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Sen. Ernest Hollings, D-S.C., lambasted Federal Communications Commission Chairman Michael Powell on Thursday for failing to take a tougher stance against media consolidation. “All you need to do is take care of the law we passed,” said Hollings, chairman of the Senate Commerce Committee, at a congressional appropriations hearing. “Instead you seem to have abandoned that responsibility and assigned it to the market.” Hollings and other opponents of industry consolidation have criticized the FCC’s recent moves to loosen wireless spectrum ownership restrictions, which is widely expected to spur telecom mergers and acquisitions. Also arousing the South Carolina Democrat’s ire is a Feb. 19 appeals court decision voiding the FCC’s cable broadcast cross-ownership rule, which barred a company from owning a cable system and broadcaster in the same market. Powell has called the rule “archaic,” and the agency is not expected to appeal the decision to the Supreme Court. Powell defended the agency’s actions to deregulate the industry, arguing that a freer marketplace is better for consumers. “The law recognizes that the use of market forces is in the public interest,” he said. “We have an obligation to implement the statute to look for mechanisms using regulations to foster market economics that will be to the overall benefit of consumers’ welfare.” Although Hollings can apply only limited pressure on Powell, the lawmaker could conceivably introduce legislation restricting the agency from passing rules promoting consolidation if it expects to receive full federal funding, said David Kaut, a telecom analyst at Legg Mason Inc. in Washington, D.C. Powell also faced questions about the prospects for NextWave Telecom Inc.’s spectrum licenses. The Supreme Court is scheduled to hear the bankrupt wireless telecom’s case, which centers on rightful ownership of wireless licenses the company purchased in 1996 for $4.7 billion. The company filed for Chapter 11 protection after paying only $500 million. Sen. Ted Stevens, R-Ark., asked the FCC chief if Congress should pursue a settlement between the FCC and NextWave ahead of a top court ruling, which could tie up the licenses for years. While maintaining that the agency is committed to its case, Powell acknowledged that the availability of NextWave’s spectrum to consumers is a concern. He also called for legislation that would clarify the jurisdiction of federal communications law over bankruptcy law in auctions of wireless spectrum. Hollings has taken a central role in halting the proposed settlement between the FCC and NextWave. “[Hollings] doesn’t believe NextWave should profit from the situation,” Kaut said. Hollings also has tried to derail the so-called Tauzin-Dingell bill, which would deregulate high-speed Internet services offered by Bell telephone companies. The lawmaker suggested Thursday that the FCC intends to pass rules deregulating the broadband industry, effectively preempting congressional deliberation on the Tauzin-Dingell measure. “You’re trying to out-do Congress before we can get to the [Tauzin-Dingell] bill,” Hollings said. Powell said the FCC’s proposed broadband rules differ from Tauzin-Dingell. Copyright (c)2002 TDD, LLC. All rights reserved.

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