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As FCC's Prowess Grows, Corporate Boards Turn to Insiders

Thanks to political support from both the Bush Administration as well as Capitol Hill, the Federal Communications Commission has gained political clout inside the Beltway and is no longer being thought of as a politically charged bureaucracy. For this reason, corporate boards may have put more weight in the stock of former commissioners in hopes of influencing public policy on a wide range of issues from spectrum to common carrier, observers noted.

Intel Corp. Wednesday announced the nomination of Reed E. Hundt to the chipmaker's board. Hundt served as FCC chairman from 1993 to 1997. The announcement comes 24 hours after Handspring Inc. announced the addition of former FCC Chairman William E. Kennard to its board. Kennard served as chairman of the FCC from 1997 through Jan. 19, 2001.

Despite the fact that commissioners are barred from official contact with the agency for a set period of time following their departures, former commissioners (especially a former chairman) have always made easy transitions from the FCC to the corporate environment. Hundt, himself, also sits on the boards of Allegiance Telecom , Novell , Northpoint Communications as well as 5 other privately held companies.

"It might help them get a door open. They'll be able to have a meeting. You turn to them for influence," according to an agency insider who requested anonymity.

And now as the current FCC chairman Michael Powell begins to articulate his deregulatory agenda, both observers and agency insiders believe the FCC will be less of a regulatory hurdle and more likely work with companies to allow the market to resolve issues for themselves.

"In this market...given where the FCC is...maybe, in the future, there will be less of an opportunity to game the market through the regulatory process but that remains to be seen," said Martin Stern, partner of Preston Gates Ellis & Rouvelas Meeds LLP. Stern previously has served as the deputy chief of the FCC's competition division.

Indeed, even though he hasn't yet disclosed details of his agenda, Powell is taking an active role in building support for key issues that will influence how Americans connect and communicate through the Internet. For example, Powell, along with Sen. Conrad Burns (R-Mont.), has embarked on an ambitious initiative to educate Capitol Hill staffers about spectrum management. Whereas previous commissioners viewed the spectrum as merely a means to raise cash through auction, Powell is more astute to how the market uses the spectrum for wireless voice or data transmission.

"[Powell] is much less inclined to used the commission for social engineering. He wants to allow the market to do what it does," Stern said.

But as fortuitous as it is having a former FCC commissioner on your side, it may not always guarantee influential on the agency's policy. For example, Harold Furchtgott-Roth, who is being replaced by Republican nominee Kevin Martin, is said to have little influence on policy-making decisions after his departure.

"He was his own island. He was not someone that's going to influence anyone inside the agency. He always said we weren't going to do anything," the FCC insider who requested anonymity said.

Democrat Gloria Tristani is rumored to be returning to politics in New Mexico following her departure, which is expected sometime later this year. She previously served on New Mexico State Corporation Commission from 1994-97, where she was the first woman elected to that office and served as Commission Chair in 1996. She has her own private practice in Albuquerque.



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