Frontier Sheriff of the Information Age

FCC chairman Reed Hundt, both free-marketeer and enforcer of child-friendly TV, draws fire

IN his roomy blue suit and trend-proof red tie, Reed Hundt looks like the picture-perfect Washington bureaucrat: the kind of guy who wears black socks with his jogging shoes.

But these days, Mr. Hundt, chairman of the Federal Communications Commission, might as well come to work wearing a shiny badge and a ten-gallon hat.

As America's massive telecommunications companies begin to invade one another's markets and pump billions of dollars into the emerging ''information superhighway,'' Hundt's job is becoming like the sheriff of Dodge City.

He even has mortal enemies. Deregulation is in the wind, and Republicans in Congress are considering plans to curtail, or even eliminate, the FCC.

While the fight over this digital frontier might sound arcane, its implications are enormous. The information revolution promises to be, in Hundt's words, ''a transforming event for our economy and for our society'' on par with the development of electricity and telephones.

In the next two years, Hundt and the FCC will help determine how hundreds of millions of Americans will interact and entertain themselves in the next century -- and how much they will have to pay to do it.

A former antitrust lawyer, Hundt went to high school with Vice President Al Gore and served as a top aide in his 1988 presidential bid. Hundt also graduated from Yale Law School a year behind Bill and Hillary Clinton.

As well-connected as he is, Hundt is still a mystery to many. Notoriously tight-lipped with the press, he is one of the most speculated-about officers in the Clinton administration. During an hour-long interview in his Washington office, Hundt discarded his usual reserve to give an impassioned defense of the FCC. This 2,200-employee agency is necessary above all else, he says, to promote competitive markets. If left alone, the telecommunications industry would ''devolve'' into a set of entrenched monopolies that would keep prices high and limit consumer choices, he argues.

With this in mind, Hundt helped prepare the 1992 Cable Act establishing price controls for the cable TV industry. He is working on plans to allow other companies to compete with the Baby Bells in the local telephone market and has reportedly devised a proposal to limit the media empire of Rupert Murdoch.

But when it comes to regulating what Americans watch, Hundt's position gets complicated. While he strongly supports allowing broadcasters to decide what to send over the digital highway, he also backs some government control over program content.

''Our obligation here at the FCC is to promote a technology of vision,'' he says, ''while, the same time, taking care of certain respectable social goals.''

Hundt argues that by itself, the telecommunications industry would not, for instance, encourage the production of high-quality, high-cost educational pro- gramming for children. Neither would it naturally allow access to companies owned by minorities. To that end, Hundt has launched a campaign to require broadcasters to provide at least three hours a week of programs for children and has set aside some of the coveted wireless telephone licenses for minority companies.

But Hundt's most visible action was the controversial raising of $7 billion by auctioning off wireless telephone licenses to the big telecommunications companies: a sum that could repay the budget of the 61-year old FCC more than three times over.

This eclectic mix of monopoly busting, deregulation, social activism, and fund-raising has put Hundt in a tight spot. While some blast him for being too light-handed, others complain of ''government meddling.''

Peter Huber, a senior fellow at the Manhattan Institute, calls the FCC ''a hodgepodge of responsibilities and powers, accumulated over the years'' and ''a monopoly in its own right.'' The FCC's regulatory functions, Dr. Huber says, could be shifted to other agencies, or left to the free market.

Hundt argues that free-market critics like Huber mistakenly assume a world of perfect sportsmanship among corporations and companies that will opt to compete with each other.

''It's one thing to say government should remove all of the concrete barriers from between the lanes of the information highway, and I completely agree with that,'' Hundt says. ''But when you take the barriers down, there's nothing convincing people to cross the lanes and compete.''

Government can't make phone companies enter the cable market, he notes, but neither can it force cable companies to offer long-distance telephone service, even though consumers would benefit. ''What you can do, he says, ''is make sure fair rules of competition exist that will attract competitors.''

But the center of Hundt's philosophy is making sure ''the communications revolution benefits everyone,'' he says, citing studies on the widening gap between America's rich and poor.

Not everybody agrees. Thomas Hazlett, an economics professor at the University of California at Davis and a former chief FCC economist, says attempts to keep cable prices low have not had a large impact on the number of subscriptions. The 1995 telecommunications bill, soon to be considered in Congress, will likely ease this regulation.

Other Hundt proposals could fare better on Capitol Hill. Although critics call his plan requiring children's programming ''a First Amendment time bomb,'' it may succeed, as one congressional staffer put it, ''because it's hard to argue against kids.''

''I'm not suggesting that government should control content,'' he says. ''I'm suggesting that because broadcasters have the spectrum for free ... we should make sure that they have the opportunity to create some suitable programming if they want a guarantee that their license will be renewed.

''We want to avoid creating a big, vicious, meddlesome bureaucracy,'' Hundt concludes, ''but we also want the communications revolution to include all Americans.''

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