WASHINGTON-Federal Communications Commission Chairman William Kennard, already under
fire in Congress over telecom act implementation, merger reviews and agency reform, hit another hot button last week
by asking a Senate appropriations subcommittee for authority to retrieve wireless licenses from bankrupt
firms.
“We also need legislation as again presented in our FY 2000 appropriations language to ensure the
goals of 309(j) of the Communications Act are met, and that our auctions/licensing process is not completely
undermined by the bankruptcy courts,” stated Kennard in written testimony. Section 309(j) is 1993 auction
authority.
Kennard’s request, which President Clinton included in his fiscal 2000 budget, follows last fall’s
tumultuous political battle over to whether to go easy or tough on bankrupt firms (NextWave Telecom Inc., Pocket
Communications Inc. and General Wireless Inc.) that accounted for more than half of the $10 billion pledged toward C-
block personal communications services licenses in the FCC’s 1995 auction.
Two weeks ago, Kennard was on the
hot seat facing questions from House telecommunications subcommittee Chairman Billy Tauzin (R-La.) about who in
the Clinton administration was responsible for pushing for bankruptcy legislation.
A lobbying campaign for
bankruptcy reform last fall had the effect of undermining a C-block bailout bill backed by Tauzin and a bipartisan
group of telecom lawmakers that eventually died last Congress.
Kennard and others at the FCC insist they did not
lobby for bankruptcy license reform. They maintain the Office of Management and Budget fought for the bankruptcy
proposal last fall and had it put in the Clinton budget.
Others question the veracity of the FCC’s account, pointing to
internal FCC e-mails that surfaced in the Pocket bankruptcy case that some say strongly suggest agency officials
actively sought bankruptcy legislation from Congress.
“Obviously, who else would have benefited but the
FCC,” Tauzin told RCR.
Tauzin, leading an effort to overhaul the FCC, said the bankruptcy proposal
“would create a new class of individuals that could not benefit from bankruptcy law” and who are overseen
by a single federal regulatory agency.
“I think the (FCC) chairman disagrees with Chairman Tauzin on the
bankruptcy legislation,” said Ari Fitzgerald, wireless policy adviser to Kennard. “We think licenses do not
belong in bankruptcy.”
Reed Hundt, former FCC chairman, vocally advocated for a bankruptcy fix to
untangle wireless licenses from bankruptcies before handing over the C-block debacle to Kennard.
Given the FCC’s
failure to secure such legislation to date, Hundt said the FCC should now settle with bankrupt wireless
firms.
“The FCC is on a very unfortunate path to be in the litigation business rather than the spectrum
development business,” said Hundt, a consultant and director on several companies’ boards.
The FCC 2000
budget request presented to Sen. Judd Gregg (R-N.H.), chairman of the Senate Commerce appropriations panel, is for
$230.8 million.
Kennard said most of the 38-percent increase from the current funding level is because of the FCC’s
relocation to the Portals.
Gregg, among other things, asked Kennard what he thought about rolling the National
Telecommunications and Information Administration into the FCC.
Kennard, noting the tension from NTIA
oversight of federal government spectrum and FCC management of non-government spectrum, said he told Gregg he’d
think about it.
Kennard also told Gregg the agency was in good shape for year-2000 computer readiness.
