When President Bush gives his first State of Union address this evening (Tues.), industry will be listening for even most modest reference to broadband. Telecom Industry Assn. (TIA), TechNet, Computer Systems Policy Project (CSCC) and other trade groups have urged Administration to clear regulatory hurdles and provide appropriate stimulus to allow creation of nationwide 100-Mbps national broadband network, far faster than traditional cable modem or DSL service that many associate with broadband. But Bush hasn’t announced formal position on broadband, although many of officials, most recently last week NTIA Dir. Nancy Victory, hinted one was coming. Bush’s mention of broadband in his speech would be very beneficial in promoting issue to policymakers, TIA Pres. Matthew Flanigan told reporters Mon.: “It will be very important in getting us over the hump.”
FCC granted Infosat Communications blanket authority to operate 50,000 mobile earth terminals (METs) on noninterference basis to provide mobile satellite service (MSS) in U.S. via Canadian-licensed satellite operating in portions of L-band. Commission said grant would facilitate increased competition in MSS market. It denied petition to deny by Motient and rejected comments by Space Systems Licensee, Iridium, Globalstar, Norcom Networks. Each opposing party said Infosat hasn’t demonstrated its operations would be consistent with DISCO II requirements. They said that: (1) Grant would prevent Motient from gaining access to sufficient spectrum to operate domestic MSS system. (2) Infosat’s proposal didn’t meet Commission’s requirements for priority and preemptive access for aeronautical and maritime safety communications. (3) Infosat would benefit unfairly from enhanced pricing flexibility due to subsidies Canadian govt. provided to TMI, which owns MSAT-1 satellite that will be used by Infosat. Motient also said Infosat had failed to obtain necessary 214 authority to provide international MSS to and from mobile terminals located in U.S. Commission said it didn’t address all of opposition concerns because identical arguments had been made in previous cases. It said Infosat was expected to obtain Sec. 214 authority before offering common carrier service. FCC said Motient had provided no evidence that Infosat didn’t intend to comply with its regulatory obligations. It also said assertions that Infosat’s application violated FCC freeze on lower L-band spectrum were misplaced since authority wouldn’t be official until action in lower L-band proceeding was finalized.
“Probably the greatest problem under the Telecom Act has been the difficulty in getting the FCC to write rules that meet court scrutiny,” American Enterprise Institute fellow Harold Furchtgott-Roth told reporters Mon. “If someone said in 1996 that 6 years later there would not be final rules, a lot of [Hill members] would be surprised,” said Furchtgott- Roth, ex-FCC comr. With 6th anniversary of Act approaching on Feb. 8, he questioned how corporations could operate without final rules governing their businesses: “It must be very difficult to make investment decisions.” Also speaking at news briefing, AEI fellow Gregory Sidak said he and economist Jerry Hausman of MIT had completed study showing that people with low incomes and poor education paid more for long distance service than other people. They tended to use higher cost basic services for reasons Sidak said he couldn’t explain. However, he said, such people are doubly hurt by fact that cost of basic phone service has risen while discount services and access charges have dropped. AT&T spokesman reacted strongly to study, saying there was “no correlation between income levels and those who subscribe to the basic rate schedule.” Furthermore, he said, “it’s patronizing and demeaning for this paper to say low-income people don’t shop around for long distance or any other service they are buying.”
EchoStar CEO Charles Ergen agreed to meet with civil rights leaders and representatives of WORD Network tomorrow (Wed.) in Washington (CD Jan 16 p4). Supporters of religious network have been picketing DISH network in effort to gain access and have vowed to oppose takeover of DirecTV. Announcement of meeting came shortly after 2nd protest, this time by about 800 people at Washington hq that culminated in arrests in human rights activists Dick Gregory and National Action Network (NAN) officials Sam Riddle of Denver and Charles Williams of Detroit, where WORD Network is located. Meanwhile, Small Business Survival Committee wrote letter to FCC Chmn. Powell in support of proposed EchoStar deal. Chmn. Karen Kerrigan said acquisition would mean “enriched competitor for cable companies” and “more competition means better and more innovative offers for consumers and small businesses.”
Satellite Industry Assn. in letter to FCC Jan. 25 opposed Nextel proposal for realignment of 36 MHz of 800 MHz band to alleviate CMRS public safety interference. SIA asked Commission to preserve 2 GHz MSS spectrum allocation and not reallocate any portion of band to Nextel, saying viability of services to be offered by 2 GHz MSS licensees would be compromised if agency awarded Nextel spectrum. SIA said proposal would result in “delay, confusion and possible increased cost of a more complicated spectrum plan at 2 GHz, which could be extremely damaging to the prospects of many 2 GHz MSS licensees.” In response to Nextel’s contention that proposed realignment wouldn’t cause incumbent licensees to lose any spectrum, SIA said Nextel was aware that FCC had issued eight 2 GHz MSS authorizations and set implementation milestones for systems. Licensees would have to expend billions of dollars in relying on Commission’s allocation by investing in satellites, launch vehicles and major gateway sites, SIA said, and it would be public disservice if Commission didn’t allow adequate time for new entrants in MSS industry to develop their systems and offer services. Assn. said MSS provided communications with rural and remote areas and underserved communities, and tampering with 2 GHz allocation would disrupt FCC’s long-standing objective of offering universal access to basic and advanced telecom services there.
House Commerce Committee Chmn. Tauzin (R-La.) is scheduled to keynote 3rd annual Quello Communication Policy & Law Symposium March 26 at Willard Hotel, Washington, sponsored by Mich. State U. Detroit Law College. Others include FCC Comr. Martin, Daniel Brenner, NCTA senior vp-law and regulation, FCC Chief of Staff Marsha MacBride, NARUC Pres. William Nugent -- 517-432-6800.
Qualcomm told SEC in filing late Fri. it no longer was obligated to make $300 million preferred stock investment in NextWave. In Aug., Qualcomm outlined investment in NextWave, which last year selected CDMA2000 to build out its national wireless network. Planned investment was part of equity financing covered under NextWave’s 2nd plan of reorganization in U.S. Bankruptcy Court, White Plains, N.Y. Commitment by Qualcomm to buy 2 million shares of preferred stock, it said in SEC filing, was contingent on: (1) Bankruptcy court approval. (2) Successful consummation of NextWave’s Aug. 2001 reorganization plan. (3) “Satisfactory resolution” of all disputes involving NextWave’s wireless PCS licenses. Qualcomm said its obligation hinged on bankruptcy court approval of company’s investment by Oct. 31. Approval also was needed for Aug. 15 technology agreement between NextWave and Qualcomm. “The approvals required by October 31, 2001, have not been obtained, and the company is entitled to terminate its investment agreement with NextWave,” Qualcomm told SEC. CDMA developer also said if NextWave abandoned reorganization plan filed in Aug. and moved ahead with new plan, Qualcomm also wasn’t obligated to terms of its investment. “As a result of the uncertainty surrounding NextWave’s financing plans, the terms of a settlement with the FCC and other factors, there is significant uncertainty as to whether the company will make its planned investment in a reorganized NextWave,” Qualcomm said.
Qwest abandoned all plans to share sensitive local exchange customer information with affiliates until after FCC issued new national rules on privacy of customer proprietary network information (CPNI) later this year. Qwest CEO Joseph Nacchio said any future decisions on information sharing within its family of companies would depend on what FCC said. “When many of our customers tell us that they're concerned or don’t understand what we're doing, it’s time to stop the process and make a change,” he said. Nacchio said 5% of Qwest’s 12 million local customers called with questions and concerns about notices it had sent with Dec. phone bills explaining its information-sharing plans and giving instructions for blocking information sharing. He said Qwest had invested billions of dollars to improve service and customer perceptions about value of its services: “We will not allow misunderstandings to unravel all the good we've done or minimize our best service results in more than 7 years.” Nacchio also announced that David Heller, Qwest’s risk management vp, would be given additional duties as chief privacy officer, overseeing implementation, enforcement and review of company’s privacy policies.
Dept. of Justice recommended Mon. that FCC approve Verizon’s application to provide long distance services in N.J., although it raised concerns about “certain changes in prices” charged to CLECs by Verizon there. “Conditions in [N.J.] local telecommunications markets now appear favorable to fostering competition,” DoJ Antitrust Chief Charles James said. However, he suggested that FCC keep eye on 2 facets of local competition in that state: (1) N.J. Board of Public Utilities recently reduced rates for unbundled network elements (UNEs), but it also instituted “significant increase” in Verizon’s one-time charges for “hot cuts.” Several CLECs have said those charges could impede their ability to compete, DoJ said. Hot cut is process in which Verizon physically disconnects customer’s phone line from Verizon’s switch and reconnects it to CLEC’s switch. (2) Department suggested that FCC exercise oversight of Verizon’s wholesale billing functions in N.J. “in view of the problems found last year with Verizon’s [Pa.] wholesale billing systems,” which are same as those used in N.J.
Increasing spectrum for public safety systems that operate in congested VHF high band would pave way for complex or wide area systems that would bolster their communications, FCC said in report to Congress released Mon. Report is companion to one released Fri. by NTIA (CD Jan 28 p3). Despite acknowledging need for more public safety spectrum, joint reports required of NTIA and FCC by fiscal 2001 defense authorization legislation found no readily available additional frequencies as alternatives to 138-144 MHz for public safety systems. Authorization legislation required studies by FCC and NTIA, as well as still-unreleased one by Defense Dept., to examine possibility of sharing in 138-144 MHz band by existing military users and public safety systems. Sources said industry attention now was turning to Defense Dept. report to Congress, designed to analyze in-band sharing possibilities at 138-144 MHz. Joint NTIA-FCC reports depict congested use of existing public safety operations in those bands and tough choices that lie ahead for making additional allocations.