WASHINGTON

MORE than five years after he began his career at the Federal Communications Commission as a lonely dissenter, Michael K. Powell is poised to fulfill a long-held vision by unshackling the nation's largest telephone companies and media giants from decades of regulation.

Mr. Powell, 39, now the agency's chairman, is in the final stages of negotiations with the four other commissioners on a broad overhaul of the byzantine telephone rules. If, as most expect, the commission adopts a version of the latest draft of the revisions at its Feb. 13 meeting, the new rules will favor the regional Bell operating companies and will hurt the small start-up local carriers and the ailing long-distance giants like AT&T and WorldCom.

By spring, Mr. Powell also intends to repeal or relax the ownership rules that have kept the biggest media conglomerates from growing larger.

Mr. Powell and his supporters say the changes will encourage tremendous new investment and promote innovation and competition through a heavier reliance on market forces.

But his detractors, including consumer groups and smaller companies, say the Powell agenda will simply make big companies bigger. By relaxing rules now, they assert, the government will stifle competition, reduce the diversity of media voices and play into the hands of the largest companies, which are trying to shut down their rivals.

Mr. Powell views the changes as imperative to help industries that have moved slowly in making the transformation from analog to digital communications.

"It's ketchup on bad meat," he says in describing the way the phone, cable and satellite industries use technologies that are rapidly becoming outdated.

He insists there will still be plenty of rules when he is finished. "I don't know what anybody is talking about when they say this is deregulation," he said. "We are talking about a paradigm of competition, but in a very regulatory way. This is not an Adam Smith market. This is industrial management."

But some officials say that he is moving too fast and that his revisions will retard years of slow progress that have barely begun to open uncompetitive markets.

At a recent Senate hearing, Ernest F. Hollings, Democrat of South Carolina, urged the commission not to sweep aside the telephone rules. "You are supposed to promote competition," an exasperated Mr. Hollings said, lecturing Mr. Powell. "Just at the time that the Telecommunications Act is really beginning to work — because of the delays of the Bell companies — now you are going to reward them and expand their monopoly."

As the debate plays out, Mr. Powell has found himself in an enviable position. This promises to be a seminal year in the agency's oversight of industries that produce one-sixth of the nation's output, and he has the political luxury of strong allies in the Republican-led Congress. In contrast with the Clinton administration, the current White House has played a minimal role in shaping telecom policy, leaving the toughest decisions to the F.C.C.

Siding with the largest telecom conglomerates, federal courts have made a sport out of striking down many regulations written by Mr. Powell's predecessors.

And the meltdown of the telecom market, Mr. Powell says, has demonstrated the falsity of the idea that rigorous regulation leads to robust competition.

Still, for all the political, legal and economic forces in Mr. Powell's favor, the commission is hardly unified and has shown signs of wanting to temper his agenda. Its two Democrats have shown signs of taking a different view on many issues. And one of the panel's two Republicans has expressed reservations about the pace and scope of Mr. Powell's agenda.

Mr. Powell speaks with thoughtful confidence about his vision of reducing the role of government, and he has little doubt that he is on the right side. He says he wants to clean up "an ugly and messy" legacy of contradictory rules that have stifled markets.

"I've seen plenty of bubbles of competition that have blown up," he said last week, implicitly criticizing his predecessors, who tried to take credit for introducing competition into some markets — like cable television or local phone service — through regulation. "I don't think we've done anybody any good if it is a flash in the pan, and I can take credit for it and walk out of here and then it pops."

To Mr. Powell, the Wall Street woes of many telecom companies are Exhibit A of the failures of previous policy makers. "If the status quo is so compelling," he said, "how is it that innovators and incumbents are suffering?"

Among other things, the proposed changes would broadly exempt the Bell companies from being forced to let rivals have low-cost access to new equipment for high-speed Internet services — a market with enormous potential.

Gregarious and personable, Mr. Powell approaches issues with academic intensity. A bit of a technogeek, he carries multiple gadgets on his belt, loves to play with the latest electronic devices and keeps up with the newest advances in cellphones and other techie toys. His original plan, to follow his father, Secretary of State Colin L. Powell, in a military career, ended abruptly in 1987, when he was nearly killed in a car accident in Germany. After a year of debilitating operations, he decided to pursue a career in law. Among Republicans, Mr. Powell is seen as a rising star who could be an attractive candidate for public office someday.

Like Ronald Reagan and William H. Rehnquist, Mr. Powell has evolved from naysayer to agenda setter. But now he faces his own set of dissenters. Moving from the role of dissenting commissioner to chairman has not been easy, but he says that even in his loneliest days, he never "tried to burn down the house" or "act subversively."

Asked if any commissioners are embarked on that kind of subversive path, he politely declined to comment.

Among lobbyists, lawmakers and telecom executives, one of the most interesting shows in town is on the eighth floor of the communications commission, where Mr. Powell's focus has been on finding votes among the four other commissioners.

Although there are three Republicans on the panel, one, Kevin J. Martin, has already outlined significant differences. Mr. Martin, 36, arrived at the commission last year from the White House, where he served as a senior adviser to President Bush on telecommunications issues after working on the Bush presidential campaign. His wife, Cathie Martin, is a top aide to Vice President Dick Cheney.

While professing faith in market forces, Mr. Martin has articulated a more pragmatic form of deregulation, which calls for the government to move cautiously in markets dominated by a few players.

Mr. Powell, by contrast, has asserted that deregulation "should not be like a dessert that you serve after people have fed on their vegetables and is a reward for the creation of competition." Rather, he said, deregulation is "a critical ingredient to facilitating competition."

Just how their philosophical differences translate into policy differences is clear from a speech Mr. Martin made recently, creating a stir in the telephone industry. Implicitly contrasting himself with Mr. Powell, Mr. Martin said he favored a longer transition period to ensure stable markets. He also expressed support for a strong role for state regulators, a stance that would have the effect of preserving many existing rules. Finally, he seemed to be less far-reaching in cutting back some current rules that have given rival phone companies access to many of the networks and equipment of the regional Bell companies at low prices.

Meanwhile, a Democratic commissioner, Michael J. Copps, has begun to marshal opposition to any broad changes in the media ownership rules. Mr. Copps is a 62-year-old historian, a self-styled New Deal Democrat and former aide to Mr. Hollings, who is the ranking Democrat on the committee that oversees the commission and the most persistent Senate critic of Mr. Powell. Mr. Copps has helped lead an influential coalition of conservatives and liberals who fear the consequences of eliminating rules they say have fostered diversity and local input in broadcasting and prevented media companies from becoming too large.

Mr. Copps has raised the profile of the media ownership issues through public hearings by the commission. Mr. Powell refused to hold more than one hearing — set for Richmond, Va., later this month — then agreed to attend one in New York set up by Mr. Copps. Mr. Powell will not, however, attend a hearing, arranged by Mr. Copps and others, to be held in Los Angeles, where the artistic community has voiced deep concerns about his plans.

The telephone rules the agency is preparing to overhaul in effect dictate how much the four Bell regionals must charge rivals for using their networks and equipment, a requirement imposed by the Telecommunications Act of 1996. The requirements have been hailed by consumer groups, long-distance carriers and smaller local phone companies for creating new competition.

 
SUPPORTERS of the rules say Mr. Powell's plan could eliminate emerging competition for local service, further tightening the grip held by the four Bell companies.

John W. Mayo, dean of Georgetown University's business school, said that "any move by the Federal Communications Commission to make the rates, terms or availability" of the current network pricing scheme "less attractive at this point will not create more competition but will, rather, almost certainly — and perversely — spell the end of the development of local exchange competition."

But to Mr. Powell, the rules have failed to live up to their promise. The Bells actually face powerful new competition for local service, he says, from wireless providers and cable companies. Rather than promote competition, he says, the regulations have enabled some companies to make use of the most valuable equipment to provide service to the most profitable consumers without having to bear any of the costs of serving the less profitable, and more needy, market sectors.

Mr. Powell and the Bell regionals have also criticized recent moves by some states to keep the rates low for using essential network elements. The states have made the rate reductions in response to the urgent pleas of companies under severe financial pressure, notably AT&T. Mr. Powell and his supporters say a change in the rules will stimulate the economy by encouraging the largest phone companies and their rivals to build more networks and spend more at equipment makers like Lucent, Corning, Cisco and Intel.

Mr. Powell, who joined the commission after working as chief of staff for Joel I. Klein when he headed the antitrust division at the Justice Department, is broadly dismissive of the predictions that his actions will simply permit entrenched monopolies to grow stronger.

But his critics say there are plenty of powerful examples of the failure of deregulation. They see the consolidation of the deregulated radio broadcasting industry, for instance, as the coal-mine canary. They also point to the cable industry, where by some measures rates have jumped at three times the rate of inflation since deregulation began in the 1990's.

Mr. Powell likewise rejects the idea that changing the ownership rules will result in less diversity and local input in broadcasting by pointing out that there have never been so many outlets and views on the airwaves. He has also draped his argument in the flag of the First Amendment, which he suggests ought to be a powerful constraint against government limits on media.

"The First Amendment means something to me," he said. "It's well and good to be concerned about Citizen Kane, but not at the consequence of returning to King George."