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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