WHITE HOUSE SELECTS 3 WASHINGTON INSIDERS FOR FCC SEATS

Copps, sole Democrat, was named to rest of Comr. Ness’s Democratic term, which expires June 30, 2004. Abernathy would fill remainder of Comr. Furchtgott-Roth’s term, expiring June 30, 2005. Martin would take remaining seat, one ex-Chmn. Kennard held, that will run for full 5 years ending June 30, 2006. That seat theoretically expires June 30 of this year but White House made clear Martin would be named for full term. All 3 had been rumored as leading candidates for several months and at least one, Abernathy, signaled announcement was imminent by resigning last week from Broadband Office, new firm in which ex-Comr. Rachelle Chong also was involved.

Another candidate is being pushed for remaining Democratic seat that Comr. Tristani has said she plans to vacate by year’s end. House Democratic leaders sent letter to Senate Minority Leader Daschle (S.D.) April 3 asking support for nomination of Andrew Levin, minority telecom counsel to House Commerce Committee. Letter from House Minority Leader Gephardt (Mo.) and House Minority Whip Bonior (Mich.) pointed out that Senate minority leadership had pushed for Copps and now support should be given for someone on House side for remaining seat. “In prior instances when minority party candidates were selected for FCC posts, deference has been given to the choices of Commerce Committee leaders from the same party on both sides of the Capitol,” letter said. “Consistent with that honorable practice, we hope you will join us in supporting the nomination of Andrew Levin… for the second Democratic seat when it opens in the near future.”

House Commerce Committee Chmn. Tauzin (R-La.) said he would meet soon with nominees to discuss importance of FCC reform. “They may be incoming freshman, but there are no rookies in this class,” Tauzin said. “All 3 of the nominees have impeccable credentials and fully understand the important role telecommunications plays in our global economy.”

Rep. Dingell (D-Mich.) is fully supportive of nominations and had expected White House to give Hollings endorsement of Copps first consideration, his spokeswoman said. Dingell remains hopeful that when Tristani formally announces her resignation President Bush will consider Levin to fill vacancy. “Mr. Dingell does not have any concerns with any of the nominees. They are eminently qualified for these positions,” she said. “We hope that the White House will give [Levin] every consideration” when Tristani slot becomes available.

Of 3 nominees, industry sources seemed to know Abernathy best because of her earlier stint at FCC and her previous leadership of FCBA. One described her as “very capable” and “approachable” telecom attorney with “open mind” on issues. Another described her as “well-connected” and “very social and astute personally.” Abernathy also worked as Washington representative for AirTouch in 1993-1998 before moving to U S West. Earlier in her career, she was legal advisor 1992-1993 for ex-FCC Comr. Sherry Marshall, along with later serving as Quello aide.

Martin joined Furchtgott-Roth’s office in 1997 from Ken Starr’s Office of Independent Counsel. He left in June 1999 to work in Bush campaign as deputy gen. counsel and moved to White House after Bush’s election. He is currently special asst. to the President for economic policy. He is graduate of U. of N.C., received master’s degree from Duke U. and law degree from Harvard U.

Copps appeared to be least known nominee in communications circles. But one source described Democratic nominee as “an old Washington hand” who, like Abernathy and Martin, “knows this city inside and out.” Deregulation advocates expressed hope that he would be “reasonable” Democrat. Although Copps has less telecom experience than 2 Republicans, Media Access Project Pres. Andrew Schwartzman contended that “his service with Senator Hollings has undoubtedly exposed him to the major issues that will arise and to the importance of promoting diversity and competition in telecommunications.” After leaving Hill, Copps worked as govt. affairs dir. for Collins & Aikman, which is Fortune 500 company, and American Meat Institute. He moved to Commerce Dept. in 1993 and in 1998 became Asst. Secy. of Commerce for Trade Development.

FCC Chmn. Powell made brief statement praising White House’s move. “I am pleased that the President has moved forward today to announce his new FCC commissioner appointments,” he said in 2- sentence statement. If confirmed by Senate, he said, each nominee “will bring important experience and expertise to the Commission and I welcome the opportunity to carry out the responsibilities of the FCC with them.”

In separate statement, Furchtgott-Roth also praised Bush for choosing “very wisely” in selecting “3 very able Americans” as nominees. “I have every confidence that they will be a credit to the Commission and to the country,” he said. Furchtgott-Roth said he was “particularly pleased” by President’s selection of his former aide, Martin: “His [Martin’s] first-hand experiences inside the Commission, keen intellect, good humor and strong commitment to public life will serve him well. Kevin will be an outstanding commissioner on the Federal Communications Commission.”

Communications industry lobbyists, analysts and trade groups generally hailed Bush’s 3 nominees as talented, experienced Washington insiders who were likely to support Powell’s deregulatory agenda. In particular, they said they expected 2 Republican nominees, Martin and Abernathy, to advance deregulatory cause, giving Powell solid backing that eluded previous Democratic chairmen William Kennard and Reed Hundt. “The bottom line is there will be a cooperative working majority for the first time in years,” Precursor Group CEO Scott Cleland said. “The end of the dysfunctional FCC years should be behind us.”

But consumer advocates expressed concern that new Republican- dominated Commission would be too focused on eliminating regulations and not focused enough on enforcing remaining communications laws and rules. They said they especially worried that Republicans Abernathy and Martin, based on their backgrounds and political allegiances, would be obsessed with deregulation.

“The 2 Republicans are talented communications lawyers who will surely hit the ground running,” Schwartzman said. “The question we will have is, ‘Which way will they run?’ Too many deregulators have been eager to find ways around the laws rather than enforcing them. We intend to seek assurance that they will do what the law says rather than what they would like it to say.”

Consumers Union used occasion to call again for revising Telecom Act, arguing that it “hasn’t delivered” on many of its promises of lower prices and more choices for consumers in 5 years since its enactment. “The new commissioners face an enormous challenge,” group said. “With the latest FCC report showing cable rates increasing another 6% last year, we believe it’s time to reopen the law and find a better way to spur more competition in the telecom marketplace.”

“I would assume that Kevin Martin, who presumably shares some of Furchtgott-Roth’s views on the value of deregulation, would certainly be someone who would share Powell’s views about deregulation,” said Susan Lynner, analyst with Prudential Securities. Aside from being former staffer to Furchtgott-Roth, as White House aide in Bush Administration Martin has been involved with Bush budget proposal that would push back certain spectrum auction dates. (Martin also headed FCC transition effort for Bush and had been among names rumored as under consideration for NTIA dir.) “Kevin Martin has been associated with the idea that this has been a good time to pause and rethink the spectrum auction process, especially in terms of timing, until the whole framework is really thought through,” Lynner said. Bush budget blueprint released last month outlined offsets of $2.6 billion for FY 2002 that would result from shifting auction deadlines and mentioned resurrecting spectrum leasing fees. “My guess is that it’s going to be a pretty congenial group,” Lynner said. In particular, naming of former Hollings staffer Copps should help to ease nominees through Senate Commerce Committee, she said: “I suspect that had Michael Copps not been included it would have bee a lot more difficult to get someone through the Senate Commerce Committee.”

NCTA and AT&T both issued bland, cautious statements praising White House for moving quickly on FCC appointments. But they, along with NAB, steered clear of commenting on individual nominees and their stands on specific issues. They also declined to predict how nominees might rule on telecom and TV issues facing Commission, calling it premature to speculate. “We're happy the appointment process is moving along in setting up a full FCC team,” NCTA spokesman said. “We look forward to working with the commissioners once they're confirmed.” AT&T spokesman seconded motion. Noting that “FCC faces enormous challenges,” he called it “good that the Administration is moving forward in sending these nominations to the Hill.” CompTel said that considering their experience in Washington, 3 nominees should “understand the issues and the importance of full and open competition in the telecommunications marketplace.