Former FCC Chairman To Join Investment Firm
Friday, August 12, 2005
Former Federal Communications Commission chairman Michael K. Powell has decided to turn his hand to the challenge and risk of big money investing by joining a New England private equity firm that focuses on media, communications and information companies.
Powell, 41, will advise Providence Equity Partners Inc. about new and existing investments as well as technology and regulatory issues. He will work from the Washington area and periodically visit the firm's Providence, R.I., headquarters.
"Michael brings a wealth of experience . . . deep knowledge of the changing technology and regulatory environment, and an exceptional network of relations across the industry," said Providence Equity chief executive Jonathan M. Nelson.
The company manages funds with more than $9 billion in equity investments, including stakes taken this year in Telcordia Technologies Inc., a communications software and services company, and Metro-Goldwyn-Mayer Inc., which has a library of more than 4,000 films.
Powell's tenure at the FCC was marked by a trend toward deregulation in the telecommunications and media industries, and by controversy over broadcast indecency.
In joining an investment firm, Powell is following in the footsteps of his father, former Secretary of State Colin L. Powell, who this year signed on with Silicon Valley's Kleiner Perkins Caufield & Byers, as well as former FCC chairman William E. Kennard, now at the Carlyle Group.
Under federal law, Powell is barred from directly lobbying the FCC for one year, and former associates suggested he had little interest in such work, preferring the risk of equity investing.
"He had a remarkable ability to see around the corners and predict technological change," said Christopher D. Libertelli, a former top aide to Powell who is now director of government relations at voice over Internet protocol (VoIP) provider Skype Technologies SA. "He has been in government for some time and wanted to try his hand at the business side."
Jeff Chester, executive director of the Center for Digital Democracy, a group that advocates an open and diverse Internet, criticized Powell's move and the trend of regulators working in industries they once oversaw.
"With lucrative industry employment ahead of them, FCC chairs (and most Commissioners) have a built-in conflict of interest. They simply can't take the independent positions necessary to fulfill their responsibilities to the public -- and to the public interest," Chester said in a statement.
Kennard argued there was nothing inherently wrong with moving to a private equity firm and that being an investor, if anything, put more distance between former officials and lobbying.
"To a large extent, being an investor you are a little further removed from trying to influence the regulatory process than someone who goes to lobby or practice law," he said. "That concern, I think, is completely misplaced."