Even though majority of FCC commissioners appeared willing to open rulemaking on eliminating broadcast-newspaper cross-ownership rules, FCC was forced to withdraw item from Thurs. agenda because majority couldn’t agree on text of rulemaking, we're told. FCC spokesman would say only that item wasn’t ready for final action. Action almost certainly means broadcast-newspaper cross-ownership rulemaking won’t be started until after new commissioners take office, officials inside and outside agency said.

FTC cleared merger of Univision Communications and USA Networks, companies said Tues. Univision bid $1.1 billion for USA’s 13 owned and 4 partly owned stations (CD Dec 8 p9), plans to convert them to Spanish-language programming. Companies said FTC granted request for early termination of Hart-Scott-Rodino antitrust review. Deal still is subject to FCC approval, but companies said they expected it to close in 2nd quarter.

Amended version of Bell deregulatory legislation introduced by House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.) would require ILECs to provide competitive carriers with access to network elements previously mandated by FCC, move that some CLECs said would leave intact legislation that would be harmful to competition but otherwise was positive step. However, manager’s amendment to HR-1542 wouldn’t change bill’s exception to FCC line-sharing order, which avoids placing mandate on ILECs to “provide [CLECs with] unbundled access to the high frequency portion of the loop at a local terminal.”

Paxson Communications asked FCC to delay May 14 deadline for comments on reallocating TV Ch. 52-59 ("lower 700 MHz band") until after auctions are held for Ch. 60-69 ("upper MHz band"), now scheduled Sept. 12 -- but request is pending to delay that until Jan. In alternative, Paxson said, deadline should be postponed until Commission rules on petitions to reconsider reallocation of Ch. 60-69 to nonbroadcast services. Before it “even attempts to establish [new] rules and policies” for Ch. 52-59, FCC “should gain the experience of auctioning the upper 700 MHz spectrum” because 2 bands are “closely intertwined,” Paxson said.

Satellite Bcstg. & Communications Assn. (SBCA) said it “strongly objects” to experimental license FCC gave to MDS America (CD May 7 p7) to test proposed terrestrial wireless service similar to Northpoint in 12.2-12.7 GHz band reserved for DBS companies. SBCA said Mitre report issued by Commission showed spectrum sharing could cause “significant interference” and MDS America experimental license was “extremely inopportune and ill- advised.” Bottom line, SBCA said, is that Commission “should never have treated MDS America’s application as another routine request for an experimental license.” Commission had obligation to put issue out to public comment, SBCA said.

Federal court decision last week on ILEC access charges has ramifications for other proceedings such as FCC’s attempts to overhaul access charge and universal service regimes for rural telcos, industry observers said Mon. Fifth U.S. Appeals Court, New Orleans, ruled May 3 that ILECs couldn’t recover their Universal Service Fund (USF) contributions through access charges levied on long distance companies. Court, which remanded FCC regulations for 2nd time on this issue, said such action constituted implicit subsidy, which is barred by Telecom Act. At issue are contributions that all carriers must make to USF. Long distance companies, for example, recover those contributions directly from their customers. FCC in 1997 ordered ILECs to recover their costs from long distance companies as part of access charges. Fifth Circuit remanded that rule in 1999 because of implicit subsidy problem. Commission rewrote rule and said ILECs no longer were required to recover costs from access charges but were permitted to do so if they wished. FCC said it interpreted court’s decision to mean it couldn’t require contributions through access charges but instead had to give ILECs choice of how they recovered contributions. In latest ruling, court said FCC interpretation was wrong. It said ILECs couldn’t recover universal service contributions from access charges, period: “The distinction the agency draws between ‘require’ and ‘permit’ is one without a difference.” Court said its original ruling “turned on the recovery method per se, not whether the Commission permitted or mandated it.” AT&T Vp Joel Lubin said he was cheered by strong language court used in defining access charge recovery as implicit subsidy. Lubin said court’s ruling could affect decision FCC is expected to make Thurs. on rural universal service. At very least, proposals under study by FCC, such as one proposed by Multi-Assn. Group, should be revised to eliminate implicit USF subsidies in access charges, he said. AT&T and several other carriers proposed such action to FCC last month, Lubin said, so court’s ruling was pleasant coincidence. Appeals Court ruling doesn’t have as much effect on large price-cap-regulated ILECs because FCC directed them last year to stop recovering USF contributions through access charges. Action was taken as part of Commission’s adoption of CALLS proposal. Lubin said court’s strong statements barring implicit subsidies in access charges applied to other industry practices as well. Among them, he said, is practice of pooling carrier common line (CCL) charges for rural carriers. Because National Exchange Carrier Assn. (NECA) pools those charges, by nature they are not cost-based, he said. Pooling access charges discourages competition, he said. Competitors such as Western Wireless can’t share in that subsidy because it’s “buried in the pool,” he said. Judge Emilio Garza wrote decision. Also on panel were Judges Eugene Davis and Donald Pogue. Pogue concurred because he disagreed with 1999 decision, saying it might have gone too far

SBC said it called FCC’s attention to “discrepancy” in information it provided to regulators to get approval for its long distance entry in Okla. and Kan. In response to news stories over weekend, SBC said it alerted regulators that it inappropriately described “manner in which our highly technical and complex computer systems provide loop qualification information to competitors interested in providing DSL service.” Company said it alerted FCC, Dept. of Justice and state commissions in early April and since has “corrected the record and improved our loop qualification process so that it now exceeds FCC requirements.” There’s “no evidence” that any competitors were disadvantaged, SBC said.

White House spokesman Ari Fleischer invoked President Bush’s faith in free market policies when asked about Alcatel’s use of New York Yankee Lou Gehrig’s farewell speech and slain civil rights leader Martin Luther King Jr.’s “I Have a Dream” speech to sell telecom equipment. Fleischer in May 4 news briefing attempted to defer questions to FCC when reporter asked whether Bush believed there should be limits to broadcast advertising. However, when asked whether Bush “would be offended by an oil ad on the backs of a Texas Ranger shirt,” he replied: “The President believes that the law needs to be followed within all the bounds of a free enterprise system.”

House Commerce Committee Chmn. Tauzin (R-La.) isn’t going to rely on good-faith efforts of ILECs to comply with Telecom Act and in May 9 markup of broadband deregulatory bill will act on repeated calls to bolster FCC’s enforcement authority, spokesman Ken Johnson said. “Chairman Tauzin supports beefing up enforcement of the Telecom Act and he intends to address the issue at Wednesday’s markup,” he said. “We are going to give the FCC expanded authority to enforce the Act.” Move follows FCC Chmn. Powell’s recent recommendation that Congress raise level of fines imposed on carriers for violating Telecom Act’s local competition requirements.

Skybridge responded to opposition to its petition for reconsideration of order in spectrum-sharing proceeding involving nongeostationary satellite (NGSO) FSS (fixed satellite service) and terrestrial systems in Ku-band, subsidiary terrestrial use of 12.2-12.7 GHz band used by DBS companies and application of Northpoint and Satellite Receivers (CD May 4 p3). Company said in reply comments Fri. that FCC decision to permit multichannel video distribution and data services (MVDDS) such as Northpoint into 12.2-12.7 GHz hand violated Administrative Procedure Act because Commission had said explicitly in Notice of Proposed Rulemaking that it was premature to make any proposals based on Northpoint petitions for license. Skybridge also wants Commission to uphold its position against PanAmSat, which wants FCC to eliminate pre- operational requirements to verify compliance with operational and additional operational limits.