WASHINGTON-The new Democratic-controlled Senate is expected to change the tone of telecom policy debate in Congress, but is unlikely to immediately have a major legislative impact. That may well change in time, however.
With Democrats assuming control of the Senate for the first time since 1994, a dramatic turn of events made possible by Vermont Sen. James Jeffords defection from the GOP last week, high-tech policy will at once be subject to greater government oversight and greater government support.
The truth is, high-tech policy has not been a top priority for the Bush administration to date. Tax cuts, education and energy trump everything. And the little high-tech declarations that have come from the White House-like support for a permanent research and development tax credit-are appendages of Bush’s broader policy agenda. Other than a broadband Internet bill supported by Baby Bells, which likely would not have been approved by the Senate had Jeffords not bolted the GOP, there is little serious high-tech legislation being pushed by congressional Republicans and the GOP White House.
Michael Powell, the Bush-appointed chairman of the Federal Communications Commission, has followed the Bush lead by embracing a hands-off approach to telecommunications regulation. That approach has drawn criticism at a time when would-be local competitors to Baby Bell telephone monopolies and high-tech firms generally are succumbing to bankruptcy and other financial problems.
Likewise, Charles James, Bush’s pick to head the Justice Department’s antitrust division, is not seen as someone likely to stem the tide of mega mergers that have reduced the number of regional Bell telephone companies from seven to four and that have led to significant consolidation in the telecom sector.
The new Democratic-led Senate will combine the voices of old-line, pro-regulation Democrats, like Sen. Ernest Hollings (D-S.C.) with the enterprising energy of New Democrats (21 in the Senate) that forged close ties with Silicon Valley in the Clinton-Gore administration and heavily promoted high-tech policies across the board in government.
Though not a New Democrat, new Senate Majority Leader Tom Daschle (D-S.D.) is closely aligned with moderate Democrats who tend to be pro-business and free traders.
But in the trenches, it will be new Commerce Committee Chairman Ernest Hollings, who will make the biggest difference on a day-to-day basis. “I think you’ ll see Hollings being deferential to McCain,” said David Siddall, a former congressional aide and FCC official who now practices law.
But while Hollings and his predecessor, John McCain (R-Ariz.) worked closely and amicably together under the 50-50 power- sharing arrangement in the Senate, philosophically the two lawmakers are worlds apart on telecom policy.
“I think we’re taking a night-and -day approach to high-tech policy,” said Adam Thierer, director of telecom studies at the Cato Institute. “The bottom line is that in the Judiciary Committee it will be business as usual, but in Commerce there will be a real sea change.”
Thierer said the Judiciary Committee, which now will be chaired by Sen. Patrick Leahy (D-Vt.), exercised aggressive telecom antitrust oversight under the Republicans. At the same time, Leahy will be more likely than Sen. Orrin Hatch (R-Utah) to give greater weight to privacy rights when balancing them with law enforcement and national security requirements. Leahy and Jeffords, both who will assume key committee chairmanships in the Democratic-led Congress, have been the most vocal and aggressive about earmarking federal funds for mobile-phone health research and about repealing a 1996 telecom act provision that forbids local governments from blocking the construction of antenna towers on health grounds.
“Hollings may not be as aggressive as McCain with respect to market-based spectrum policy,” said Dan Phythyon, a communications lawyer and one-time congressional staffer who was previously chief of the FCC’s Wireless Telecommunications Bureau.
Phythyon and others predicted Powell’s FCC policies are likely to come under tougher scrutiny from Democrats, especially those who believe not enough is being done to promote local competition and limit consolidation in the six years since the passage of the telecom reform act. But there is the sense that Powell is unlikely to veer from his non-activist approach to telecom regulation.
“The real world impact of the change, however, would be slight,” said Blair Levin, a Legg Mason analyst who was chief of staff to former FCC chairman Reed Hundt. “Sen. Hollings would not be able to stop the commission from doing things he does not like; he would merely be able to raise a political challenge to actions.”
Hollings unsuccessfully attempted to derail the merger between VoiceStream Wireless Corp. and Deutsche Telekom AG. Future telecom deals that involve significant foreign-government ownership may not be as lucky.
Hollings’ clout is extended through his seniority on the Senate Commerce appropriations subcommittee, which oversees the budget of the FCC and the departments of Commerce, State and Justice. The sharp-tongued South Carolina Democrat likely will replace Sen. Judd Gregg (R-N.H.), a major advocate of the wireless industry on third-generation mobile-phone spectrum issues. The impact of Democratic Senate control on the Armed Services Committee, which is looking at 3G through the eyes of the Pentagon and will continue to do so under Chairman Carl Levin (D-Mich.), is clear. Republicans and Democrats alike on the panel are unhappy with Defense Secretary Donald Rumsfeld for a variety of reasons.
A big loser in the political shakeup is Sen. Conrad Burns (R-Mont.), who was shaping the telecom agenda in the Senate as chairman of the Senate communications subcommittee, while McCain went to war on campaign finance reform and other pet issues. McCain was unequivocal in voicing disappointment over the change in fortune for Senate Republicans: “Tolerance of dissent is the hallmark of a mature party, and it is well past time for the Republican Party to grow up.”
