Panel Chairman Meets Resistance From Within

While calling for looser rules governing the telecommunications industry, Federal Communications Commission Chairman Michael K. Powell has attracted resistance from an unusual alliance of critics, ranging from consumer groups to big corporations.

But perhaps the most unusual challenge of all has come from Kevin J. Martin, a fellow Republican on the FCC who shares many of Powell’s free-market ideals.

Powell and Martin -- at 39 and 36 the youngest members of the commission -- have clashed repeatedly over the scope and pace of change to regulations governing the nation’s $400-billion telecommunications industry. As those rules come under court-ordered review, Powell needs Martin’s support to pass any new regulations out of the five-member panel.

Until December, when Democrat Jonathan S. Adelstein was sworn in at the FCC, the tension remained largely obscured by a 3-to-1 Republican majority. Recently, though, Powell has found it difficult to keep his political majority in line as Martin sides with the two Democratic commissioners.

“Martin is like the Sandra Day O’Connor of the FCC,” said J. Gregory Sidak, a resident scholar with the America Enterprise Institute, a conservative think tank in Washington, referring to the less-than-predictable Supreme Court justice. “You never know what side of an issue he’s going to be on.”

How Powell and Martin resolve their differences will shape the future of telecommunications and media policy, from how much consumers pay for phone calls to how many stations a broadcaster can own. “Billions of dollars are at stake,” said Rep. Charles W. “Chip” Pickering (R-Miss.), who worked on the Telecommunications Act of 1996 as a staff aide and is now a member of the House Energy and Commerce Committee. “Companies’ futures are at stake.”

Philosophical wrangling is common in Washington policy debates, but insiders describe the rivalry between Powell and Martin as personal and intense. One influential lobbyist who knows both men well has openly told friends and colleagues that someone needs to take Powell and Martin “to the woodshed” so they’ll settle their differences.

Last week, Martin was called to Capitol Hill for a private meeting with Rep. W.J. “Billy” Tauzin (R-La.), the chairman of the House Energy and Commerce Committee, who has encouraged Martin and Powell to patch things up. At a subsequent public hearing, Tauzin added more pressure, commenting that “our Republican FCC commissioners” should work together to overturn restrictions hampering the regional Bell companies.

“They both embrace strong deregulatory policies, and if anybody should be working together and not butting heads, it is these two,” said committee spokesman Ken Johnson. “That’s why it’s so troubling.”

Powell himself hinted at the fight during a December speech to telecommunications lawyers. After joking that he had been pressured to take fellow FCC members on the road for public hearings into the consolidation of media ownership, Powell likened the trip to the “Magical Mystery Tour” with “Martin insisting on singing the lead.”

The comment drew uneasy laughter -- and a few gasps.

Publicly, the two men downplay any spat. Powell, a former antitrust attorney and son of Secretary of State Colin L. Powell, declined to be interviewed for this story but issued a statement to The Times saying, “I respect my colleagues on the commission, and value and encourage their input and debate in our difficult decision-making process at the FCC.”

Martin, a former FCC staffer and telecommunications lawyer, said in an interview that he and Powell have “a good relationship ... and generally similar views.” But he acknowledged “philosophical” differences.

Both Powell and Martin are young stars of the Republican party. Both are keenly aware that their work at the FCC could lead to other top-level positions in government or private enterprise. And both believe that deregulation is admirable and achievable.

But Martin differs with Powell on whether enough competition exists at this point to make deregulation anything more than a return to monopolies, particularly in the phone business.

The phone companies are awaiting clarification from the FCC on the lease rates that local carriers charge long-distance companies to use their lines. The arrangement was intended to loosen the Baby Bells’ monopoly over local phone service.

But companies such as SBC Communications Inc. and Qwest Communications International Inc. complain that the rates are too low and that competitors should build their own networks if they want to play in local markets. Competitors such as AT&T; Corp. and Sprint Corp. counter that they cannot afford to build networks until they attract a critical mass of customers.

The FCC is trying to clarify the rules by Feb. 20. Two weeks ago, Powell circulated a 400-page proposal at FCC headquarters that recommended eliminating the discounts SBC and other regional operators are required to offer. Powell also proposed lifting much of the state and federal oversight from the pricing of phone network facilities.

But Powell was rebuffed by a majority of his colleagues, including Martin, who based his opposition on an ideal as sacred to conservatives as deregulation: states’ rights. Martin said in a Dec. 10 speech that it is “premature” to discuss limiting oversight by state agencies such as the California Public Utilities Commission.

By Friday, sources said, Martin and the agency’s two Democrats had agreed on a framework that would maintain current restrictions on existing copper wires and cable and turn day-to-day regulation over to the states.

“The states’-rights view is actually a conservative and typically Republican view,” Martin said last week in an interview with The Times.

Martin’s position matches the stance of President Bush, who appointed him to the FCC in 2001. As governor of Texas, Bush oversaw implementation of the telecom act in that state and was a strong proponent for giving local regulators more control.

Officials in the Bush administration “really trust the judgment of Kevin Martin because he’s one of them and knows what he’s doing,” said lobbyist Vin Weber, a former congressman from Minnesota. Martin was on the Bush transition team, and his wife, Catherine L. Martin, is a top aide to Vice President Dick Cheney.

For his part, Powell, who joined the FCC in 1997 as a Clinton appointee, has sought to establish a legacy as an efficient administrator paving the way for a nationwide transition to digital technologies, greater deployment of high-speed Internet access and better management of the country’s airwaves.

The White House has not gotten involved in the dispute. A senior White House official, who spoke on the condition of anonymity, said only that the administration has “no problem with the pace” of a telecommunications overhaul at the FCC.

Indeed, some former FCC commissioners have characterized the disagreements between Powell and Martin as the sort of vigorous debate that leads to sound policies able to withstand court scrutiny.

“I think this is an honest disagreement philosophically,” said former FCC Commissioner Andrew Barrett, a Republican who knows Martin and Powell well. “You are talking about two very bright lawyers who want to get these issues right. And sometimes you are on opposite sides. That doesn’t mean it’s personal. My disagreements with” former FCC Chairman Reed Hundt “were never personal, even though on one occasion ... I called him ‘gutless.’ ”

Others, though, see less-noble roots to the feud.

Martin, a Harvard University law graduate, has complained to associates about not being accepted as a peer by Powell. Martin also has groused about allegedly being among the last to be informed about key agency matters by Powell.

On critical issues, Martin appears to relish the role of gadfly.

He teamed up with FCC Democrat Michael Copps to pressure the television industry to curb violent and indecent programming. In a Jan. 22 speech to television executives in New Orleans, Martin called for an industry revival of a “family hour” and proposed that satellite operators and cable television providers give customers refunds if they didn’t want to receive inappropriate channels included in a basic subscription package.

“We at the FCC need to address these issues,” Martin said. “We need to do more.”

Powell, saying he embraces the conservative view that the government has no authority to tell broadcasters what to air, fired back: “I think somebody ought to defend the 1st Amendment here.”

The retort reflects an increasingly aggressive stance by Powell.

After largely eschewing the press during his first two years as chairman, he has begun holding monthly news briefings in an effort to make his case on telecom policy directly to the public.

He also has reached out to intermediaries in hopes of mollifying Martin. It is a strategy that many of Powell’s predecessors adopted to overcome political deadlock at the agency. And some observers say it may point the way to a firmer consensus as the FCC gets closer to final decisions on key issues.

“At the end of the day, there will be both relief and reconciliation” between Powell and Martin, predicted Pickering. “Whether they realize it today, they both need each other for them to be successful.”