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BusinessWeek: March 30, 1998 |
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Information Technology: TELECOMMUNICATIONS
LESS SOUND AND FURY AT THE FCC New head Bill Kennard plays telecom peacemaker
Some 100 days after Bill Kennard took over as FCC chief, the laid-back 41-year-old Californian is squarely on the hot seat. He faces vein-popping pressure from Congress, industry, and the states--all steamed that two years after the Telecommunications Act of 1996, the law designed to promote competition has yet to bear fruit. Worse, he has stumbled politically--in one case by not notifying Senate Commerce Committee Chairman John McCain (R-Ariz.) of a White House initiative to give political candidates free airtime. Now Kennard, the FCC's former general counsel and its first African-American chairman, needs to regain momentum just as the commission faces perhaps the toughest challenges in its history. "The fights we've seen so far are hard," says Anne K. Bingaman, senior vice-president at long-distance carrier LCI International Inc. and former Assistant Attorney General for Antitrust at the Justice Dept. "But we ain't seen nothing yet." Instead of fighting fire with fire, though, Kennard is playing the peacemaker. While his predecessor, Reed E. Hundt, frequently warred with state regulators, Kennard has gone out of his way to work with them--and even made a point of giving his first speech as chairman to their trade group. That "was a real turning point," says Jolynn Barry Butler, president of the state regulators' association. After the speech, so many state officials wanted to chat with the new chairman that original plans for a small dinner party grew to a table of 20. "Our challenge is to get out of the blame game," says Kennard, a Yale Law School grad. "We need to get everybody invested in the success of the Telecom Act." That attitude comes as no surprise, given Kennard's role model. As a teenager, he had a complete set of Martin Luther King Jr.'s speeches on records that he would listen to repeatedly. Now, he's using many of King's values of cooperation at the FCC. "In another 20 years, all the noise will be forgotten and we'll all be judged by what we did," he says. "I'm confident that I'll be on the right side of history." Kennard is starting to make his mark with a down-to-earth attitude that puts him in sharp contrast with the imperious Hundt. At the FCC, he arranged one- to two-hour "Bible readings" of the Telecom Act so he could get others' opinions on the often-abstruse law. And he has begun a regular coffee klatch with the four other commissioners after formal meetings. "INNER COMPASS." Kennard's ability to work with differing views and backgrounds stems from his parents and from his childhood in the interracial Hollywood Hills. His mother grew up among Hispanic migrant workers and became a bilingual schoolteacher. When his father, Robert, was nine, his parents sent him to a nearby whites-only school instead of a black one farther away. Although he was harassed by the kids and repeatedly denied admittance by the principal, Robert returned daily and eventually was accepted. Robert Kennard later founded the largest African-American architecture firm in Los Angeles. Says the younger Kennard: "You have to have your own inner compass and know where you want to go." To find his way at the FCC, Kennard will have to overcome huge obstacles. Two years after the 1996 act, local phone competition is still just a promise for the vast majority of consumers. In the cable industry, lawmakers want the FCC to keep a lid on rising rates without extending a rate-regulation law that expires next year. And broadcasters are dragging their feet on the transition to digital television. "I can't remember a new chairman with the depth of problems he has to deal with," says Robert T. Blau, vice-president of Atlanta-based BellSouth Corp. Another potential snag: rivalry from up-and-coming Republican Commissioner Michael K. Powell, who is the son of General Colin L. Powell. In January, the younger Powell took the unusual step of issuing his own paper detailing how the FCC can help the Bells with their as yet unsuccessful applications to enter the long-distance market. With that kind of initiative, Powell could grab the leadership role on key policy issues. "Powell is a real force to be reckoned with," says Kennard's former law partner Lawrence R. Sidman, a telecom lobbyist. Both men downplay the prospect of a clash. Powell says his paper was designed to advance discussion on a critical issue. It "was intended to encourage companies and regulators to get back to the table and redouble their efforts," he says. For Kennard's part, he notes that he suggested the same policy months earlier: "I'm more than happy to give other commissioners credit as long as the bottom line is consistent with my agenda. I reject the notion that the other commissioners must live in fear of the chairman." Such confidence is bolstered by the fact that Kennard has had a stellar Washington career. As former FCC general counsel and a dealmaker before that at the heavyweight D.C. law firm of Verner, Liipfert, Bernhard, McPherson & Hand, he was known for his ability to craft a consensus in contentious situations. As Kennard grapples with the challenges of leadership, he has even less time for favorite pursuits with his friends and family. Returning home by 10 p.m. means he had a "slow day at the office," says his wife of 14 years, Deborah D. Kennedy, an attorney for Mobil Corp. whom he met while both were at Yale. When he can, Kennard relaxes by fishing for small-mouth bass in the Shenandoah Valley. Kennard won't have much time for angling while he's at the FCC. Besides completing the work left over from Hundt's tenure, Kennard wants to add his own imprint by "infusing [my] agenda with opportunities" for minorities, women, and the disabled. That's an objective he has pursued throughout his career--he has provided legal advice to black-owned companies and done pro bono work for homeless youth. "We need to make sure the telecommunications revolution brings us together as a country," he says. That's a tall order. But in this era of rancor, Kennard will make a contribution just by forging peace among the titans battling at the FCC. Return to top | |
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 TABLE Unsnarling the FCC's Problems PHONE COMPETITION The FCC is taking heat for not making telecom deregulation happen faster. Kennard must now push the Baby Bells to open their local markets more quickly while resisting pressure to let the Bells into the long-distance business right away. UNIVERSAL SERVICE Kennard is caught between farm-state Senators, who want to keep subsidies for rural and needy customers, and Vice-President Al Gore, who wants to use the money to fund schools' Net access. CABLE RATES Despite opposition from cable operators, he must keep a lid on rates, even as the FCC's regulatory authority expires in March, 1999. DIGITAL TV The FCC must accelerate the adoption of digital TV even as broadcasters drag their feet and complain that the new equipment is too pricey. Return to top |
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