FCC Comr. Martin said Tues. he was wary of instituting new regulations on Internet but indicated willingness to lift rules to achieve regulatory parity between cable and other kinds of companies that provided Internet or information services. He told reporters Commission should act soon on Notice of Inquiry pending more than year on how to define Internet delivered over cable. Question whether it’s telecom service, cable service, information service or some other kind of service has regulatory implications no matter which way it is decided, he said. Bankruptcy judge allowed Excite@Home to turn off its Internet network, leaving thousands of AT&T Broadband customers without service (CD Dec 4 p1, Dec 3 p4). Because Internet provided via cable has yet to be defined, FCC has no regulatory role now, raising criticisms from consumer advocates. Internet service provided by telcos over phone lines is regulated, which angers telco executives. Martin pointed to DSL provider Rhythms, which went out of business earlier this year and had to ask FCC for permission to discontinue service. In such case, Commission could provide transition period for consumers.
Consumer groups were weighing their options Mon. while hundreds of thousands of people were trying to cope with losing their high-speed Internet service. Consumers Union and Media Access Project bemoaned lack of regulation that they said might have prevented shutdown of service to 850,000 customers of AT&T @Home service. Consumer groups planned in coming days to seek action from govt. and to urge officials to take greater role in overseeing Internet-over-cable service. Shutdown hit AT&T cable modem customers Fri. night after San Francisco bankruptcy court judge decided that maintaining service was burden to struggling @Home (CD Dec 3 P4). While AT&T and Charter weren’t able to secure agreements with @Home to continue providing service, other major cable MSOs did. In addition to losing stored e-mails and other information, customers’ e-mail domain names were changing.
FCC denied complaint filed in 1998 by WorldCom’s predecessor MCI that alleged Bell Atlantic, now called Verizon, didn’t negotiate interconnection agreements in “good faith” as required by Bell Atlantic’s 1997 merger with Nynex. FCC said there was no “preponderance” of evidence that showed lack of good faith in those negotiations. Agency also dismissed cross-complaint by Bell Atlantic -- E-98-32.
Supreme Court Mon. denied petition for certiorari filed by Media Access Project and other consumer groups seeking to uphold FCC rules that limit number of cable systems one company may own. Without comment, high court let stand lower court ruling in Time Warner v. FCC that called Commission’s 30% vertical and 40% horizontal ownership caps arbitrary. Appeals court had said FCC pulled its numbers out of “thin air” (CD March 5 p1). Agency is weighing other options on possible ownership limits. Joining in petition were Consumers Union, Center for Media Education, Assn. of Independent Video and Filmmakers, National Assn. of Artists, National Alliance for Media Arts and Culture, Office of Communication of United Church of Christ and National Council of Senior Citizens. AT&T, which currently is over vertical cap, supported Time Warner in case.
Inmarsat said it welcomed news that President Bush had signed legislation extending Orbit Act deadline for its IPO. New deadline is Dec. 31, 2002, but FCC has authority to further extend it to June 30, 2003. Inmarsat Pres. Michael Storey said company was pleased its partners could compete fairly and evenly in mainland U.S. market since Congress had recognized it as private entity. As former intergovernmental organization, Inmarsat was restricted from conducting business in mainland U.S. except in coastal waters and in skies overhead under Orbit Act of 2000.
FCC probably doesn’t even have enough evidence to justify notice of inquiry on broadcast-newspaper cross- ownership rules, NAB said in comments on rulemaking (MM 01- 235). Broadcasters said FCC never had been able to show competitive harms from cross-ownership, so burden of justifying retention of rule “clearly lies with the Commission.” Goal of diversity of voices “reflects an outmoded regulatory philosophy of promoting the maximum diversity of ownership at all costs,” NAB said, and burden of justifying rule was increased by First Amendment implications. NAB also said any justification for ban had been reduced by expansion of information outlets and easing of other ownership rules, and that cross-ownership actually could increase news, information and programming options by allowing pooling of resources. Not surprisingly, Newspaper Assn. of America also supported eliminating rule, saying ban “serves no legitimate purpose in the modern media marketplace.” Group said “explosive” growth in media outlets justified eliminating ban and repeal “would lead to significant efficiencies and operational synergies” that would “benefit both consumers and advertisers.” Pooling resources would allow tailoring news content to different media, newspaper group said, and wouldn’t lead to “any material reduction in viewpoint diversity.” Consumer, civil rights and media public interest groups called on FCC Mon. to maintain limits on broadcast-newspaper cross-ownership. Groups cited study that said media diversity was at risk from mergers and acquisitions. They warned of dire consequences if FCC eliminated its long-standing prohibition against common ownership of newspaper and TV station in same market. Filing called for new policies “to open communications wires and the airwaves to more independent voices, in order to preserve our nation’s commitment to maintaining institutions and market forces that promote a robust democracy.” Document, more than 100 pages long, represented views of Consumer Federation of America, Consumers Union, Center for Digital Democracy, Civil Rights Forum, Leadership Conference on Civil Rights and Media Access Project. Filing cited 1945 Supreme Court ruling that First Amendment “rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public.” That principle will be jeopardized if broadcasters are allowed to own or be owned by newspaper in same community, filing said. Claims that Internet was viable news and information alternative ignored possibility that same entities could dominate Internet as well, filing said. “A small number of giant corporations interconnected by ownership, joint ventures and preferential deals now straddle broadcast, cable and the Internet,” filing said.
Former FCC Comr. Harold Furchtgott-Roth joins Economics Inc. as special consultant, remains visiting fellow at American Enterprise Institute… Optical Cable Corp. said it removed Robert Kopstein from positions as chmn., pres. and CEO; Senior Vp Neil Wilkin is acting pres… Changes at Advanced Communications Technologies: Gary Ivaska promoted to pres.-CEO; board member Randall Prouty becomes chmn.; Chmn.-CEO Roger May becomes nonexec. dir… U.S. Senate confirmed Arden Bement as dir.-National Institute of Standards & Technology… Andrew Baer, ex-Verizon, named Verestar chief information officer… Charles Tilden promoted to COO, InterDigital… James Matthews, ex-Home Wireless Networks, named senior vp-CFO, Adtran… Dennis Wald promoted to vp-affiliate mktg, Game Show Network… Harvey Lee, ex- Sierra Online, and Kelly Zmak, ex-Flipside.com, join V Global Media advisory board… Scott Feira promoted to partner in Arnold & Porter telecom practice.
FCC Wireless Bureau approved applications filed by Chadmoore Wireless Group to transfer 800 MHz and 900 MHz specialized mobile radio (SMR) licenses to Nextel as part of pending $130 million acquisition. Bureau turned down requests of some commenters who wanted agency to deny applications or impose conditions to resolve interference issues between SMR licensees and public safety users. “Those issues are being addressed elsewhere,” FCC said in order dated Nov. 30 but released Mon. Nextel asked agency last month in new White Paper to put rule changes into effect in next 6 months that would constitute spectrum swap between it and public safety licensees to help resolve interference issues (CD Nov 23 p1). Chadmoore and Nextel had sought FCC consent to assign 1,062 Chadmoore licenses to Nextel. Several local govts. had asked Commission to deny or impose conditions on applications, citing interference problems between commercial SMR licensees such as Nextel and public safety operations. Bureau said approval of application didn’t pose risk to competition in U.S. telecom markets or “any other public interest harm.” Several commenters had told FCC that best practices guide issued in Dec. 2000 to address solutions to public safety interference from SMR licensees wasn’t working. They suggested mitigation efforts outlined in guide “result in suboptimal use of either the commercial or the public safety systems or both,” order said. Order said bureau declined to grant request of some commenters that approval of Chadmoore license transfers be conditioned on Nextel’s filing reallocation proposal similar to White Paper last month. Order said bureau found that local govts. commenting on Nextel applications had not shown how they would be harmed or would experience relief from interference based on how Commission disposed of applications. Public safety comments “lack standing” in case, order found. “The more efficient use of spectrum, the additional services that will be provided to Chadmoore’s current customers, Nextel’s increased ability to compete in the CMRS marketplace and its increased ability to resolve interference issues with the public safety channels all constitute transaction-specific public interest benefits,” order said.
FCC should delay negotiations over 2 GHz band relocation until it resolves other 2 GHz issues such as reallocation of 2020-2025 MHz for 3G services and allowing mobile satellite licensees to offer terrestrial wireless, group of broadcasters said in comments (ET-95-18). Broadcasters said FCC should harmonize its plan for 2 GHz broadcast auxiliary service with other 2 GHz proceedings first. Filing was by Cosmos, Cox and Media General.
Cal. PUC said Verizon unilaterally couldn’t change existing interconnection agreements to reflect new FCC rulings unless contracts had explicit provision for amendment due to changes in laws or regulations. PUC’s ruling addressed CLEC complaints about letter Verizon sent to CLECs in May announcing rate caps on reciprocal compensation for Internet-bound local traffic, consistent with last spring’s FCC ISP remand order that set caps on ISP call compensation and established 36-month transition to bill-and-keep. Since FCC didn’t explicitly preempt preexisting agreements, PUC said it still had jurisdiction over reciprocal compensation disputes in interconnection agreements that were in force before effective date of FCC order. PUC (in Case 00-02-005) said that when interconnection agreements lacked change-of- law provisions, parties remained subject to existing ISP reciprocal compensation arrangements until pact expired. Meanwhile, PUC administrative law judge proposed Pacific Bell and Verizon be required to pay new type of performance failure penalties directly to CLECs in addition to any other wholesale service quality penalties carriers might owe. Payments would be owed to CLECs whose customers received worse service than incumbent’s own retail customers. Plan (Case 97-10-016) would require establishing explicit performance benchmarks where incumbent’s performance for its own customers could be compared to performance for CLEC customers. ALJ said such penalties would provide strong incentive to incumbents to provide wholesale-retail service parity, and suggested 6-month trial of plan.