FCC Chairmen and the Revolving Industry Door: A Higher Standard is Required

The list of former FCC chairs working in the media and communications business–either as lobbyists, consultants, or investors–is in illustration of why the commission is badly in need of reform. One day a chair is overseeing a media company–or a policy directly affecting it. The next day–after they leave office–they are working for the company or the industry. We really require FCC commissioners who are independent of the media and communications industry–before and after they leave the commission.

Michael Powell took a job as senior advisor at the buy-out firm Providence Equity Partners. Since he joined the firm, they have acquired–in whole or part–TV stations, a spanish language network, other media properties. Take a look at this report from the Los Angeles Times about the Orange County Register and note the role of Powell’s Providence. The deal was made prior to Powell joining the firm, but he’s there now, while these layoffs are happening [my italics]:

“Newsroom staffers described a morose — and tense — newsroom. Dragging out the layoffs for a week, they said, seemed particularly cruel and stressful.

“The way they’re doing this is just horrible,” one longtime staffer said. “It’s like, ‘Thanks for everything. Get out. Here’s some boxes, start packing.’ ”
…In 2004, privately held Freedom Communications Inc., parent of the Register, worked out a $1.3-billion buyout deal that saw more than half of the members of the founding Hoiles clan cash out their holdings and private equity firms Blackstone Group and Providence Equity Partners purchase nearly 40% of the shares. At the time, insiders said the investors borrowed a little less than $1 billion and provided about $400 million more in private capital to finance the deal.”

Then we have former Clinton appointed chair Reed Hundt engaged in his favorite twin occupation of media industry guru/investor. Hundt had been helping lead the effort by his Frontline Wireless company to have the commission approve policies compatible to his interests. Even former Reagan-era FCC chair Mark Fowler is working with Hundt’s Frontline.

FCC reform should be at the top of the public interest policy agenda, esp. with the future of democratic communications at stake.
source for Powell/Provide/OC Register story: “O.C. Register lays off workers: The newspaper will also trim news space to reduce costs as its revenue decline.” Kimi Yoshino. Los Angeles Times. Aug. 7, 2007.

Author: jeff

Jeff Chester is executive director of the Center for Digital Democracy. A former journalist and filmmaker, Jeff's book on U.S. electronic media politics, entitled "Digital Destiny: New Media and the Future of Democracy" was published by The New Press in January 2007. He is now working on a new book about interactive advertising and the public interest.

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