A TAXING TENURE FOR REED HUNDT AFTER A TOUGH FIRST YEAR, FCC CHAIRMAN PREDICTS MORE ROADBLOCKS AHEAD

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Reed Hundt this month marks the end of his first year as chairman of the Federal Communications Commission, a year that saw the FCC's first-ever auction of spectrum, bitter fighting among cable TV and phone companies for access to each other's markets, and the failure of the so-called information superhighway bill.

He spoke with Advertising Age Reporter Christy Fisher about the FCC's agenda for the next year and the triumphs and failures of the past year.

Advertising Age: What has been your goal since coming to the FCC?I would say the goal is to promote competition in all communications markets. Industries competing vigorously with each other is the way to grow the economy, lower prices, generate the most product innovation and lead to productivity gains for all American businesses.

AA: Can you give some specifics? Mr. Hundt: Most recently, we laid out a set of fair rules by which the telephone companies can go into the business of delivering video dialtone programming to the home so that the consumers will have a choice of programming not only over the cable network but over the telephone line ...

At the same time, I'm doing everything that I can to allow the cable industry to use its coaxial cable network to deliver telephone services. I'm constantly talking to the different states to try to persuade them to relax their legal barriers against the cable companies going into the telephone business.

AA: Would you discuss the telecommunications legislation that didn't make it through Congress this year? Do you expect to see it in the next session?

Mr. Hundt: I sure hope so ... The legislation would have given us the ability to establish as a national policy applicable in each and every state permission for the cable industry to deliver telephone services. We need that power. We really need to make sure America doesn't have a Balkanized telecommunications policy.

AA: Do you think this will slow the building of the information superhighway?

Mr. Hundt: The way I look at it is you play a baseball game in nine innings. When you have to go into the 10th inning to decide who wins, that's not so bad. If Congress has to go on for a few months next year to get this legislation into the win column, then we'll all look back and say it took a little longer-but it's still a win.

AA: What will the information superhighway look like by the end of your term?

Mr. Hundt: Bigger, faster, cheaper. I hope by the end of my term the information highway represents a national commitment to two ideas: first, the introduction of competition in all consumer markets. Second, making all the tools of modern communication available to children in the classroom.

AA: What is the role of advertisers and advertising on the information superhighway?

Mr. Hundt: Many of the media in the communications revolution are supported primarily by advertisers because they have the ability to attract audiences. I believe that more media yet to be developed will have this function. So I believe advertisers are going to be to many parts of the communications revolution what gasoline is to a car engine.

AA: What are the major issues for the FCC in the next year?

Mr. Hundt: We have to send out as many rulemakings as can be issued that implement the policy of competition.

We're very eager to restate and redefine our commitment to high-definition television. We're extremely eager to hear from the grand alliances exactly what they propose as industry standards for the delivery and reception of digital broadcast signals.

I believe we're entering a revolutionary period of change for the broadcast industry-the transition from the historic 50-year-old analog signal to this 21st-century version of broadcast, digital signal/digital reception.

The digital signal is going to give the broadcast industry numerous ways to make money that it doesn't now have. It is potentially going to change the way the broadcast industry performs its fundamental economic functions.

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