FCC at our deadline Thurs. approved 2 key Bell applications for Sec. 271 authority to enter long distance business: (1) It voted 4-0 to approve BellSouth’s application for Fla. and Tenn., last remaining states in its territory without Sec. 271 authority. (2) It voted 3-1 to approve SBC’s application for Cal., biggest market in country. Comr. Martin dissented on SBC vote. Comr. Adelstein didn’t vote.

T-Mobile finished deploying wireless priority access (WPA) technology Mon. in Washington for National Communications System (NCS), latest phase in broader project to give network-access priority to national security personnel and first responders nationwide. This stage of Capital-area deployment of WPA is significant, but is only beginning of eventual end-to-end national capability that will include Internet priority access, NCS Technology & Programs Div. Chief Peter Fonash said at E-Gov Homeland Security 2002 conference in Washington.

Satellite officials are fearful of lengthy delays in obtaining visas may hurt future industry trade shows and may cause relations with some non-U.S. companies to break down, they said. “The visa situation with China certainly could have a long-term effect on cultural business and scientific relations between the U.S. and China,” satellite consultant Timothy Logue said: “I think it should be of concern of every organizer of space satellite or telecommunications conferences in this country which count on significant involvement of foreigners.” Logue has been working on problems on behalf of several clients who do business with foreign companies.

Mont. PSC, doing about-face, advised FCC to reject Qwest’s current Sec. 271 interLATA long distance entry bid on ground carrier hadn’t complied with 2 public interest conditions PSC attached to its Aug. 1 endorsement. of Qwest entry. Mont. filed its negative recommendation late Tues., due date for comments from states and 3rd parties on Qwest’s pending 9-state Sec. 271 interLATA long distance application. With exception of Mont., Qwest states’ latest comments to FCC reiterated support they gave this summer. Petition seeks entry in Colo., Ia., Ida., Mont., Neb., N.D., Utah, Wash., Wyo.

Cal. PUC’s controversial decision to support SBC/Pacific Bell interLATA long distance entry contains seeds of what could blossom into federal-state legal conflict over whether FCC Sec. 271 long distance approval for interstate service automatically confers approval for intrastate long distance service as well. PUC’s 4-1 vote for Sec. 271 support (CD Sept 20 p3) also marked first time in recent history that compliance with certain 271 checklist points was in doubt because parties weren’t certain what compliance requirements were.

Satellite launcher market has “double, if not triple, overcapacity” with addition of Atlas 5 and Delta 4, Lockheed Martin Vp John Karas said. Meanwhile, Japan prepared to make its first foray into crowded market with Sept. 10 test launch of H-2A, National Space Development Agency spokesman said. Japan, which used launch to place Data Relay satellite and test module into orbit, has “established rocket technology of the world’s top class,” Prime Minister Junichiro Koizumi said. Japan is hoping to enter market dominated by U.S. and Europe with new-generation booster, spokesman said. Fourth mission of H-2A is planned later this year. Data Relay satellite was designed to help communication between ground stations and other satellites. It’s first time Japanese booster has launched geostationary satellite in 7-1/2 years and cost it $86 million.

Rural telephone customers are paying more for same telecom services than customers in nonrural areas, said National Exchange Carrier Assn. (NECA) study released Mon. It said rural America was affected by govt. policy that shifted burden of telephone network cost recovery from long distance carriers to end users and govt. support mechanisms. “The FCC’s recent regulatory proposals to reduce access charges even further and the growing questions about the sustainability of the universal service fund mechanism suggest that rural customers are likely to see even more end- user charge increases,” NECA’s Demand Forecasting & Rate Development Dir. Victor Glass said: “While the drafters of the Telecommunications Act of 1996 expected that opening the local telephone network to competition would lower rates and lead to better service, these outcomes are not evident in rural areas.” Study said average cost of line per year in rural telco service areas was $337, with average of 10.5 lines per square mile, compared with 134 in nonrural areas. That’s partly because customer base of rural telephone companies is primarily residential, he said: “For example, special access revenues account for only 18.9% of total interstate revenues, in sharp contrast to its 63.3% share for nonresidential carriers. That means that rural telephone companies have much smaller customer base.” Study said rural customers were less able to absorb increases in end-user charges than were urban customers. Rural median annual household income is $40,600 per year, compared with $46,000 per year for nonrural households, research said. People aged 65 and over represent 14% of rural telcos’ population base, he said, but only 12.2% of other telcos’ population base. However, rural customers’ bills continue to rise, he said. Since 1994, rural basic service rates have risen 36% -- to $28.08 a month in 2002 from $20.69, report said. It said Federal Subscriber Line charge increases alone accounted for 1/3 of that increase, or $2.50 per month. Although rural end users have faced bigger increases in their charges than urban customers, “they are not necessarily sharing in the benefits that should accrue,” NECA said. Only 57% of customers have access to long distance discounts, report said. FCC documented that average long distance rates had dropped to 9 cents per min. in 2002 from 14 cents per min. in 1994, but many rural customers were paying 18-1/2 to 35 cents. Average share of local to total min. in rural areas is 58% compared with 79% in nonrural areas, study said. “That means that rural customers make a lot of long distance calls, but don’t have access to discounts… that is a burden,” Glass said. NECA projected rural interstate access rates would increase 50% to 3.68 cents per min. by 2007. “Rural customers have seen their bills rise more than nonrural customers,” Glass said. Report said nonrural basic service rate increased 10.25% between 1994 and 2001, to $21.84 per line per month from $19.81 to $21.84 or $2.03 per line per month.

Verizon more than doubled its loss to $2.1 billion in quarter ended June 30 from year ago and trimmed revenue forecast for 2002. Carrier attributed net loss to charges related to write-down of certain investments and to $4.2 billion in after-tax charges, including $2.4 billion related to its investment in Genuity. Verizon said last week it was relinquishing its right to reintegrate Genuity, deciding to not reabsorb company that it was forced to spin off as condition of GTE-Bell Atlantic merger (CD July 26 p1). Other charges include $862 million to reflect loss of value of its investment in Telus, Cable & Wireless and other operations and $475 million for severance payments. Verizon also reported charge of $183 million related to its WorldCom exposure. Company updated its 2002 guidance to projected revenue of no growth to minus 1% for full year, compared with earlier expectation of 0-1% growth. Earnings per share before nonrecurring charges now stand at $3.05-$3.09, down from $3.12-$3.17. Capital expenditure estimates were trimmed to $13-$13.5 billion from $14-$15 billion. At end of 2nd quarter, Verizon said it had 9 million long distance customers, making it 4th largest IXC in U.S. Company said it added 800,000 long distance customers in quarter, up 51% from year earlier. It also added 150,000 DSL lines in quarter for total of 1.5 million, 80% increase from same period last year. Verizon said it was on track to meet year-end DSL line target of 1.8-2 million lines. Total switched access lines in service dropped 3.3% to 60.4 million, with largest decrease in business lines, down 11.2% to 564 million. Carriers’ and CLECs’ min. of use fell 7.4% to 66.5 million. High-capacity and digital data revenue rose 6.8% to $1.9 million.

Despite several complaints to SEC about how merged company would be managed, shareholders overwhelmingly approved corporate marriage of AT&T Broadband and Comcast. If ultimately approved by FCC and Dept. of Justice (DOJ), as well as local franchise authorities, merger would form nation’s largest cable company, with 22 million subscribers. Comcast said deal, currently valued at about $50 billion, was expected to close in 4th quarter. Approvals were announced at separate shareholder meetings in Charleston, S.C., (AT&T investors) and in Philadelphia (Comcast). Although analysts had expected votes to favor deal, several institutional investors in AT&T had objected to corporate governance structure of deal. Provisions keep Comcast Pres. Brian Roberts in place as CEO of new company until 2010 unless 75% of board -- 9 of 12 of members -- vote to oust him. Originally, corporate structure didn’t contemplate board elections until 2005, 2-1/2 years after deal was scheduled to close, but investor outcry prompted move to hold elections in 2004 instead. There also were objections to provision that would bar anyone from amassing more than 10% voting power without first getting board approval, but in end that plank passed along with deal.

Adelphia said Thurs. it missed interest and dividend payments totaling $30 million on heels of missing $51 million interest payment on its debt last week. Company said it missed $23.4 million interest payment on its 9-3/8% senior notes and $6.5 million divided payment on its 7-1/2% Series E mandatory convertible stock. Adelphia said its subsidiaries Olympus Communications and Olympus Capital Corp. had missed $10.62 million interest payment and Arahova Communications had missed $4.19 million interest.