FCC Comr. Copps will give kickoff speech at OPASTCO Legislative & Regulatory Conference March 6 at Marriott Metro Center Hotel, Washington. Among other speakers scheduled for March 6-7 conference are Reps. Buyer (R-Ind.), Deal (R-Ga.), Hayworth (R-Ariz.), Terry (R-Neb.) -- 202-659-5990.
All content creators and distributors should clarify their positions on DTV copyright issues in filings to FCC, CEA Pres. Gary Shapiro said after hearing Thurs. (CD March 1 p3). Shapiro said Home Recording Rights Coalition was “delighted” about studios’ support for home recording, but said their official filings at FCC didn’t reflect that or other positions at hearing.
Main goal of recent surge in cable operator filings for rate relief is freedom to cut rates to discourage competitors, rather than freedom to raise fees, critics said. Surge has local regulators worried about protecting consumers not only from rate increases but also from operators’ “predatory pricing” strategy to discourage competitors. FCC filings for rate relief doubled in last year, which MSOs acknowledged was shift in strategy to compete more aggressively with DBS at local level (CD Jan 28 p1). “What’s driving these filings is the strategy to get out of the uniform rate provisions of the Cable Act,” said attorney James Baller, who represents cities. In at least 2 cases, cable operators had used rate relief orders to resort to predatory pricing to undermine competitors, he charged. When FCC makes determination on effective competition, it should look at pricing issues as well, Baller said. Some local regulators interviewed called on FCC to conduct full review of effectiveness of rate regulation in current form.
Comment deadlines have been published in Federal Register for FCC proceeding that examines regulatory treatment of broadband access to Internet provided by wireline carriers: April 15 for comments, May 14 for replies. In what is considered major proceeding (CD Feb 15 p1), FCC has proposed reclassifying wireline Internet access as “information services,” which could lead to different regulation.
Universal Service Administrative Co. (USAC) asked FCC for increase in funding for e-rate program for year starting July 1. USAC’s Schools & Libraries Div. told FCC that program needed $5.74 billion, increase of nearly $550 million from current year. Funds, offered through universal service fund, are used to provide discounts to schools and libraries for Internet access and telecom services used to hook up computers. USAC said that even at that level of funding it wouldn’t be able to meet all requests from schools and libraries.
Several wireless carriers told FCC this week they wanted to see more details before Commission gave Conn. Dept. of Public Utility Control (DPUC) go-ahead for service-specific overlay code. In Jan., DPUC became first state commission to seek such authority, taking advantage of Dec. FCC numbering policy change that lifted previous restriction on service- specific and technology-specific overlay codes. Move allowed states to petition for such overlays and DPUC indicated it wanted to implement overlays on top of both Conn. area codes, 203 (New Haven) and 860 (Hartford), to be used for wireless and other non-geographic based services. Cingular Wireless asked FCC to dismiss Conn.’s petition without prejudice so agency could refile with more details on proposal. Cingular said it was among wireless carriers that had backed idea of “transitional” overlay under certain conditions to make sure numbers were available to carriers not involved in pooling and to provide more flexibility for area code relief. But it said DPUC petition “does not contain specific information to determine whether it gives proper weight to the Commission’s competitive and numbering efficiency concerns.” Cingular said petition should include more information on types of non-geographic-based services to be included in service- specific overlay code. Carrier said there hadn’t been adequate public comment on issue of what types of services were truly “nongeographic.” As example, Cingular said FCC’s Dec. order cited GM’s OnStar system as type of nongeographic application, but OnStar since had argued its service was geographically based. VoiceStream also raised concerns about more details that it said were needed on DPUC petition before FCC granted approval. Petition marks “noteworthy first effort,” VoiceStream said, but it fails to show that specialized overlays would provide better numbering optimization or that benefits outweigh costs “to be borne in the form of discriminatory and anticompetitive operations and market practices.” VoiceStream said outcome was important because FCC decision would “precedential.”
If telcos don’t like FCC’s proposed “connection-based” method of collecting contributions to universal service fund (USF), they could help FCC by suggesting alternative, FCC Comr. Abernathy told USTA members Thurs. Speaking at group’s Washington Leadership Conference, she said she was convinced current contribution system “isn’t sustainable” so something would have to replace it. Abernathy told group it probably would take “a good 2 years” for FCC to replace current collection system and agency would welcome ideas from carriers. Explaining recently opened wireline Internet access proceeding, she said FCC’s proposed definition of Internet access as information service could mean that “most provisions of Title 2 [of Telecom Act] would not apply to Internet access.” She said there also was universal service angle to that proceeding because USF contributions were assessed only on telecom services. Under assumption that DSL was telecom service, USF contributions now are assessed on DSL provision. Proposed new definition for wireline Internet access services as information service could be interpreted as excluding DSL from universal service base because it’s no longer telecom service, she said. And that could have “significant impact” on money available for universal service support for high-cost carriers, she said. Asked about time frame for broadband proceedings, she said desire was by end of year but that would be “rocket speed.” She said she thought some parts would be completed, perhaps with further notice of proposed rulemaking on remaining issues.
Ariz. Corporation Commission suspended for 4 months Qwest tariff proposal to give customers option of freezing in place their current local service provider. Agency acted after Cox Telecom protested that local service freeze might not be in public interest given nascent state of local competition and dearth of local service slamming complaints. Agency staff also supported suspending tariff (Case T-0105B- 020073), noting that FCC had recognized that while provider freezes were weapon against slamming, they could have adverse effect on development of competition in newly opened markets.
Cable industry representatives have been on campaign to convince FCC not to allow local franchise authorities to tax or otherwise regulate cable modem services. Commission is widely expected to announce proposal to classify cable modems as “information service,” rather than “telecom” or “cable service,” at its March 14 meeting. With that in mind, cable industry also wants to make sure FCC’s conclusions don’t result in imposition of taxes and other fees on Internet services over cable. In last few weeks, representatives of Adelphia, AT&T Broadband, Charter, Cox and NCTA have visited with media advisers of commissioners, all calling for agency to somehow restrain local franchise authorities (LFAs) from regulating Internet-over-cable. Among Adelphia’s talking points was idea that there should be no “forced access.” Charter’s list included notion that no franchise could overrule existing federal law that forbids LFAs from regulating information services on cable. NCTA asked FCC specifically to declare cable modem to be interstate service and that there was no retroactive refund liability for previously collected franchise fees on cable modem service. Related issue came up during FCC Comr. Abernathy’s appearance at USTA conference Thurs. Member of audience asked whether proposal to define wireline Internet access as information service would encourage local authorities to assess franchise fees on DSL provision. Abernathy said she didn’t think information services definition would have that effect and “that’s not my intention.” She told group that “if you need special words [to make that view clear to local authorities], I'd like to hear about it from you.” Her comments, however, appeared limited to DSL provision.
SEC is expected to complete review of proposed $26 billion EchoStar acquisition of Hughes Electronics by June and FCC could finish its investigation by late summer, EchoStar CEO Charles Ergen told analysts in conference call Thurs. Deal will carry $7 billion in merger-related costs, $5.5 billion of which will be financed by bridge loan, EchoStar said in SEC filing. Loan amount has been reduced to $3.3 billion by EchoStar’s sale in Dec. of $700 million of 9.18% senior debt. It also sold $1.5 billion in preferred stock to Vivendi Universal.