Media Consolidation Seen on Menu in Election
Published on Friday, October 29, 2004 by Reuters
Media Consolidation Seen on Menu in Election
by Jeremy Pelofsky

WASHINGTON - Media and telecommunications mergers would likely face greater scrutiny by the U.S. Federal Communications Commission if Sen. John Kerry wins next week's presidential election, industry analysts and lobbyists say.

If President Bush is reelected, these experts expect the FCC to continue freeing companies from regulation and pushing competition between cable, wireless, telephone and satellite systems, rather than within each mode.

No matter who wins, the next president is seen getting a chance to reshape the five-member FCC due to the expected departure of chairman Michael Powell, but it's unclear who Bush or Kerry would select to replace him.

The FCC, while a small government agency, has broad powers to decide who owns the nation's media landscape, set the rules for competition and enforce limits on the broadcast of indecent material.

"On the question of media ownership, a Kerry FCC and (Justice Department) is likely to be tougher on media concentration," said Blair Levin, a former FCC official during the Clinton administration.

The FCC last year relaxed ownership limits allowing companies to own more radio and television stations but a court put those rules on hold. The agency has until Dec. 2 to appeal that decision to the Supreme Court.

If Kerry is elected, most expect the interim chairman to be Democrat Commissioner Michael Copps, who has railed against media consolidation, indecency, and how deregulating the telephone industry has hurt competition.

Copps "has some pretty clear views that the FCC's current deregulatory path is the wrong path," said Paul Glenchur, an analyst at Schwab SoundView. "That's not great news for the Bells," referring to the major local telephone carriers.

Cable and telephone companies have been lobbying the FCC to set the rules for deploying high-speed Internet service, a product good for their profits. But the companies have been fearful that they may have to share their new networks.

Other names floating to lead or join the commission under Kerry include California Public Utility Commissioner Susan Kennedy, former FCC Commissioner Susan Ness, communications lawyer Antoinette Cook Bush, and former Kerry aide Greg Rothschild. One source noted it could be someone from outside the FCC world.

But if Powell and his two fellow Republicans decide to leave rightaway, that could paralyze the FCC because it needs at least three commissioners to act and the new members must be confirmed by the Senate.

If Bush is re-elected, most expect Powell to leave by mid-year, potentially to head the College of William and Mary whose president steps down in June or maybe move within the administration. That could open the door to Commissioner Kevin Martin or Kathleen Abernathy.

Other Republican names include telecommunications consultant Janice Obuchowski, Texas Public Utility Commissioner Rebecca Klein if she loses her congressional race, and Michael Gallagher, the head of the National Telecommunications and Information Administration at the Commerce Department.

Regardless of who joins the FCC under a second Bush term, most industry watchers expect the agency to continue its hands-off approach, especially for new technologies like telephone services via the Internet.

"If Bush wins, I see that continuing," said independent telecommunications analyst Jeff Kagan. "If Kerry wins all bets are off."

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