Credit Where Credit Is Due Under Hundt's leadership, the FCC pioneered many free market reforms. Most notable was implementation of the deregulatory provisions of the Telecommunications Act of 1996, as well as privatization of the modest amount of spectrum that has thus far passed through the auction mill. Although we have not yet seen the arrival of broad-based competition in the local exchange market, it is coming--though not as rapidly as the feverish mergers being pursued by the unleashed colossi of the industry. While the spectrum auction was not without its troubles--extracting too much money from bidders in some auctions (leaving winners bankrupt and exhausted) and not enough money in others (leaving certain congressmen who were counting on spending the proceeds in a similar funk)--almost anything would have been better than the old comparative hearing process.

Above all, a new spirit seems to have animated the FCC, with staffers at all levels not only acknowledging the existence of market forces, but also recognizing their importance in designing policy. In the process, the arcane machinery of policy-making has been opened up, bringing in a wider and more representative assortment of participants than ever. Even communi cations with the public have improved. Electronic filing of comments is now supported, and few government Web sites are as comprehensive or well run as the FCC's (www.fcc.gov).

Business as Usual But progress has been uneven. The TV broad cast industry managed to dodge most reforms, extracting huge swaths of free spectrum for digital TV in return for a "gentleman's agreement" to deploy this expensive and commercially unproven technology as quickly as possible. Nanny-state management of content remains the norm, with a continuous dance going on between lobbyists and industry executives over V-chip mandates, liquor advertising bans, family-values programming and free airtime for politicians. Is it any surprise that this over-regulated and protected segment of the communications industry continues to shrink as broadcast TV becomes increasingly irrelevant?

Finally, there was the worst kind of special-interest pandering--the creation of a redesigned $20 billion middle-class entitlement and corpora te welfare program. Welcome to the "new and improved" Universal Service slush fund--designed to keep billions of dollars flowing into the pockets of incumbent telecom monopolists serving rural states with powerful senators. Apparently, selling this deal to the public required festooning it with a grab bag of goodies for schools, libraries and health-care providers, enticing a whole new class of constituents to the dole. After all, who could be against kids and sick people? The spectacle of Reed Hundt playing Santa Claus--riding into the sunset down the Information Superhighway sprinkling billions on the needy and greedy alike, while proclaiming himself a champion of free enterprise--perfectly captures the contradictions that characterize his tenure at the FCC. His successors will have to deal with this monstrosity as it balloons out of control, distorting the industry for decades to come.

In a few years, then, you can count on seeing a new wave of "reforms" to fix the last ones. After all, this is Washing ton, where the more things change, the more they stay the same.

Bill Frezza is a general partner at Adams Capital Management. The opinions expressed here are his own. He can be reached at frezza@alum.MIT.EDU or techweb.cmp.com/nc/frezza/frezza.htm l.