Nearly a year into office, Bill Kennard has defied all attempts to be pigeonholed as the newest chairman of the Federal Communications Commission. He was general counsel and an understudy to former FCC chief Reed Hundt. Yet Kennard is not Hundt like. He’s not the bold and brazen activist Hundt was. Rather than provoke conflict, Kennard tends to seek out consensus in a firm, straightforward manner.
The FCC is a happier place under Kennard. That is true regardless of whether the agency remains at 1919 M Street or ends up at the Portals.
Kennard is the first African American FCC chairman in history. He is committed to telecom diversity. Yet Kennard is not a black FCC chairman; he is an FCC chairman who happens to be black.
Though once a top lawyer for the National Association of Broadcasters, Kennard, 41, is not in the pocket of the powerful broadcast lobby-nor in anyone else’s hip pocket for that matter.
Just ask the wireless telecom industry. Kennard refused to be bullied into pre-empting local regulation of antenna siting or into rubber-stamping the industry’s deregulatory wish list.
Truth be known, Kennard is leery of lobbyists. He is suspicious of wireless industry sincerity, for example when carriers tout public-safety benefits of mobile phones but then filibuster a `strongest signal’ solution aimed at improving 911 emergency access.
Kennard’s interest in `strongest signal’ is more than professional; it’s also personal.
Kennard is friendly and gentlemanly-some say too nice-but he’s not a pushover. A Clinton appointee, Kennard is a loyal Democrat who must deal with a GOP-led Congress fiercely critical of telecom act implementation generally and wireless policy management specifically. He has his work cut out for him: Telecom consolidation overshadows competition as the telecom act approaches its third anniversary.
The Los Angeles native has a serene seriousness about him, a sense of family and history and a respect for the rule of law. That he has character in a city where character is in short supply wins him respect, but not necessarily votes, from fellow commissioners Harold Furchtgott-Roth, Susan Ness, Michael Powell and Gloria Tristani.
What does all this mean for the next four years? It’s hard to say. Strong character does not necessarily translate into strong leadership. Kennard has a tight grip on the former, but has yet to lay solid claim on the latter. Hundt was a highly controversial and unpopular chairman, but he managed to round up votes and put together an impressive record.
In an interview with RCR Washington bureau chief Jeffrey Silva, Kennard spoke frankly about top wireless issues of the day and laid out a road map for taking the telecom industry into the next century.
Kennard: I think the overarching goal should be-first and foremost-doing everything we can to foster an environment wherein wireless can become a full-fledged substitute for wireline service. That means encouraging new and improved wireless services and technologies, encouraging flexible rules for spectrum use, opening new spectrum where possible so that wireless can be an important tool for the public in bringing more competition to the incumbent wireline networks.
Second, I think it’s vitally important that the wireless industry meet the needs of the public for public safety. I am always impressed when I see the wireless industry marking their product as a public-safety product, but the marketing rhetoric has to be matched by the performance of the product. So I think it’s important for the commission to continue to push hard on ensuring that there is not only additional spectrum for public safety and life-critical communications needs, but also that the incumbent wireless industry step up to the plate and assume its obligations in the public interest for things like the E911 program.
Third, I believe it’s important for the commission to do its job in making it easier for the wireless industry to interface with the commission. And here I’m talking about streamlining our rules and regulations and continuing to implement programs like the universal licensing system so that the wireless industry can do business easier with our agency. And also, the other part of that, is eliminating regulatory burdens.
Dan Phythyon (Wireless Telecommunications Bureau chief) told me the other day that once we implement our universal licensing system fully, we’ll be able to save the wireless industry 700,000 hours of paperwork burden per year-and that goes directly to the bottom line. So I’m very excited and want to move aggressively to conclude that universal licensing operation.
RCR: On the issue of competition, are you concerned (about) not being able to round up votes for commercial mobile radio spectrum flexibility?
Kennard: Yes, I am concerned about that. I think that Dan Phythyon and his team came up with a brilliant way to thread the needle and come up with an item that gives the wireless industry more flexibility to provide fixed wireless services while fully complying with the statute.
I have two concerns. One is that while I think my colleagues agree on the endpoint-where we want to end up-we have disagreement on the means to get there. And I’m hoping that we will be able to come up with an approach at the end of the day that gets us to the endpoint.
But second, and quite frankly, I’ve heard conflicting things from the wireless industry about this. I am happy to promote the wireless industry as a full substitute for wireline service because I believe that’s good for consumers and good for the country. But the wireless industry, in some quarters, don’t share my view. And that’s unfortunate because issues like CMRS flexibility become a lot easier for me to advocate if I have the support of the wireless industry. And frankly I don’t know why the wireless industry wouldn’t want to support me on something like that.
RCR: Were you alluding to the strongest-signal debate in your prior comment about wireless public-safety marketing?
Kennard: I was careful not to advocate strongest signal specifically because I know there are alternative proposals being floated that may serve the end that I’m trying promote-which is to give consumers a high degree of confidence that wireless will be an important device to promote public safety. I’m encouraged there is today a lot of active discussion going on that will hopefully result in coalescing around a proposal which will serve the needs of strongest signal and perhaps be more efficient and more cost effective in implementing.
RCR: Can you afford to wait a long time for a perfect solution on this?
Kennard: Absolutely not. I’m impatient. I’m willing to give the industry a short period of time to continue to look at alternatives because there has been a lot of industry opposition to strongest signal. If we can’t come to agreement with the industry on an alternative, we will have no choice but to go ahead with strongest signal.
RCR: In light of recent criticism from Senate Commerce Committee Chairman John McCain (R-Ariz.), do you have concerns with the management of the Wireless Telecommunications Bureau under Dan Phythyon?
Kennard: I have tremendous confidence in Dan Phythyon and his team in the wireless bureau. You know these people. They have tremendous experience in the industry. These are not neophytes. They have been around. The team of (deputy chiefs) Gerry Vaughan, Roz Allen, Kathleen Ham-these are very experienced, well respected people, as is Dan. I think it’s important to separate the criticism and parse it a little bit to better understand it.
One category of criticism is that there is backlog in the wireless bureau. That backlog is being addressed. And frankly some members of the wireless industry are comfortable with the backlog because the alternative is to auction a lot of spectrum and there are some elements of the ind
ustry that are not comfortable with that notion. I am very comfortable with the notion of auctions. An
d think it’s important that we move quickly. There should not be a backlog. It’s an unacceptable backlog, and we’re addressing it.
So it’s important to look at the backlog issue separate and apart from some of the other criticisms, which really are what I call sour grapes. That is, some groups criticizing the bureau because they did not achieve the policy result that they wanted from the bureau.
I want to be very clear about this. Our job is not (to) advocate the interests of any particular industry. We’ll do that only if it’s consistent with the public interest. It goes back to what I was saying earlier. I am happy to advocate something like CMRS flex because I think that’s consistent with the interests of the public. It also happens to be consistent with the interests of at least some sectors of the wireless industry.
I do react against this sort of sour-grapes attitude that some industry players take by attacking the hard-working wireless bureau because they didn’t achieve the policy result that they wanted at the commission. That, in my view, is unacceptable.
RCR: Any thoughts on the FCC auction program?
Kennard: As a general matter, Congress has spoken on auctions. It’s clear that the Congress of the United States has decided that auctioning is the preferred method of licensing spectrum, and we are continuing with the auction program. We’ve got a 220 MHz auction that [began last week]. We’ve got auctions scheduled for December for the local monitoring service and a C-block PCS reauction in March.
As a veteran of the old comparative hearing process and the lottery process-when I was in private practice-there’s no question auctions are a more efficient, effective way of getting this spectrum out working for the public. We obviously want to work with all sectors of the wireless industry to make sure that the auction program is administered in a way that doesn’t disrupt existing service or hamper the ability of these companies to provide service. But overall, it’s now our national policy to conduct auctions, and we will implement that policy at the FCC.
RCR: Are spectrum lease fees an option in lieu of auctions for private wireless?
Kennard: I have not been at meetings where that’s been discussed or floated. It sounds like an interesting idea, but I can’t react because I haven’t been briefed on it. By the way, I think you’d need legislation to do that anyway.
RCR: Do you need any wireless legislation from Congress?
Kennard: There were some changes in the ’97 budget act which we’ve been implementing, and they’ve been helpful. I think the most important thing we need right now is legislation to change the bankruptcy laws so that when we are in the position of taking installment payments from licensees, bankruptcy is not an impediment to getting licenses back to re-auction for the public. As you know, we’ve been working on this project for a number of years now. I am going to continue to aggressively lobby the Congress to try to get this changed because I think it’s important to the auction program.
RCR: Early on, you took a strong position on antenna-siting policy. Are you still comfortable with that position?
Kennard: First, I believe it’s a serious issue and one that we have to focus on and spend a lot of time on. And this commission has. We have worked closely with the Local State Government Advisory Committee to give them the ability to work closely with industry to come up with compromises that work out these problems.
I start from the following perspective: In the vast majority of cases, tower siting does not seem to be a problem. In most cases, these issues are getting worked out. There’s an incentive to work them out because the wireless industry wants to provide service. They want to have good relations with the local community and the wireless industry basically is dealing with their customers in these communities.
But there are situations where you have sort of “outlyers” on both sides, where the industry is not being reasonable and pushing communities to do things that are not reasonable. And then on the other side of the ledger, you have local governments that in my view are not acting responsible. They’re not acting responsibly when they say-flat out-“We’re not going to put a tower in our community, ever. No way. No where.”
What we’ve tried to do is to come up with a set of guidelines-and that’s what we did through the Local State Government Advisory Committee-that defines the zone of reasonableness. What best practices do we think are reasonable? That will allow us identify where the outlyers are and we’ll take appropriate action. I have not ruled out pre-emption. I’m just saying that it should be a last resort. One of the things we did with the agreement reached between the industry and the advisory committee was to identify where that zone of reasonableness is so that the commission can get a better sense of who the miscreants are.
I really have to applaud Roz Allen for the work that she did on that committee, which was really masterful, working out that compromise.
RCR: Going back to your sour-grapes comment, how to explain turning down the PCIA forbearance petition if you are truly interested in promoting competition?
Kennard: It’s a balancing of issues. Again, our responsibility ultimately is to serve the public and we want to do that in ways that are most efficient for the industry and which are deregulatory. We have to do that in ways that comply with the law. On a forbearance issue, for example, we have to make sure we’re complying Section 10 of the Communications Act. Congress, in that act, has specified what-public interest tests we can use. We can’t be a rogue agency and deregulate in ways that are not lawful because the courts will put a stop to it. That is the reality of the checks’ and balances’ system, and it’s a good reality.
My answer to the industry is that if you have proposals to make wireless more competitive and to allow your industry to better serve the public, I want to hear about them. Anything that is lawful and in the public interest, I want to promote and I want to work with you to promote them. But don’t ask us to do things that are unlawful.
RCR: Where should the U.S. go 3G?
Kennard: Earlier in the year, I went to Brussels and met with my counterparts in the European Union-myself and representatives from NTIA [National Telecommunications and Information Administration] and the State Department-and basically delivered the following message to the Europeans: We understand you have philosophical differences of opinion with us on standards. The European approach is fundamentally to embrace a standard. The U.S. approach, as we’ve seen in PCS, is to allow multiple standards to try to get acceptance in the marketplace. My own view is that the U.S. approach is a better one, and I think it has been proven in our experience.
We struggled with standards in cellular and it delayed getting cellular into the marketplace by years. By contrast, in PCS, we had a more open approach to standards. PCS was licensed much, much faster and, as a result, we have three standards that are competing vigorously in the marketplace. That’s a good thing because they’re competing with one another to innovate and to serve consumers better. And that’s a good thing.
I don’t know if we will convince the Europeans that our philosophy is a better one. But at a minimum, they should allow a process so that they don’t effectively exclude manufacturers with different standards from getting in the marketplace. And that’s my concern with the whole ETSI [European Telecommunications Standards Institute] process, that there is, in effect, a weighted preference toward certain manufacturers against others. And I think that’s a fundamentally not a pro-competitive approach to take.
RCR: What lessons have you learned in your first year?
Kennard: I think I’ve learned a th
ousand lessons. I don’t where to begin (laughs). I will say one of the things I’ve learned is that c
ontroversy comes with this job. Particularly, at this particular time, we’re dealing with a such dynamic industry, a new statute, lots of players vying in the marketplace. That’s what makes the job fun and exciting. The other thing I’ve learned is that fundamentally Congress got it right in the 1996 act and it’s important for this agency to stay strong and stay the course and continue to advance a pro-competitive course for all these industry sectors. I’ve learned a lot in talking to my counterparts around the world in this job, meeting with regulators from Europe, and South America and Africa. We’re all facing fundamentally the same challenges. We’re all trying to transition from an monopoly environment to a competitive environment. We’re all trying to manage this transition from analog to digital technology. The important thing that we all have to remember is that there will always be forces out there that will try to force us back, back to the old ways of monopoly. And we’ve just got to be strong. A lot of eyes are watching this country because we’ve been on the forefront. So it’s important for this agency to stay the course, be strong and continue a pro-competitive agenda.
