It’s not often that a regulator’s exit from an agency disappoints defenders of the free market. But that’s the case with Michael Powell, who has resigned his chairman’s position at the Federal Communications Commission and will leave in March.
“Anybody that was seeking deregulation – telecom, wireless, cable and emerging technologies – will be sad to see Powell go,” Scott Cleland, head of the research firm Precursor, told Investor’s Business Dailyrecently. Hard to imagine, but it’s true that a federal bureaucrat once said that Washington must “clear away the regulatory underbrush.” And that is what Powell saw as his job.
One of the deregulatory achievements Powell will likely be remembered for is his effort to reverse rules that required the Baby Bell local telephone service carriers to share their networks with competitors at below-market prices. He also ruled that cable modems were an “information service,” which protected the cable industry's Internet services from some regulation. Powell also pushed to relax the central planning that governed media ownership rules. But now that Powell is leaving, it appears the administration won’t follow through with his blueprint to relax media ownership rules.
Powell’s legacy, though, might best be defined by his focus on voice over Internet protocol, a fancy name for Internet telephone service.
Also known as VOIP, Internet telephone calling promises to save consumers money. An FCC ruling declared that VOIP carriers were exempt from most state regulation and taxation. That didn’t make Powell popular with state regulators and tax-hungry legislators, but it was appropriate for the FCC to take the shackles off an important emerging industry.
“Contrary to the classic bugaboo that markets are just things that favor big business and big money,” Powell told the Federal Communications Bar Association, a group known for its obsessive devotion to what it defines as the “public interest,” “market policies have a winning record of delivering benefits to consumers that dwarfs the consumer record of government central economic planning."
“Thus, if you are truly committed to serving the public interest, bet on a winner and bet on market policy.” That’s the attitude every regulator should have.