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The F.C.C. had a crucial role in all this. The arbocks are rich, 
aggressive, politically powerful, and generally Republican (though like 
all important interest groups they work with both parties); they 
immediately filed lawsuits, which wound up tying the hands of their new 
competitors in the local phone market for more than three years. Through 
rule-making, enforcement, and litigation, the F.C.C., then headed by 
Reed Hundt, who was Gore's classmate at St. Albans, was supposed to keep 
the arbocks in their cages, so that not only long-distance companies 
like A.T. & T. and MCI WorldCom but also a whole category of new 
companies, "see-lecks" (the pronounced version of CLECs, or competitive 
local exchange carriers), could emerge. This entailed the regulatory 
equivalent of hand-to-hand combat: the see-leck is supposed to have 
access to the arbock's switching equipment, the arbock won't give the 
seeleck a key to the room where it's kept, so the see-leck asks the 
F.C.C. to rule that the arbock has to give it the key.

Partly because Hundt assured the see-lecks and other new companies that 
he would protect them, and partly because of the generally booming 
condition of the economy then, investment capital flooded into the 
see-lecks—companies with names like Winstar, Covad, and Teligent—and 
into other telecommunications companies. Even not obviously related 
technology companies like Cisco Systems benefitted from the telecom 
boom: demand for their products was supposed to come from the see-lecks 
and other new players. There would be no conflict between the interests 
of the new telecom companies and those of consumers; as one of Hundt's 
former lieutenants told me, "Reed used to joke that my job was to make 
sure that all prices went down and all stocks went up."


The years following the passage of the Telecom Act were the peak of the 
boom. Wall Street had its blood up, and that meant not just more 
startups but also more mergers of existing communications companies: 
Time Warner and AOL decided to throw in together, and A.T. & T. and 
Comcast, and so on. (Surely, WorldCom and the other telecom bad guys 
believed that their self-dealing, stock-overselling, and creative 
accounting would go unnoticed because the market was so 
undiscriminating.)

By the time the outcome of the 2000 Presidential election had been 
determined, the telecom crash was well under way. Nonetheless, the 
chairmanship of the F.C.C. remained one of the best jobs, in terms of 
influence and visibility, available to a career government regulator. 
Three Republicans emerged as candidates: Powell, who was a commissioner; 
Harold Furchtgott-Roth, the farthest-to-the-right commissioner; and 
Patrick Wood, the head of the Texas Public Utility Commission and, as 
such, a George W. Bush guy. In Texas, however, Wood had crossed the most 
powerful person in the arbock camp, Edward Whitacre, the C.E.O. of 
S.B.C. Communications, which is headquartered in San Antonio. This meant 
that the arbocks didn't want Wood as head of the F.C.C., because he 
might be too pro-see-leck. (Wood is now the head of the Federal Energy 
Regulatory Commission.) Michael Powell had to signal the arbocks that he 
wasn't as threatening as Wood, while also signalling the conservative 
movement that he was only negligibly farther to the left than 
Furchtgott-Roth.

Powell did this deftly. For example, in December of 2000 he appeared 
before a conservative group called the Progress & Freedom Foundation and 
gave a very Michael Powell speech—whimsical, intellectual, and 
free-associative (Biblical history, Joseph Schumpeter, Moore's Law)—that 
began by making fun of the idea that the F.C.C. should try to keep new 
telecom companies alive. "In the wake of the 1996 Act, the F.C.C. is 
often cast as the Grinch who stole Christmas," Powell said. "Like the 
Whos, down in Who-ville, who feast on Who-pudding and rare Who-roast 
beast, the communications industry was preparing to feast on the 
deregulatory fruits it believed would inevitably sprout from the Act's 
fertile soil. But this feast the F.C.C. Grinch did not like in the 
least, so it is thought." Thus Powell was indicating that if he became 
chairman he didn't expect to administer first aid to the see-lecks as 
part of the job. He was appointed to the chairmanship on the first day 
of the Bush Administration.

Twenty months into the Administration, nearly all the see-lecks are dead 
or dying; nearly all long-distance companies, not just WorldCom, are in 
serious trouble; cable companies have lost half their value; satellite 
companies are staggering. The crash has had an automatically 
concentrating effect, because as new companies die the existing 
companies' market share increases, and, if the existing companies are in 
good shape financially, they have the opportunity to pick up damaged 
companies at bargain prices. During the Bush Administration, as the 
financial carnage in communications has worsened, the communications 
industry has moved in the direction of more concentration. If the Bells 
wind up protecting their regional monopolies in local phone service, and 
if they also merge, the country will be on its way to having a national 
duopoly in local service: Verizon, in the East, and S.B.C., in the West. 
And these companies could dominate long distance as well, because of the 
poor health of the long-distance companies.

The cable business also seems close to having two dominant national 
companies, AOL Time Warner and Comcast. Unlike the phone companies, they 
don't have to share their wiring with other companies and so can more 
fully control what material they allow to enter people's homes. As part 
of the complicated bargaining with interest groups that led to the 1996 
Telecom Act, the limits on concentration in the radio industry were 
significantly loosened, and in the past six years the number of 
radio-station owners in the United States has been cut by twenty-five 
per cent; today, a large portion of local and national radio news 
programming is supplied by a single company, Westwood One, a subsidiary 
of Viacom.

In this situation, many Democrats and liberals think, the F.C.C. should 
be hyperactive—the superhero of government regulation, springing to the 
rescue of both consumers and the communications industry. It should try 
to breathe life into the see-lecks and other new companies. It should 
disallow mergers, maintain ownership limits, and otherwise restrain the 
forces of concentration. It should use the government's money and muscle 
to get new technology—especially fast Internet connections—into the 
homes of people who can't afford it at current market prices. (An 
analogy that a lot of people in F.C.C. World make is between telecom and 
the Middle East: the Clinton people blame the bloodshed on the Bush 
people, because they disengaged when they came into office, and the Bush 
people blame it on the Clinton people, because they raised too many 
expectations and stirred too many passions.)

But Michael Powell's F.C.C. has not been hyperactive. Powell has been 
conducting internal policy reviews and reforming the management of the 
F.C.C. and waiting for the federal courts and the Congress to send him 
signals. (In mid-September, Powell finally initiated a formal review of 
the F.C.C.'s limits on media concentration.) This doesn't mean he has 
been inactive; rather, he has been active in a way that further 
infuriates his critics—in a manner that smoothly blends the genial and 
the provocative, he muses about whether the fundamental premises of