Copyright 2002 Knight Ridder/Tribune News Service

Knight Ridder/Tribune News Service

…05/08/2002

From LexisNexis

NEW ORLEANS - Federal Communications Commission Chairman Michael Powell sought Tuesday to clear up what he said was an inaccurate public perception of his agency's increasingly less strict treatment of media and telecommunications firms.

"I think there's been a misappreciation of market philosophies. … They're not just simply, 'Get out of the way,"' Powell said at a breakfast for attendees of the National Cable and Telecommunications Association's annual convention, which ends Wednesday.

Powell's agency, along with the U.S. Justice Department, will decide whether to approve Philadelphia-based Comcast Corp.'s proposed acquisition of AT&T Broadband, the cable and fast-Internet unit of AT&T Corp.

The combination would create the nation's largest cable company, with 22 million subscribers.

Comcast officials at the convention said it would be inappropriate for them to react to Powell's remarks.

But his message clearly resonated within the industry. In another convention session, House Commerce Committee Chairman W.J. "Billy" Tauzin, R-La., told the audience, "We want to protect you from those who want to regulate you to death." The comment was met with massive applause.

The FCC is the main government agency that will set policy for how high-speed Internet access is introduced nationwide. Powell, the son of Secretary of State Colin L. Powell, has often been criticized by consumer groups who complain he is ceding control of the medium to industry lobbyists.

"For two decades, federal authorities have let cable companies run amok, jacking up prices at nearly three times the rate of inflation, while delivering poor service quality, and mergers have played a key role in creating cable monopoly power," said Mark Cooper, director of research for the Consumer Federation of America, in a statement Tuesday.

The federation and other consumer groups called on local authorities in Cambridge, Mass.; San Francisco; Dallas; and Montgomery County, Md., to impede the Comcast-AT&T Broadband merger by refusing to transfer their cable franchises to the combined company.

Last week, Cooper said the Powell-run FCC was "attempting to achieve back-door deregulation of telecommunications markets" by lifting restrictions on the industry before competition existed to warrant the relaxations.

Powell said Tuesday there were plenty of examples of market forces functioning well, without interference from regulators.

He asked convention goers, "I don't know about you, but are you using your hotel phone?" No one raised a hand.

Powell suggested that people were using their cellular phones instead, to avoid long-distance fees and hotel surcharges. "That's competition," he said.

He discounted complaints that consolidation in the cable industry would lead to bland television and fewer choices for consumers. "What do we really mean by diversity and viewpoint?" he asked. Despite consolidation among media companies, he said, "The media's more varied than ever."

He said media-ownership rules enacted nearly two decades ago to ensure that multiple voices had access to the mass media were outdated in an era of hundreds of TV channels and nearly limitless content on the Internet.

"This is not some rush to deregulate because we don't like the rules. … We have to fix this," Powell said.

Separately, the cable industry association honored Joseph W. Waz Jr., Comcast's vice president of external affairs, with the industry's highest accolade, a Vanguard award. Waz won in the government and community relations category, for promoting a favorable public image for the industry and lobbying for the industry at the national, state and local levels of government.