Federal Communications Commission Chairman William Kennard said that budget cuts sought by House Republicans would be "devastating" to the agency, forcing it to downsize and abandon work on policy issues critically important to the growth of the telecommunications sector.
"This institution--controversial as it may be--is very important to the [growth of the] economy," said Kennard in his quarterly news conference on Friday. The House approved a fiscal 2001 Commerce-Justice-State appropriations bill this week that cuts FCC funding nearly $30 million below President Clinton's request while slicing in half the funding for the agency's media relations and legislative affairs offices.
Kennard also said congressional efforts to limit the FCC's authority to review mergers would "force more merger denials outright," while forcing the agency to do much of its work "behind closed doors."
Kennard defended the agency's decision to inform several members of the Texas congressional delegation that the FCC is close to ruling on SBC Communications' application to enter the long-distance market in Texas. The move spurred Rep. Gene Green, D-Texas, to hold a news conference Thursday announcing the FCC had approved the bid.
Kennard did not deny Green's statement, but said the agency would announce its decision by Wednesday--the statutory deadline for action. Kennard said it was "absolutely appropriate" for the FCC to brief congressional staff. "It's part of our job to keep members informed." However, Kennard added he will begin an investigation into a series of "leaks" on classified, market-sensitive proceedings.
Kennard said the agency will focus on cable access and intercarrier compensation issues during the final six months of the year--which are likely to be Kennard's last at the helm of the agency. Kennard said the two issues are "really, really hard issues" that are key to shaping the telecommunications market of the future.
On open access, Kennard said it has become clear the FCC should help facilitate a national broadband policy. However, he did not say whether the FCC would force cable companies to share their lines with Internet competitors or if the agency should allow market forces to open the lines. "It is preferable to allow the marketplace to come up with a solution," he added. On intercarrier compensation, Kennard said the agency would decide reciprocal compensation within a few months.
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