Reporters covering the media business love to quote from former FCC chairmen (there’s never been a woman running that agency!). They are seen as expert sources with great “inside the FCC†expertise. But they have conflicts that require disclosure to readers/users, at the very least. Because of the `golden’ revolving door, former agency officials generally end up immediately working for the very media and telecommunications sector which only minutes before they oversaw (allegedly to protect the public interest).
Take, for example, today’s New York Times story quoting Michael Powell about the proposed Sirius and XM satellite radio merger. Powell said that the deal “could get through,†although acknowledged it would be difficult. But Powell should have been identified as a “senior advisor†to the media and telecom buy-out firm Providence Equity Partners. Through his work at Providence, Powell is engaged in helping make media buy-out deals happen. Incredibly, Providence’s deal-making has included an attempted buy-out of the radio conglomerate Clear Channel and Tribune—companies that were under the regulatory purview of Mr. Powell only a short while ago. Last fall, Providence acquired Univision, another company where Powell played a key role at the FCC.
The revolving door of former FCC “experts†is bipartisan. The last Clinton era FCC chair William Kennard is “Managing Director†for “U.S. Buy-out-Telecom and Media†for the Carlyle Group. Kennard is also a director of the New York Times Company.
The very same New York Times writer, who covered the satellite deal, had another story in today’s paper. Providence Equity Partners, Mr. Powell’s firm, has “raised $12 billion for what would be the largest specialized fund in the world…†Powell’s role for Providence wasn’t mentioned in that story either. The frenzy of takeovers that will likely ensure should give Mr. Powell and other former officials working for the industry many more opportunities to be used as an unbiased source.
It’s time Congress did something to address what is ultimately a very corrupt environment at the FCC. Chairs, commissioners, and senior staff should, at the least, be required to pledge they will not seek industry related work for a minimum of five years. The majority of commissioners should not come from industry (sorry K Street!). They should be independent academics, consumer advocates and community media officials. How about an FCC that actually puts real people–not public-and-private deals to be brokered–first!
Sources: “Policy Shift May Benefit Radio Deal.†Andrew Ross Sorkin. New York Times. Feb. 21, 2007
“Equity Firm Said to Raise Big New Fund,†Andrew Ross Sorkin. New York Times. Feb. 21, 2007
