Del. PSC approved Verizon proposal to add 5 new unbundled network elements (UNEs) to its statement of generally available terms (SGAT). New UNEs include 2-wire loop, 4-wire loop, DS-1 digital line, DS-3 digital line and customer-specific signaling. PSC also adopted $35 flat rate for Verizon hot-cut switchovers that will stay in effect for 24 months and adjusted other nonrecurring wholesale charges to conform with total element long-run incremental costing (TELRIC). Verizon sought changes to have TELRIC-complaint rates in place before filing its Sec. 271 long distance application. In related matter, PSC plans June 18 hearing on Verizon’s post-entry wholesale performance assurance plan and June 25 hearing on its overall compliance with 14-point Sec. 271 checklist. In other actions, PSC amended payphone rules to allow all providers to offer directory assistance and intrastate call completion rate information orally instead of posting operator service rates at phones. That rule is similar to FCC’s on interstate calls. New rules also require payphone providers to have plans in place for refunding incorrect charges to customers and to post information at phones on whom to call for replacement of damaged or inoperative phones. PSC also approved small Verizon rate cuts under annual adjustment formulas of carrier’s price cap program. PSC ordered 3-cent reduction in monthly residential Touch-Tone dialing charge and 57-cent cut in business Touch Tone. It also ordered 9% reduction in per-min. switched access charges.

Supporters of controversial Cal. bill (AB-2958) to limit PUC price capping authority promised vigorous lobbying efforts to convince state Senate to approve measure, which sailed through Assembly May 9 on 66-1 vote. Pac Bell and Verizon, joined by CWA, NAACP, Congress of Cal. Seniors, Cal. Chamber of Commerce, Cal. Hispanic Chamber of Commerce, Cal. Small Business Assn. and several regional business advocacy groups, held news conference to praise Assembly’s action. They vowed to make sure senators knew of their strong support for legislation. Bill would prohibit PUC from reinstating until 2007 profit-sharing and productivity-based inflation indexing features of Bell and Verizon plans, which agency suspended 3 years ago. PUC is in midst of 4th triennial review of program. Agency has been urged by some competitor and consumer interests to reinstate sharing and indexing to correct allegedly excessive telco earnings and prices. Reinstatement calls were spurred by Bell and Verizon audit reports filed earlier this year indicating companies might have failed to report several hundred million dollars in potentially shareable earnings. PUC and other opponents in May 9 news conference said passage of bill would be bad news for state and telecom industry and vowed to fight it (CD May 10). Telcos said overwhelming bipartisan support in Assembly showed lawmakers agreed that bill was positive step forward for regulatory process. Telcos said opponents’ assertions that bill would entrench incumbents’ monopoly position or lead to reinstatement of rate-of-return regulation by stripping PUC of tools needed to make price cap regulation work, were completely unfounded. SBC attorney Mark Weideman said postponing sharing and indexing wouldn’t impair PUC’s direct authority over prices. Former PUC Comr. Mitch Wilk, who served when program was being developed, said framers of price cap regulation never intended that indexing or sharing be permanent features. He said they were included as temporary safeguards for small ratepayers against uncertain future of competition. He said PUC always had intended program to evolve to today’s pure price cap regulation. Wilk said opposition had “exaggerated” role competition was supposed to play in cap program. Pac Bell and Verizon said current cap plan insulates consumers from investment or revenue losses carriers might suffer due to risks of competition while allowing companies to keep profits if their strategies paid off. SBC’s Weideman said cap system had worked well over last 3 years, producing basic residential rate of only $10.69 monthly while encouraging investment by incumbents and competitors alike, and bill would merely maintain status quo for next 4 years.

Copyright Arbitration Royalty Panel (CARP) ruling setting rates for Internet radio broadcasting (CD Feb 21 p8) managed to aggravate all sides and is raising privacy issues as well, panelists said Thurs. at D.C. Bar Assn. discussion on Webcasting and digital music. Report set rates of 0.014 cents to 0.14 cents per Webcast performance, plus ephemeral license fee of 9%, depending on type of media. Webcasting fees will be retroactive to effective date of Digital Millennium Copyright Act (Oct. 1998), and first payments will be due around June if CARP report is accepted by Copyright Office.

Astrium is seeking $133 million damages from TRW and 2 other companies in U.S. Dist. Court, L.A., for problems associated with solar panel contracts on 9 satellites constructed for company. Following weeks of negotiations, companies haven’t been able to agree, and case apparently will go to court, industry source said. Astrium has revised its original complaint and now is accusing TRW of fraud in its handling of contract. Optical Filter Corp. (OFC) of Natick, Mass., div. of Corning Netoptix, and Pilkington Optronics of Tustin, Cal., were also named in suit, accused of negligence.

As it warned in ex parte filing Dec. 13, AT&T raised monthly universal service line-item fee for residential customers to 11.5% starting first of year, from 9.9%. AT&T had asked Commission for permission to change formula used to determine contributions to Universal Service Fund (USF) because falling revenue had skewed it. It said problem was that FCC determined how much a company should contribute to USF using revenue from 6 months ago. When company’s revenue is falling, as AT&T’s is, using that contribution factor on lower current revenue results in larger per-customer fee, company said. It had asked for permission to base its contribution factor on projected revenue rather than 6-month- old revenue and had offered to true up contributions if there were shortfall once actual revenue total was available.

Covad added 9 cities to Telextend T-1-based Internet access service introduced last month (CD Nov 27 p4). Service will be available in first quarter of 2002 in Chicago, Dallas, Denver, Detroit, Houston, L.A., Phoenix, Portland and Seattle, which raises total markets to 14, company said. Telextend replaces symmetrical DSL that often couldn’t be deployed to small businesses due to distance constraints or technical problems such as bridge taps on line, it said. Covad has signed Internet service providers Speakeasy and DSL.net to sell service. Telextend also is available from Megapath Networks or directly from Covad, it said. Unlike company’s core DSL services, Telextend is T-1 Internet access similar to services long available from Bells, CLECs and long distance companies, Current Analysis senior analyst Rob Carlson said. Pricing is competitive for T-1, he said, “but at $449 per month it is not really in the ballpark with DSL services.” Telextend allows Covad to fill “coverage holes” in national network with service that avoids large build-out cost of extending DSL network -- major concern as company currently is in bankruptcy, he said: “T-1 access loops are a good hole filler because they are not distance sensitive and they do not suffer from distance-related performance degradation -- as do DSL circuits.” Other advantages of T-1 are 1.5 Mbps throughput in both directions, static network addresses, ease of supporting multiple users and applications. “The same cannot be said of all DSL services,” Carlson said. Advantage of DSL is inherently low access cost. “It’s a POTS line,” he said, “it’s cheap and that alone makes it popular” in contrast to T-1 circuits that add “significant monthly operating expense” for both Covad and customer. Telextend service “is priced way out of the reach of prospective DSL customers.” Companies that want T-1 for Internet access will purchase it from more stable provider “and probably have already done so,” he said.

Number of high-speed Internet connections in U.S. grew 158% last year, to 7.1 million, FCC said in report issued at agency’s agenda meeting Thurs. As expected, biggest growth was in ADSL lines, which increased more than fourfold to 2 million by end of 2000, while connections over coaxial cable systems jumped 153% to 3.6 million. At end of 1999, cable had much bigger edge, with 1.4 million lines compared with 370,000 DSL lines. Although provision of high-speed service by satellite and fixed wireless technology represents “small fraction” of total lines in use, number grew to 112,000 in Dec. 2000 from 50,000 in Dec. 1999, report said. FCC spokesman said other wireline technologies such as T-1 and DS-3 accounted for most of remaining 1.4 million lines. Those are mainly offered to business customers.

House Telecom Subcommittee announced following witnesses for hearing Thurs. (June 14) on progress of E911 implementation: Michael Amarosa, vp-pub. affairs, True Position; Steve Clark, vp- network operations, U.S. Cellular; James Nixon, senior mgr.- regulatory affairs, VoiceStream Wireless; Andrew Rimkus, vp, Airbiquity; Steve Souder, administrator, Arlington (Va.) 9-1-1 Emergency Communications Center; Thomas Sugrue, FCC Wireless Bureau Chief. Hearing will be in Rayburn Rm. 2322 at 10:00 a.m.)

Assn. of Public-Safety Communications Officials-International (APCO) applauded FCC Wireless Bureau decision last week concerning how certain Enhanced 911 expenses are to be divided between wireless carriers and public safety answering points. Bureau clarified where line is to be drawn for allocating costs of E911 Phase 1 network and database components in letter to King County, Wash., E911 program (CD May 9 p6). Letter stipulated proper demarcation point was input to 911 selective routers that ILECs maintain. “The FCC’s decision will single-handedly cut untold red tape from the process of implementing wireless enhanced 9-1-1 throughout the nation,” said APCO Pres. Lyle Gallagher. APCO pointed out that bureau decision sides with recommendations made by APCO, National Emergency Number Assn., National Assn. of State 911 Administrators.

Comr. Ness, senior member of FCC, announced Thurs. she would be leaving agency by June 1 after 7 years. Ness, Democrat who was sworn in May 23, 1994, sought 2nd term after her 5-year term expired, but was stymied by Senate Commerce Committee Chmn. McCain’s refusal to confirm her. McCain said he didn’t approve of commissioners serving more than one term. Ness said she was making announcement now because “an orderly transition is best accomplished by announcing when my time with the Commission will end.” President Bush has announced names of 3 individuals he plans to nominate for Commission seats (CD April 9 p1) although there was some uncertainty about when new members would be confirmed. Their names haven’t been formally sent to Hill. Ness didn’t announce her plans.