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McCain Wants More Northpoint Disclosures

U.S. Sen. John McCain (R.-AZ) wants more information about the financial interests of those involved with Northpoint Technology, a controversial, well-heeled and powerfully-connected Texas-based telecommunications company heavily lobbying Congress for a free spectrum license.

The company is seeking to force the Federal Trade Commission (FCC) to give it a license, instead of having to bid for spectrum at an auction, to provide terrestrial wireless services such as the Multichannel Video Distribution and Data Service (MVDDS) to compete with satellite operators.

Northpoint proposes to use the same spectrum as DirectTV and the Dish Network but, instead of using satellites, it wants to mount transmitters on a series of towers. Testing has concluded there would be no interference problems and last year the FCC ruled Northpoint and other MVDDS developers could share the same spectrum with satellite companies but would have to bid for the spectrum.

Northpoint protested that satellite operators were not required to bid for their spectrum space and demanded equal treatment. The FCC countered that satellite companies receive their space for free because of the enormous cost of building, launching and maintaining satellites and the International nature of the business. The Congressional Budget Office (CBO) estimates an MVDDS auction would bring in as much as $60-$100 million.

The company then turned to Congress and, earlier this year, Senators Kay Bailey Hutchinson (R.-TX), John Sununu (R.-NH) and Mary Landrieu (D.-LA) attached amendments to separate bills that would give Northpoint its spectrum without an auction.

The amendments prompted immediate charges by Northpoint's opponents of unfair political influence.

McCain, who opposes Northpoint's bid to bypass the FCC ruling, claims in his letter to Northpoint Chair Sophia Collier, the former treasurer of the New Hampshire Democratic party, "Recent reports indicate that Northpoint has provided financial interests in the company to several well-connected individuals, including relatives of Sen. Joseph R. Biden, Jr., former aide to President Clinton Betsey Wright, a former executive director of the Mississippi Republican party, the wife of a former aide to Senator Conrad Burns, and 'major Democratic moneymen.'"

Northpoint's founders include Katherine Reynolds, an heiress to the famous Texas King Ranch; J. Bonnie Newman, former aide to the first President Bush and current executive dean of Harvard's Kennedy School of Government; and Mitchell A. Johnson, a former senior executive at Sallie Mae.

The company's executive vice president is Antoinette "Toni" Cook Bush, a former serious contender to head the FCC during the Clinton administration and the stepdaughter of Democratic power broker Vernon Jordan. Cook also served as senior counsel to the Senate Commerce Committee's communications subcommittee.

While Northpoint currently has only five employees, its list of franchisees include Hollywood producer David Salzman, comedienne Lily Tomlin, and former U.S. Reps Louis Stokes and Samuel Coopersmith.

In addition, Northpoint's chief Washington lobbyist is former House Speaker Bob Livingston.

"In the interests of providing members of Congress the necessary facts to render an informed decision (on the proposed amendments), I urge Northpoint to disclose information regarding who stands to gain from the assignment of free licenses," McCain states in his letter.

McCain then asks Northpoint for a list of all individuals, including all shareholders, affiliates and franchisees, who hold a financial interest in the company.