Impact of Martin’s Management Style Unclear

The jury’s still out on whether FCC Chmn. Martin’s more closed style of management (CD Sept 5 p1) will have a long- term impact on the agency, according to industry officials, many of them former FCC employees. Some Washington insiders see possible harm to the agency, others think changes under Martin reflect normal management adjustments common to new chief executives.

“Time will tell,” said an industry official who worked at the FCC a long time. “It’s cyclical,” she said: “Sometimes the agency relies more on staff, sometimes less. It often coincides with the arrival of a new chairman. At first the chairman relies more on trusted advisers. As the comfort level increases, the bureaus begin handling more.”

In other administrations, items took form on the 8th floor, often spurred by events, or “bubbled up from the bureaus,” said a lawyer who once worked at the agency. “That last route has all but shut down.” The Commission no longer is “taking advantage of staff expertise,” the lawyer said: “Good people leaving the agency indicate jobs must not be as rewarding as they once were -- that staff members don’t have much input.”

Bureaus are supposed to develop proposals, basing them on analysis of comments and facts, economic impact and technology, said a former FCC employee. But that’s not being done. “Now nobody does anything but sit by the phone” waiting for instructions from the 8th floor to “force the facts to fit a preordained conclusion, and if anyone in a bureau has the integrity to say that’s not what the facts show, they may get reassigned to jobs they don’t want.” A recently approved FCC order requiring VoIP providers to contribute to the Universal Service Fund, for example, didn’t begin with a notice of proposed rulemaking (NPRM), as such proposals usually do, the source said: “It was an order without an NPRM. I think that may be a departure from the Administrative Procedures Act.”

Martin’s slow installation of permanent leadership in a number of bureaus and offices could sap their importance, several sources agreed. “He still has a number of positions that are ‘acting,'” the lawyer said: “He hasn’t made Catherine Seidel Wireless Bureau chief. She’s acting. It’s the same situation” at the Office of Engineering & Technology and at the International Bureau.

Centralized authority -- and a Republican majority, since June, when Comr. McDowell came aboard - have left the FCC’s 2 Democrats on the sidelines while orders were drafted and revised, several sources agreed. A vote on radio multicasting was delayed because Martin aides took weeks to respond to order changes proposed by Comrs. Adelstein and Copps, said the officials. In the $17 billion Adelphia deal, the Democrats didn’t get Martin’s final draft order until hours before a vote was scheduled, said the officials.

People at the FCC don’t seem to be “having fun any more,” a former staffer member said. He recalls employees enjoying their work because they felt it was worthwhile, he said. A current staff member said it’s not fun because employees don’t feel valued. “Everything is so closely held, you don’t know what’s going on, what your contribution means to the whole,” the staff member said.

The high level of staff disgruntlement probably isn’t solely Martin’s fault, said a long-time FCC official now in business. Ex-Chmn. Michael Powell gave much emphasis to staff development, perhaps “raising expectations of the staff a little too high,” she said. So when Martin made staff changes and instituted a less “empowered” staff policy, FCC employees were “more let down” and fell harder -- though Martin “wasn’t doing anything that other chairmen have not done,” she said. Staffers also complained about former Chmn. Reed Hundt’s staff policies, she said, and “probably [Ex-FCC Chmn.] Al Sikes as well.”

Enough senior people have left to result in “a little less expertise” on the staff, she said: “The institutional memory has diminished a bit.” But that isn’t solely Martin’s doing either, she said. Many staffers became qualified for retirement around the same time, she said; for example, the FCC several years ago began recruiting engineers out of concern over an exodus. And “early out” offers have been generous. A former official who took such an offer last year told us he wasn’t leaving over problems with Martin but because he couldn’t pass up the deal, he said.

“I guess the agency will come back” from any setbacks caused by Martin’s many staff changes, said the long-time FCC official. Staff restructuring under Martin has cut further down into the hierarchy than previous moves had, she said. “Before, if you were a bureau chief or deputy bureau chief, you probably knew you wouldn’t be staying” in the same job when a new chairman came, she said. Under Martin the restructuring went deeper, to division chiefs or bureau chiefs of staff, and came with less notice, she said. On the other hand, “every chairman has the right to have people” the boss is comfortable with.

“It certainly does seem to have some impact on morale,” a former FCC official said: “The staffers seem to feel their role has diminished and there’s been a more top-down approach in general. There have been more departures. People are thinking of departing, and it also to some degree has stifled information flow between the inside and outside. People are less comfortable telling outside parties even status reports. It’s not clear that they're supposed to answer timing questions. It could have a chilling effect beyond what’s been intended on information flow and on noncritical issues.”

Chairman Seen as CEO

Former FCC Chmn. Reed Hundt said critics should remember that an FCC chairman is also a CEO, who “can and should engage in selecting short-run and long-run targets” for regulatory change. In that role, the chairman must use resources, including staff, to advance his priorities, Hundt said. He said he’s not following Martin’s moves but thinks an FCC chairman “as CEO should allocate personnel to issues he thinks are of strategic importance.” Sometimes the FCC can’t be run “as a committee,” he said: “As CEO and manager, the FCC chairman’s job is to organize the bureaucracy and be held accountable.”

“There may be some backlog building up if only a few people can make core decisions,” a regulatory lawyer said. “Some people are suggesting that even non-important decisions need to go through the same parties. That could be affecting the amount of work that’s getting done and might be putting a lot of pressure on just a few people.”

A sign that the FCC backlog may be growing is the number of items docketed through July, as compiled by Michael Marcus, a consultant and former FCC official. By his count, the FCC had docketed 142 items before the Aug. slowdown, compared with 231 in 2005, 255 in 2004, 165 in 2003 and 185 in 2002. The last year with less activity was 2000, with 130 items.

“This year is not a record for the minimum in recent years,” Marcus wrote. “2000 was an election year and at such times the FCC chairman often thinks about finishing things, not starting new proceedings. But this is an indication that productivity is slipping. Is the new product higher quality? I hope so, but I see no such indication.”

The FCC’s move toward centralized decisionmaking also has stymied some media and telecom lobbyists. Ex parte and other meetings with Martin staffers are sometimes less informative than those with aides to previous chairmen, said attorneys for a variety of companies regulated by the FCC.

Aides to Martin provide little feedback to lobbyists in meetings, said regulatory attorneys. Instead, they said, staffers often listen passively. That can make it harder to gauge what will be important at the FCC, lawyers said. “That’s frustrating to people who want to be responsive to the concerns of various offices,” said a cable lawyer. “You can be talking, and it’s just passive, poker face” from FCC staffers, said the attorney.

Sources questioned why Martin and his staff don’t take more advantage of industry experts in developing proposals, as some past administrations have done. “He doesn’t send out trial balloons to industry much” to judge the feasibility of regulatory changes, said an industry official.

Another industry official said it’s harder to check with the bureaus on the status of applications and other routine items. “Now, when you call the staff for a status check, they can’t tell you a whole lot,” the source said: “You don’t really have a sense that the bureau is involved in the decision making.” A Washington communications attorney said his clients have decided not to make waves about changes at the FCC. They've decided to “weather it” and keep forwarding their views “the old-fashioned way, with facts,” he said.

Long-term trends toward consolidation of influence created a “perfect storm” that has led to recent lobbyist carping, said George Washington U. Prof. Christopher Sterling. In the early 1980s when Sterling was an 8th floor advisor, “there was a lot more give and take,” Sterling said: “It is much harder for others to get a reading on what is going on in the building.” Other contributing factors to “institutional isolation” include an increase in the number of orders voted on in circulation versus at public agenda meetings, he said.

An industry source said it’s hard to argue with Martin’s success in controlling Commission output: “Every FCC chairman wants to control things, his image, the information flow… None have been as successful as Martin has been so far.”

Analyst Blair Levin, who was Hundt’s chief of staff, said that in assessing Martin’s record, too much shouldn’t be made of the concept of the chairman as a CEO. “The Commission is a lot more than a board. There are lots of decisions you can’t make yourself, and when things go badly people say he should have done it. It is a very difficult management challenge.” Levin also said the FCC has moved forward on all major issues even with some bureaus headed on an acting basis.

“It certainly is true if you had a permanent bureau chief that person would have more authority. Why there isn’t a permanent bureau chief [at the Wireless Bureau] I don’t really know,” Levin said: “In terms of the things I cover, I can’t think of a wireless item that needs to be addressed tomorrow that hasn’t been addressed.” The AWS auction has proceeded as planned and other major wireless items have been dealt with, Levin said: “If during Reed’s time we didn’t have a Common Carrier chief the day the Telecom Act passed and we had 110 items to get through, that would have been a real big screw up. I"m sure there are other times it just wouldn’t have mattered as much.”