COMMERCE DEPARTMENT WOULD FOLD NTIA INTO SEPARATE AGENCY LED BY TA

Commerce Department (DoC) said Thurs. that, pending statutory approval, it would fold NTIA, Technology Administration (TA) and e-commerce duties of International Trade Administration into new agency headed by TA Undersecy. Phil Bond. The move would keep current NTIA Dir. Nancy Victory as asst. secy. for communications & information, but she would report to Bond and not directly to Commerce Secy. Donald Evans, as she does now. Proposal sparked public plaudits from several trade groups, but privately several industry observers questioned whether plan would lower profile of telecom in Administration.

Victory will “maintain her leadership role,” DoC spokeswoman said. Evans described proposal as reflecting in federal govt. “digital convergence” now occurring in industry. “This Administration understands that our global marketplace has changed and that telecom and technology operate together, not separately,” Evans said. Victory echoed that, saying “these organizational changes will institutionalize the effective and productive working relationship that I have developed with TA under the leadership of Undersecretary Phil Bond, and this also puts in place a workable structure that will benefit our successors in the years to come… What matters most is performance and results.”

Proposed move isn’t first time NTIA has been eyed for merger. In 1989, first Bush Administration proposed Commerce Dept. reorganization that also would have folded NTIA into new Technology Administration, with NTIA head no longer directly reporting to Commerce Secy. Congress ultimately didn’t approve that proposal. At time, Rep. Dingell (D- Mich.) blasted move as “downgrading” NTIA’s independent status in department. His office couldn’t be reached for comment Thurs.

Commerce source said there was support in House and Senate Commerce Committees and House Science Committee. Source said DoC officials hadn’t talked with Hill appropriators yet about plan. Source also said it was proposal and that Commerce still had some internal reviews to conduct.

House Commerce Committee Chmn. Tauzin (R-La.) was scheduled to meet with Secy. Evans late Thurs. afternoon, spokesman Ken Johnson said. “We're taking a wait-and-see attitude,” Johnson said. “[Tauzin] has the greatest respect for Secretary Evans. But we're not sure yet what this plan is intended to accomplish. Is it change for the sake of change or are there real and meaningful benefits that we seem to be missing?”

Rep. Markey (D-Mass.), ranking Democrat on House Telecom & Internet Subcommittee, criticized latest proposal, which he said would demote status of NTIA. “This move is highly counterproductive. It diminishes the role of NTIA and makes the head of NTIA a much less effective advocate on behalf of the Executive Branch, both overseas and before the Congress,” he said, saying plan also was untimely. “Just when the telecommunications marketplace needs more focused energy and streamlined action to promote economic growth and new jobs, this proposal buries NTIA and its highly important policy portfolio beneath new layers of red tape and administrative officialdom.”

“We would be concerned telecom issues would take a back seat,” industry lobbyist said. Such move would be welcomed if it would help to clarify which parts of Administration have purview over which policy areas, source said: “The question is whether telecom loses in priority.”

Among logistical concerns raised by moving NTIA deeper into another part of Commerce Dept. is potential impact that would have on international negotiations involving spectrum and other communications issues, several sources said. Under current structure, administrations that negotiate with head of NTIA do so knowing that that position reports directly to Commerce Secy., industry source said. Many nations have cabinet-level post that oversees telecom and related issues, source said. With this proposal, “we are going to substantially cut our negotiating capability,” source said. Another industry source said that in negotiating internationally, “it matters when you're an agency head.” Perception in bilateral and multilateral discussions changes when U.S. representative reports directly to Commerce Secy. or President, source said.

However, USTA hailed proposed move as “strengthening the Commerce Department’s role in directing telecom policy.” USTA Pres. Walter McCormick said that is important to bolstering economic growth, capital investment and job creation at “vital time for the telecom sector.” AT&T and Information Technology Assn. of America (ITAA) also praised move. AT&T spokeswoman Claudia Jones said merger proposal showed the important role technology and telecom played in fostering economic growth, job creation and American competitiveness. ITAA highlighted global nature of many issues new agency would address, such as e-commerce, spectrum and the Internet: “Merging these 2 organizations will sharpen government’s focus on critical issues and help assure that the U.S. voice will help companies better serve their customers around the world.”

Information Technology Industry (ITI) Council also lauded proposal. ITI Pres. Rhett Dawson said merger of those parts of Commerce Dept. “represents a clear instance where the whole will indeed be greater than the sum of its parts.” In letter to Evans, he said: “Your leadership in recognizing global realities and proposing action on positioning the department to better respond to the convergence of what were once thought to be distinct entities -- technology and telecommunications -- is both timely and significant.” AeA Pres. William Archey also praised the proposal, calling it “the right move at the right time… By consolidating these 3 bureaus into one agency under the Department of Commerce, the Administration shows that it understands how important a unified and coherent technology agenda is to our nation’s economy.”

Shift of NTIA into larger body at Commerce Dept. would put it into entity whose budget was focused largely on National Institute of Standards & Technology and lab facilities, said former NTIA Dir. Larry Irving, who now is consultant. “Budget drives policy,” he said. Irving said that as NTIA director under then-President Clinton, “I was clearly seen domestically and internationally as the voice of the President on telecommunications and had a seat at the executive management table at the Department of Commerce.”

Former NTIA Dir. Greg Rohde, who also was in the Clinton Administration, said: “What this does is subject NTIA and its decisionmaking process to more bureaucracy by putting on more bureaucratic layers.” Rohde said such move would be “harmful” to agency in short term. Of most consequence, “it removes the decisionmaking lines of authority further away from the President. It’s the opposite of streamlining.”