May 29, 1998

The Honorable William E. Kennard
Chairman
Federal Communications Commission
1919 M Street, N.W.
Washington, D.C. 20554

Dear Chairman Kennard:

On March 25, 1998, Chairman Bliley, Mr. Tauzin, and I wrote to you expressing our views on the Commission's administration of matters concerning its C-block licensees. We asked that you establish reasonable means for C-block licensees to move rapidly through the regulatory process so that they could build their competitive networks. Further, we cautioned that to the extent "the Commission's plan creates incentives for licensees to seek refuge in bankruptcy court, rather than in proceedings governed exclusively by the Communications Act, it will not serve the public interest and will greatly trouble the leadership of this Committee."

We asked specific questions about the Commission's plans to resolve certain matters that are crucial to a licensee's ability to make an informed and meaningful election of a restructuring option. Those matters included finalization of attribution and control group rules, restructuring requests, and publication of the procedures that the Commission will use, in coordination with the Department of Justice (DOJ), concerning C-block debt restructuring. While resolution of all of these matters is critical to a licensee's ability to make an informed election, the DOJ coordination on debt restructuring is of particular significance for any licensees contemplating return of any C- block licenses.

In your response of March 30, 1998, you agreed that a number of issues needed to be resolved, including the matters we raised, prior to the restructuring election date. You also stated that you were setting in motion a course of action that would "insure adoption of the rules well in advance of the election date and would therefore allow C-Block licensees to make business decisions with full knowledge of the governing rules."

The Commission subsequently set a restructuring election date of June 8, 1998 and, just last week, released two Public Notices that do no more than set out purely ministerial details associated with making an election. Unfortunately, the Commission has not yet resolved any of the matters raised in our last correspondence and which you acknowledged in your response were essential if "C Block licensees [are] to make business decisions with full knowledge of the governing rules." Among the matters to which you specifically alluded in your March 30 letter were the attribution and control group rules, which you asserted would be resolved "by May 1998" and the DOJ coordination on debt restructuring, which you asserted would be made as "clear and unambiguous as possible."

It is now less than two weeks from the election date. Absent a change in the election date, it is impossible for the Commission to make good on its pledge to this Committee to "insure adoption of the rules well in advance of the election date." The Commission's failure to make critical decisions in a timely fashion compounds the uncertainty C-Block licensees have encountered since the Commission commenced the debt restructuring process in March 1997. I believe it is categorically unfair to require a large group of small businesses and entrepreneurs to make the most fundamental business decision possible, i.e., whether or not to keep their licenses, in the absence of the necessary regulatory clarity Congress has been asking the Commission to provide for over a year.

Given the short timetable the Commission has adopted, please advise me by no later than Friday, June 5, 1998 how you intend to resolve the dilemma now confronting the restructuring election process so that licensees are able to make a meaningful and informed election.

Sincerely,

JOHN D. DINGELL
RANKING MEMBER

cc: The Honorable Tom Bliley
The Honorable W.J. "Billy" Tauzin
The Honorable Edward J. Markey
Commissioner Susan Ness
Commissioner Harold Furchtgott-Roth
Commissioner Michael Powell
Commissioner Gloria Tristani

Back to the Public Record Home Page