Merger deal announced Tues. night by Comcast Corp. and AT&T comes at time when FCC has no ownership cap in place by which to measure if combination of nation’s first and 3rd largest cable is too big. New company, called AT&T Comcast Corp, will have about 22 million subscribers, be major presence in 17 of nation’s 20 largest cities and be competitor in 41 states. AT&T’s decision, which received unanimous approval by its board Tues., came after Comcast significantly upped its original $44 billion price offered, and rejected, over summer. Under terms of agreement, AT&T will spin off its broadband unit and simultaneously merge it with Comcast. New company assumes nearly $20 billion in debt and other liabilities from AT&T and its subsidiaries, as well as $5 billion of AT&T subsidiary securities held by Microsoft Corp. Microsoft agreed to convert that $5 billion into 115 million shares of new company.
Four FCC commissioners, 14 members of Congress, 2 FTC commissioners and several other govt. officials are among those scheduled to attend or speak at Consumer Electronics Show in Las Vegas Convention Center Jan. 8-11, CEA said. Public policy panels at convention include: Jan. 8, Digital Download (11:30, N250), In the Public Interest (1:30, N257), and Driver Focus and In-Vehicle Electronics (1:30, N256); Jan. 9, Tax Relief (noon, N254) and Which Party Is Best for Consumer Technology (2:30, N255); Jan. 10, Electronic Solutions to Energy Use (10:30, N256). Legislators slated to attend include Sen. Burns (R-Mont.) and Reps. Barton (R- Tex.), Bilirakis (R-Fla.), Buyer (R-Ind.), Ehrlich (R-Md.), Herger (R-Cal.), Issa (R-Cal.), Jefferson (D-La.), Johnson (R-Cal.), Oxley (R-O.), Smith (D-Wash.), Stearns (R-Fla.), Upton (R-Mich.), Weller (R-Ill.). FTC Comrs. Sheila Anthony and Mozelle Thompson, as well as Grant Aldonas, Commerce Undersecy. for International Trade, and David Garman, Energy Asst. Secy. for Energy Efficiency, also are to attend.
FCC rules exempting SMATV operators from franchise obligations give them “ostensible” competitive advantage over cable operators, R.I. Div. of Public Utilities & Carriers (DPUC) said, and cable is justified in questioning why it has to bear regulatory obligations and associated cost. That disparity helps SMATV operators sell their services at discounted rates, DPUC said in interim ruling on New England Cable TV Assn. (NECTA) petition for clarification of status of SMATV operator Starlight Communications(CD Dec 18 p9). Clearly Starlight and Cox, largest cable operator in R.I., provide “relatively indistinguishable” video programming service, agency said. “The Division acknowledges that the fine distinction associated with Starlight’s ‘use’ of the public right-of-way, through Verizon, vis-a-vis the proprietary cable infrastructure used by NECTA members offers little solace in understanding why Starlight is not required to construct and maintain an institutional network (I-Net) and public access studios for its subscribers,” DPUC said. Saying it couldn’t deem Starlight to be cable operator under current FCC rules, DPUC said, it would file amicus brief if NECTA decided to challenge Starlight’s status at FCC to “convey our conviction that supervising and regulating all cable service operators in Rhode Island is in the public interest.” Since several years had passed since FCC’s ECI decision, agency may be willing to “revisit and perhaps reverse its previous policy on SMATV cable operators,” it said.
Indicating FCC staff has been questioning at least one aspect of BellSouth’s Sec. 271 application for Ga. and La., company sent 10-page ex parte filing to Commission and staff Mon. defending its compliance with “checklist Item 2.” Deadline for FCC action on that application is Dec. 31. At issue, according to filing, is whether BellSouth has properly integrated its preordering and ordering functions. Competitors must be able to electronically transfer preordering information such as customer’s address onto order forms that won’t be rejected by incumbent’s operations support system (OSS). Process involves competitors’ transferring preorder information from incumbent OSS to their own back office systems and then back into incumbents’ ordering interface. BellSouth said it submitted evidence of compliance to PSCs in both Ga. and La. No CLEC challenged integration issue in Ga. and AT&T was only one to raise it in La., BellSouth said, and AT&T “has no significant local competition activities” in that state. BellSouth said FCC staff raised concerns in Nov. 20 meeting and company responded by submitting letters from 3 competing carriers -- GoComm, Momentum Business Solutions and Access Integrated Networks -- that said they hadn’t had problems with integrating preordering and ordering. “Importantly, even prior to the filing of this additional material, BellSouth, as well as the [Ga. and La. PSCs] had clearly submitted evidence satisfying the prima facie proof requirements,” carrier said. BellSouth also disputed recent WorldCom ex parte filing that raised integration issue. Bottom line, BellSouth said: (1) At least 4 competing carriers have integrated preordering and ordering. (2) Ga. and La. PSCs have found integration is functioning properly as has KPMG testing company.
Suzanne Tetreault promoted to FCC Enforcement Bureau assoc. chief and chief of staff… Hill staffers moving to ML Strategies: Mark Buse, ex-aide to Sen. McCain (R-Ariz.); David Leiter, ex-aide to Sen. Kerry (D-Mass); Patrick Mara, ex-aide to Sen. Chafee (R-R.I.)… Lori McFarling advanced to senior vp-gen. mgr., Discovery Digital Networks…Harold Simpson, vp-R&D, TV Bureau of Advertising, retires in Feb. after 41 years with Assn.
FCC should deny Verizon’s Sec. 271 request to offer long distance service in R.I. because rates it charges competitors for unbundled network elements (UNEs) are “substantial barrier to UNE-based competition,” Assn. of Communications Enterprises (ASCENT) said. In comments filed Mon. in FCC’s review process, ASCENT said use of UNE platform in R.I. “lags far behind” N.Y. because of high prices. To serve residential customers in R.I. using UNE platform, CLEC would have to pay Verizon 35% more than Verizon charges its retail customers for its unlimited local calling service offering, said ASCENT, which represents resellers and other competitors. That forecloses CLECs from using UNE platforms in R.I., ASCENT said. AT&T joined in opposition, saying problem was “simple and straightforward” -- Verizon’s UNE rates in R.I. didn’t comply with FCC’s Total Element Long-Run Incremental Cost [TELRIC] pricing standard. Even though R.I. PUC issued order establishing TELRIC principles, “those principles are not in effect now and they have not been applied to Verizon’s current rates,” AT&T said in its filing. WorldCom accused Verizon of “seeking to lower the bar” for Sec. 271 entry by submitting application based on UNE rates “that are not yet in effect and that are not as low as even the current rates in Massachusetts and New York.” Sprint said “the public interest requires that the application be denied.” Verizon had said 8 CLECs were competing in R.I. but Sprint said only one -- Cox Communications -- was competing for residential service. Rest are in business market. Sprint also urged regulators to give more emphasis to importance of CLECs’ access to last-mile facilities from Bells. Sprint said it had greatly reduced its CLEC operations and abandoned local entry via resale or UNE-P because those entry vehicles didn’t prove profitable. “Among factors contributing to Sprint’s decision was the difficulty of obtaining the ‘last-mile’ facilities needed,” it said. FCC staff recently asked Verizon to submit comparison of UNE rates in Mass. and R.I., which Verizon did Mon. in ex parte filing. Dept. of Justice is due to give its evaluation of R.I. application by Jan. 4 and FCC is required to make final decision by Feb. 24 -- CC Doc. 01-324.
Rep. Wolf (R-Va.) will hold press briefing today (Thurs.) to address broadcast liquor advertising, but isn’t ready to introduce legislation, staffer said. Although staffer acknowledged earlier in day that legislation was being considered for possible introduction Thurs., she said later that news conference would only address need for legislation in near future. Broadcast industry source said it remained unclear whether Wolf bill would seek to ban liquor ads on TV or would propose Dept. of Justice inquiry into issuer.
Officials of IBM, Intel, Sharp Labs of America, Siemens and Texas Instruments urged FCC Chmn. Powell to push for “prompt adoption” of ultra-wideband rules. They said they were writing after FCC decision earlier this month to take UWB off Dec. 12 agenda meeting, with plans to take it up again in Feb. meeting. “We appreciate your commitment to resolve this process in February,” they wrote. “We are concerned that a short delay could be extended, which in turn would be a substantial setback to the timely development and deployment of UWB services. This could have a negative impact on current industry momentum focused on building UWB technology and products.” Letter was signed by Kevin Kahn, dir., Communications & Interconnect Technology Lab for Intel; Steven Stewart, dir., public affairs, IBM; John Boidock, vp- govt. relations, Texas Instruments; Ken Gray, dir., Multimedia Communications Dept., Sharp; Gregg Ward, vp-govt. relations, Siemens. Group said UWB proceeding was 3 years old and had resulted in docket with 800 documents. “UWB proponents have filed detailed technical analyses showing that operation of their devices will not cause harmful interference to other users of the spectrum, both government and nongovernment,” letter said: “It is time to issue a decision.” At latest, decision should be made at Feb. agenda meeting, letter said.
Kan. Supreme Court ruled that FCC’s slamming rules didn’t preempt state’s antislamming laws. State’s top court affirmed lower court decision upholding Oct. 1999 slamming conviction of Frontier Communications under provisions of state law. Case involved unauthorized switch of Frontier local exchange customer from Southwestern Bell toll service to that of switchless reseller International Exchange Communications. Customer filed complaint against Frontier alleging telco had submitted change order without verifying its legitimacy. Frontier argued that it merely was intermediary that had no authority to verify change orders under FCC rules, but court disagreed, saying that under state law, Frontier fit definition of “submitting carrier” with responsibility for verifying changes. Court said nothing in FCC rules would compel state to absolve Frontier of its verification responsibility under state law. Court also rejected Frontier’s argument that state law and FCC rules were in conflict, saying Frontier had misinterpreted FCC rules and would have borne verification responsibility under federal rules as well.
In advance of upcoming regional meetings that lead to World Radio Conference (WRC) in 2003, WRC Advisory Committee took up draft U.S. views on 10 more agenda items Wed., although other policy areas were awaiting final position from U.S. govt. before preliminary view could be crafted. “Our stated objective when we started this process was to be ready a year or more in advance [of WRC] to consult with our colleagues around the world, so that we have solid proposals that have international support as we go into Caracas,” FCC International Bureau Chief Donald Abelson said at WRC Advisory Committee at FCC hq Wed. Next WRC meeting is set for 2003 in Caracas, Venezuela, with Latin American regional meeting in advance of WRC in Feb. “The goal is to try to come up with, as soon as we can, final proposals… so that we have a great chance of success when we get to Caracas,” Abelson said. U.S. planning process for next WRC has emphasized having positions crafted well enough in advance of regional telecom policy meetings so U.S. could weigh in as those broader stances were formed. FCC last week closed comment period on preliminary views and draft proposals, including dozens adopted by WRC Advisory Committee as of Oct.