last year by the Senate Judiciary Antitrust Subcommittee identified numerous routine license transfers that had been waiting for a decision at the agency for years.

In a dramatic shift from usual protocol at his first meeting scheduled for Thursday, Powell has not slated any votes for the meeting's agenda, but rather plans an exercise to gather information on each agency as he develops his blueprint for change.

The chief of each FCC bureau such as cable or wireless will sit at a table before Powell and the other commissioners, explain the mission of his or her bureau, and then prepare for the piercing questions from Powell and his fellow Republican on the commission, Harold Furchtgott-Roth.

Still, Furchtgott-Roth doesn't see the latest drive for reform as a partisan one.

The FCC "is an equal-opportunity target," he said in an interview recently, noting that the agency's fiercest critic during the Democratic tenures of Hundt and Kennard was Rep. John Dingell of Michigan, the highest-ranking Democrat on the House Energy and Commerce Committee.

Kennard himself made a game attempt to transform the agency, launching a five-year effort in 1999. That plan fizzled out due to lack of support in Congress (Dingell, Tauzin and others then said publicly they didn't trust the FCC to reform itself) but Kennard did manage to clear out much of the backlog of pending items in various bureaus. He also consolidated all of the FCC's enforcement actions in one bureau.

The creation of the Enforcement Bureau by Kennard "was one of the great innovations of recent years," Furchtgott-Roth told a group of communications attorneys at a seminar recently.

Powell has been reluctant to share details of his own restructuring plan. "I'm not going to get the agency excited prematurely," he said. But he's made clear that the bureau structure of the agency, where any technology-driven service is regulated under separate rules for cable, phone, wireless or satellite, bothers him.

Furchtgott-Roth said a time limit on merger reviews "would be a good thing." But the former chief economist for the House Commerce Committee also said that FCC "organizational structures should be left to the chairman" of the FCC. "That's not a good use of Congress' time."

That stands in contrast to Tauzin, who has said the merger review process would be the first target of Congress.

Furchtgott-Roth had a simple way to ensure that the FCC moved quickly and responsively and didn't act as a burden on innovation, given that historically the agency is a reflection of its chairman.

"A lot of this goes to who is in charge here," he said. "The way to deal with these problems is to get the right person in place as chairman."