TDF benefits from wireless license down payments.

Byline: Leon Lazaroff

The Clinton administration's attempt to promote the growth of small telecommunications companies owned by women and minorities produced a five-year legal battle over 90 spectrum licenses won by a company that couldn't pay for them and eventually went bankrupt. It was not one of wonkism's finest moments.

But not all the consequences of the programs developed under the Telecommunications Act of 1996 have gone unfulfilled.

For example, a small privately owned venture capital group has benefited -- though by picking up pennies dropped as billions of dollars changes hands -- from the regulatory efforts to spread the wealth.

From 1996 to 1999, the Washington-based Telecommunications Development Fund collected about $25 million from the interest on "up-front" money that all bidders must pay the Federal Communications Commission to participate in one of its many auctions. Since then, the TDF has invested about $12.5 million in eight startup telecoms. So far, …