**Remarks of Michael K. Powell**

**Chairman, Federal Communications Commission**

**Dialogue with Brian Lamb**

**At the**

**National Cable & Telecommunications Association (NCTA)**

**New Orleans, LA**

**May 8, 2002**

MR. ROBERT SACHS, PRESIDENT NCTA: Good morning, and welcome to our first
public policy session of the day. Chairman Powell, Brian Lamb, come on
up.

MR. LAMB: I'm delighted to see everybody this morning, and I have with
me to kick this off, the April 29th issue of Forbes Magazine. Have you
seen this?

CHAIRMAN POWELL: Yes.

MR. LAMB: There are some wonderful things in here. One of the things I
wanted to ask you to start off is about the copy on the cover. It says,
"Trillion Dollar Man: FCC Chairman Michael Powell\'s Rescue Plan for
Tech, Telecom, and Media: Get Out of the Way.\" Is there anything on
that cover that you disagree with?

CHAIRMAN POWELL: Sure. It\'s not a trillion dollars. If you hadn\'t
noticed the market last week since the article came out, I think I\'m
maybe down to 100 million.

Secondly, there is a tendency to, I think, misappreciate what market
philosophies really mean. They are not just simply "get out of the way."
I think they are conscious judgments about what are the best vehicles
for reaching effective decisions that need to be made in a dynamic and
innovative marketplace.

A lot of times that is a market without any intervention. Sometimes that
is a market with certain parameters curtailed. And anyone who really
knows about market philosophy knows that it is dependent heavily on the
rule of law. There is no such thing as laissez-faire in the United
States or any other economy in the world, not true laissez-faire,
because there have to be certain expectations that are protected, and I
think at a minimum there is always a role for government in the
protection of very anti-competitive activities.

So I think it makes good copy to make everything black and white, rules
or no rules, but I think it\'s significantly more complicated than that.
And most of us don\'t serve in the government so that we won\'t have
anything to do. We find something to do here and there.

MR. LAMB: By the way, what\'s the difference between being a
commissioner and being the chairman?

CHAIRMAN POWELL: I was asked this the other day. I see some of the
people who heard the answer the other day.

It is interesting. One, I feel very grateful to have had the perspective
because I think the chairman is a heck of a job to come into cold. It\'s
a dynamic, fast-moving institution with a huge portfolio. I don\'t think
people realize the width and depth of the kinds of things that fall
under the FCC umbrella. So to have had some experience, at least with
the workings of the agency and some of the issues, for me was a God-send
before going down the hall.

I guess I naively thought when I first moved that it was just the same
job at sort of an incremental level higher. It is not at all. I think
the thing that I convey to you is it is an entirely different job in
some ways.

Your range of responsibilities explodes exponentially \-\-- just the
little things, like preparing the federal budget, doing all the hiring,
and sometimes firing, throughout a 2,000-person agency, the daily
managerial challenges of everything from, "oh, my God the elevators
don\'t work, call GSA and do something about it," to the real struggles
of how we will be organized, the reorganization reform, trying to
prepare the agenda.

The chairman also has the responsibility of developing the agenda so my
colleagues and I can keep the business of the agency moving forward,
which is much more difficult than I had imagined. It\'s very difficult
on a daily basis to look out over all the things we have going on, and
say what\'s in May, what\'s in June, what will we try to do this year,
what will we not be able to do this year?

The other thing which I find both hard and sort of fun is whether you
like it or not you kind of become the personification of the FCC.
Everything it does wrong, they say, "well, Mike Powell did this."
Everything they do right, sometimes they say, "Mike Powell did that."
But I get a lot more of \"it\'s his fault\" stuff than the credit stuff.
And that\'s really tough because we are an agency of \-\-- at the moment
four \-\-- five commissioners. We do deliberate. We do try to work out
solutions.

But the press of media coverage and the political intensity tends to
want a central focus, a central figure to represent all that goes on
there, and that becomes you. So you have this sort of unending
notoriety, good and bad, an extensive amount more of phone calls and
press reports and press interests that take up your day.

So it is a very different job. But I have never had so much fun in my
entire life. It\'s the best thing I have ever done.

MR. LAMB: There are a couple of quotes from this article that I am sure
you will remember, and they kind of bracket the question I want to ask
you. The first quote is from one of your former chairman colleagues, and
that\'s from Bill Kennard, who said, \"The FCC is one of the last of the
New Deal dinosaurs.\"

And then the other quote is from Reed Hunt, and he says the following:
\"Powell faces a greater, a far greater challenge than any chairman
before. There has never been a turndown like this. Powell has the bad
luck of being cast as the Herbert Hoover of telecom. If this sector
doesn\'t turn around, the economy isn\'t going to turn around. He has
got his hands on the throttle of the engine that is going to pull
it.\'\"

Start with your past colleague, Bill Kennard says that it\'s a New Deal
dinosaur, and then Reed Hunt says it\'s all you, you\'re responsible for
the future, the past, you\'re the Herbert Hoover of an FCC dinosaur.

CHAIRMAN POWELL: By a show of hands, who knows what that means? Poor
Reed has been saying this in article after article. I have yet to figure
out what on earth it means to be Herbert Hoover. I don\'t think it\'s
good, though. I guess he\'s Franklin. But anyway, so I have no idea what
that means, so I have no comment on being Herbert.

But we are certainly a New Deal agency in the sense of our origination,
but I don\'t accept at all that we are a dinosaur. I think that for very
important reasons the Commission sits at a crossroads of transition
between an extraordinary migration of historical import, of moving
because of the developments in technology and the revolutions that
underlie the changes that all of you are grappling with, and that every
industry in our sector is grappling with. We serve a very important role
in, if other than "traffic copping," the migration from a lot of legacy
technology, a lot of legacy legal thinking, a lot of legacy economic
thinking, a lot of legacy political thinking, and trying to pass that
through a constructive filter that is optimized, supercharged for the
digital information age.

And I think that there are times where government has played very bad
roles, and I think there are times where government plays very important
roles, and I think that the role of the FCC, three letters
notwithstanding, is one of the most important institutions in the
federal government at the moment, as long as it\'s humble enough to know
where it\'s constructive and honest enough to know where it\'s not.

But I have rarely had anyone \-\-- in any industry, in any political
element or even among consumer groups \-\-- that doesn't think that not
only are we needed but we are important.

So in terms of being a dinosaur, we are only a dinosaur if we let
ourselves be. One of the things we become deeply committed to is we are
going to be the finest government agency out there, and we are going to
do everything we can in the training, recruitment, development of our
staff and development of policy positions so that we stay current with
modern changes. This includes everything from our committed effort last
year to increase the number of engineers we had and the recognition that
technology is too important to let other people tell us about what they
are doing at the same time they are asking for a decision on something.
Last year we hired 40 engineers, more than the FCC has hired in many
decades in one single year.

We have built training and development programs that distribute that new
intelligence all through the Commission so that we are not a dinosaur,
we will be something that is capable of adapting and responding to
really what is one of the most fundamental changes in economic history.

MR. LAMB: But you still have 527 lawyers?

CHAIRMAN POWELL: Yes, and I\'ve got 750,000 words of statutes for them
to play with.

MR. LAMB: One of your favorite things to talk about is competition.

CHAIRMAN POWELL: Yes.

MR. LAMB: One of your goals is to improve competition. Can you give us a
couple of examples of industries that you are responsible for regulating
that you consider to be healthy, competitive industries?

CHAIRMAN POWELL: Let me qualify a little bit. I believe in competition
deeply, but I believe in healthy markets. You can get in heated debates
about how many competitors constitute a market, how many don\'t. So you
can have healthy market conditions and even have fairly concentrated
markets in some instances.

But that said, I think that we are beginning to see some pretty
significant competitive environments. I think, for example, the wireless
telecommunication space is extremely competitive. By some peoples\'
estimates, too competitive, to the point that it\'s costing the industry
significantly. And you certainly hear Wall Street crying for some
rational consolidation because of the hypercompetitive effects.

Certainly the long distance, long haul market had become
hypercompetitive. I don\'t have to tell you the plight of notable
companies like World Com and Qwest struggling at the moment because of
the glut in long haul, fiber optic capacity. That is certainly a
competitive space.

I personally believe that the media environment is fairly competitive
though concentrated in certain ways. I think that there still are pretty
energized competitive pressures for who gets on, where, what kinds of
programming, when, ratings, etcetera. I think it's still a pretty robust
and vital space for the most part. I think there are things to watch
there, but I think for the moment I would certainly ascribe it as a
healthy market environment by and large.

One of the things we are going to have to get really used to is once
upon a time the world was really simple. We knew who all the companies
were. We knew all the CEOs by name. We knew what they did and we knew
what they didn\'t do. We had one phone company for a long time, and then
at most we had seven. We knew who to call. We could see the results of
what we did very simply, very easily. We would call them up. They did it
or they didn\'t do it. You either saw the change in a large scale or you
didn\'t.

I think what we are going to have to get used to is that there is never
again going to be the ability to be very simplistic about a country this
large and diverse and about whether the country is competitive, is this
market segment this or is that market segment that. I think it\'s going
to be much more dynamic and chaotic. It will be difficult to make broad
generalizations about the entire space.

I think you will be able to go to cities that have four broadband
providers. I think you will go to a town 100 miles away that will have
none. I think you will go to other places that will have many. And I
think the policy should always be attempting to get ubiquity and
affordability. But I think we will have challenges because we are used
to \-\-- I think policy is used to \-\-- a more simple picture of the
players and the markets and the technologies, and they are fragmenting
into many, many versions and variations across the country. So you will
get this noise, this anxiety in Washington, and I think in policy,
because you don\'t really know what is going on. You feel like you do,
or you don\'t.

I gave a speech about five years ago called \"Big Guy Myopia,\" and, it
was my view that I thought policy was too focused on these big guys
versus those big guys, and they often ignored all the wonderful activity
that was going on below it. You know, phones was nothing but AT&T versus
the BOCs, and that was somehow the entire phone industry, ignoring, for
example, the hundreds of telephone companies in the State of Iowa or,
this cable company or that cable company.

And I think it has gotten even worse and more fragmented, and it\'s not
easy to make broad generalizations. For us it also means it\'s very
dangerous to make one size fit all rules, because rules are wonderful,
but they are dangerous because they can be over-inclusive and
under-inclusive all at the same time. And you might be hitting one set
of problems while really dangerously disrupting other parts of it. And I
think it\'s going to be hard for policy-makers. I think it\'s going to
be hard to get your head around it.

Is it competitive? Is telephone competitive? Well, if you measure this
way, I would say no. But if you measure the degree to which people use
their wireless phone instead of their land-line phone, I would say it\'s
pretty competitive.

I don\'t know about you, but is anybody using the hotel phone? Aren\'t
you picking up your cell phone and calling with your buckets of minutes?
That\'s competition. That\'s coming right out of what used to go into
the phone system. But we don\'t have any capture of that, any easy way
to know how many times a consumer does that instead of this. But it\'s
really cutting into the competitive environment.

MR. LAMB: Before I ask the question, I have got to admit that when a lot
of our callers will call up on the call-in show and say things like, \"I
don\'t know how George Bush became President because nobody I know ever
voted for him.\" Or the reverse of that, \"I don\'t know how Al Gore got
the most votes last time because I don\'t know anybody in my
neighborhood that voted for him,\" as a way of saying to you I have
never had anybody say to me, \"Do you have a high definition television
set, and I can\'t wait to get mine?\"

CHAIRMAN POWELL: There are a couple guys out here who might say it.

MR. LAMB: But the reason I ask that is, who wants high definition
television? And is the government in the position of trying to force
this on us, or do people really want it if only we could see it?

CHAIRMAN POWELL: I will be very strident about this. You want high
definition television. Everybody in the country wants it who is in the
media-video entertainment space.

Why? Because the digital revolution is genuine and real, and every
segment of the market and industry got a little piece of this future.
Whether it be cable and its digitalization of its infrastructure for the
provision of services we are still speculating about; whether it be the
telephone system and their move toward DSL and high speed interactive
components so that their network will make the migration to the
broadband future, whether it be satellite, third generation wireless, or
wireless networks in your home; \-\-- everybody got a little piece, a
little down payment on the digital future.

And I think that digital television transition is the little piece,
number one, for broadcasters. It\'s largely their exclusive piece. I
think it\'s an enormous piece and opportunity for cable as well, or
anyone who hopes to be accessing individual consumers in their homes
with the products of the future, whatever they end up being. I know they
will be using digital and those kinds of advanced protocols. I think you
want devices to get smarter, more powerful and capable of receiving
higher levels of quality and \-- put it this way \-- higher amounts of
bits, because you just don\'t know where it is going.

But I am positive it\'s going someplace where you have to have a node on
that consumer that is capable of allowing your innovation to reach them.
And I think that the industry needs it for that reason. I think the
government needs it because for right or wrong we committed to this
digital transition.

I might have done it differently if I was here and we were doing it all
over again, but stop whining about it. It happened. The spectrum has
been given, and that spectrum is extremely valuable and the government
wants it back. The government wants it back so that many of these other
great digital things that we see being experimented with have more
breathing room, more spectrum for their real estate. To get it back,
that transition has to succeed. So that\'s who wants it back.

And do consumers want it? The market will tell us if they do. I suspect
that they will. I was with a woman the other day, Arlene Harris, who is
a great wireless pioneer, and she said that a lot of times with new
products, innovative products, we forget that you have to be missionary
about them.

Consumers don\'t know yet. Part of what you have to do in your business
as an entrepreneur is show them the way. She had been around when they
were the first company selling pagers. And she said people looked at us
like they were crazy. For years, nobody had any idea what one does with
a pager. And she said you had to be missionary about it.

And it really resonates with me. I think in the digital world,
interactive world, you and everyone else will have to be missionary
about it. And your neighbor very quickly one day is going to say, \"Have
you seen this? Why don\'t you have it?\"

It was the same way with e-mail. Don\'t you remember the first moment
somebody said, \"Don\'t you have an e-mail address?\" And you said, \"I
don\'t know. I don\'t have an e-mail address.\" And then, you could for
awhile act indignant and say, \"I don\'t care. I don\'t need an e-mail
address. I have been here as long as some of you. I don\'t have an
e-mail address.\" Then it was, if you didn't have an e-mail, \"Well,
I\'m getting it really soon.\" And now if you don\'t have one, you are
just a luddite.

That can happen very fast \-\-- who hasn\'t paid attention to this
802.11 wireless network? I never heard of the thing six months ago. I've
got neighbors who don\'t know anything about technology who say, \"Have
you got the wireless network thing? Let\'s go to Circuit City and get
this thing.\" And it is taking off like wild fire.

So consumers can be funny But you all have a fine tradition of showing
them ways to things they didn\'t know they ever wanted to do, but then
once they do they will never go back.

MR. LAMB: But at some point isn\'t it a little bit different than
whether you have e-mail? In this case you\'re almost going to be forced
some day to walk in there and have to buy a new television set.

CHAIRMAN POWELL: Unless these TVs are better built than I think, you are
going to do that anyway. Some time in the next 10 years you\'re going to
go in and buy a new TV set.

You know, the hopefulness is Americans have a deep love and obsession
about their television set. It\'s quite a statement on the American
citizenry, I suppose, that more people own television sets than
telephones. It\'s true. The average family, I think, has three
television sets in their home in the United States. That\'s the average.
Some of us, five, six. It\'s amazing. And we do buy new ones.

And I think that when I go into Circuit City, nobody is over there
staring at the 13-inch black and white. They are all in that really dark
room with the big ones. And if they are not buying it, they are wishing
they could buy it. Every man in this room knows the TV envy thing,
right? Sixty-two inches, huh? What are you watching the Super Bowl on?
There is a lot of culture wrapped up in these television sets.

I think people like high quality TV. I think they buy \$1700 sets,
63-inch sets, the Sony Vega flat screen that will blow your eyeballs
back when you look at them. People will do the same thing for high
definition.

First, I think one of the things is they are still very confused about
it. They don\'t want to buy a very expensive thing that doesn\'t live up
to its billing. Can you plug it into anything? Because let me tell you
if you buy \$2,000 TV sets, you probably have cable or dish and you
don\'t want to hear that that somehow doesn\'t work.

Secondly, you want something to watch, and that\'s why, you know, in our
own plan we are trying to get all of those pieces a little further down
the road so that when a customer starts quizzing their Circuit City rep,
these answers will be better.

Yes, cable has committed to making this available everywhere by the end
of 2003, so I can tell you that much about it. Now you can add that to
your purchasing decision. Yes, the set is capable of plugging into this
or that, so you can add that to your decision. There will be more. There
will still be people who say, "I\'m not ready." But there is going to be
a significant number who will say that there is enough comfort to
purchase it. So I am convinced it\'s coming.

MR. LAMB: I am one of the few people in the room old enough to remember
Saul Taishof, who never wrote a nice thing about cable in his life. He
doesn\'t own the magazine anymore, but I was a bit surprised to see a
line in his editorial this week \-- not his \-- in Broadcasting in
Cable, and I wanted to ask you about it. It says, \"If you wait for
broadcasters to make HDTV happen, we suspect you will still in 2012 be
watching that 26-inch RCA you bought in 1992.\" Basically, they are
saying the broadcasters aren\'t doing a very good job. Would you agree
with that?

CHAIRMAN POWELL: No. I think broadcasters could do better. I think they
have challenges just like you do in making a transition. I think it\'s a
burdensome one. It\'s an expensive one. They signed up for it, so I
don\'t have a lot of sympathy for the challenges associated with it. But
I do think that it\'s a tough challenge.

But I think that it was always a mistake, the more I have thought about
this, to think that something as significant as swapping out the
television sets of at least 85 percent of all Americans with something
that was going to be a broadcast-only proposition when you think about
the fact \-\-- even just this simple fact that 84 percent of Americans
have cable or DBS.

How on earth did anyone think a digital TV transition could or would be
a broadcast-only phenomenon? You just simply couldn\'t ever get near the
penetrations that are presumed to be the triggers. So I have never
understood why there wasn\'t some understanding of how vital cable would
be or DBS would be, or the content community would be, because people
don\'t buy these sets to catch a show every now and then that's in this
product.

The reason I have urged this industry to be a leader is you all have
some of the very best-suited content for this format of anybody.
Everyone tells me the big sellers are sports and movies. Well, where are
Americans watching most of their sports and movies these days? They are
watching them on your plant. It's HBO and Show Time and all the other
wonderful movie products that are existing in multi-channel platform.
It\'s ESPN, and FOX Sports and those networks that are picking up large
swaths of major league seasons.

These avid fans of those things, the movies or the entertainment, are
largely on those platforms, and if they are not, they are very likely to
be in the near future. And so I think the transition always had to have
the concerted commitment of many other industries and many other
variables. I think we are just finally getting that in Washington, and I
think proudly so, with industry as a whole understanding that we all
have to get across this Rubicon. It\'s not just someone\'s thing.

So we have tried to do things in a way where we stop finger pointing. At
the end of the day, this isn\'t some "whose fault was it that it didn\'t
work" question. Everybody probably has a little of that culpability,
including the government. But let\'s just talk about what have we got to
do to make it work because everybody stands to benefit if it is
successful.

MR. LAMB: We have about 15 minutes, and we need some questions from the
audience. I will ask one more and then if somebody has got a question
they can either use that microphone, or put their hand up and we have a
roving microphone. What advice do you have for not just this audience,
anybody that comes into your office to lobby you?

CHAIRMAN POWELL: Come only if you have to, number one. Lobbying is very
intense at the Commission, and I sometimes get very cranky because I
say, \"When do these people expect me to read the stuff they want to
lobby me about?\"

It\'s very tough, and each year I am more experienced, and I get more
aggressive about whether I really take the meeting. Because for me the
time is the most critical thing. I am very happy with meetings if they
really are well timed and they are productive and they are meaningful.
But if it's, "I just wanted to come by and tell you how we\'re doing,"
send me a note. I don\'t mean it that cynically.

So, one, really it\'s very important. We have such a robust portfolio
that a lot of times we'll say no because it\'s not ready yet. Mentally I
have to sort of be in the zone of focusing on that problem because I
want your presentation to be meaningful. If it\'s something that\'s
three months away, at least for me, then I will lose focus of what you
told me very quickly after you've left because I\'ve got 4,000 other
things between your meeting and that event.

So I think timing is really important. And in my office we are willing
to work with people about timing. If they ask for a meeting, we will
say, "you know what, it\'s not time," or "it would be better to try in
this month," or "he\'s not ready to focus on that." You want that
because if I am in that zone for me, I am really ready to talk to you.
And most of you who have come to see me usually know when I am ready,
and we can have a good conversation about it.

MR. LAMB: Is there a signal? I mean, when you are ready for us to leave,
is there a --

CHAIRMAN POWELL: My secretary knocks on the door. They know. Everybody
here knows. They still stay, but they know. It\'s at least conscious
disregard.

MR. LAMB: We have a question right here. Yes, sir?

MR. BAUMAN: Thank you, Chairman Powell. My name is Mark Bauman from
Starizon Corp, and we are the third movie company.

You mentioned that you really think that the HD, high definition
transition is something that is wanted by the consumers. But I look
around the room and this industry, and I look at the resolution of the
four by three line quadruples up on the wall. It looks pretty good.

And if you say let\'s use five or six times the spectrum for only
marginal improvement in that picture versus the bandwidth used, I have
really got to wonder is HD the answer or just digital. And this whole
room has done very good in transitioning their programming to digital on
the delivery mechanism, and I just question whether HD is the answer or
just good digital quality pictures with line doubling, line quadrupling,
which is still bandwidth efficient. I wonder if you have any comments on
that.

CHAIRMAN POWELL: I guess I don\'t know. That\'s part of what you all
will figure out, what they really do respond to, what they don\'t
respond to. But I would say this: I have seen this mistake made many
times. Finding the sweet spot for this moment in time can be dangerous
for installed plant that is going to go into a home for 10 years.

My philosophy generally about a lot of these products is it\'s very
hazardous not to have pretty good growth potential within the products
you are selling, because how many times can you resell the TV, how many
times can you swap out the boxes, and the great box wars.

I am not one of those people who believes that bandwidth is infinite or
is a "Consumers, build it and they will come" kind of philosophy. But I
do believe quite strongly that what looks like enough or adequate
changes very, very rapidly in this phase.

And when I was in law school, I thought that our little 9600 modem was
the coolest thing I had ever done to look up cases. If you tried to give
someone that speed today, these are very relative concepts. Speed, time
and visual perception, I think, are things that are very hard to reduce
numerically and say this is okay, because I think that human beings
evolve and acclimate to ever more higher standards about things. Speed
is a wonderful example of this. You can think something is fast enough
until you have it faster, and then you can never go back again.

I always like the story of the elevator. Elevator scientists figure out
that when you push the button, how long before a consumer will push it
again? Now, every consumer in that elevator lobby knows that elevator is
not coming any faster because you push the button. But that time \-\--
it\'s fascinating \-\-- it keeps shrinking. Now it\'s like 30 seconds
before the average person will still push the elevator button.

I think visual stuff is similar.

I don\'t know if digital is a big leap from analog, but is it going to
be the path to what people have in terms of expectation?

The real challenge \-\-- and I will leave the question with this \-\--
is you don\'t know what the creative community is going to do. I keep
thinking we sort of forget about the writers, directors and producers.
When you begin to put more paint on the pallet, you\'re not quite sure
what will get made.

I see all kinds of new shows experimenting with changes in concepts that
are really neat, like my favorite show, "Twenty-four." To sort of dare
to say, "let\'s shoot real time," and every hour of this show is a real
hour of the day, now that\'s very different \-- it\'s turning time on
its head in the traditional programming sense. So what if the medium now
could interact with that somehow \-\-- that it\'s the hour, but if you
want to know what Jack did late, you have some interactive functionality
to go do more.

I think what we don\'t know is what the artisans will begin to develop
that will take advantage of those capabilities that a consumer will
respond to. If we just leave ourselves saying it\'s just a pretty
picture versus a prettier picture, I think we are being kind of naive.

MR. BAUMAN: I think this industry has been very good at if the consumer
wants it, then they will certainly provide it for the right price. And
rather than setting out in policy what the bandwidth requirements ought
to be, I think we are all in favor of transition to digital. And if the
market wants to pay for high definition and pay for the use of that
bandwidth, that\'s great, and I think this industry has been very good
at responding to it. My point was simply that we would love the
marketplace to dictate, and if we see consumers willing to do that, we
will.

CHAIRMAN POWELL: Yeah, but there is one caveat on this \-\-- for the
marketplace to work there has to really be a choice. You can\'t say,
"never show consumers HDTV" and then say, "they don\'t respond to it."
This missionary point, it seems to me, to come back to, which is, if
they really made a conscious choice, then I would totally agree with
that. But when you are talking about innovation space, you are talking
about the opportunity for them to see and embrace and genuinely consider
making that choice as opposed to things that might have been shown that
are never seen because they were pre-selected out of the marketplace.

MR. BAUMAN: Right. Well, I understand we have committed to five, so
that\'s probably a good start.

MR. LAMB: We\'ve got to \-\-- is there another question?

QUESTION: Yes, Chairman Powell, given the fact that the courts have
recently struck down media ownership rules, could you comment on how you
see the Commission addressing that going forward?

CHAIRMAN POWELL: Sure. I think this has been a problem that has been
long coming. I think that we have a unanimous sense that the values that
those rules are meant to represent are still important, but the right
regulatory framework in the modern context for achieving them is under
great strain.

I think it was under strain for a lot of reasons. I think it was under
strain because it was rarely contextualized for modern changes in the
marketplace, you might say competitiveness. But when a rule was adopted
in 1970, when cable penetration might have been whatever, but certainly
nothing, and yet no one wants to examine that rule\'s viability in the
face of these changes, I just think that\'s intellectually dishonest.
You might reach the same decision, but you really must recalibrate and
take into consideration the kinds of changes that have taken place in
the market landscape in the interim.

I think that is one problem with a lot of the rules. They are rooted in
valuable concepts but they are dated in their methodologies. I think the
courts lost some patience with the unwillingness of the Commission to
genuinely examine their underpinnings.

That ripples through all kinds of things, like what really is the
market, because that leads to another thing which I personally have
always had some problem with, which is trying to do the analysis in
"stovepipes."

We ask what should a rule be for broadcasters, as if it\'s really a
space that lives all by itself, and as if somehow consumers are just
broadcast watchers. And so the bad public interest impact or the
positive public interest is somehow narrowly confined to that medium,
ignoring that a whole bunch of people are watching cable, or ignoring
that DBS is here, or ignoring that the Internet is here. Somehow the
rule will just do what it\'s attempting to do only in this broadcast
stovepipe.

And then we will have a cable rule that\'s only for cable, and we won\'t
take into consideration the intersections of those other media outlets
in what the right balance should be. I think that\'s the second thing
that the court finally pulled the plug on, or at least cried foul on. It
said that "even if you are not going to do that, you have really got to
do a lot better job of explaining to us why not, because it does not
seem intuitive to us."

I think, then, that there is this sort of philosophical struggle which
has always been slippery and doesn\'t have a lot of precision: what do
we really mean by diversity and viewpoint? And I keep trying to struggle
to get that narrowed down to its essence so that the rules are really
about something you can show. It can\'t mean copiousness. The media is
more voluminous and available than at any time in history. So diverse,
meaning plentiful, is hard to argue.

Do you mean varied? Certainly, I think, in my opinion, the media is more
varied than it\'s ever been in its history. I think there is more of it
\-\-- more parochial, different niches. That kind of diversity, it seems
to me, is flowering, certainly compared to any other time in history. Do
you think the golden age, with three networks, was more varied in terms
of the content you could watch? I have seen channels specializing in
stuff you would have never thought would be viable on their own. So at
least if that\'s what you mean, you\'ve got to focus on that. Is it
variety? Drama versus comedy? Is there enough of it?

And then I think, you sort of get down to the nub of it, which is this
notion of, "well, it\'s a viewpoint." And I think you have to push
through that too. Well, what is the viewpoint in a comedy program?
What\'s the viewpoint in a sports show? Is that what we mean? Or are we
really starting to then get really down to political news viewpoints
that affect voting or political ideology in America?

I think usually that\'s at the heart of what people have an anxiety
about, and that\'s fine. If we could all agree that that\'s what we want
to focus on, I think things would get a lot easier. I don\'t know if
that means, then, certain rules that reach across everything necessarily
are the right rules, if that\'s your focus.

The long and the short of it is that this exercise is what the
Commission is doing, and has to do. And let me be really clear about
this. This is not some rush to deregulate because we just don\'t like
the rules. We have to fix this regulatory environment. And we have to
fix it now. And we\'re going to take the time that\'s necessary. We are
not going to be rushed on this. We are not going to be pushed on this
until we are ready to do it in a way that I think is constructive, in
the public interest, and is going to survive judicial scrutiny. Because
the stability of the marketplace is not going to gain anything if we
continue to react piecemeal to this problem and have the court send it
back again, and have this constant flux with these rules.

And I assure you, one of the things I learn, when companies start
winning in court, every rule they don\'t like is going to court again
because, why not. You\'ve got a free shot at taking it out again.

And so I think there is this real instability in the media ownership
regulation space that it\'s our sacred duty to try to fix. And I think
that our goal is to try to do it fairly comprehensively as a product of
a lot of development of record and empirical evidence, and to digest the
court decisions and to know what the parameters of our choices are, and
then hopefully \-\-- as expeditiously as we can, but not a thing before
it\'s time \-\-- issue something or begin to change this environment in
a way that I think serves the goals as productive and as judicious. And
the world will be a lot better off if we have even three-quarters of the
success than what we are doing right now.

MR. LAMB: We are out of time. One last quick question. With all that you
do, and all the meetings you have to have with people in this room, how
did you have time to go on the board of William & Mary?

CHAIRMAN POWELL: You know, I have a philosophy that you have the time to
do anything that you love. I love my alma mater, and it gave me all the
tools I needed to be where I am. The opportunity to give back to your
own school at its highest governing level to \-\-- I\'m a giddy about
it. I was sort of shocked that I got asked, and thrilled that I could do
it because it\'s where my heart lies in terms of my own educational
development. So what greater thing to do with your free time, such that
it is, than to do something like that.

But you know, everybody always talks about what they don\'t have time
for. I usually think that\'s wrong. I think you probably spend too much
time on things you shouldn\'t and not enough time on the things you
should. And for me, if you love it and you care about it and it\'s
important to you, you will find, make and create the time. And I do that
\-- I do that for my family and my kids, and I do that for my school.

MR. LAMB: Thank you for your time.