ELECTION EFFECT: DASCHLE LOSS MAY END ADELSTEIN'S FCC TERM

Most industry observers believe President George W. Bush's re-election last week means the FCC will maintain its deregulatory philosophy in the telecom arena for the next four years, although wholesale personnel changes at the commission are expected during the next eight to 10 months.

First among those changes likely will be the departure of Democratic FCC Commissioner Jonathan Adelstein when Congress adjourns its lame-duck session. Caught in the middle of an appointment standoff between the Bush administration and Senate Minority Leader Tom Daschle (D-S.D.), Adelstein needed to be reappointed to a full term after the elections to continue serving on the FCC.

But those hopes unraveled when Daschle — Adelstein's patron and former employer — became the first minority leader in more than 50 years to lose an election. Without Daschle to advocate his return, several sources said Adelstein's term will end when Congress adjourns.

“He's toast,” said a Washington, source speaking on the condition of anonymity.

Adelstein's expected departure would give FCC Chairman Michael Powell a 3-1 Republican majority at the commission early next year, with critical rules for IP services, universal service and intercarrier compensation on the docket. But Reed Smith managing partner Judy Harris said she does not believe the Republican commissioners will remain long enough to address universal service and intercarrier compensation.

“Even if there were three Republicans and not a single Democrat, those are not easy issues that can be resolved quickly,” Harris said. “And I think it would be very, very hard to keep all three [Republicans] on the commission for another six months.”

FCC sources have long said that Powell and Republican Commissioner Kathleen Abernathy are prepared to leave the commission in 2005. If that happens, some say the third Republican commissioner — Kevin Martin, who sided with Democrats Adelstein and Michael Copps on the triennial review order last year — would become chairman. However, Powell reportedly does not want Martin to be his successor and would prefer Abernathy.

Most sources think Abernathy wants to return to the private sector, but she may be intrigued by the possibility of becoming FCC chairman.

“When you ask [Abernathy] if she would do it, if asked, for the good of the country, she hesitates,” said Ray Gifford, president of the Progress and Freedom Foundation. “She gets a little more coy than she used to a year ago.”

Martin may be in a similar spot. Many say he would leave if he is not named chairman.

Outside the current FCC, the most likely candidates to succeed Powell are National Telecommunications and Information Administration (NTIA) Administrator Michael Gallagher, former Texas PUC Chairman Rebecca Armendariz Klein and Janice Obuchowski, former NTIA head and co-founder of NextWave Telecom, said Tom Tauke, Verizon Communications' executive vice president of public affairs and communications.

Other names include Earl Comstock, former aide to Senate Commerce Committee Chairman Ted Stevens (R-Alaska) and FCC Chief of Staff Bryan Tramont. Though the names may change, FCC appointments still will come from an administration increasingly active in setting telecom policy, Tauke said at a press conference, adding, “I would expect that philosophically, you're going to get people who think somewhat along the same lines.”

THE CHANGING FACE OF THE FCC

* Rules allow commissioners to remain at the FCC until Congress adjourns for the year after their term expires

Kevin Martin

term expires*
2006

Kathleen Abernathy

term expires*
2004

Michael Powell

term expires*
2007

Jonathan Adelstein

term expires*
2003

Michael Copps

term expires*
2005

Source: FCC