The Reluctant Planner

FCC Chairman Michael Powell on indecency, innovation, consolidation, and competition.

Nick Gillespie, Jesse Walker & Drew Clark from the December 2004 issue

His decision to loosen media ownership rules "insulted your intelligence and wounded democracy," one newspaper columnist declares. He's obsessed with "trying to save America's virtue," writes another. He has presided over "an end to an era of competition," a consumer advocate argues. He's Michael K. Powell, 41, arguably the most controversial chairman in the history of the Federal Communications Commission (FCC), the central planner charged with overseeing the structure and details of telecommunications in America.

As a young man, Powell joined the Army, following in the footsteps of his father, Secretary of State Colin Powell. After a back injury ended his military career, he took up law, graduating from Georgetown University Law Center in 1993. In 1997 the Senate selected him to be one of the two Republican commissioners at the FCC. (The agency has five commissioners, three traditionally picked from the governing party and two from the opposition.) When George W. Bush became president, he tapped Powell for the top job.

There are two ways to look at Powell's performance in office. One is the way Powell portrays himself: as a "Reagan-era child" eager to lighten the government's burden on the communications industries. This Powell has a vision of digital convergence--of a market where cable, telephone, cellular, and satellite companies compete to sell bundles of video, voice, and data packages across Internet-style networks--that is finally gaining traction in the market and in Washington. In this coming world, he argues, government regulation is much less necessary.

That Powell applied the same deregulatory principle to long-established limits on the number of television stations a single company can own. Powell and the other two Republican commissioners approved a modest plan to liberalize those regulations in June 2003, but it was a Pyrrhic victory. Public interest groups denounced the move, and legislators retightened some of the rules. Others were overturned by the U.S. Court of Appeals for the 3rd Circuit.

That's one perspective on Powell. Another view argues that the chairman isn't the deregulator he's reputed to be--that in fact, he's made the government more intrusive. His FCC has pushed an industrial policy-style mandate for digital television (DTV), and last year it forced TV and computer manufacturers to include anti-copying tools in their products. In August the agency took a similar step with Internet telephones, requiring them to install surveillance-friendly wiretap equipment in the name of homeland security.

And while Powell's proposed changes to the media ownership rules were deregulatory in many ways, they would have tightened the caps on how many radio stations a company may own, while grandfathering in most of the acquisitions that predated the rule change. Worse, the chairman seems more interested in letting existing broadcasters merge than in letting new broadcasters emerge: During the Clinton years, he voted against a plan to license new low-power outlets on the FM band, citing the possible "economic impacts" on incumbent stations.

Then, too, politics has forced Powell to eat some of his deregulatory words. Where he once wanted to re-evaluate rules governing "indecency" in broadcasting, he now enforces them with a vengeance. His agency has issued 21 fines--and two consent decrees--for $4.7 million within the last year.

In August--one month prior to issuing the biggest fine of all, a $550,000 slap at CBS owner Viacom for its role in the Super Bowl halftime show featuring Janet Jackson's bared breast--Powell sat down in his office to discuss these issues with reason Editor-in-Chief Nick Gillespie, reason Managing Editor Jesse Walker, and Drew Clark, senior writer for National Journal's Technology Daily.

Reason: What would you say of someone who said, "There is nothing unique about the scarcity of radio frequencies....Rather than continuing to engage in willful denial of reality, the time has come to move forward toward a single standard of First Amendment analysis that recognizes the reality of the media marketplace and respects the intelligence of American consumers."

Michael Powell: It sounds like you're reading a speech of mine.

Reason: From 1998.

Powell: I thought it sounded familiar.

I completely agree. Do you think a 12-year-old knows what a broadcast channel is? Do you think that they have any idea what the differences between Channel 4 and Channel 204 are? Do you think that the First Amendment ought to change as the dial changes?

I don't. To suggest that we bend the First Amendment for one industry singularly is to do hazard to our most cherished principle.

Reason: What's changed in the six years since you made the speech?