McCain tax bill throws Kennard a crumb

McCain tax bill throws Kennard a crumb

FCC CHAIRMAN BILL KENNARD may not know it, but Sen. John McCain has made him an offer he can’t afford to refuse.

In a recent speech to the National Assn. of Broadcasters in Las Vegas, the Senate Commerce Committee chairman said he would push for legislation that would give broadcasters tax incentives to sell TV and radio stations to minorities. In return, McCain wants Kennard and the Clinton administration to allow some form of broadcast ownership deregulation to move forward.

The deal would not only accomplish Kennard’s goal of boosting the abysmally low level of minorities among broadcasting’s stakeholders, but it also might rejuvenate his legacy as chairman which, in 18 months on the job, has produced nothing more than a few talking points.

TO THE SURPRISE of almost anyone who got to know Kennard during his 20 years as a practicing broadcast attorney in Washington, his chairmanship got off to a rocky start and never got better.

A year and a half into his tenure, the conventional wisdom is that Kennard’s quiet personality just doesn’t lend itself to the rough-and-tumble world as the nation’s top telecommunications industry regulator.

When Kennard is attacked on an issue such as broadcast deregulation or providing free airtime to politicians, he almost always responds by retreating.

Broadcasters now whisper perversely that they miss Reed Hundt, the domineering but effective former chairman. Hundt may have been arrogant and deceitful, say broadcasters, but at least he got things done.

In contrast, Kennard is unable to push his agenda through the commission even though he has what Hundt never had: three solid Democratic votes on the five-member body.

As the first African-American FCC chairman, Kennard wants his legacy to be one of creating opportunity for minorities. Instead he has been forced to fight a rearguard action against federal courts, which overturned the FCC’s 30-year-old affirmative action program.

SO IT’S HIGH TIME that Kennard scores a victory. He finds himself now, perhaps as never before, in a position that he can exploit to his advantage.

Hours before McCain made his offer in Las Vegas, Kennard addressed the same crowd and indicated that he is now willing to entertain the idea of some limited form of ownership deregulation. If he takes advantage of McCain’s proposal, his willingness to bend could be the foundation of a political compromise instead of yet another retreat.

At the heart of McCain’s proposal is the revival of the so-called tax certificate that grants significant tax breaks to companies that sell properties to minorities.

It is a proposal that could actually increase the number of minority owners in broadcasting. Broadcasters would jump at the tax break and NAB president Eddie Fritts praised the idea the day after McCain’s speech.

The program had been quite successful during the 1980s, but ran afoul of Congress in 1995 after allegations that some companies were using minority fronts to reap millions of dollars worth tax benefits. Both McCain and Kennard say the certificates can be redesigned in ways that guard against abuse.

BUT IF KENNARD IS GOING to benefit from McCain’s proposal, he’s got to elbow his way to the negotiating table. He needs to broker a deal directly with McCain. That’s going to be a difficult task because there’s already somebody there ahead of him.

FCC commissioner Michael Powell is already working closely with McCain. Powell is a Republican and his father, retired Gen. Colin Powell, could be a potential player in a McCain presidential administration — if there ever is one.

With 18 months left in the Clinton administration, this may be Kennard’s last chance to salvage his FCC legacy.

In the meantime, Kennard should defend his political turf by reasserting himself as the lead negotiator with the Senate Commerce Committee chairman. It would not only benefit his reputation: Given his political skills, the fewer people he has to negotiate with, the better off he will be.