Kennard made the announcement at a news conference called to discuss the commission's approval of the America Online-Time Warner deal.
Although he could have stayed on as one of the five commissioners until June, Kennard, a Democrat, said he that felt his work at the commission was done and he will leave his post Jan. 19. He will become a senior fellow at the Aspen Institute, a non-profit organization that convenes leaders from various fields to address critical issues confronting society.
Republican FCC Commissioner Michael Powell, son of Secretary of State-designate Colin Powell, is said to be the leading contender to replace Kennard although Bush spokesman Ari Fleischer declined to comment Friday, when asked if Mr. Bush would name Powell to the FCC post.
Kennard, a former general counsel for the FCC, took over as chairman in 1997, just after Congress passed a landmark law largely deregulating the communications industries. Much of his tenure has been spent implementing pieces of the 1996 Telecommunications Act and fighting court challenges to the new regulations.
Kennard, the first black to head the agency, said he sought to bring new telecommunications services to groups that historically have had less access than other Americans.
He spearheaded initiatives to expand basic telephone service on American Indian reservations and include descriptions of TV programming for those with visual disabilities.
The agency was "always alert to the fact that no American should be left behind," he said Friday.
But the agency, under Kennard's leadership, also faced heated attacks from Republicans on Capitol Hill who felt that the commission was trying to act beyond the scope of its authority.
The FCC has been criticized for seeking too many conditions when approving mergers and the agency's GOP members, including Powell, argued that the commission should take a more limited view of its authority to review communications deals.
Kennard's effort to create a new low-power FM radio service for schools and churches met with fierce opposition from the broadcasting lobby, which asserted that the proposal would result in interference for listeners. The industry eventually persuaded Congress to scale back the plan but several hundred low-wattage stations are still expected to go on the air in the next year.
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