“Having completed a bold and aggressive agenda, it is time for me to pursue other opportunities and let someone else take the reins of the agency,” wrote Michael Powell last week, announcing his decision to leave the chairmanship of the Federal Communications Commission in March. Although many pundits had predicted this resignation, it still launched the usual torrent of commentary, tributes and wish lists from the industry and from the inside-the-Beltway community, as well as speculation on potential successors and possible new directions for the regulatory agency.

From a satellite industry perspective, Powell likely will be remembered for a few things, including regulatory actions to help usher in new digital technologies, not giving an FCC seal of approval to allow EchoStar Communications Corp. to buy DirecTV and the opening of satellite communications spectrum to unlicensed communications activities (though the jury is still out as to whether this will ultimately be a good thing or a bad thing). Also, he may be remembered as a catalyst for the boost in the profile of satellite radio, as shock jock, Howard Stern in response to an agency crackdown on indecency, jumped from terrestrial radio to Sirius Satellite Radio, boosting the public awareness of satellite radio in general.

Powell’s Legacy

“The top issue [that Powell will be remembered for] will be indecency, much to his chagrin,” one industry insider, who requested his name be withheld, told Satellite News. But because of that indecency push, “a lot of creative talent seems to be moving toward subscription services, namely satellite radio and [subscription-based satellite and cable] television. The creative talent really finds the regulatory landscape for subscription services to be a better place to develop their content.” He added that any successor likely will continue to apply the recent FCC decision to not apply indecency oversight to subscription services. The FCC has “been pretty clear that the indecency regulations apply only to broadcasters. There is a strong history behind that and it’s not likely to change anytime soon.”

The insider also pointed to two other significant actions that occurred during the Powell years that will remain a part of his legacy–rejecting the EchoStar-DirecTV merger and opening satellite spectrum to be used by terrestrial services.

“The commission does not reject mergers often, but that was one where they did,” the insider notes. “I do not think it was a surprise to anybody, but at the same time it was a remarkable event.”

The American Cable Association concurred with the insider’s asses-sment that the merger decision was a significant one, with association President and CEO Matt Polka saying in a prepared statement that “Chairman Powell was also at the helm of the commission in its landmark decision to impose conditions on the DirecTV-News Corp. merger [after the DirecTV-EchoStar merger was rejected] and to decide for the first time that a media conglomerate like Fox/News Corp. can harm competition in the marketplace.

The one thing that remains open as to how it will affect Powell’s legacy is the decisions allowing terrestrial services and unlicensed devices to operate in satellite spectrum bands. In particular, he pointed to the 2002 decision allowing wireless cable operators to share the 12 GHz band with incumbent direct-to-home satellite broadcasters. The order, commonly referred to as the Northpoint decision for one of the companies involved in the action–Northpoint Technology–raised vocal concerns from the satellite industry regarding the potential interference these systems would cause to satellite television services.

“The question, over time, is whether the introduction of terrestrial services or unlicensed devices will create interference issues,” the insider said. “It is unclear whether this will be something he is remembered for,” but these decisions to allow other services into satellite spectrum “happened on his watch.”

Satellite Broadcasting and Communications Association spokeswoman Camille Osborne focused more on the work Powell did to bridge the digital divide when reflecting on his accomplishments as FCC chairman.

“I think what Powell will be remembered for is pushing new technology innovation and helping push the digital transition,” Osborne told Satellite News. She said the push was particularly important to the satellite industry “because most of our technology is so new and ground-breaking in terms of what we are doing on a day-to-day basis in television, radio and satellite broadband.”

A second satellite industry observer, who also requested his name be withheld, was not as forthcoming with any praise that is typically associated with the retirement of a high-ranking official, but at the same time, did not offer any significant criticism either.

“No one was happy he was leaving, but no one was disappointed he was leaving either,” he told Satellite News. Powell “has helped in that he has drawn some extra attention to the satellite industry throughout the past few years,” including getting satellite industry representation on groups such as the Media Security and Reliability council and the Homeland Security Council. However, with regard to specific actions at the commission, there is nothing that I can point to and say ‘that was an outstanding order’ or ‘I really wish he hadn’t done that.’ There have been a few orders that have been controversial, but typically with orders from the FCC, no one lost and no one won on the satellite side. And if they did lose or win, it wasn’t because of Chairman Powell, it was because of the commission as a whole.

“Though Chairman Powell has been an advocate for allowing new technologies to come to market, he leaves a far more consolidated communications marketplace than when he began,” Information Technology Association of America (ITAA) President Harris N. Miller told sister publication Telecom Policy Report (TPR). “Business users and consumers have fewer alternatives because of his policies. Assuring affordable access to innovative services and applications over the resulting bottleneck networks will be a significant challenge.”

Michael Calabrese, vice president and director of spectrum policy at the New America Foundation, told TPR, “Powell’s tenure as FCC chairman has been decidedly mixed, but mostly negative. Powell left only one significant positive legacy, which was to encourage experimentation with the sort of unlicensed wireless broadband technologies that have generated the Wi-Fi productivity boom. On most other issues, however, Powell’s tenure has radically changed the nation’s media and telecom-policy direction.”

Successors In The Running

The rumor mill so far has not fleshed out any future employment plans by Powell, but taking on well-paying and/or prestigious new positions after government jobs has not been a problem for past FCC chairmen and many others in federal service. Meanwhile, TPR has learned that as far as ‘new blood’ is concerned, some of the leading subjects of the name-game are familiar faces:

• FCC Commissioner Kevin J. Martin, who has been on the panel since July 2001. He touts a background at the White House, with the Bush campaign, with the law firm of Wiley, Rein & Fielding (the practice of former FCC Chairman Richard E. Wiley) and the commission.
• Michael D. Gallagher, deputy assistant secretary at the National Telecommunications and Information Administration and acting head of the NTIA’s office of the assistant secretary and administrator positions.
• Rebecca Armendariz Klein, chairman of the Texas Public Utility Commission and active member in the National Association of Regulatory Commissioners (NARUC).

Also being mentioned but considered dark horses are former NTIA Chief Janice Obuchowski, former Interstate Commerce Commission Chairman Darius Gaskins and former Federal Trade Commission Chairman Jim Miller.

In addition, Earl Comstock, a partner in the law firm of Sher & Blackwell, currently is regarded as a candidate to fill any vacated commissioner’s post, and there could be two: that of Martin, should he be promoted and also of Commissioner Kathleen Abernathy, now rumored to be considering a departure. Comstock has a 10-year background at the U.S. Senate, including time spend with Sen. Ted Stevens (R-Alaska) and the Senate Commerce Committee.

The top-job change would be oc-curring when one of the most potent issues remaining on the FCC agenda is the regulated vs. non-regulated status of virtually all Internet Protocol-related services–possibly interceded by congressional legislation. In addition, there are a variety of pending matters involving greater use of radio spectrum in the United States, plus homeland security and public safety matters connected with the nation’s communications infrastructure.

Yet in a broader sense, whoever winds up sitting in the middle chair on the FCC dais will be expected to uphold the sweeping pro-competition and deregulation policies that have been taking shape during years of different White House policies, which only were accelerated during Powell’s tenure.

Party Placement Fundamental

Certainly, nobody expects the new FCC chairman to be a card-carrying monopolist who advocates anything but towing this consistent line, and President Bush is likely to be interested in preserving a 3-2 Republican FCC commissioner majority. LeggMason‘s Blair Levin, a former chief of staff at the commission, said a new appointment could take several weeks or even months, depending on who is nominated and the confirmation processes–which could get complicated, particularly if there is a brawl in the Senate over Supreme Court justices and other federal judges.

“Whoever his replacement is, we do not expect fundamental changes in FCC policy that has generally been moving in a deregulatory direction,” Levin told TPR.

Although the Progress & Freedom Foundation was among the groups singing Powell’s praises (as is the case when most high-ranking officials decide to leave the fold, indiscriminant of reputation), the research think tank also suggests the transition represents an opportunity for a far-reaching restructuring of the FCC and of the Executive Branch when it comes to handling telecom policy.

With a new chairman soon to be named to the FCC and efforts afoot on Capitol Hill to revisit 1996 communications law, the time is ripe for consideration of serious institutional or internal change at the FCC, said Randolph May, a senior fellow at PFF and director of its communications policy studies.

“Whoever is selected to lead the commission next as chairman,” May told TPR, “I hope that he or she — in addition to leading the substantive effort to achieve a deregulatory, market-oriented regime — will also be willing to think about how the FCC should be reformed institutionally.” In a five-member agency, May wrote in a just-released opinion, it becomes more likely that compromises made in reaching a decision “will lack clarity or even be internally contradictory.” May suggested that the number of commissioners could be reduced to three or even to an agency with a single head, and that this new, slimmer FCC could be put in the executive branch.

–Frank Barbetta and Gregory Twachtman