KENNARD SEEN AS ‘HONORABLE’ BUT LACKING IN POLITICAL SAVVY

Most Washington insiders credit Kennard with making telecom services more accessible to people with handicaps, residents on tribal lands, those living in urban poverty areas and other underserved groups. One lobbyist said he also was very effective in extending FCC’s competitive telecom model to other countries through frequent meetings with overseas regulators. It’s necessary to look at a person’s goals, lobbyist said: If broadening access to underserved people and forwarding competitive principles abroad were Kennard’s goals, and he says they were, then he was successful, lobbyist said.

As for Kennard’s telecom policies, reactions were predictable. One ILEC official complained that Kennard simply continued policy set by predecessor Reed Hundt that gave CLECs too much regulatory aid, rather than depending on market forces to encourage competition in local service. If FCC at least had set sunset on duration of regulations, CLECs would have had better economic incentive to develop good business plans that didn’t depend upon regulations for their survival -- and ILECs could focus more of their resources on customer service instead of CLEC needs, he said.

Publicly, telecom officials lauded Kennard’s tenure. “Chairman Kennard enthusiastically tackled the complex issues confronting the changing world of telecommunications, and the industry and consumers have benefitted from his service,” said Thomas Tauke, senior vp-public policy and external affairs for Verizon. “As he forged policy, he clearly thought of consumers first.”

Privately, however, other telecom sources faulted Kennard and predecessor Hundt for extending disparate “legacy regulations” of phone and cable industries to such new services as high-speed broadband. They argued that those moves had created investment disincentives for high-speed data and future Internet-delivered services. As result, they plan to press new Congress for proposed Title 7 regulatory plan that would “bring coherence to the market” by imposing similar rules on broadband services delivered by cable operators and phone companies.

“There have been many positives for our industry” during Kennard’s tenure, USTA Vp Lawrence Sarjeant said, citing “major breakthroughs” such as CALLS plan, pricing flexibility for BellSouth and progress toward reforming universal service and access charge regimes for rural carriers. USTA and other associations serving rural telcos worked together to develop reform proposal at Kennard’s bidding. “He should get credit for moving the ball forward on rate-of-return access reform,” Sarjeant said. On other hand, “one glaring area of disappointment goes back to 1996” and FCC’s interconnection order, Sarjeant said. He said agency “still has not arrived at policies that conform to the 1996 [Telecom] Act.” ILEC community has been criticized for trying to “overcome” FCC’s interconnection rules but ILECs on several occasions have been upheld by courts, for example on colocation rules, he said.

Kennard departs with reputation on Hill for overreaching, several there said. Too often, “he tried to enact policy rather than carry out policy mandated by Congress,” said Ken Johnson, spokesman for House Commerce Committee Chmn. Tauzin (R-La.). At same time, Johnson put much of blame on White House. “It was clear to us that in all too many cases, he was getting his marching orders directly from the White House,” he said, pointing to free air time controversy in which President Clinton essentially ordered Kennard to proceed despite congressional criticism. “We believe he was put in a difficult position.” Spokesman for Senate Communications Subcommittee Chmn. Burns (R- Mont.), only senator to vote against Kennard when he was confirmed, said: “Under Kennard, the FCC overstepped its bounds on a number of occasions.”

Other decisions that raised ire of Hill members, especially Republican majority, included Kennard’s insistence on pushing low- power FM (LPFM) rules and controversial interpretation of educational TV rules that would have excluded some religious broadcasters from reserved spectrum. In each of cited instances, Kennard got little for his trouble but criticism. Free air time rules never coalesced, religious broadcaster rules were rolled back under congressional heat and LPFM rules were curtailed by act of Congress. Kennard also faced criticism from Bell-friendly lawmakers over his interpretations of Telecom Act rules such as Sec. 271.

In most cases, disagreements stayed civil. “He’s an immensely likable guy,” Johnson said, and Tauzin’s disputes with Kennard were “never personal, it was always about business… We wish Bill Kennard well. He’s leaving with a friend over here.” Burns spokesman said his boss felt Kennard was “very easy to work with” despite “philosophical differences about how the FCC should work.” However, others weren’t so cordial. House Commerce Committee ranking Democrat Dingell (Mich.) had very public feud with Kennard that sometimes turned personal, as when he called Kennard “several affiliates short of a network.”

Kennard -- former NAB intern and then staffer in NAB legal dept., after getting his law degree -- shocked broadcasters, and caused uproar in Congress, in first week of his chairmanship in 1997 when he called for free air time for political candidates and announced plans to open inquiry looking toward eliminating or setting restrictions on beer and wine ads. Neither project got off launching pad for several reasons, including opposition from Hill and from other commissioners. All broadcasters we talked with -- including minorities -- were critical of what they felt was Kennard’s failure to give industry credit for efforts that had been made in employment, ownership, diversity in programming. Cited as example was continuing 9-month effort of NAB Educational Foundation to train minorities to be managers and station owners. Kennard, we were told, turned down invitations to meet with group of 21 minorities and women who gather in Washington for 3-day weekend each month.

Broadcast executives and NAB staffers interviewed in Cal. earlier this week at Assn.’s board meetings generally were reluctant to speak unkindly for attribution about Kennard -- although many had private comments, some of them unprintable. “I say good riddance,” TV group exec. told us. “I can’t say anything nice about him.” Added another: “How mean do you want me to be? He didn’t leave much of a legacy.” Another: “I'm trying to find one thing he’s done right.” Or this: “Has it just been 4 years? It seems like 8.”

NAB Chmn. James Yager, pres. of Benedek Bcstg., didn’t try to hide his disappointment in Kennard’s tenure. “He didn’t take the time or make the effort to understand that he was regulating,” Yager said. “He had total disregard for the technical standards [of broadcasting] and he did nothing to foster digital… His term was a disaster.” NAB Pres. Edward Fritts was more diplomatic, calling Kennard “a dedicated public servant who honestly believed in the issues he promoted. While we didn’t always agree, I respect him personally.” NAB TV Chmn. Ben Tucker, Fisher TV, said he wished outgoing chmn. well: “He was a principled man… but he didn’t give the industry enough credit for all the good things broadcasters have done in making our industry more diverse.”

Outgoing radio board member Al Vicente, Pamal Bcstg., called Kennard “a visionary at a time when the winds weren’t favorable to his agenda… He was very naive.” Michael Carter, Carter Bcst. Group, said “methodology” used by Kennard “caused a lot of turmoil” and was a mistake: “He had the right thing in mind, but he should have tried to work with broadcasters.” NAB Radio Vice Chmn. John Dille of Federated Media said Kennard was “thoughtful and sensitive about things that were important to him and his agenda.” Added Preston Padden, Washington representative for Disney: “I admire the conviction he has for what he really believes in,” praising his attempts to help minorities. On a personal level, he’s a good guy,” said Cullie Tarleton of Bahakel Communications and chmn. of Fox TV Network affiliates assn. “But he disappointed me in that he didn’t help close the gap on digital.”

Unlike broadcasters, cable officials praised Kennard for not making many regulatory moves on TV front. In particular, they saluted him for not imposing DTV must-carry rules and open access requirements on cable. While Commission has been considering both, it has refrained from acting, cheering cable operators and disappointing cable critics. “Chairman Kennard has had the courage to let the free market guide the development and deployment of new services,” NCTA Pres. Robert Sachs said. “History will show the wisdom of his approach.”

“To his credit,” Kennard moved debate about availability of wireless spectrum for broadband services to near top of FCC agenda, making issue “one of his most important legacies,” one industry source said. Along those lines, Kennard also has pushed development of new technologies such as ultra-wideband and software defined radio, as well as new concepts such as secondary wireless market, source said. “One wishes he had begun to do that earlier in his term,” source said of new technology issues. “Implementing all those things will be left to his successor.”

“Bill Kennard drew the short straw of having to exist in the transition period from monopoly providers to competition,” CTIA Pres. Thomas Wheeler said. “He was very supportive of wireless as being the example of what competition could be and he was very protective of that competition.” Not surprisingly, Wheeler pointed to commercial mobile radio service spectrum cap as issue where he and Kennard differed. CTIA has been among those in wireless industry asking agency to look at lifting spectrum cap of 45 MHz in most markets except rural areas, where cap is 55 MHz. “As a result of his not wanting to lose the poster child of competition, he took a position on the spectrum cap, for instance, which has thwarted the industry’s ability to offer next-generation services,” Wheeler said. He referred to issue as “honest disagreement” between parts of wireless industry and Kennard. “It is clear that if we are going to have viable voice as well as data services, there has to be more spectrum,” Wheeler said. He pointed to Kennard’s leadership on NextWave spectrum that has been tied up in legal battles and now is part of PCS auction that has topped $16 billion. “Spectrum that has lain fallow is finally being auctioned,” he said. “That wouldn’t have happened without Bill Kennard’s leadership.”

Consumer advocates praised Kennard’s efforts on behalf of minorities, disabled and development of low-power FM, among other matters. They also gave him high marks for preserving Commission’s authority and implementing Telecom Act despite often hostile Congress and many unfavorable judicial decisions. “Under the circumstances, he got a lot of work done and did very well,” Media Access Pres. Andrew Schwartzman said. “The implementation is the hard part.”

But consumer advocates also expressed much disappointment and dissatisfaction with Kennard’s reign, particularly on such issues as cable open access, media concentration, interactive TV access. “I think there was a lost opportunity with Bill,” said one source. “The job of the FCC chairman is not just about making the telecom trains run on time.. He ducked many of the central public interest issues.”

“The industry has to be afraid of the regulator,” said Mark Cooper, research dir. for Consumer Federation of America. He said industry representatives promised Kennard consumer benefits, but he shouldn’t have believed them. Example was AT&T promising its cable acquisitions were in public interest because company planned to offer local telephony, he said. “Kennard sold his soul for local competition and he didn’t get it.” By contrast, ex-FCC Chmn. Hundt “scared the industries,” Cooper said. Kennard relied too much on “the promises of huge corporations who always will fall back on their own interests.”