A Senate committee extended its unofficial blessing today to William E. Kennard as the new chairman of the Federal Communications Commission, but not without taking him to task for the agency's performance in implementing the 1996 Telecommunications Act.
"I have to say in the strongest of terms that the results have not met the expectations of Congress," Senator John McCain (R-Arizona), chairman of the Commerce, Science, and Transportation Committee, told Kennard at his nomination hearing. "To sit there and allege the law has been a success, well, it's just not true."
While expressing admiration for Kennard, who for the past four years has been FCC general counsel, panel members demanded assurances that the agency would clear the way for competition among telecom firms as mandated in the 1996 law. Other chief concerns included phone rates in rural areas, the FCC bureaucracy, TV ratings, the V-chip, broadcast standards for HDTV, and the proliferation of broadcast towers.
The main thrust of the new telecom law is opening markets - letting the regional Bell companies other local telcos vie for long-distance companies, and opening local markets to AT&T, MCI, and other long-distance powers. But partly because of the law itself - it contains a 14-point test the Bell companies must pass before they get clearance for long-distance competition - and partly because of the arduous process of writing orders implementing the statute and assessing service applications, real competition in most markets remains in the future.
Instead, the FCC is fighting a series of legal battles defending its interpretation of the law. One major company, SBC Communications Inc., is challenging the law as unconstitutionally discriminatory because it singles out the Bell companies. At the same time, companies have shown a tendency to combine rather than compete.
McCain pointed to today's announcement that WorldCom will try to outbid British Telecom to partner with MCI as evidence that the telecom act was fostering mergers instead of consumer benefits.
Kennard responded that the FCC has been working 'round-the-clock to meet deadlines for rules on competition and other aspects of the law, and he blamed the slow pace of approving business proposals to the companies. Kennard also outlined his "guiding principles" as commissioner, defining them as "competition, community, and common sense."
But the senators didn't buy it.
"While I admire your guiding principles, it seems to me that first and foremost you have to be guided by the straight language of the statute, and this is what troubles me," said Senator Sam Brownback (R-Kansas).
Kennard retorted that "many times congressional intent is not particularly clear, and often there is disagreement among members of Congress" in interpreting the act's intent.
This was exemplified by John Kerry (D-Massachusetts) and Conrad Burns (R-Montana), who, during the hearing, disagreed over what universal service is exactly. Senators from rural states, like Burns, want to ensure that people in rural areas don't pay more for phone service than those in urban areas, where there is more competition. Kerry said that urban states, like his, should not have to pay for rural service.
The universal service fund to provide phone service to all Americans is one of the stickier issues in the law. When the FCC came out with a proposal last spring on who should pay into the fund, and who would benefit, it created a firestorm. Paging companies have to pay in, but ISPs do not. Rural states said they needed funding for more than one line per household and business, while urban states said they did should not have to pay for this. None of the issues have been resolved.
"The act casts a very wide net on who would pay into the fund," Kennard said. He added that ISPs should not have to pay in, at least until the Net is so widespread that everyone has access to it.
Despite the fact that Kennard has been a key figure in the FCC decisions that Congress so disdains, only one committee member, Senator Ted Stevens (R-Alaska), expressed serious reservations about Kennard's nomination. Stevens accused the FCC of ignoring some of the provisions of the new law and said the agency has offered no guidance in developing broadcast standards for high-definition television.
"I should hope that you could answer what happened on your watch," Stevens said.
Kennard offered few clues as to how he would lead the FCC in the direction Congress is clamoring for. When asked what decisions current chairman Reed Hundt made over the past four years that he would have done differently, Kennard said he could think of none.
He did say, however, that he would conduct a "top-to-bottom" review of how to streamline the agency. He also said that he planned to install a computer-tracking system needed to answer the 6,000 letters the agency receives from members of Congress each year. When questioned about the recent doubling of the size of his legal staff, Kennard attributed the increases to the need for more help in fighting the barrage of legal challenges the commission now faces over the telecom act.
Kennard also said the agency is in the process of gathering evidence to determine the usefulness of a voluntary ratings plan that went into effect today on all networks except NBC. Among new ratings letters displayed at the beginning of programs are V for violence, L for strong language, D for objectionable dialog, and S for sexual content.
In passing, Kennard endorsed the V-chip as an acceptable use of technology to help parents control what their kids see on TV.
"Personally, I sometimes cringe when I'm watching TV, particularly with my nieces and nephews," Kennard said.
The Commerce Committee will vote next week on whether to confirm Kennard's nomination. A full Senate vote will follow.
