FCC’s Media Security & Reliability Council (MSRC) will focus on “preventive best practices” to avoid loss of media in crisis, as well as ways to restore media after crisis such as hit N.Y.C. broadcasters Sept. 11, said Susan Mort, deputy Designated Federal Official for council (CD March 29 p6). Group’s first CEO-level meeting is set for 10 a.m.-noon May 17 at FCC hq.
FCC proposed fines: (1) Commission said WESL(AM) East St. Louis was liable for $10,000 fine for denying access to public inspection file on 2 occasions. (2) Clear Channel- owned WGBF(FM) Henderson, Ky., faced $6,000 fine for broadcasting live telephone conversation without informing party to conversation.
FCC approved formal complaint that McLeod Publishing filed against Wood County Telephone, saying Wood County must charge no more than Commission-prescribed presumptively reasonable rate of 4 cents per listing for base file subscriber listing information (SLI), rather than its proposed rate of $0.6257 per listing. It said Wood County had failed to provide credible and verifiable cost data supporting rate for base file SLI in excess of presumptively reasonable rate. Commission also accepted McLeod’s claim that Wood County must charge no more than 6 cents per listing for “update” SLI listings. McLeod publishes white and yellow page directories in competition with Wood County.
FCC Wireline Bureau adopted protective order for documents filed in triennial review of unbundled network elements (UNEs), as requested by CompTel and ALTS. Two groups said commenters might have to rely on sensitive business information to provide meaningful answers to questions raised in triennial review. FCC agreed, saying it had encouraged commenters to submit information about actual marketplace conditions and “we recognize that the type of information requested… will be competitively sensitive in nature.”
FCC asked for comments by April 10, replies April 17, on 2 requests for changes in its Jan. 31 payphone rate order. Wis. Pay Telephone Assn. sought reconsideration and Verizon asked for correction to eliminate Verizon North, former GTE company, from requirements. Order would require Bell companies to set intrastate payphone line rates using forward-looking “new services” test (CD Feb 1 p5).
Eldorado Communications said Fri. it planned to seek review of FCC decision to return 85% of deposits by winners of Jan. 2001 PCS re-auction (CD March 28 p1). Eldorado, which had competed with NextWave in original C-block auction, had opposed carrier’s refund request, contending it would amount to unfair and discriminatory treatment of Eldorado and minority-owned and small businesses that were intended to benefit from PCS auction. FCC order concluded Eldorado lacked standing to challenge refund request. Eldorado, which filed for bankruptcy protection after auction, had returned C-block licenses it won in bidding and agreed to forfeit money already paid. “We think the FCC is wrong on the question of our legal standing and wrong in balancing the equities between the giant carriers, who got their money back at no risk to their licenses, and the small businesses, who had to forfeit their licenses and lose their deposits,” Eldorado CEO Will Yandell said. Eldorado Managing Dir. Stephen Roberts said although company would seek review of FCC order, it continued to believe Commission should encourage settlement of NextWave dispute “as long as the small businesses who were injured by NextWave’s conduct are included.”
FCC authorized examination of data filed by Qwest that company said contained competitively sensitive data on its nonregulated payphone operations. Commission said it didn’t reach decision on merits of request for confidentiality but meanwhile granted protective order to facilitate exchange of relevant material. At issue is information Qwest filed March 14 in response to Commission’s request for data to supplement record in Pay Telephone Reclassification & Compensation proceeding.
Viacom doesn’t have to comply with 35% station ownership cap until at least year after final FCC decision on ownership limits, Commission said in order. Viacom had requested stay of ownership rules pending FCC decision. Its acquisition of CBS gives it combined audience reach of just over 41%, which would have required it to divest stations by May 4. Comr. Copps concurred, but said he would have preferred to give Viacom just 12 months to come into compliance, rather than 12 months after FCC decides on new ownership limits in proceeding that hadn’t been begun yet: “Under this scenario, Endgame could well be the twelfth of never.”
FCC put merger of AT&T Broadband and Comcast out for public comment and established comment cycle, with comments due April 29, replies May 14 (MB 02-70). Commission said proceeding involved broad public policy issues, so it would be treated as “permit but disclose” for ex parte rules. Companies submitted more than 80 applications for consent to transfer control of licenses and authorizations to what would be new AT&T Comcast, if merger ultimately were approved. Separately, Commission issued protective order on any documents it sought that companies believed could be of proprietary or confidential nature. Some of those documents may be redacted to allow public inspection of parts of documents, agency said.
Standard & Poor’s said Thurs. it wasn’t revising credit rating or outlook for Verizon in light of FCC decision late Wed. to return 85% of deposits made by winners of Jan. 2001 PCS re-auction, including Verizon Wireless (CD March 28 p1). S&P said it was keeping credit rating and outlook status for company “because of the uncertainty regarding Verizon’s ultimate obligation to pay the total $8.7 billion it bid in the auction.” FCC order returned $2.8 billion of deposits from re-auction but concluded that bidders should continue to be held to nearly $16 billion in bid obligations, pending outcome of Supreme Court review of D.C. Circuit’s decision that reversed FCC decision to cancel NextWave licenses for nonpayment. S&P noted FCC had said bidders were responsible for full amount of re-auction commitments if Commission prevailed at high court in NextWave case. “However, given the decline in wireless asset values since the auction, full payment of the licenses will continue to be discussed with the FCC,” S&P said. Commission turned down Verizon request to be relieved of overall $8.8 billion payment commitment in connection with re-auction. Legg Mason said in research note to investors that decision left wireless carriers “with considerable financial overhang” on licenses caught up in NextWave litigation: “We thus continue to believe that in the absence of a settlement, the FCC will come under increasing pressure to provide carriers with relief, but the Commission’s unanimous March 27 order suggests it will not do so while the Supreme Court reviews the agency’s appeal of a lower court ruling siding with NextWave.” Report said if FCC prevailed in Supreme Court and carriers defaulted on their obligations, re-auction winners could face penalties of more than 3% of their bids. “It’s our understanding that if the FCC were to subsequently re-auction the licenses and receive smaller winning bids, the carriers from the 2001 auction could be required to make up the difference,” Legg Mason said. It said Commission was likely to continue to face pressure and potential legal attacks to provide carriers with relief on their overall auction commitments. Otherwise, billions of dollars in commitments could linger for years as litigation played out and “complicate the industry’s ability to formulate business plans, strike deals, improve systems,” Legg Mason said. Verizon Wireless lauded return of 85% of deposit but said: “We have made no secret of our position that Auction 35 is void.” With Commission having spelled out its opinion on Verizon’s request to be released from its auction contract commitments, “we will look at options to resolve this difference of opinion,” carrier said. “Even after the refund, the Commission will hold $260 million of our deposit money, and we've lost at least another $115 million in unpaid interest on our deposit,” spokesman said. “In addition, the FCC says we remain on the hook for $8.7 billion for licenses they haven’t delivered and can’t deliver. We need the slate wiped clean and get on with competing in our business.”