Sunday, May 22, 2011
FCC Regulator to Highly Paid Industry Exeuctive: Meridith Attwell Baker
Joe: this is what is wrong with the country and is an excellent example of what we have been saying. This is legal cronyism. It’s a major cause of the financial disaster. These elites rotate from academia, to government regulatory bodies, then to industry for the big pay-off and then back again. This is why those that regulate the financial industry actually worked for these same firms. Everyone needs to make a living but the integrity of the system has to have priority and clearly we don’t have that. Burecrats deserve much blame but there just aren’t that many career burecrats at the top level to preserve and protect the system as long as it is legal to rotate out. I agree with Hilzik and Andrew Schwartzman (see below) whoheartedly. –Bob
FCC commissioner's move to Comcast shows the revolving door is still spinning
Meredith Attwell Baker's new employer is the corporate entity whose merger with NBCUniversal was blessed by the FCC in January.
By Michael Hiltzik
No political adage gets a more vigorous workout than the one about how the real scandal in Washington isn't what's illegal, but what's legal.
Case in point: Meredith Attwell Baker's announcement that she will be stepping down as a Federal Communications Commission member in June to join Comcast-NBCUniversal.
Baker's new employer, of course, is the huge entity whose merger was blessed by the FCC only in January, after a year of scrutiny. Baker voted in favor.
Let's examine what's legal about Baker's move.
First, no one suggests that she tailored her vote on the merger, or indeed on any issue that came up in her nearly two years as a commissioner, with an eye toward jumping to Comcast.
On the contrary, during her tenure she's hewed consistently to cherished conservative deregulatory principles — reining in the FCC's scrutiny of mergers and acquisitions and of net neutrality, which is the idea that Internet service providers should be prevented from giving preferential treatment to some services and content over others.
Baker's positions might have gratified Comcast, which is both a major Internet service provider with a commercial incentive to squeeze website owners for preference fees and a merger party that bristled under the FCC spotlight. But the signs are that she came by them honestly enough.
"I am a conservative Republican who believes in the free market," Baker told me last week. Government, she says, tends to "overregulate on issues where the free market might be able to solve some of the problems."
Before joining the FCC she worked as a Commerce Department official under President George W. Bush and a Washington lobbyist for the telecommunications industry, so President Obama knew what he was getting when he named her to the commission as one of its Republican members. It's not as though he had much choice: Customarily, senators of the minority party get their say on its appointees to federal bodies required to have bipartisan membership, such as the FCC.
Nor has anyone suggested that Baker broke the law by accepting a job with Comcast so soon after voting for its merger. She appears to have scrupulously observed the required formalities, recusing herself from Comcast and NBC matters at the FCC — in fact, from all FCC matters — since mid-April, when she says she entered employment discussions with Comcast.
She'll be barred from lobbying any federal administrative agency for at least two years and as long as Obama is in the White House, and she'll be barred for life from lobbying the FCC over any of the Comcast merger conditions. Her FCC term is due to expire next month, and that's when she'll leave to become a senior vice president of NBCUniversal.
"You have to be a little surprised Comcast was still interested in me after I told them all the things I would be recused from," Baker told me.
But that's disingenuous, and her job change is a scandal. The rules she complied with are designed to place a white dusting of powdered sugar over what is deep down a grimy Washington institution — the revolving door.
The restrictions she faces are hardly stringent, their effects easily circumvented. She's not prevented from lobbying Congress or from strategizing with her new colleagues about how they should present Comcast's case to regulators. Comcast will be able to make full use of all her experience as a regulatory veteran, thank you very much.
"The system is fundamentally flawed," says Andrew Schwartzman, policy director of the Washington-based Media Access Project. Thanks to the revolving door, "People attain expertise which is extremely valuable to the regulated companies and turn around and make that expertise available to them at the expense of the public."
The incredible speed with which Baker is transforming herself from federal regulator back into corporate lobbyist underscores why regulation in Washington has become such a spavined, toothless beast.
To be fair, Baker was not a monochromatically conservative regulator. Schwartzman says she bucked Republican orthodoxy on issues such as the development of low-power FM broadcasting and public access to unused TV broadcasting spectrum.
But on more momentous issues she carried water for big business, often maintaining that regulators shouldn't do much regulating. In March, for example, Baker delivered a speech for the Texas-based Institute for Policy Innovation, which devotes itself to promoting tax cuts for the rich, supply-side economics and the privatization of Social Security.
Her theme was that the FCC spent so danged much time scrutinizing media and telecommunications mergers that some dealmakers might have got discouraged. "Ask yourself, would you subject yourself to the FCC merger review process?" she queried her audience of telecommunications executives. "My concern is that you might walk away."
I'd like to see a list of transactions that were discouraged or derailed by its promoters' fears of the lengthiness of the regulatory review. Baker doesn't cite a single one. And that's not even to consider whether any transaction so affected would have been in the public interest in the first place.
It's hardly the FCC's job to grease the skids for big merger deals, any more than it's the FAA's job to give airlines a pass on safety inspections. The FCC's duty is to weigh mergers' effect on the public interest, plus or minus, and stop them if it's the latter. Anyway, given that Comcast and NBC pursued their $30-billion merger and AT&T and T-Mobile have a $39-billion merger deal on the table despite the prospect of lengthy FCC proceedings, plainly the big dealmakers haven't been so discouraged.
FCC Commissioner Michael Copps made a telling observation about how industry really views the regulatory obstacles to big merger deals — as minor annoyances to be waited out. "Power is patient," he says. "Big businesses can bide their time when they have to in order to reap the fullest harvest."
Copps' observation came as part of his statement marking the FCC's approval of the Comcast-NBC deal, on which he was the only dissenter. He called the deal virtually devoid of benefits to the public and predicted it would result in higher cable and Internet bills and add to the potential for "walled gardens, toll booths … and a stake in the heart of independent content production."
Baker's statement on the Comcast vote (issued jointly with her fellow Republican commissioner, Robert M. McDowell) said the merger "has the potential to bring exciting benefits to consumers that outweigh potential harms." It's as though Comcast's PR staff were already drafting Baker's statements for her, back in January.
But that's churlish. Baker didn't need Comcast's corporate flacks to help her reach that conclusion. "She won't have any problem adjusting to Comcast's positions," remarks Craig Aaron, chief executive of Free Press, a Washington media reform group that has been vehemently critical of Baker's move.
Washington has always brimmed with young lawyers who take jobs with consumer regulatory agencies to gain a little training and seasoning before launching lucrative careers in corporate law. The only way to keep these ambitious greenhorns focused on the obligations of enforcement while they're in public service is for the leaders of their agencies to take those obligations seriously.
When leaders like Baker signal that it's acceptable to cash in without even waiting for a decent interval, what hope is there that government will serve the public interest, not the corporate interest?