WASHINGTON-The Clinton administration is set to intervene shortly in a Democratic Party power struggle for leadership of the new Telecommunications Development Fund, a potentially huge pool of money small businesses can tap into for wireless projects and other telecommunications ventures.
The controversy, according to sources, pits the Congressional Black Caucus and others against Federal Communications Commission Chairman Reed Hundt.
Bob Nash, director of personnel at the White House, is said to be positioned to arbitrate the dispute and make a recommendation on behalf of the administration as early as this week. Calls to Nash were not returned.
The fund was created by the recently enacted telecommunications reform bill to aid small businesses-including wireless firms and others with $50 million or less in annual revenues-with monies generated from interest on auction down payments. It is comprised of a seven-person board of directors that FCC Chairman Reed Hundt is charged with assembling.
Four members will come from the private sector and the other three from the FCC, Treasury Department and Small Business Administration. The terms of members range from one year to five years. The full board is expected to be in place within the next month or so.
Hundt last month named Solomon Trujillo, a U S West Inc. executive with extensive small business dealings, interim chairman of the fund despite strong support in Congress and the telecommunications industry for Thomas Hart, an experienced African American communications lawyer who worked closely with Rep. Edolphus Towns (D-N.Y.) to craft the Telecommunications Development Fund and get it added to the telecommunications bill.
Towns, seemingly upset with the Trujillo appointment and the apparent lack of support for Hart at the FCC, voiced concerns at a recent oversight hearing about Hundt’s handling of the matter.
“The commission’s vision and Ed Towns’ vision [for the TDF] are somewhat different,” said Khalil Munir, a spokesman for Towns.
Munir said that when Congress returns Tuesday from its two-week Easter-Passover recess “things will become more definitive” insofar as the composition and administration of the fund, but he did not elaborate.
Hundt was not available for comment. Hart declined comment.
The fund, which has $3 million today but will grow as more auctions for wireless licenses are held, was designed to give small businesses a chance to compete in a telecommunications market deregulated by Congress and dominated today by the seven regional Bell telephone companies and long-distance carriers AT&T Corp., MCI Communications Corp. and Sprint Corp.
The TDF, which will operate much like a corporation in Washington, D.C., represents a novel undertaking for Congress and the FCC. The board will have broad discretion in aiding small businesses, with loans, extensions of credit and investments among its options.
The creation of the fund and the requirement to remove market barriers for entrepreneurs and small businesses come at a time when affirmative action programs are being curtailed or eliminated as a result of the Supreme Court’s Adarand ruling last summer.
The GOP-led Congress, meanwhile, has promised to end all race- and gender-based preferences in federal programs in legislation backed by Rep. John Canady (R-Fla.) and Robert Dole, the Kansas Republican who is leader of the Senate and the presumptive GOP presidential nominee.
President Clinton said he is willing to reform affirmative action programs, but not end them.
As such, the TDF could be used to finance studies of any past discrimination in the telecommunications industry. Blacks and other minorities are vastly unrepresented in the multibillion dollar telecommunications business. Documentation of discrimination could give affirmative action programs stronger legal standing.
In addition to making capital available to small business (the biggest obstacle facing minority businesses), the TDF is intended to foster advanced technology development; promote employment and training; and support Congress’ universal service goal of delivering telecommunications services to underserved rural and urban centers.
