The Party (Telephone) Line


01/20/2003

Among many things the Bush administration has been especially good at is casting off its detritus. This accomplishment is particularly pronounced when compared to the Clinton administration's record in that regard - although it must be admitted that the Clinton administration, being mostly detritus to begin with, had a much more difficult problem.

Even competent governments though, will inevitably put into office some individuals whose performance will be disappointing. In the worst cases, these individuals will become embarrassments to the government, with regard to policy, politics or both.

Bush moved deftly to deal with Paul O'Neill, Harvey Pitt, and - in a prodigious feat of cross-branch casting off - Trent Lott.

The problem posed by FCC Chairman Michael Powell, however, is far more subtle.

As a legacy and a minority appointee (Is America a great country or what, that someone can be both?) Powell would be particularly difficult to fire, or subject to a forced resignation.

There have been persistent rumors that he has ambitions in electoral politics in Virginia; another rumor has been that he is seeking a position in the new Department of Homeland Security. The private sector, too, must surely hold dazzling prospects for such a man, should he choose that route. If any of the above scenarios ensues, the trick for Bush is to limit the damage he causes between now and then. If instead, he digs in his heels and stays where he is, the trick will attain an exceptional degree of difficulty. Powell's new five-year term will not expire until 2007.

Powell is both a policy and a political problem for the administration, the extent of which became clearer in his testimony, last week, before the Senate Commerce Committee. The message of Powell's statements was dazzling in its inconsistency. With regard to broadcasting, he expressed concern about overconcentration in ownership, especially in radio, but with regard to telephone service, he pulled the rug out from under those who are fighting a situation characterized by overconcentration so extreme as to deserve the label monopoly.

How Powell can be "concerned" about a lack of competition in radio and oblivious to a much greater lack of competition in telephone service is difficult to comprehend. Seen in conjunction with his putting the kibosh on the Echostar-DirecTV merger last year, the only consistency one can discern is that he favors competitive airwaves and monopolistic wires.

At the Senate hearing, Democrats like North Dakota's Byron Dorgan attacked Powell's statements on telephone service. "'The American consumer, in my judgment is going to suffer grievous injury," Dorgan said, and his sentiment seemed to be echoed by Republicans on the Committee - most notably, Illinois' Peter Fitzgerald and New Hampshire's John Sununu, among others....

That lineup pretty much spans the GOP ideological spectrum, and is a solid indication of the political problem the telephone issue presents for the administration. If Republicans go off the reservation and join with the Democrats on a key consumers vs. big business issue like telcom policy, it will be a major problem for Bush.

Of course, it is really Powell who is off the reservation on the telephone issue. Bush has no stake in preserving the monopolies enjoyed by the Baby Bells, which is what Powell's position would do. Bush's own appointee to the FCC, Kevin Martin, appears to be at odds with Powell (who, although a Republican, was initially a Clinton appointee), and one presumes it is Martin who is speaking for the administration on the issue.

The process of allowing individual states to set reasonable wholesale telephone infrastructure access rates, a feature of the 1996 Telecommunications Act, is just beginning to bear fruit. In those states where regulators have done so, competition for local service is thriving and rates are going down. Other states are bound to see this and respond before long, each considering its own circumstances.

"State commissions have worked well with the commission in implementing the requirements of the 1996 Act," Martin told the Committee, noting that each state will have its own individual circumstances, which will likely lead to a healthy diversity of custom-made solutions.

Dispersed decision-making is certainly a Republican hallmark, and increased competition even more so. The demonstrable benefits rate reductions would bring to consumers and the economy would also make a potent example of compassionate conservatism. It's always nice when ideology and short-term practical results go hand in hand, as in this case they do; properly exploited, lower telephone rates could be a big plus for the re-election prospects of the Republican Administration, Congress and Senate.

Emasculating the Telcom Act, as Powell proposes, would hand the Democrats an issue, and a dynamic such as that seen in the case of campaign finance reform would likely develop, particularly if Senators like Fitzgerald - who faces an extremely tough re-election campaign - abandoned the party line.

The party line. The party telephone line. It should be pro-competition, pro-Federalism, pro-innovation and pro-consumer. Surely that is what most Republicans want, and if Michael Powell disagrees, then it is up to the White House to find a way to sit on him until he can be persuaded to pursue his career in a venue other than the Federal Communications Commission.

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