FCC rules require open video system (OVS) operators to match cable operator’s public, educational and govt. (PEG) access contributions, in addition to channel capacity, National Assn. of Telecom Officers & Advisers (NATOA) and Alliance for Community Media said in filing. They were opposing complaint by CTC Telecom against Rice Lake, Wis., seeking to bar city’s imposing PEG contributions on company in discriminatory manner. Case involves no more than application of settled law, groups said.
U.S. Appeals Court, D.C., judges hammered FCC Tues. on whether agency’s latest reciprocal compensation order (CD April 20/01 p1) was properly grounded in Telecom Act. D.C. Circuit is same court that remanded FCC’s earlier attempt to set limits on reciprocal compensation for ISP-bound dial-up traffic. In challenge brought by WorldCom and other CLECs, 3-judge panel questioned Commission’s reliance on what Judge David Sentelle called “grandfathering provision” of Act to justify decision that ISP-bound traffic wasn’t subject to Act’s reciprocal compensation requirements. If court determines FCC can’t rely on Sec. 251(g), “don’t we have to remand again?” Sentelle asked. FCC attorney John Rogovin said that was “unappealing” result. Judges said they read Sec. 251(g) as attempt by Congress to make sure preexisting policies weren’t affected adversely by Telecom Act’s changes. They questioned how that type of holding clause could be used to make forward-looking changes in law, as FCC did in crafting its latest reciprocal compensation regime.
Most important universal service issues pending before FCC, according to FCC Comr. Abernathy: (1) Action on remand by 10th U.S. Appeals Court, Denver, in Qwest v. FCC. Appeals court ordered FCC to reexamine how it calculated high-cost universal service support for nonrural telcos. Abernathy said she would like to have had action already, “we need to get back to the court.” (2) Action on “contribution methodology,” issue teed up for agenda meeting Thurs. She said FCC had to look at how it collected universal service contributions in light of declining revenue and new technology. (3) Effect on universal service funding of “migration of technology to new digital platforms.” Depending on how those new technologies are defined, move to digital technology could eliminate providers’ obligations to contribute to universal service, she said. That could jeopardize current funding structures and place “tremendous burden on isolated users,” she said. Abernathy spoke at FCBA brown-bag lunch on universal service. She also said she would like to see data developed to compare telephone penetration rates vs. universal service funding vs. use of Lifeline and Linkup programs. She said it would be interesting to see whether data showed relationships to guide FCC and states in upcoming proceedings. Asked about universal service funding restrictions for rural LECs that buy exchanges from Bells, Abernathy said that’s tough policy decision. Some rural customers are “probably better off” with smaller telcos but “you don’t want to create a land grab” mentality, she said. Nanette Thompson, Alaska Regulatory Commission chmn., who also was featured at lunch, said that when GTE sold off exchanges in Alaska, smaller company bought them knowing it might not get much universal service funding but “they were willing to make the investment anyway.” She said that was “some of the worst plant in the state” and regulators were “happy to see a small company, closer to the community, take over.” On issue of universal service portability, Abernathy said it was difficult to determine whether competitors should get support based on incumbents’ costs or their own costs. She said it struck her as odd for competitors to get support based on incumbents’ costs. It doesn’t appear to be good long-term business plan for competitor, she said: “I don’t like to create uneconomic incentives like that.” Thompson said she agreed, but said it was difficult to determine CLEC costs because PUCs traditionally hadn’t sought as much information on them: “The prospect of having to learn the costs of CLECs troubles me.” Some have advanced idea of giving CLECs support based on either ILEC costs or unbundled network element (UNE) rates, whichever is lower, she said. Thompson said that would be “a good incentive for ILECs to set UNE rates right.”
FCC granted 6 appellations to Iridium for transfer of licenses from Motorola to operate satellite telephone system. Commission also granted ancillary application for permission to assign license for unbuilt 2 GHz Mobile Satellite Service system and dismissed petition for reconsideration of order granting permission for pro forma assignment of Iridium handset license. FCC also approved petition from Iridium Carrier Services despite indirect foreign ownership of 25%.
As FCC gears up for Thurs. vote on ultra-wideband (UWB),several lawmakers urged Commission to not let date slip again on item. Agency had deferred vote at Dec. agenda meeting in response to letter from Commerce Secy. Donald Evans seeking more time to evaluate safety-of-life and other issues. Among apparent concerns of some on Capitol Hill and in private sector is lack of transparency in parts of negotiating process between NTIA and FCC. Because of high stakes nature of UWB proceeding, several industry observers said it had brought to forefront natural tension between FCC’s regulatory role over commercial spectrum and NTIA’s purview over govt. bands.
Current shift of TV transmissions to digital from analog “is a mess,” said Paxson Communications Chmn. Lowell (Bud) Paxson. In Mon. letter to FCC Chmn. Powell, he said: “The heart of that mess is the absence of immediate full digital must-carry” requirement on cable and satellite systems. “Let’s tackle that issue without delay by fully airing the matter” in several days of public hearings at FCC, he wrote Powell: “It is foolish to wait any longer and do nothing.” He first called for FCC hearings year ago in speech before FCBA (CD Feb 22 p6), but Commission didn’t respond. Repeating request, Paxson said TV stations were closing in on DTV construction deadlines “but there is no prospect of cable carriage of these digital signals.”
Paul Kolodzy, ex-DARPA, appointed senior spectrum policy advisor in FCC Office of Engineering & Technology, and chmn. of new FCC spectrum policy task force… N.Y. Times Co. promoted Christian Gwinn to senior vp-NYT TV… Stephanie Fleming, ex-RoadRunner, named senior vp-mktg.& new media, National Geographic Channel… Mike Farese, Tropian Inc., joins Communications Intelligence Corp. board… Joel Welch, ex-Lucent Technologies, joins Society of Cable Telecom Engineers (SCTE) as dir.-certification and program development… Tim Chambers promoted to senior vp-advanced platforms, Sony Pictures Digital Entertainment.
Speakers at NARUC winter meeting panel on special access agreed impartial performance standards for special access were of vital interest to telecom suppliers and buyers. Chip Casteel, WorldCom dir.-regulatory affairs, said improving incumbent telco accountability for special access provisioning was critical to development of effective local competition. He said lack of universal special access performance metrics meant unpredictable provisioning, which would upset CLEC business planning. Casteel said long distance entry would give Bell companies incentives to retain their overwhelming dominance in special access market so they could offer customers one-stop shop. Melissa Newman of Qwest said major question in special access standards debate was “which is the ‘right’ standard.” She said if there were to be national minimum performance metrics, they should be few in number and uniform for all providers. She suggested most useful general measures would be order confirm time, percent completed on time, percent done correctly first time, outage restoration time. Carl Johnson of N.Y. PSC staff said that 6 years after passage of Telecom Act, Verizon still had more than 80% share of special access market. He said Verizon special access service quality generally had been good up until adoption of price cap regulation in 1995, after which time quality plummeted for variety of reasons and didn’t get back to anything approaching good until late in 2000. He said PSC requirements such as credits to wholesale and retail customers for late special access installations could address intrastate service, but bulk of special access was interstate and it was up to FCC to develop and enforce performance standards. Brian Moir, partner with Moir & Hardman, said bulk of dedicated service contracts between big users and carriers consisted of performance metrics and guarantees. Special access today, he said, is mostly for data circuits essential to customers’ business operations. Performance is key for biggest users, he said, and they tend to stay with biggest provider because they are more likely to get performance they must have.
Benefits to consumers of EchoStar acquisition of DirecTV “far outweigh the costs,” so FCC “should give its blessings,” Progress & Freedom Foundation Pres. Jeffrey Eisenach said in comments. He asked Commission to pay close attention to “the potential efficiency and procompetitive effects” of deal on broadband market currently served by cable and telephone companies: “Satellite-delivered broadband Internet services represent the most likely near-term prospect of providing the third pipe to homes and businesses and there is every reason to believe that the merged firms will have an enhanced ability and incentive to fulfill this promise.” League of United Latin American Citizens (LULAC) also supported merger in letters to Attorney Gen. Ashcroft and FCC Chmn. Powell. LULAC Pres. Rick Dovalina said proposed deal would provide improve communication services and programming to Hispanic community.
FCC will accept late petition from Eagle Bcstg. that opposes EchoStar request for approval of acquisition of DirecTV. Eagle made filing one day late, but Commission said it accepted petition as “timely filed” in light of good-faith efforts to comply with agency’s new filing procedures.