How would this bespectacled ad man with a Harvard degree perform in the highly politicised arena of regulation? And how sympathetic would he be to the interests of client marketers?
The 38-year-old former head of J Walter Thompson had been linked to virtually every free seat at the top of media companies since he left his position as managing director of NTL late last year. Was he going to replace Dawn Airey as boss of Channel 5? Would he take the vacant chief executive role at Emap? Few expected him to jump from the proverbial frying pan of the cable industry into the forging fire of New Labour media policy.
For those who know Carter it was not such a surprise. Although the Scottish-born law graduate is a reserved family man at heart, colleagues say he gets a huge amount of satisfaction from a challenge, possesses strong views on media policy and whose political sympathies are attuned to those of the current administration.
When he starts his new job on March 1, Carter will actually be the boss of very little for his £350,000 a year remuneration. Ofcom was only conceived in March 2002, through paving legislation for the Communications Bill, and it's unlikely to utter its first words until October, by which time the Bill is expected to have become an Act.
So during the next six months Carter will build the organisation and, along with the Ofcom board, will be charged with formulating its strategy and policy.
But industry lobbying is already building a head of steam. Advertisers, sensing that they are at last close to convincing the government to extend self-regulation of press and poster advertising to broadcast media, were quick to fire the opening shots.
Ian Twinn, director of public affairs at the Incorporated Society of British Advertisers, says: "Ofcom should recognise that advertisers have a right to be consulted on broadcasting issues as customers of an economic service being provided. We should be allowed to get on with setting up a self-regulatory system for broadcast advertising. And we are hoping for support on advertisers' desire to preserve competition between TV sales houses."
On the media owner side of Carter's new jurisdiction, Channel 4 commercial director Andy Barnes says: "I would ask him to be as even-handed as possible and to get a firm understanding, quickly, of how the advertising market really works so that he is in the best position to adjudicate on any future disputes."
Carter, who will not be available for comment until he takes his new post, is thought likely to be sympathetic to such demands. Having spent the first 15 years of his career at JWT, he is only too aware of the demands of marketers and the everyday wheeling and dealing of advertising. However, media and telecommunications brands with monopolistic tendencies such as BBC, BT and BSkyB can expect to get a rougher ride from the regulator.
Addressing the Westminster Media Forum late last year, Carter said these companies would "need watching" and argued that the BBC should be fully regulated under Ofcom. This remains unlikely.
Such sentiments suggest a clash with BBC director-general Greg Dyke, who last week took a pot shot at the whole Ofcom concept: "I'm not sure that the idea of bringing the regulation of telephony and programme content together has any rationale," said Dyke.
Intriguingly, Carter's first major job in the autumn will be to oversee a review of public service broadcasting.
But Carter should have the necessary steel for the job by now. "Stephen was quite arrogant when he came back from Harvard thinking he could take on the world. Maybe he could," says a former colleague at JWT. "But I think NTL was a shock for him, because he was forced to deal with a critical City for the first time. It must have matured him and now he's back in the media community which knows him better."
Jeremy Davies, NTL's marketing director under Carter and a former colleague at JWT, says: "Stephen has an absolute aptitude for all things political, with a big P and a little p. His difficulties will lie in the black-and-white nature of this new world. It can be far less forgiving than even the commercial world, and he may have to walk a delicate tightrope at times."
Carter's attempt to update the stuffy 'university of advertising' culture that prevailed at JWT was generally considered successful. "Stephen gave the agency direction and belief," agrees former JWT colleague Mark Robinson, who is now managing director of the Miracle Media Group. "He had the ability to instantly win over clients with his insights."
However, Carter's spell at NTL was less auspicious. Although he had limited time there, he left behind a firm with a dire reputation for customer service and on the brink of bankruptcy. Most think that he has done well to escape this tarnished brand and land such a prestigious job. Now he must prove his mettle at a different level altogether.
BIOGRAPHY
1985 - 1997: Graduate trainee to managing director, J Walter Thompson
1997 - 2000: Chief executive, JWT
2000 - 2002: Managing director, NTL
March 2003 - Chief executive, Ofcom