Fifth U.S. Appeals Court, New Orleans, issued mandate Nov. 2 on CALLS decision (CD Sept 12 p5), indicating no one had asked for stay and only thing left was appeals to U.S. Supreme Court, if anyone chose to do so. Court had upheld most of FCC’s order that reformed universal service and access charges for Bells and other price-cap regulated telcos. It did remand 2 parts of order because it said FCC hadn’t properly justified them: (1) Size of new universal service fund. (2) FCC’s use of 6.5% productivity factor (00- 60434).

“Window” for filing e-rate applications for funding year 5 opened Mon. and will remain open through Jan. 17, Universal Service Administrative Co.’s Schools & Libraries Div. announced. Funding year starts July 1, 2002.

FCC adopted new access charge regime for rural telephony Thurs. that departed from proposal offered by coalition of associations representing rural telcos. For one thing, new access rate system is mandatory while Multi-Assn. Group (MAG) had proposed making it optional for some carriers. Order adopted at agency’s agenda meeting also postponed action on incentive plan to encourage rural carriers to move from rate- of-return to price cap regulation. That component, also proposed by MAG, will be subject of further notice of proposed rulemaking, also adopted Thurs. Rural reform plan is attempt to convert implicit universal service subsidies, buried within access charges, to explicit funding, as required by Telecom Act. FCC said in news release it also sought to meet another goal in order: Aligning access rate structure more closely with how costs are incurred by “driving per-minute access charges toward lower, more cost- based levels.”

SCOTTSDALE -- FCC Comr. Abernathy confirmed Sun. what USTA members here already knew and didn’t like -- that rural access charge reform item on agenda for Commission’s Thurs. open meeting was different from what Assn. and other members of Multi-Assn. Group (MAG) had proposed. Speaking at USTA’s annual convention here, Abernathy acknowledged that MAG group had asked agency to postpone vote once it became known that FCC would adopt version that “departs from the way it was written” by telco associations. However, she said she believed “the Common Carrier Bureau had good reason” to make changes and while it’s “hard issue” she thought it would move forward Thurs. Asked from audience whether FCC had taken into consideration letter from Congress urging delay, Abernathy said Commissioners always considered such views but they also had obligation to follow law requiring action on rural access charge reform. Throughout convention that started Oct. 7 with traditional “Regulatory Sunday” program, USTA members and staff frequently brought up their dismay at FCC’s plan to go ahead with vote. MAG plan is “really important to rural telcos and yet the Commission staff has a better idea,” retorted USTA Pres. Walter McCormick in meeting with reporters Mon. FCC ought to take compromise by rural telcos “more seriously,” he said.

With Comr. Martin dissenting, FCC designated Western Wireless as eligible telecom carrier (ETC) for universal service support for Pine Ridge Indian Reservation in S.D. Order released late Fri. concluded that FCC, not S.D. PUC, had jurisdiction over decision on whether to grant ETC status to Western Wireless for service. Commission said S.D. PUC should make ETC determination for providing services to nontribal members on Oglala Sioux Tribe’s reservation. Companion order designated Western Wireless as having ETC status for serving tribal population, move that S.D. PUC and some LECs had opposed. In Aug. 2000, Oglala Sioux and Western Wireless had signed agreement for wireless universal service offering on Pine Ridge, where tribal members comprise 91% of population. PUC had argued that Western Wireless was subject to state’s general regulatory authority over service quality and prohibitions against unreasonable rate and service discrimination. State also contended it was in better position to make public interest determination on whether to permit additional ETC carrier for area now serviced by ILEC. “Although we are sympathetic to state concerns about maintaining uniformity and preventing unjust and unreasonable discrimination in telecommunications statewide, we are persuaded that the tribe’s interests in regulating service quality and determining the procedures by which to resolve complaints between Western Wireless and its tribal members are more compelling,” FCC said. While states typically are more familiar with local circumstances, it said: “Here we have been presented with a full record detailing the Oglala Sioux Tribe’s sovereignty interests and its desire to regulate the relationship between the carrier and its own tribal members.” Sec. 214 of Communications Act sets out that where state lacks jurisdiction, FCC will make public interest determination on whether carrier should be designated as ETC. “Perhaps most importantly,” Commission said regulated wireline carriers, unlike Western Wireless, hadn’t consented to tribal jurisdiction. However, FCC disagreed with Western Wireless contention that agency should declare tribal jurisdiction over all of Western Wireless’s service on reservation. In dissent, Martin said part of Sec. 214 of Communications Act at issue was written by Congress based on concerns that some Indian-controlled carriers couldn’t obtain forum in which to seek ETC status due to jurisdictional limits of state PUCs. “In my view, the Commission has taken a misguided approach to effectuating Congress’s intent,” he wrote: “Rather than simply ensuring that carriers have a place to go when state commissions or courts conclude that a state lacks jurisdiction, the Commission has made itself the arbiter of competing jurisdictional claims made by states and Indian tribes.” Martin also highlighted “legal and practical problems” of order. “Among other things, we have set up a regime in which Western Wireless will receive universal service funding for serving Indians, but not non-Indians, even if they live on the same land.” He expressed concern that order would encourage “more parties to come before the Commission seeking to displace state claims of jurisdiction.” Western Wireless said grant of ETC status on Pine Ridge reservation meant “the FCC has empowered the tribe to have a real choice and resolve the long-standing telephone service problems on the reservation.” Company said that within one month of starting wireless phone service on reservation in Nov. 2000, it had more than 1,000 customers.

Consumer advocates painted bleak picture for customers seeking better service and more competitive rates for cable, phone and Internet access at Consumer Federation of America conference in Washington. One advocate said deregulatory atmosphere at FCC and in Congress meant large companies such as AOL Time Warner (AOL-TW) would continue to dominate country’s telecom service sector. “We think there’s going to be more relaxation with this Bush-led FCC,” said Gene Kimmelman of Consumers Union. “There’s no real engine to produce a major overhaul at this time.” He said FCC under Clinton administration “put blinders on,” allowing companies to acquire bigger footprints without competition. Unless public “rises up” and forces govt. to “deliver on what was promised,” it will continue to pay higher prices for fewer choices, Kimmelman contended. Every govt. effort to deregulate has resulted in higher bills, he said, and strict regulation and oversight, along with true competition, are only ways to resolve problem of monopolies. “We want not just many [cable TV] channels, but many channels from many sources, owned by many people,” he said. Kimmelman acknowledged that with Sept. 11 attacks, telecom services weren’t top priorities for many people and that safety, security, education and health care were much bigger issues for most Americans.

Asked what regulators could do better, industry players, analysts and others agreed on one thing at pulver.com conference Tues.: They need better understanding of how telecom industry works. Panelists, some of them offering lessons learned from failed CLEC ventures, said FCC and state regulators worked in terms of years while CLECs could change business plans in matter of months. They said regulatory uncertainty and regulatory barriers could slow rollout of services to consumers -- for example, one municipal govt. could stop entire regionwide network from beginning service.

Better Business Bureau’s National Ad Div. (NAD) ruled in favor of AT&T in ad dispute with Verizon. AT&T filed complaint in spring saying Verizon’s long distance ads were deceptive because they didn’t indicate consumers had to pay Universal Service Fund (USF) fee. Ads, which since have been changed, touted Verizon’s 10 cent per min. plan and said there are “no hidden charges,” claim AT&T challenged because USF fee wasn’t disclosed. Verizon contended it didn’t need to reveal USF fee because it was tax-like surcharge and consumers knew about it. NAD said it was “concerned that the commercial at issue failed to disclose what NAD believed to be material information to the consumer.” It said USF charge varied from month to month depending on size of consumer’s long distance bill and “had the potential to significantly affect the total monthly charges.” As result, “disclosure was required,” NAD concluded.

All 347 PBS member stations in country will be equipped soon with new encoder that automatically will set clock on viewers’ VCRs and TVs in program funded by Consumer Electronics Assn. (CEA). Assn. is providing more than $633,000 to replace outdated equipment in PTV stations, said John Tollefson, PBS vp-engineering and technical services. Device will insert time signal for broadcast on PBS stations, which in turn will be used by all NTSC VCRs and some TV receivers to set internal clock automatically. Tollefson said encoders also would pass other signals in vertical blanking interval (VBI), including program content rating and multiple language closed captions. If clock isn’t set correctly, VCRs can’t be preprogrammed to record programs when viewer isn’t at home. Saying present arrangement in PBS stations is unsatisfactory, Tollefson said not all member stations had insertion equipment. Insertion equipment now used removes other signals such as program content rating and multiple language closed captions. He said new equipment would provide near- universal coverage of time signal to public, while still allowing stations to broadcast program content rating and other VBI information. Many commercial stations have similar equipment, he said, but most don’t insert time signal, instead using it to insert other signals in VBI. PBS expects devices to be delivered, installed and in operation by end of year. CEA spokeswoman declined to provides details of pact with PBS until final agreement is released next week. Automatic clock set function of new equipment essentially is signal sent out by Extended Data Services (XDS) encoder, she said, and it’s part of closed caption system. Current automatic clock set inserters write time-setting data on top of all other data, overriding data required for new services, she said. CEA had been working to remedy that through hardware (encoder) upgrades, she said.

FCC unveiled details of its restructuring plan at Thurs. agenda meeting, most dramatic of which would be combination of Cable and Mass Media Bureaus into newly named Media Bureau. As expected, bureau would include separate Office of Broadcast License Policy, which would be headed by current Mass Media Bureau Chief Roy Stewart, FCC Chief of Staff Marsha MacBride said at media briefing. Also as expected (CD Aug 29 p1), bureau would handle “postlicensing” policy for direct broadcast satellites (DBS), which would be shifted from International Bureau. Common Carrier Bureau would be renamed Wireline Competition Bureau and would have greater emphasis on technical and economic analysis, said Mary Beth Richards, special counsel to FCC Chmn. Powell, in presentation after meeting’s regularly scheduled business. Under changes, which require approvals from labor union, 8th floor and congressional appropriators, Consumer Information Bureau would carry new name of Bureau of Consumer Information & Intergovernmental Affairs and have broader policy functions. Wireless Bureau and Enforcement Bureau would assume some new duties, but their structure would remain intact. “This is a substantial effort at reorganization but it’s not radical,” Powell said.