Albion Monitor /Commentary

Telecom Fund Potential for Abuse

by Randall M. Chastain

Seven appointees will control a potentially substantial amount of money

(AR) COLUMBIA, S.C. -- The enormous telecommunications bill approved earlier this month has been widely discussed in the media. However, concentration on some high-tech and unconstitu- tional aspects of the new law has obscured its potential for aiding small business and creating boondoggles.

Sections 707 and 714 of the Telecommunications Act allows entre- preneurs access to government dollars if their businesses increase competition in the telecom industry. Although these provisions have been little noted by the media so far, the Act creates a Telecommunications Development Fund to be headquartered, unfortunately, in Washington, D.C.

The purposes of the Fund are "to promote access to capital for small businesses in order to enhance competition in the telecommunications industry," to "stimulate new technology development, and promote employment and training," and "to support universal service and promote delivery of telecommunications services to underserved rural and urban areas."

There is to be a Board of Directors made up of seven persons to be appointed by the Chairman of the Federal Communications Commission, and four to come from the private sector, one of whom must be the fund's Chairman. The FCC Chairman is supposed to appoint the Chairman of the Fund within 30 days after the enactment of the bill.

The Fund gets an generous source of income: all interest on depos- its of bidders for various concessions regulated by the Act (a potentially substantial amount of money) is to be made available to the Fund. In addition, the Fund can have appropriations from Congress, and the Act contains an apparently self-executing authorization for such appropriations -- and it can accept monies from anywhere else, if it chooses.

Thus, the Telecommunications Act creates a source of money for those who know how to get it. But how will Americans know unless the media tell them? So far, there has been mighty little telling.

Also, the very short time within which appointments are to be made to the Board and the Chairman is named suggests that at least some people will have access to this information, and that initial distributions of funds will benefit those who know what's going on -- not necessarily members of the public at large.

Isn't it the job of the media to let the public know about the availability of this money, and the potential for its abuse?

Will it be government as usual -- for the insiders? Or an opportunity for small businesspeople to help everyone by increasing access to electronic information via innovation?

It's really up to the media; if they don't tell the world (or at least Americans) about the opportunity, they become part of the problem, don't they?

Following the career of the Telecommunications Fund should be interesting.

Albion Monitor February 18, 1996 (

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