FCC Chmn. Powell told House Appropriations Subcommittee Wed. that he was somewhat uncomfortable about delaying 700 MHz auction again and violating congressional mandate. It’s one thing to say Commission has delayed auction already but that’s not going to carry much weight before a court if FCC is sued for violating congressional order, he told Subcommittee on Commerce, Justice, State and Judiciary. Answering questions at hearing on FCC FY 2003 budget, Powell also revealed that vote had been taken by commissioners on Northpoint petition but he declined to say more, saying that press release would be issued “in next few days” that would give outline of decision. Northpoint was on agenda for Commission’s open meeting today (April 17). “I can confirm that the item has been adopted but it’s in the final stages when things can change, so I don’t feel comfortable” talking about it, he told Rep. Vitter (R-La.). Vitter had said he heard FCC would call for auction of spectrum sought by Northpoint and thought that “penalizes innovations and hurts consumers.”
Carolyn Fleming named acting dir., FCC Office of Communications Business Opportunities… Marv Danielski promoted to vp-mktg. & creative services, Hearst-Argyle TV… Roy Cowan advanced to vp-key account mktg., Hallmark Channel… Daniel Zito, ex-Lehman Bros., rejoins Legg Mason Wood Walker… Elected at American Assn. of Ad Agencies: Chmn. Ken Kaess, DDB Worldwide; Vice Chmn. James Heekin, McCann Erickson; Secy.-Treas. Marsha Lindsay, Lindsay, Stone & Briggs… Correction: Anita Wallgren is joining Sidley Austin Brown & Wood law firm (CD April 11 p12)… Yvette Gordon-Kanouff, SeaChange, elected to board of Society of Cable Telecom Engineers (SCTE).
Coalition of state broadcaster associations told FCC there was “no factual or logical basis” for agency to impose regulations for EEO and that Commission lacked statutory authority to do so. “As no evidence indicates that the broadcasting industry is a discriminator, it would be inappropriate for the Commission to reregulate,” group said. “Other effective methods, including a host of federal and state antidiscrimination laws, already deal with the isolated bad actor.” Despite that, associations said FCC still had “an important role” to play in monitoring industry and bolstering industry efforts for recruiting outreach. Group said only rules that FCC should contemplate for stations were Internet job bank postings of at least 50% of jobs, including requirements to report ways stations promote their Web-based recruiting efforts, and additional outreach through referral organizations, documentation only for Commission and limited to postings themselves and promotional copy. Groups said any Commission request for information about discrimination complaints should be limited to final, adjudicated decisions. National Organization for Women (NOW), however, suggested that Commission expand its proposal to require broadcasters and cable operators to issue on-air announcements, keep its reporting requirements, not increase threshold for exemption by small employers. American Women in Radio & TV (AWRT) also said Commission “has not gone far enough,” adding that broadcasters and cable operators should be required to advertise all job vacancies widely and partner with trade associations geared toward minorities. American Cable Assn., which represents small and rural cable operators, sought exemption from EEO outreach requirements and streamlined recordkeeping and reporting requirements.
FCC unanimously approved Verizon’s long distance application for Vt. Wed. Commission said competing carriers in that state now served 21,500 lines and 5,600 lines using unbundled network elements or their own facilities. Remaining 15,900 lines are provided by competitors through resale. So far, Verizon has received long distance authority for N.Y., Mass., Pa., Conn., R.I., and has applications pending at FCC for N.J. and Me. and pending request with Va. regulators for that state’s support. Dept. of Justice in Feb. had recommended that FCC approve Verizon’s Sec. 271 application in Vt., urging Commission to carefully review concerns by several CLECs about Verizon’s pricing of unbundled network elements in that state.
Mich. PSC ordered Verizon North to reduce its intrastate access charges immediately to interstate levels and told it to refund to AT&T within 30 days difference between its interstate rates and what it charged AT&T for intrastate access since last July 13. AT&T said refund would run to millions of dollars. PSC ruling was on Sept. complaint filed by AT&T (Case U-13125) charging that Verizon had violated provision in state’s price cap law that capped intrastate access at interstate rate and allowed no exceptions. Complaint arose after Verizon last July cut its interstate access charges under FCC-approved CALLS access reform plan but didn’t mirror those cuts on intrastate side. Result, said AT&T, was intrastate access charges on some rate elements that were double or triple corresponding interstate rate. Verizon said state cap law was equally adamant that it couldn’t price any service below total service long run incremental cost (TSLRIC) floor and mirroring interstate rate cuts would violate that provision. Since there was no PSC ruling to determine which of those conflicting provisions to obey, Verizon said safest legal course was to leave intrastate access rates unchanged. PSC ruled that law’s very specific ceiling on access charges took precedence over its more general cost floor for all services, so Verizon should have cut its intrastate access charges when it lowered its interstate rates even if resulting rates were below TSLRIC. PSC rejected AT&T’s requests to fine Verizon and make it reimburse AT&T’s legal fees, saying this was first case to address those conflicting statutory provisions and Verizon had plausible grounds for its position. Verizon also had contended access cap was unconstitutional on due process grounds and because it denied carrier’s rights to recover costs, but PSC said that claim belonged in courts. As administrative agency, PSC said it must presume statutes it enforces are constitutional.
Bell companies, not CLECs, are the real beneficiaries of govt. regulations, according to study by Lee Selwyn, pres. of research firm Economics & Technology Inc. (ETI) and commissioned by AT&T. Study said it was ironic that Bells were complaining about being held back by govt. regulation since they had benefited greatly from it. Govt. regulations have contributed nearly $29 billion annually to 4 Bell companies, “a substantial portion of total RBOC [Regional Bell Operating Company] revenues,” Selwyn said. Study cited “top 10 corporate welfare” regulations: (1) Switched access rates “in excess of economic costs,” accounting for $9.9 billion annually. (2) “Free nationwide cellular licenses,” $4.7 billion annually. (3) Dedicated access rates “in excess of economic costs,” $3.9 billion. (4) “Monopoly rents” derived from Yellow Pages directory business, $2.8 billion. (5) Ability to terminate ISP-bound calls “at below-cost rates,” $1.8 billion. (6) Ability to offer interLATA vertical features “without compensating IXCs,” $1.7 billion. (7) “Competitor-financed universal service subsidies,” $1.6 billion. (8) “Restrictions on competition for small business customers,” $1.2 billion. (9) Ability to “preferentially market own long distance services,” $1.1 billion. (10) Unregulated provision of billing & collection services, $200 million. Charles Black, co-chmn. of CLEC-based Voices for Choices coalition, said study “unveils a supreme irony about the RBOCs’ massive lobbying campaign to have Congress and the FCC change the rules on high-speed Internet access.” He said that “though the Bells talk about parity,” in reality they're taking advantage of their own subsidies -- www.econtech.com/corporatewelfare.pdf
FCC Comr. Copps said Wed. he believed Commission needed to look more “intensively than we are at what other countries are doing to roll out broadband, especially to their rural citizenry.” He spoke at FCC hq at event sponsored by ABA International Communications Committee and FCBA International Practice Committee. Copps cited examples of Latin American countries that were using universal access fees to invest in new broadband applications and demonstration projections in rural communities in S. Korea. U.S. doesn’t necessarily need to emulate projects in other countries, he said. “We ought to at least look seriously enough at what they are doing. Are there lessons we can learn?” Copps said: “I don’t think we have the granularity of detail or the data that we ought to have to make all of the broadband decisions that we have before us.” As for communications regulation outreach, FCC already is doing great deal in areas such as “best practices” that can be considered by regulators elsewhere, Copps said, but he would like to see Commission take even more active role in that area. Similarly, Commission already has “commendable record” in regulator-to-regulator meetings between U.S. and other countries. “I would like to see us devote significantly more in the way of resources than we are to that,” Copps said, acknowledging such funding decisions remained in hands of Congress. Where those additional funds would come from “I don’t know but I think we need to make it a priority and I think we need to push and explain to Congress that it is a priority,” he said. Copps also raised questions such as who regulators should be talking to in such bilateral discussions. He asked, for example, whether U.S. should talk only to countries that had independent regulators. “Does this mean you don’t talk to anybody in China? I don’t think so, but we need to have some rules of the road.” Copps will be part of U.S. delegation that attends bilateral discussions with China in Beijing next month, along with NTIA Dir. Nancy Victory and others. Asked if U.S. needed broadband strategy, Copps said Italy and U.S. were only 2 countries in world without one, and Italy had one under development. Each year, FCC puts together Sec. 706 report looking at whether deployment of broadband is proceeding “a reasonable and timely fashion,” he said. “I think somewhat too cavalierly we say things look pretty good, we have now got a subscriber in each zip code. It’s a little like saying if you feed one hungry child in a zip code you solve the problem of hunger. You haven’t really addressed it. We need to be working on it much more systematically than we are.”
NTIA Dir. Nancy Victory told FCBA policy forum late Tues. that among themes that emerged at recent NTIA spectrum summit were need to address length and complexity of regulatory proceedings, which in some cases were seen as too “reactive.” In other areas, discussion turned to extent that innovative technology in receivers could maximize spectrum use by reducing size of guard bands and channel spacing, she said. “Not surprisingly, there’s a sliding scale between cost and efficiency,” she said. One issue that “surprised me most” at summit was interest in govt. and commercial users in exploring ways to use same system, Victory said. “Obviously this won’t work for all uses,” she said. “But if we can eliminate some redundant systems we can clearly increase efficiency and open up some spectrum for new services.” Among themes from summit that Victory said she expected would figure prominently in NTIA’s spectrum management agenda was “need for teamwork to replace turf wars. Spectrum needs are too important to be undermined by internecine squabbling between and among and within branches of government.” Victory said she planned to talk with FCC Chmn. Powell and David Gross, U.S. deputy asst. secy. of state for international communications, on developing action plan that would “facilitate the efficient functioning of the nation’s spectrum management team at home and abroad.” Victory also said: “We need to make a concerted effort to eliminate unnecessary government micromanaging of spectrum uses. This means a fresh look at legacy rules and restrictions to assess their ability to accommodate emerging technologies or spectrum needs.” In separate panel discussion moderated by Bryan Tramont, senior legal adviser to FCC Comr. Abernathy, Cingular Vp-Federal Relations Brian Fontes expressed dismay at recent Wireless Bureau decision to keep 700 MHz auction date intact. Bureau last week turned down CTIA request to delay June 19 start. Decision by bureau amounted to “no, we will do this auction come hell or high water,” Fontes said, noting that FCC had notice of proposed rulemaking on potentially reconfiguring 800 MHz band that could be affected by decisions in 700 MHz. Nextel Vp-Chief Regulatory Officer Robert Foosaner on separate panel said CTIA had set up committees on 800 MHz NPRM stemming in part from White Paper on band reconfiguration floated by Nextel last fall. Seven other associations have set up similar committees and 5 alternative plans are known to be in works other than Nextel’s original paper, he said: “Spectrum allocation… is about the most difficult decision that faces policymakers at the FCC.” Nextel proposal attempts to address “in a hard and concrete way with $500 million on the table” issue of interference in that band.
National Communications System (NCS) approved contract award to VoiceStream Wireless to provide priority access service for Washington and N.Y. metro areas. Approval had been expected since FCC granted VoiceStream temporary waiver earlier this month of its wireless priority access service (PAS) rules for GSM-based system that will provide national security and emergency personnel (NS/EP) access to wireless networks during emergencies. VoiceStream said it expected PAS system to be operational within 60 days. DynCorp, systems integration contractor for NCS’s wireline Govt. Emergency Telecom Service (GETS), awarded contract to VoiceStream. Carrier said agreement allowed its handsets to be provided by govt. to NS/EP users at federal, state and local level. Percentage of NS/EP users on wireless network compared with network’s customer base is expected to be less than 0.1%, VoiceStream said. It hasn’t attached dollar figure to contract, to which 5,000 users will have access in both cities on subscription basis, spokeswoman said. NCS Deputy Mgr. Brent Greene said agency would continue to work with VoiceStream and other wireless carriers toward national solution to wireless NS/EP communications by end of year. He said system would “enable us to balance national security and emergency preparedness needs while minimizing the impact on consumer access to the same wireless infrastructures.” FCC in 2000 issued rules on how NS/EP users could gain access in emergencies to next available wireless channel to originate call without preempting calls already in progress. Commission didn’t require carriers to provide PAS but created uniform operating protocols.
NCTA said it believed General Accounting Office (GAO) investigation requested by Sen. McCain (CD April 17 p7) would confirm earlier conclusions by FCC and Bureau of Labor Statistics that cable prices per channel had remained relatively constant since deregulation in 1999. FCC reported earlier this month that rates increased 7.5% on average across country (CD April 5 p6). NCTA contended that while prices had gone up, consumers were getting more for their money. Assn. pointed out that price increases were affecting all multichannel video providers, including satellite companies. It said McCain’s request was for study of pricing trends since 1996 Telecom Act but that rates were regulated from 1996 to 1999. “We're confident that a close examination will show that marketplace competition has caused price increases to moderate since 1999,” NCTA spokesman said. McCain spokeswoman said her office hadn’t heard back from GAO or FCC Chmn. Powell on request.