Washington Scene

News about Reed Hundt, Pioneer's Preferences and FCC's Re-organization

The FCC's new Chairman, Reed Hundt, is making waves in the US capitol, according to the San Francisco Examiner of August 21. Mr. Hundt is quoted saying "There is an unbelievable magnitude of opportunity . . . The development of the information highway (is) one of the great events of our history." Mr. Hundt, once a 9th grade classmate of V. P. A1 Gore (he also went to Law School with Hillary) not only now has a full 5 member Commission, he is taking on a lead role in setting communications policy.
After heading up the first round of "Spectrum" auctions (where not everyone was a serious bidder -- more than a dozen winners of that auction defaulted on their first payments to the FCC) -- Mr. Hundt is now re-organizing the FCC from top to bottom and getting ready for the upcoming PCS auctions.
The FCC recently gave final approval to the AT&T buyout of McCaw Cellular Communicarions. This $12.6 billion deal has literally sailed through the courts and other approval authorities and will create one of the worlds largest telecommunication/cellular carriers. Anyone want to compete with them?
Congress and the FCC have had second thoughts on the Pioneer's Preferences granted to APC, Cox and Omnipoint for PCS services. First off, Congress directed that the FCC reserve "entrepreneurs' blocks' of spectrum (and the attendant licenses) for small, minority or women owned businesses who bid at the upcoming PCS auction(s). The "special" bidders will be give "discount credits" of from 10 to 35% so that they may better compete against the big boys at the auctions.

Next off, Congress decided that the previously awarded Pioneer's Preferences were a mistake. They directed the FCC to reverse the "damage" and revoke the Preferences. Only APC has formally appealed the FCC revocations, so far -- but, look for some very serious behind-the-scenes lobbying. The "blame" for the special treatment of minorities can surely be placed at the feet of the Commission's latest two female, liberal Commissioners. However, why Congress wanted to dump the Pioneer's Preferences defies explanation. They cited that the awards were made too quickly, under unusual circumstances and were unlikely to survive court challenges. Congress also cited ethical considerations -- a dead giveaway that they were caving in to lobbyists' pressures.
The FCC is involved in a total re-organization. An early result of this effort was the creation of a Wireless Telecommunications Bureau, to be headed by Mr. Ralph Haller, formerly the highly respected head of the Private Radio Bureau. We wish Mr. Haller well in this new job.

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