Michael Powell, Chairman of the FCC

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This is a partial transcript from Your World with Neil Cavuto, June 2, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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BRENDA BUTTNER, FOX SENIOR BUSINESS CORRESPONDENT: Well, ever since he took over as chairman of the FCC, Michael Powell has been causing quite a stir in Washington. His quest for free markets and less government intrusion led to harsh criticism and even harsher enemies along the way. But nothing like his latest move. He single-handedly paved the way for the biggest media shake-up you may ever see in your lifetime. Earlier today, the FCC voting to throw out stodgy, outdated ownership rules for media companies.

Now, Michael Powell is here at FOX for his very first TV interview after the vote. Chairman Powell, welcome.

MICHAEL POWELL, FCC CHAIRMAN: Good to be here, Brenda. Thank you.

BUTTNER: Well, these rules were written back when we had black and white TV, rabbit ear antennas and three channels to choose from. Obviously, the media world is very different today. What does this mean?

POWELL: I think it means a great deal. I think 87 percent of consumers have moved to pay TV platforms, for example, getting most of their news and entertainment and information from cable television and direct broadcast satellite television. And what it means is, most of our rules that are about broadcasting, which is all we were dealing with today, are dating back to the '40s in many instances. And for that medium to remain competitive and for those rules to make sense, it is long overdue that the commission attempted to make them relevant in a multi-channel, 500 channel world.

That is not to say limits aren't necessary, but they should reflect the color TV era, not the black and white era. Particularly if we hope they will stay sustainable upon court review.

BUTTNER: Well, politics make for strange bed fellows. But, have you been surprised by your opposition, everything from the National Rifle Association to the National Organization of Women? It's quite a broad base of opposition.

POWELL: Not particularly. Frankly. I welcomed it. I think it is a demonstration that our democracy is healthy and vibrant and that people can organize to express their views and their concerns.

Many of the groups you describe are more similar than they are different with respect to this issue. When you have an advocacy group that has a very strong voice, a very strong viewpoint, a very particularized viewpoint, they all share the desire to continue to make sure that the message is that they're organized around disseminating to our citizens that they can get carried. And the rules that the government employs that affect that ability affect all of them. So I think it seems strange that they are together, but, frankly, I think many of them are concerned and are focused on similar things.

BUTTNER: Now you mentioned court. And this can still be appealed in court, and, quite frankly, it has to go to Congress, where you face a lot of opposition. What do you expect there?

POWELL: Frankly, it doesn't go to Congress. Parties can sue and have the rules reviewed in court. I fully expect them to do that. It happens every time we do a major rule making proceeding.


POWELL: It is what happened the last time the commission reviewed the rules, and had them all struck down as inappropriately defended, which is why I've worked so hard on this proceeding. The United States Congress, which I have great respect for, I can only act on the statutes that Congress passes. And I think that our decision today was completely faithful with the statutory laws that exist.

If, in the judgment of Congress, we ought to change the media regulatory structure, we ought to have a different set of rules, a different basis for those rules, I'd welcome that. It's certainly within their purview to do, but they would need to pass statutes that would sustain constitutional muster in doing so.

BUTTNER: Because, in fact, this wasn't really a major overhaul. You simply loosened the rules a bit. I mean, was that just an understanding of the compromise you need to make in Washington, or was this an understanding that the framework makes sense, you need to just give a little bit more to the media companies?

POWELL: I think you make a very good point, because I think if you were to listen to some of the rhetoric that borders on alarmist, you would think we eliminated every protection on the media ownership that exists. I think the package is quite modest.

Of all the rules, not a single rule has been eliminated. One was kept in exactly the same form; one was actually tightened in the area of radio. And all the others were modified slightly.

I don't think it is just a political compromise; I think it is the commission's demonstration that the values that those rules represent are still important to us, diversity, competition and localism. And it is a reaffirmation of our belief that limits are necessary. But we think those limits need to reflect the facts, the fact of the modern media marketplace. And when you listen to those facts, you result in a moderately liberalized package.

And I think that's what we achieved today. And I think it's a good package, and I think it's going to continue to protect the public interest.

BUTTNER: Do you expect the kind of media frenzy that many of your opponents are pointing to, kind of cap cities marrying with Disney, CBS, Viacom type thing? Do you expect to see those media deals on that order?

POWELL: No, I frankly don't. I think this is another one of the facts that has been exaggerated.

First of all, I would reaffirm that networks like you were mentioning are prohibited from merging under the rules that were voted on today. So you won't see that stratospheric set of combinations.

There are many strong local rules still in place. I think where you will see merger activity is where I think it will benefit the public interest, in small and medium-sized markets, where you have struggling smaller stations with poor performance, or a station that doesn't have news in a local market. You might find a moderate sized newspaper interested in purchasing that property to program it with news content that it is so expert in.

But I do think in larger markets, and a good substantial number of the markets in the United States, there will be very modest, if any, major rush to merger. And I think it is important to note that just because a rule allows something doesn't mean it makes strategic or business sense to do so.

BUTTNER: Right. All right. Chairman Powell, thank you so much for joining us. We really appreciate it.

POWELL: Thank you, Brenda.

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