Revolving door of perception (with guest commentary from Jeff Chester)
Today's top story in the Times' Business Day section declares that former FCC chair Michael Powell has "changed sides" and is now working for the industry he once "regulated."
While reading the guest blog below, let this passage from Powell swirl around in your mouth. The Times allows it to just sit there, a punchline without a joke. Unless you consider coverage like this a joke. Powell's line:
"One of the things that most excited me about the firm is its concentrated focus on the areas which I know and can bring value to ... I didn't want to be a lobbyist. I didn't want to be a classic former government official that does nothing but sell access back to the corridors of D.C."***
Michael K. PowellÃ¢â‚¬â„¢s Golden Revolving Door
Another Chairman Goes to Work for the Companies He Once "Regulated"
August 11, 2005
TodayÃ¢â‚¬â„¢s announcement that Michael K. Powell has become a Ã¢â‚¬Å“Senior AdvisorÃ¢â‚¬Â at Providence Equity Partners is evidence once again that the Ã¢â‚¬Å“revolving doorÃ¢â‚¬Â between the FCC and the very industries it oversees should be slammed shut. Powell joins his fellow former chairs Richard Wiley, Mark Fowler, Dennis Patrick, Reed Hundt, and William Kennard, all of whom went from the FCC to work in the media and telecommunications industries. With lucrative industry employment ahead of them, FCC chairs (and most commissioners) have a built-in conflict of interest. They simply canÃ¢â‚¬â„¢t take the independent positions necessary to fulfill their responsibilities to the public--and to the public interest. One of PowellÃ¢â‚¬â„¢s new duties, according to Providence, is to Ã¢â‚¬Å“advise the firm onÃ¢â‚¬Â¦regulatory issues in the mediaÃ¢â‚¬Â industries.
PowellÃ¢â‚¬â„¢s "golden parachute" into the Ã¢â‚¬Å“preeminent private equity firm in the global media, communications, and information industriesÃ¢â‚¬Â comes as no real surprise. Throughout his tenure, Powell was an avid believer in the mystical forces of the commercial marketplace. He spent more of his time quoting economist Joseph Schumpeter (who developed the theory of Ã¢â‚¬Å“creative destructionÃ¢â‚¬Â) than taking an honest, hard look at the public interest consequences of media business trends. During his watch at the FCC, he relied on market forces as his primary touchstone, supporting further consolidation in the broadcast, cable, and telephone industries. Powell ignored growing public concern about media consolidation, including its negative impact on journalistic standards and content diversity.
And the public paid dearly for PowellÃ¢â‚¬â„¢s term at the FCC. Aside from setting the stage for more media mergers and broadband consolidation, his uncritical faith in the market blinded him to major problems with some of the largest companies under his purview, such as with Adelphia, WorldCom and Enron (recall its fiber optic subsidiary).
In the Ã¢â‚¬Å“free-marketÃ¢â‚¬Â economy of Washington DC and Wall Street, being a political "quick change" artist and then going to work for an industry one once oversaw is considered a mark of success. But the practice does a disservice to the public, including workers, investors, and competitors. Michael Powell helped spark one of the largest public protests against the FCC. Perhaps his example of a former public official cashing in will inspire much needed reforms. Chairs and Commissioners should pledge that they will work in the nonprofit sector for a reasonable period after the serve in office. Otherwise, there will always be the concern that--like Michael K. Powell--his so-called high-minded pro-Big Media philosophy was simply part of his resume for a highly-paid post-chairmanÃ¢â‚¬â„¢s gig.
Jeff Chester is executive director of the Center for Digital Democracy. His new book, Digital Destiny, reviews the FCC career of Michael Powell. The New Press will publish it next year.