We mentioned last week that FCC Chairman Powell's deregulatory agenda was in jeopardy, largely due to the efforts of fellow-Republican and Bush insider Kevin Martin. This has come to pass:

With Republican FCC commissioner Kevin Martin staging a palace coup on Thursday and joining with Democrats on a key vote, agency chairman Michael Powell can no longer necessarily count on a Republican majority when deciding the fate of key media ownership rules.

Thursday's action by the Federal Communications Commission concerned the rewriting of telephony regulations. In recent days, Martin went against Powell and began circulating a competing proposal that did not go as far as Powell's plan did in deregulating the phone industry.

Martin — who has strong ties to the White House — convinced Democratic commissioners Jonathan Adelstein and Michael Copps to vote with him and shoot down Powell's plan. Martin, who worked on President Bush's transition team, is sure to have vetted his plan with the Bush administration.

It is unusual for a FCC chair to lose out on a key vote. "This is hard evidence that he is willing to buck the chairman," one insider said.

Powell was clearly furious, saying that portions of Martin's blueprint were filled with egregious legal errors and just plain bad for business. He said some of these "compromise some important principles to which I adhere unwaveringly."

Long labeled a deregulator, Powell has insisted that he hasn't made up his mind regarding the media ownership rules now under review at the FCC. The commission is expected to vote in late spring.

Martin's so-called revolt drew harsh words on Capitol Hill, where lawmakers such as Rep. W.J. "Billy" Tauzin (R-La.) have long advocated deregulation of the media and telecom industries.

Issuing a blistering statement, Tauzin said Martin is a "renegade Republican" and a "pro-regulatory soulmate" of the Democrats.

"Clearly, this marks a low point for the FCC. Despite chairman Powell's best efforts, and those of (Republican) commissioner Kathleen Abernathy, regulatory reform has been stabbed in the back. A palace coup led by Kevin Martin has breathed new life into the dying era of big government control over U.S. telecommunications policy," Tauzin said.

The vote was as key to the telecom sector as the media ownership rules are to the TV industry.

Martin's plan upholds rules that require local phone companies — namely, the Baby Bells — to share their systems with rivals at a substantial discount, but gives individual states new authority to relax the requirement.

page 1 | 2