Will Powell's FCC Wire Black Business For Success?

WHEN PRESIDENT GEORGE W. BUSH NAMED MICHAEL K. Powell chairman of the Federal Communications Commission (FCC), Washington insiders were talking about the creation of the latest political dynasty. You would expect such talk since his father is Colin L. Powell, the first African American secretary of state and a political and military icon.

But the 37-year-old Powell is more focused on the enormous task in front of him instead of such hyperbole. He is the second African American chosen to lead the five-member panel responsible for regulating the multibillion-dollar telecommunications industry, which includes telephone services, radio and television broadcasting, cable television, and the Internet. Powell replaces William E. Kennard, the first African American to head the agency. The incoming chairman is expected to exhibit a more limited view of the government's role in regulatory issues than the past chairman.

A graduate of Georgetown Law School and former chief of staff to the assistant attorney general in the Clinton administration, Powell will have to deal with issues that grew out of the Telecommunications Act of 1996, as well as increasing entrepreneurship opportunities for minorities (see "Could It Be a Brighter Day for the Broadcast Industry," Newspoints, this issue).

In an exclusive interview with Executive Editor Derek T. Dingle, Powell discusses his agenda, media diversity, and the prospects for black business in the digital era.

BLACK ENTERPRISE: What will be your priorities as chairman of the agency?

MICHAEL POWELL: The major priority as well as the major challenge for the FCC, as a steward of policy, is to make the pretty complex transition to the digital broadband environment. We have cultural shifts to make. We need to find processes that are more efficient and responsive in order to maintain our relevancy in our critical role as we go from the past into the future. I think that requires management and operation efficiency, trend development, [and] a better understanding of the incentives for investment, innovation, and entrepreneurship.

B.E.: What role does the FCC play in making sure small and minority businesses gain access to significant opportunities?

POWELL: I think the entire mission of the commission is to continue to create market conditions that provide opportunities for small businesses, including those that are minority, which tend to have the same challenges [and] constraints. We continue to steward any number of creative programs designed to ease the burdens that limit capital formation and [create] opportunities [through] auctions [by] trying to find ways to lower the cost obligation of getting licenses. We have been carefully examining our policies [on] ownership restrictions [and] the impact of increased consolidation [in the telecom industry].

B.E.: You hold a strong belief in supporting market forces in the telecommunications industry. Doesn't that philosophy place small and minority companies at a disadvantage?

POWELL: I always disagree with the idea that a pro-market philosophy is somehow an anti-small business or anti-entrepreneur policy. In fact, I argue that it's quite the opposite. The regulatory costs and burdens that are imposed on the market often hit small and entrepreneurial businesses much harder than they do large incumbents, which often have cash reserves, lobbying teams, [and] legal and judicial teams to weather a heavily-regulated environment I actually take issue [with the notion] that somehow regulatory intervention is vice tO the big [business] and disregards the small business. A lot of times, the big guys are very much in favor of the regulation; it is often to their benefit.

Entrepreneurs want the opportunity to innovate and to be able to reap the benefits. The government adds to the complexity of raising capital because regulatory overhang often introduces risks. Then the markets are hesitant [to provide] funds, which becomes a challenge for small and minority entrepreneurs to gain access to capital.

B.E.: How can minority entrepreneurs gain access to the capital-flow pipeline?

POWELL: It is tough. There are a lot of possible ways to address capital accumulation from my expertise. The government can [create access] through its tax treatment of those opportunities, which is one of the reasons why I have been driven to support and encourage Congress to reconsider the use of tax incentives. Sen. [John] McCain has agreed to reintroduce a bill [to reinstate a tax-certificate program that would allow companies the ability to gain tax credits if they sold broadcast properties to minorities]. I think it is sort of a win-win [proposition] designed to facilitate small minority businesses [hearing about] opportunities because [companies that] have the benefit of getting tax relief by selling [broadcast properties to minorities] will have an interest in seeking them out. It helps with the flow of capital by reducing the taxing burden associated with the transaction. There is a strong coalition that supports it that is not only representative of entrepreneurs, minorities, and women [but also includes] large, traditional broadcast interests that would love to see such tax advantages.

B.E.: The NAACP has pushed for diversity over the airwaves. What role will you play in diversifying the broadcast media?

POWELL: The NAACP is able to use the collective watching and buying power of a community to take their case to the producers and advertisers of programming. If the FCC passes a rule designed to increase the appearance of more brown and black faces on television, I assure you it will get struck down on First Amendment grounds.

[In terms of entreprenuership,] we definitely support increased diversity in the communications space. [The challenge for us, however,] is to articulate a policy designed clearly for minorities, women, or other constituencies mostly because of our increasing judicial constraints. We can have rules that are designed to create opportunities for [them]; we can continue to be a strong enforcer of any competitive behavior by big companies. I hope that [we] can aid the conditions for real business opportunities. [The telecommunications industry] is a very sophisticated business with high capital requirements and real challenges, but I am confident that talented entrepreneurs have plenty of opportunities. We will do anything to facilitate it.

RELATED ARTICLE: THE CABINET

For many of the 92% of African Americans who did not vote for President George W. Bush last fall, a black Republican is an oxymoron. But since taking office in January, the president has appointed more blacks to prominent positions--19 at last count--than any Republican administration has in the past.

You have to give Bush his props. Appointing so many African Americans to prominent positions in his administration is a wise political move. At least one influential African American, the Rev. Kirbyjon Caldwell, pastor of Houston's Windsor Village United Methodist Church, was so impressed by the level of African American involvement in the Bush camp--and insulted by the striking lack thereof on the Al Gore campaign team that he abandoned his lifelong Democratic roots to become a vocal supporter and spiritual advisor to President Bush.

Politics can only get you so far, though. In the end, the policies Bush enacts will count more with African American voters than the number of black faces he puts in high places.

Here's a partial roster of prominent black appointees in the Bush administration (some were still awaiting confirmation at press time):

Colin L. Powell Title: Secretary of State Age: 64 Education: B.A., City College of New York; M.B.A., George Washington University Powell, unanimously confirmed in this post in January, is established in the firmament of American history as a four-star general and chairman of the Joint Chiefs of Staff who led troops to victory in the Persian Gulf War in 1991. Still holding the unofficial title of the most likely to be elected, black, undeclared presidential candidate, Powell has already faced the Bush administration's first international crisis, achieving a diplomatic resolution to the U.S.-China spy-plane crisis in April.

Condoleezza Rice Title: National Security Advisor Age: 46 Education: B.S., Ph.D., University of Denver; M.A., Notre Dame University A director, then senior director of Soviet and East European Affairs, and later special assistant to the national security affairs advisor (1989-1991) during the first Bush administration, Rice has long been a prized and rare jewel in the SOP brain trust--a ready-for-prime-time, brilliant, black female Republican. A former Stanford University provost, Rice is known for her expertise in Russian affairs and arms control.

Roderick Paige Title: Secretary of Education Age: 67 Education: B.A., Jackson State University; M.A., Ph.D., Indiana University Paige had been the superintendent of schools for the Houston Independent School District since 1994, introducing incentive pay for teachers, performance contracts for senior staff members, and charter schools. Named National Superintendent of the Year by both the National Association of Black School Educators (2000) and the American Association of School Administrators (2001), he has championed decentralization and a focus on core curriculum development.

Larry D. Thompson Title: Deputy Attorney General Age: 55 Education: B.A., Culver-Stockton College; M.S., Michigan State University; J.D., University of Michigan Thompson, a partner in the Atlanta-based law firm King & Spalding, is No. 2 in the Justice Department. As a former U.S. District Attorney for Georgia's northern district, which includes Atlanta, Thompson directed the Southeastern Organized Crime Drug Enforcement Task Force and served on the attorney general's Economic Crime Council. Thompson has experience with legal matters involving white-collar crime, complex civil litigation, corporate litigation, and False Claims Act cases.

Ralph F. Boyd Jr. Title: Assistant Attorney General, Civil Rights Age: 44 Education: B.A., Haverford College; J.D., Harvard University Who cares that Boyd, a partner with the Boston law firm Goodwin Procter, doesn't actually have any civil rights experience? Certainly not Bush, who most likely considers it a plus that Boyd, the son of the founder of the NAACP's Schenectady, New York, chapter, lacks a record that people can point to. Boyd was editor of the Civil Rights Civil Liberties Law Review at Harvard and interned at the Southern Poverty Law Center in Montgomery, Alabama, but he's best known for cracking down on street crime and gun violence as a federal prosecutor for the Boston U.S. Attorney General's office.

Charles A. James Title: Assistant Attorney General, Antitrust Age: 46 Education: B.A., Wesleyan University; J.D., George Washington University James, a partner with the Cleveland-based law firm of Jones, Day, Reavis & Pogue, chairs the firm's Antitrust and Trade Regulation Practice out of its Washington, D.C., office. No stranger to the Justice Department's antitrust division, James has served stints as acting assistant attorney general and deputy assistant attorney general.

Alphonso R. Jackson Title: Deputy Secretary of Housing and Urban Development Age: 54 Education: B.A., M.S., Truman State University; J.D., Washington University Jackson, who defended Supreme Court Justice Clarence Thomas during his confirmation process, was a former president of American Electric Power-TEXAS. Also a former president and CEO of the Housing Authority of the City of Dallas, he has spent a career in policy-making positions affecting public housing in his native Washington, D.C.

Albert Hawkins Title: Assistant to the president, Secretary of Cabinet Affairs Age: 48 Education: B.A., University of Texas at Austin; M.P.A., Lyndon B. Johnson School of Public Affairs A former director of the Office of Budget and Planning for the state of Texas, Hawkins served as then-Gov. Bush's chief advisor on state and local fiscal issues, and later as a deputy manager overseeing financial planning and budget management for the Bush presidential campaign.

--Joyce Jones