WASHINGTON-While Federal Communications Commission Chairman William Kennard distanced himself from charges at a recent congressional hearing that his agency lobbied for legislation to recover scores of mobile phone licenses entangled in bankruptcy, internal government e-mails show the FCC and the Department of Justice last year wrestled with legal, regulatory and legislative strategies to accomplish that very, still elusive goal.
Separate from the issue of whether the Clinton administration can secure congressional support this year for its bankruptcy proposal is the question of whether Kennard’s handling of the matter will further erode his standing on Capitol Hill, where Republicans remain disenchanted with the implementation of the 1996 telecom act and contemplate overhauling the FCC.
The e-mails, produced in the Pocket Communications Inc. bankruptcy case, suggest the FCC was willing to postpone action on C-block personal communications services issues in order to buy time for legislation.
On May 15, 1998, Mark Rubin, of the FCC’s Office of Legislative and Intergovernmental Affairs, e-mailed Lauren “Pete” Belvin, telecom adviser to Senate Commerce Committee Chairman John McCain (R-Ariz.): “Pete, when we discussed our bankruptcy proposal a few weeks ago, you inquired about the FCC taking further action on C Block. WTB [Wireless Telecommunications Bureau] received 11 petitions for further reconsideration on C Block. As you know, normally the petitions would be put out for public comment. That process, however, can be forestalled somewhat by the FCC secretary. Would it facilitate Senator McCain taking legislative action if the petitions were delayed for the time being from being put out for public comment?”
Rubin’s e-mail was copied to Kathleen O’Brien-Ham, a WTB deputy chief; Dan Phythyon, WTB chief at the time; and Sheryl Wilkerson, the FCC’s top lobbyist.
It is unclear who directed the FCC lobbying campaign for bankruptcy legislation and how Kennard could have been unaware of it.
Today, Rubin is on detail assignment with Rep. Rick Boucher (D-Va.), an influential telecom lawmaker on the House Commerce Committee. That has caused angst among some who fear Rubin could exploit his Capitol Hill position to promote bankruptcy legislation again this year.
Rubin’s e-mails to congressional staff last year were produced by Pocket’s debtors-in-possession lenders as evidence the FCC was not negotiating with it in good faith.
Pocket, NextWave Telecom Inc. and General Wireless Inc., which accounted for more than half of the $10 billion pledged toward C-block PCS licenses in a 1995 FCC auction, subsequently filed for bankruptcy. The firms claim, among other things, the FCC contributed to the massive devaluation of licenses after the auction.
Some licenses returned from C-, D-, E- and F-block PCS bidding currently are being re-auctioned by the FCC.
Internal e-mails and testimony from a Pocket bankruptcy court hearing in Baltimore on Nov. 13 also suggest FCC lobbyists and lawyers were working closely together, keeping WTB staff informed along the way.
In addition to Rubin and Wilkerson in the FCC’s Office of Legislative and Intergovernmental Affairs, and Ham and Phythyon in the Wireless Telecommunications Bureau, court documents point to Stewart Block, of the FCC’s Office of General Counsel, as playing a key role in FCC lobbying for bankruptcy legislation.
In addition, evidence produced in the Pocket case points to Lloyd Randolph as the Justice Department’s point-man in the administration’s lobbying campaign for bankruptcy legislation.
Randolph, in an Oct. 20, 1998, e-mail on “C block/retroactivity of legislative fix,” observed: “So long as any retroactivity legislation is enacted while our GWI appeals are pending, I do not believe that the legislation poses separation of powers problems.”
When contacted, Randolph declined to comment.
Others involved in the bankruptcy bill lobbying campaign could not be reached for comment.
Neither bankruptcy legislation nor a C-block bailout bill-backed by a bipartisan group of top House telecommunications lawmakers-was passed by Congress last fall. In fact, lobbying campaigns on behalf of the two causes effectively canceled out each other.
However, in a Senate appropriations subcommittee hearing on March 25, Kennard asked lawmakers for help in getting bankruptcy legislation approved by Congress this year.
Only two weeks earlier, Kennard, when facing House telecommunications subcommittee Chairman Billy Tauzin (R-La.), disavowed responsibility for FCC bankruptcy legislation advocacy.
