Justice Dept. told FCC that changes in horizontal and vertical ownership limits on cable companies wouldn’t diminish DoJ ability to evaluate mergers and acquisitions for anticompetitive effects. “Regardless of the Commission’s ultimate determination in this proceeding, the Department will continue to exercise its enforcement responsibilities,” it wrote. Comments came in reply to those submitted earlier on cable industry vertical and horizontal ownership limits, with deadline Mon. NAB supported NCTA’s petition for rulemaking that asked FCC to reevaluate its attribution policies and whether minority shareholders should be considered “owners” of company if they held as little as 5% stake. World Satellite Network contended that Commission had more than enough evidence to justify its previously stated caps. Group calling itself Concerned Citizens proposed FCC create common carrier framework for cable that would allow unaffiliated programmers access to cable networks. Concerned Citizens acknowledged current law expressly prohibited subjecting cable operators to common carrier regulation but said Congress should consider amendments and FCC should consider creating common carrier system anyway.
Saying FCC had “no valid reason to think [national TV station ownership cap] is necessary to safeguard competition,” U.S. Appeals Court, D.C., remanded ownership cap to Commission, saying it needed further justification. In same decision, appeals court completely overturned ban on cable systems’ owning TV stations in same market, saying remand wasn’t justified because of “low” probability that FCC could justify that rule. In TV ownership cap case, court rejected networks’ suggestion that ban be overturned completely, saying rule wasn’t inherently unconstitutional and FCC might be able to justify it.
FCC seeks comment on joint application filed by Norway Rural Telephone and Iowa Telecom for waiver of definition of study area. Norway is acquiring Iowa Telecom’s exchanges in Corwith and Klemme, Ia., including 300-500 access lines. Waiver would permit Iowa Telecom to alter boundaries of its existing Iowa study area in order to remove those lines. It also would permit Norway to expand its current Iowa study area to include exchanges acquired from Iowa Telecom. Comments are due March 21, replies April 5.
FCC’s tentative conclusion that DSL and other phone- based Internet services should be reclassified as information services (CD Feb 15 p1) is likely to have broad impact on cable industry, which is nation’s leading provider of high- speed Internet access. With parallel proceedings examining classification of cable modem service pending, Commission appears to be extending its vision of broadband across platforms, observers say, and that could add regulatory burdens to cable modem service that aren’t there today. For example, in FCC’s notice of proposed rulemaking (NPRM) are questions about universal service requirements and whether companies other than traditional wireline telephone service providers should be only ones contributing to it.
Cingular Wireless and 3 rural carriers asked FCC to reconsider part of spectrum cap order that retained cellular cross-interest rule in rural service areas (RSAs) but eliminated it elsewhere. Decision came in Nov. FCC order repealing spectrum cap effective Jan. 1, 2003, and raising it to 55 MHz in all markets during transition period (CD Nov 9 p1). Before change, rule had limited ability of carrier to have ownership or other attributable interests in cellular licenses on different channel blocks in overlapping geographic area. FCC said it kept rule intact for rural markets because cellular incumbents generally continued to dominate market in those areas. In petition for reconsideration filed Feb. 13, Dobson Communications, Western Wireless and Rural Cellular asked FCC to eliminate immediately cellular-cross interest rule for RSAs. Alternately, they wanted Commission to sunset rule for rural areas at same time as spectrum cap itself is phased out. Distinction between urban and rural markets “does not rationally reflect the state of competition or the impact of the rule in specific geographic markets and is paternalistic and fundamentally arbitrary,” they wrote. If rule continues to be applied, it will create “adverse impacts,” petition said. Carriers said it would limit their ability to secure financing from carriers with 5% or more interest in other cellular licensee in given RSA to expand wireless service in such markets. Restriction would prohibit “economically efficient mergers,” they said. “The Commission’s promise to consider waivers of the rule is well intentioned but inadequate to resolve these concerns.” Petition said rule would prohibit investment and consolidation in regionalized markets by treating RSA parts of such markets differently from urban markets without factual basis. “Petitioners are in the difficult position of either limiting the pool of potential merger or financing partners to noncellular licensees or negotiating transactions that involve disaggregating overlapping cellular markets,” carriers said. In separate petition, Cingular said: “Given today’s trend towards national and regional calling areas and plans (in many cases coupled with either free or inexpensive long distance service), individual RSAs are simply not segregable from metropolitan statistical areas from a customer service standpoint,” Cingular said. Examining competition only on basis of individual RSA “skews the competitive analysis in a way that does not reflect the relevant geographic market,” petition said. Cingular said although local wireless service still could be purchased, it was rare that service was limited to single RSA due to proliferation of regional and national calling plans. MG
NextWave said it had activated its wireless network in 60 markets and had started customer trials of its wireless data service in certain markets. Carrier, which received its PCS licenses back from FCC after U.S. Appeals Court, D.C., ruling last year, said it anticipated finalizing first construction phase of its wireless network in its remaining 35 PCS markets. NextWave said it was offering trial customers with palm-sized computers its CDMA-based wireless data service. It said that after network and wireless device testing, it planned to offer full commercial service “in selected markets” later this year. Completion of company’s Chapter 11 reorganization awaits “resolution of pending litigation,” said Frank Cassou, NextWave exec. vp-gen. counsel. He said company hoped for “rapid resolution” of litigation. FCC has petition for certiorari pending before U.S. Supreme Court, seeking review of D.C. Circuit decision that had overturned Commission’s decision to cancel NextWave licenses for nonpayment.
In latest skirmish over regulatory reform in rural areas, rural LECs (RLECs) urged FCC to give them flexible rules to better serve their costly areas, while competitors said agency should stick to its guns in eliminating protections for RLECs. Their comments, filed Feb. 14, were in response to 2nd part of agency’s reform effort. FCC last year acted on access and universal service portions of Multi- Association Group (MAG) plan proposed by RLECs (CD Oct 12 p1). Agency now is looking at several portions that were deferred, such as incentive regulation to encourage rural carriers to move from rate-of-return to price cap regulation.
U.S. GPS Industry Council said it was heartened by level of protection in FCC rules on ultra-wideband (UWB) technology adopted at Feb. 14 agenda meeting (CD Feb 15 p3). “But the Commission’s announcement that it intends to review the safety margins and spectral emission limits within the next 6 to 12 months is insufficient time for UWB products to appear in the marketplace,” Council said. “Reliable measurement and reasoned assessment is essential for proper interference analysis.”
FCC Wireless Bureau plans forum Feb. 28 on acquisition and evaluation of data on state of competition in wireless industry. Focus will be on data obtained for FCC’s annual Commercial Mobile Radio Service Competition Report. Meeting will cover data on development of rural and underserved wireless markets and ways FCC can acquire industry data and competition levels for such markets. Wireless Bureau Chief Thomas Sugrue will speak, followed by panels on: (1) Industry research, consumer information and data analysis. (2) Rural and underserved areas in a nationwide context. (3) Service rollout from rural perspective. Anyone not presenting at forum can provide written comments ahead of time -- Cindi Schieber, 202-418-7530, or Rachel Kazan, 202- 418-0651.
FCC adopted proposed rules for consumers to file informal complaints that are patterned after existing rules for informal complaints filed against common carriers. Under proposal, approved at FCC’s Feb. 14 agenda meeting, complaints filed about any of services regulated by Commission would follow same format and be handled in same way. This “uniform, streamlined” complaint process now would include consumer complaints that raised issues in FCC’s jurisdiction and filed against broadcast station licensees and cable franchise operators. Proposal asked whether existing rules should be changed to specify type of documentation that should accompany informal complaints and to set specific timeline within which company must respond to complaint. FCC officials said goal of proposed changes was to provide single point of entry for consumer complaints that would allow Consumer Information and Enforcement bureaus to better respond. In separate statement, FCC Comr. Copps said he supported proceeding but wasn’t convinced that proposals in notice of proposed rulemaking would move agency toward goal of less-burdensome process for consumers. NPRM outlined 3 ways that consumers could seek redress for their complaints -- direct complaint to company, proposed informal complaint process and traditional formal complaint process, Copps said. “We need to be crystal clear that these are options and that one process should not be a prerequisite for another,” he said. “Nor must the exhaustion of one remedy preclude the utilization of another.” In moving toward simplified consumer complaint process, he said, FCC shouldn’t inadvertently create new bureaucratic layers for consumers to deal with before agency addressed their complaint. Comr. Abernathy said “it is past time for us to amend the complaint process.” She said FCC should encourage companies to respond on their own to consumer concerns. “But for those complaints that do require the attention of the FCC, we must provide a prompt and sure resolution,” she said.