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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