FCC released its annual summary of Telecommunications Industry Revenues for 2000 showing total was up 9% to $293 billion. Increases in other segments included: (1) Wireless industry, up 28% to $62 billion. (2) Competitive local telephone companies up 68% to $10.9 billion, accounting accounted for 9% of $121 billion of local service revenue. (3) Total toll service up to $109.6 billion from $108.2 billion, reflecting $3.2 billion decrease in switched toll and $3 billion increase from long distance private lines.
FCC dismissed about 100 petitions for reconsideration of reports on universal service and first and 2nd report on local competition, saying many of issues raised in petitions had become moot or irrelevant. Comr. Abernathy, in separate statement, said Commission should consider use of form orders to deny petitions for reconsideration and applications for review so it could avoid situations where petitions became moot because they have remained pending for so long. Comrs. Copps and Martin said they supported Abernathy’s efforts to eliminate outstanding petitions, but said process was “far from ideal.”
Group of industry observers, companies and individuals announced formation of TeleTruth, national alliance for customers’ telecom and broadband rights. Organizers said group was formed to defend public’s interests, educate and inform customers on how to combat monopoly control, promote competition and innovation, accelerate deployment of services. “The year 2002 is a critical time for all phone and broadband customers. Prices for local services are going up, customer service is getting worse and the promise of high-speed DSL has not been kept,” said Bruce Kushnick, chmn. of TeleTruth and exec. dir. of New Networks Institute. Group is against Tauzin-Dingell bill, describing it as effort to eliminate competition provisions in 1996 Telecom Act. Joseph Plotkin, adviser to TeleTruth and dir. of DSL/marketing for ISP Bway.net, described FCC under Chmn. Powell as unbalanced, “ignoring the plight and concerns of small competitors while clearing the way for the largest phone monopolies to expand into and disrupt competitive long distance service markets.”
EchoStar said carriage complaints by Word Network and other public interest programmers “underscores the importance” of its pending takeover of Hughes (CD Jan 29 p8). Spokesman said deal would free up bandwidth to provide more services to more people. Word Network would continue to be carried because it currently is on DirecTV, EchoStar said. Spokesman, responding to criticism and protests at Washington hq, said EchoStar selected African-American owned Colours TV and StarNet as part of 21 public interest channels being offered by DISH network. Spokesman said EchoStar also carried BET and Black Starz stations that were geared to African-American audience. He refused to confirm planned meeting today (Wed.) of representatives of Word and EchoStar Chmn. Charles Ergen in Washington, citing nondisclosure agreement with Word Network. Civil rights leaders told Communications Daily following March on Mon. that they would be returning to Washington for meeting to discuss concerns about carriage of Word Network, but spokesman for group said late Tues. that meeting was “iffy.” He said protests would move to Littleton, Colo., and FCC if Ergen refused to meet groups’ demands. Meanwhile Word filed opposition petition against EchoStar-Hughes deal at FCC Fri.
Increased focus on broadband “in the last 3 to 4 months has made the issue bigger than Tauzin-Dingell,” Verizon Pres. Ivan Seidenberg said Tues. He made his comments to reporters following his keynote that opened the Comnet show in Washington. Position that govt. should make broadband deployment top priority, stated earlier this month by Silicon Valley advocacy group TechNet (CD Jan 16 p2), “is gaining momentum,” Seidenberg said. Referring to Bell-friendly broadband deregulation bill sponsored by House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.), he said he believed House planned floor vote in late Feb., and bill “still had the vast membership of the House that likes what it does.” Seidenberg predicted Senate would consider Tauzin-Dingell “as well as other approaches,” and that bill “would be a catalyst for broadening the debate.” While Verizon supports “most of” Tauzin-Dingell bill, it would accept any deregulatory relief, he said.
Franchise fee isn’t surcharge or tax and is owed by cable operator, National Assn. of Telecom Officer & Advisers and coalition of Tex. cities said in brief filed in 5th U.S. Appeals Court, New Orleans. It’s challenging FCC order allowing operators to pass through to subscribers franchise fees on non-subscriber-related revenue (CD Oct 5 p8). Franchise fee is expense and part of operator’s cost of doing business, they said. Contending cable industry was increasing rates based on FCC order, cities said customers could be overcharged $100 million annually if practice were allowed to continue. FCC order gives cable operator discretion to cross-subsidize its ad and home shopping business through itemized surcharge on subscriber’s bill, it said, and order “simply ignores” plain meaning of statute. “The more successful the advertising and home shopping business, the more ordinary subscribers must pay, and the greater the cross-subsidy,” petitioners said. Such cross- subsidy is inconsistent with congressionally mandated market approach to rates and allocation requirements, they said. Commission acknowledges “perverse” effect of its order that the more cable system can support itself through nonsubscriber revenue, the more subscribers must pay, petitioners said. FCC order also concedes that line itemization on subscriber bills now will be “inaccurate,” cities said: “There is no relationship between the amount of the subscriber bill and the amount an operator owes as a franchise fee on nonsubscriber revenue. It appears that operators intend to go through an imprecise process of estimating nonsubscriber revenues.” Commission also hasn’t set mechanism for calculating amount of passthrough of nonsubscriber franchise fees on subscriber bills, coalition said.
Inmarsat still plans “to go public before the end of the year,” but exact date hasn’t been decided, company official told us. Official restated public position revealed in FCC filing 6 months ago (CD May 16 p4): “An IPO is very much on the agenda, but we will need to wait until some stability returns to the U.S. markets.” Weak market forced Inmarsat to cancel planned IPOs twice last year. Official said everything now was in place, including FCC license for service to 5 company distributors. Inmarsat also has set Nov. 18 for launch of regional broadband global area network (B-GAN) that will allow high-speed data transmission of up to 144 kbps. Company has signed contracts worth $220 million to lease satellite capacity from Thuraya and terminals from Hughes, official said. He said “interim agreement” with Thuraya would be used until launch of new Inmarsat satellites in 2003 and 2004.
FCC isn’t moving to return NextWave re-auction deposits as quickly as expected in new development that could tie up $3.1 billion in down payments for several more months, industry sources said. Commission now is said to be likely to return portion of down payments closer to time that U.S. Supreme Court makes decision on whether to grant FCC’s petition for review of U.S. Appeals Court, D.C., ruling that had overturned agency’s decision to cancel NextWave’s licenses for missed payment. NextWave’s opposition brief to Commission’s petition for certiorari is due Fri. at Supreme Court, which is expected to decide by spring whether to hear appeal, possibly by late Feb. or early March. Item on returning part of down payments had reached 8th floor at FCC and decision on return of at least most of deposits for Jan. 2001 re-auction winners had been expected as early as last week (CD Jan 25 p6).
FCC asked for comments on how to fine-tune its rules for administering e-rate program, part of universal service program that provides funding to connect schools and libraries to Internet. In Notice of Proposed Rulemaking (NPRM) issued Jan. 25, FCC said parties, including schools, libraries, service providers and representatives of local and state govts., had made proposals to improve program. NPRM will explore those ideas, as well as any others offered by parties: “We continue to seek ways to ensure that the program funds are utilized in an efficient, effective and fair manner, while preventing waste, fraud and abuse.” Agency said it sought comment on variety of eligibility issues such as whether: (1) Wide area networks, wireless services and voice mail were eligible for e-rate funding. (2) Schools and libraries could get discounts for Internet access service that might have limited amount of content if it was most cost-effective way to get access. (3) Schools and libraries should be required to provide certification that they were in compliance with Americans With Disabilities Act. (4) Changes were needed to rule governing when members of consortium could receive service from tariffed provider at below-tariffed rates. FCC also seeks comment on issues that arise once discounts have been granted, such as: (1) How schools and libraries make payments. (2) Limits on transferring equipment obtained with universal service discounts. (3) Allowing members of rural communities to use, for other purposes, excess capacity of services obtained through e-rate discounts. NPRM also will look at proposals for improving appeals process, strengthening enforcement, handling unused funds. Comments will be due 45 days after publication in Federal Register. Comr. Copps said that although he “wholeheartedly” supported seeking comment on ways to improve program, he dissented on one part involving whether unspent funds in one year could be provided to schools and libraries in later years. He said Commission made clear in its original rules in 1997 that funding could be carried forward to subsequent years, “yet the notice the Commission adopts today states that our rules are ambiguous” on that issue. “I find no ambiguity.”
Pegasus supports FCC decision to file Vivendi documents related to investment in EchoStar and initiate new comment period if investment present issues aren’t raised in initial transfer application, Vp Howard Verlin said in statement.