House report finds leadership breakdown at FCC

[December 10, 2008]  WASHINGTON (AP) -- In a scathing report released Tuesday, congressional investigators outlined a pattern of mismanagement, dysfunction and abuse of power at the Federal Communications Commission under the agency's Republican chairman, Kevin Martin.

The report -- the result of a nearly yearlong, bipartisan investigation by the House Energy and Commerce Committee -- accuses Martin of manipulating data and suppressing information to influence telecommunications policy debates at the agency and on Capitol Hill.

The report charges that the commission has become politicized and failed to carry out some important responsibilities under Martin's leadership. It also blames him for undermining an open and transparent regulatory process.

In addition, Martin is accused of micromanaging commission affairs, demoting agency staffers who did not agree with him and withholding information from his fellow commissioners. "Chairman Martin's heavy-handed, opaque, and non-collegial management style has created distrust, suspicion and turmoil among the five current commissioners," the report says.

Robert Kenny, a spokesman for Martin, said the committee "did not find or conclude that there were any violations of rules, laws or procedures." Martin is widely expected to leave the commission after the White House changes hands.

Martin's legacy at the FCC will be "a blueprint of what not to do," said Bart Stupak, D-Mich., who chairs the House Commerce Committee's Subcommittee on Oversight and Investigations.

"The findings suggest that, in recent years, the FCC has operated in a dysfunctional manner and commission business has suffered as a result," said Commerce Committee Chairman John Dingell, D-Mich., who will be relinquishing the reins of the panel to California Democrat Henry Waxman next year.

But the top Republican on the committee, Joe Barton of Texas, greeted the report's findings with skepticism.

"A congressional investigation has established that the chairman of the Federal Communications Commission doesn't play well with others," said Larry Neal, who serves as deputy Republican staff director for the committee under Barton. "The inquiry was supposed to pin down some weightier matters. Evidently that didn't pan out."

Among the findings of the 110-page report:

• Martin manipulated the findings of an FCC inquiry into the potential consumer benefits of requiring cable companies to sell channels on an individual -- or "a la carte" -- basis. The House investigation concludes that Martin undermined the integrity of the FCC staff and may have improperly influenced the Congressional debate on the matter by ordering agency employees to rewrite a report to conclude that a la carte mandates would benefit consumers.

• Martin tried to manipulate the findings of an annual FCC report on the state of competition in the market for cable and other video services to show that the industry had a big enough market share to permit additional government regulation. When the full commission voted to reject that conclusion, Martin suppressed the report by withholding its release.

• Under Martin's leadership, the FCC's oversight of the Telecommunications Relay Service Fund, which pays for special telecommunications services for people with hearing or speech disabilities, was overly lax. This resulted in overcompensation of the companies that provide these services by as much as $100 million a year -- costs that were ultimately passed along to phone company customers.

Kenny said Martin makes no apologies for his "commitment to serving deaf and disabled Americans and for fighting to lower exorbitantly high cable rates that consumers are forced to pay." He added that Martin remains confident that pricing channels on an individual basis would bring down cable rates.

The House report is a significant victory for the cable industry, which has fought Martin's efforts to impose a la carte requirements and other regulatory changes. At Martin's urging, the FCC in October opened an investigation into the industry's pricing policies, including its practice of moving analog channels into more expensive digital tiers of service.

Among the companies being investigated are Comcast Corp., Time Warner Cable Inc. and Cox Communications Inc.

Gene Kimmelman, vice president for federal policy at Consumers Union, which helped bring attention to the cable pricing practices now being probed, said the issues highlighted by the House report are not new or unique to Martin.

"The FCC processes have been an enormous problem for years," Kimmelman said. "This is just more of the same."

[Associated Press; By JOELLE TESSLER]

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