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FCC outlines plan to ward off Congress

Chairman William Kennard takes the defense in Congress, attempting to ward off legislative reformers with a plan for restructuring the agency.

Federal Communications Commission chairman William Kennard took the defense in Congress today, attempting to ward off legislative reformers with a plan for restructuring the agency.

The FCC has been the target of growing criticism At the crossroads in recent months from a group of legislators who want to scale back the agency's power over telecommunications companies. Today's House subcommittee hearing was the first of several aimed at drafting comprehensive FCC reform legislation.

Kennard has defended the Commission's role in the past, but today outlined a path by which the agency could evolve to match changes in the markets it regulates.

"As the marketplace changes, so must the FCC," Kennard said in remarks prepared for his appearance before the committee. "The top-down regulatory model of the Industrial Age is as out of place in this new economy as the rotary telephone."

Kennard's testimony was responding to the most frequent refrain among the agency's legislative critics, who say the agency's regulatory mindset has hampered the development of new telecommunications markets.

One bill already has been introduced this year that would trim the length of time the FCC has to review major telecommunications mergers, such as those now pending between SBC Communications and Ameritech, or GTE and Bell Atlantic .

Other legislators, including Rep. Billy Tauzin (R-Louisiana), who chaired today's hearing, have said they want to go further in stripping the FCC of some of its regulatory powers.

In his testimony today, Kennard said the agency had already begun a restructuring drive last November, which will eventually consolidate several disparate areas into a new Enforcement division and a Public Information division.

He also laid out a timeline for a more dramatic restructuring of the agency along "functional" rather than "technology" lines. Today, the FCC is divided into bureaus handling different technologies such as cable, wireless, and telephone service.

This process will likely result in a draft restructuring plan in May, and the submission of a final five-year plan to Congress in September, he said.

"My vision for a new FCC is a bold one," Kennard said. "In five years, the FCC should be dramatically changed."

Along with the internal restructuring, Kennard's report laid out a change in focus for the agency. The FCC needs to trim its regulatory functions, and focus more on protecting consumers in ways the market itself cannot, he said.

This may mean staying the agency's hand when new technologies emerge, as has been done with most Internet functions, the chairman's report noted.

"Our guiding principle should be to presume that new entrants and competitors should not be subjected to legacy regulation," Kennard's report said.

The FCC's legislative critics have welcomed Kennard's advances, but some say they still want to go farther--and faster--than his proposal indicates.

Tauzin plans to have a FCC reform bill in place by summer, which will likely include elements scaling back the agency's regulatory powers. Several more hearings on the agency's functions will be needed before the bill can be drafted, his spokesman said.