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FCC PLANS TO REVISIT MINORITY PREFERENCES

WASHINGTON-The Federal Communications Commission will address affirmative action issues left over from last summer’s Supreme Court Adarand ruling as it implements telecommunications reform legislation, a move likely to intensify early Republican criticism of the effort.

Last month, Senate Commerce Committee Chairman Larry Pressler (R-S.D.) chided the FCC for requesting more funds for 80 new rulemakings tied to the Telecommunications Act of 1996 that President Clinton signed Feb. 8. Pressler said the FCC is meddling in issues-such as wireless long-distance access-that do not require immediate attention. Congress is expected to confront FCC Chairman Reed Hundt on telecom bill implementation and agency reform in upcoming authorization hearings.

The telecommunications industry also is concerned about the breadth of the implementation schedule, but appears sympathetic to increased FCC funding.

Meanwhile, the GOP-led Congress is anxious to eliminate race and gender preferences in federal programs, believing affirmative action can be used against President Clinton. However, Republicans, despite much rhetoric, have actually done little toward that end because their leadership hasn’t settled on a strategy. Senate Majority Leader Robert Dole (R-Kan.), the GOP presidential front-runner, and Rep. Charles Canady (R-Fla.), head of the House Judiciary subcommittee on the Constitution, last year offered bills to end set-asides.

If and when they re-energize the issue, Republicans may meet more opposition than they did after the 1994 mid-term election now that former Rep. Kweisi Mfume (D-Md.), a vocal and high-profile civil rights activist, heads the National Association for the Advancement of Colored People.

The Supreme Court did not wipe out affirmative action, but made it more difficult for federal agencies to justify. As a result, the FCC was forced-at least temporarily-to abandon Congress’ 1993 mandate to make wireless opportunities available to women, minorities and others in order to avoid further auction delays caused by lawsuits and to give federal regulators time to study what, if any, room Adarand leaves for carrying out the-then Democratic Congress’ desire to increase diversity in the telecommunications industry.

“The commission has an obligation to fulfill its mandate in a constitutionally acceptable way,” said William Kennard, general counsel of the FCC.

Though it is likely to stay clear of politically explosive terms like affirmative action, set-asides and preferences, the FCC sees the new telecommunications law as a platform for women and minorities to potentially regain lost ground from new curbs on affirmative action imposed by the high court.

Some issues raised in Adarand will be addressed in an inquiry the FCC launches March 21 on market entry barriers. Congress gave the agency until next May to remove roadblocks to entry by entrepreneurs and small businesses in telecommunications. Rep. Bobby Rush (D-Ill.) is responsible for getting the provision in the bill.

The landmark telecommunications measure also set up a Telecommunications Development Fund, from which businesses with $50 million or less in recent annual revenues can draw for telecommunications projects. Rep. Ed Towns (D-N.Y.) was the force in Congress behind the TDF.

Hundt will name the chairman and possibly other members of the fund’s seven-person board of directors this Friday. Four members, including the fund’s chairman, will be chosen from the private sector. The other three will come from the FCC, Small Business Administration and the Treasury Department. The members will serve staggered terms ranging from one to five years, with the chairman and one other director serving the latter duration.

“We’re trying to identify the gap in capital markets that the fund can fill and to figure out what is the best delivery mechanism,” said Catherine Sandoval, director of the FCC’s Office of Communications Business Opportunities. The fund will be financed from interest on upfront auction payments. The FCC said $780 million in auction upfront payments has been deposited in an interest bearing account for the TDF. Monies can be made available through loans and investments.

Sandoval said the market barrier proceeding will not necessarily supersede a historical study of minority participation in the telecommunications industry that the FCC might use to support re-enacting bidding credits for women and minorities in future wireless auctions. She said the FCC has not resolved how the report will be funded and whether some entity other than the agency, such as a university or think tank, might undertake the report.

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