Holding that municipalities had “very limited and proscribed role” in regulating telecommunications, 9th U.S. Appeals Court, San Francisco, last week struck down telecom ordinances of Auburn and more than dozen other Wash. cities that, among other things, required telecom providers to pay application fees, file detailed disclosure of matters such as maps, corporate policies and financial and technical qualifications and provide cities with network capacity. In challenge to ordinances brought by Qwest, court ruled that Sec. 253 of Telecom Act barred all state and local regulations that “prohibit or have the effect of prohibiting” any company’s ability to provide telecom services unless regulations fell with statute’s “safe harbor” provisions relating to local regulation of rights-of-way. “The preemption is virtually absolute and its purpose is clear -- certain aspects of telecommunications regulations are uniquely the province of the federal government and Congress has narrowly circumscribed the role of state and local governments in this arena,” court said. Three-judge panel conceded that Act didn’t define management of public rights-of-way, but said it relied, as several federal courts had done, on FCC interpretation as meaning “control over rights-of-way itself, not control over companies with facilities in the rights-of-way.” Finding that several provisions violated Sec. 253, court struck down: (1) Requirement that companies submit lengthy and detailed application form to enable cities to determine financial soundness, technical qualifications and legal ability to provide telecom services. Such requirements aren’t related to regulation of public rights-of-way, court said. “The upshot of the application process is to regulate the provision of telecommunications services rather than to regulate the rights-of- way.” (2) Requirements for reporting transfer of ownership and stock. Although cities may want to “have a right to know” who owns shares in the telecom companies that use rights-of-way, court said, municipal regulation of stock transfers “extends far beyond management of rights-of-way.” (3) Requirements that franchisees offer “most-favored-community” statutes (best available rates and terms) and provide free or excess capacity for use of cities. Those requirements bear no relation to rights-of-way management, but focus solely on rates, terms and conditions of service, court said. (4) Provisions giving cities “unfettered” discretion to grant, deny or revoke franchise based on “unnamed factors.” Grant went far beyond limits of anything city deemed to be in public interest, court said, holding that such ordinances were too vague and too broad to comply with Sec. 253. Referring to cities’ argument that stock ownership was linked to company’s financial well-being that ultimately could affect its use of rights-of-way, court said: “Under this semantic 2-step, Sec. 253 will have no limiting principle. The safe harbor provisions would swallow whole the broad congressional preemption. Municipalities could regulate nearly any aspect of the telecommunications business.”
Spectrum allocation, regulations on space imaging and expediting process for satellite export controls are 3 main issues on tap for Aerospace Industries Assn. (AIA), Bruce Mahome, AIA dir.-space policy, said Mon. after news briefing in Washington on declining R&D federal budget for aerospace research. AIA has been working “to reassure [FCC International Bureau] that it should continue to back the industry,” said David Logsdon, AIA mgr.-space operations, and “put money into [R&D] efforts.” “Some people in the FCC are nervous the satellite industry can deliver workable systems after problems with Iridium and Globalstar” and satellite phones, he said.
HOT SPRINGS, Va. -- FCC under Chmn. Powell will be “flexible” and will focus on core issues of agency organization, enforcement and spectrum management, according to staffers at FCBA Annual Seminar here over weekend. Chief of Staff Marsha MacBride said Powell wasn’t formulating specific policy positions, instead was addressing “change management” as new Commission took shape. Chief Legal Adviser Peter Tenhula also said no new rules currently were being contemplated. Rather than force agenda, he said, “our priorities are to do what we have to do when we have to do it.”
It’s hard to believe building access issue still is in play at FCC because agency intervention is “unconstitutional, unauthorized and unnecessary,” Gerry Lederer, vp, Building Owners & Managers Assn. (BOMA) said Mon. Speaking at FCBA Brown Bag Lunch at Fleischman & Walsh, Lederer said BOMA members actually liked CLECs because they offer tenants choice, thus enhancing building amenities. “We want these folks [CLECs] to succeed” because they increase property values, he said. What BOMA doesn’t want is intrusion by govt., he said, because “it’s unauthorized” intrusion onto public property. “We aren’t utilities.” Many office buildings do allow competitive access but “there are practical space limits in our risers,” Lederer said. ALTS Pres. John Windhausen, also on program, complimented Lederer for putting “a really good face on bad arguments.” Windhausen said CLECs faced “endless negotiations,” high fees or requests for part of revenue when they went to property owners seeking entry. “The biggest problem is delay,” he said. Windhausen also rebutted BOMA’s legal arguments: (1) It’s not unconstitutional to demand access to multitenant buildings because owners already have let ILECs in. (2) “Takings” argument doesn’t work because CLECs are willing to pay for access, he said. (3) FCC has authority to regulate inside wire because it used to do so. It may have deregulated inside wiring in 1980s but “it certainly can regulate it now without a change in the law.” Windhausen said FCC last year prohibited exclusive contracts for telecom services in multitenant buildings but needed to go further. Lederer questioned Windhausen’s concern about tenants’ being deprived of choice: “The facts don’t prove it out. When asked in a survey if they are served by the provider of their choice, 99% of tenants said yes.” Noting that car phones operate in cars, Lederer asked whether FCC should regulate cars the way it wants to regulate buildings: “How far does this go?” Marketplace will work as long as there’s not “invidious government intrusion,” Lederer said. Laurence Bensignor of developer Van Metre Companies, described planned community in Va. where one telecom provider was selected to develop sophisticated infrastructure that offers phone, video home security, Internet services. Residents can select another provider but in essence will be paying twice because they still must pay for mandated developer-selected provider, he said. Bensignor said that arrangement was best way to build infrastructure. Lederer said that arrangement wouldn’t work in office buildings.
N.Y. PSC approved Global Crossing’s sale of Frontier Telephone of Rochester and 5 other small Frontier-affiliated incumbent telcos to Citizens Communications, with only 2 conditions. Deal is part of $3.65 billion Global sale to Citizens of local exchange and wireless operations in 13 states that was approved by FCC April 16. PSC said Citizens must forgo $4.9 million rate increase that had been approved for Frontier and must maintain “major” operations and administrative center in N.Y. Citizens said it expected to close sale within 60 days.
In attempt to resolve dispute between long distance providers and CLECs, FCC Fri. placed limits on how much CLECs could charge long distance companies for access to customers. In news release, agency agreed with long distance companies that “certain competitive LECs had used the [tariff rate system] to impose excessive rates for access service.” Issue has been boiling for at least one year, with AT&T, for example, refusing to pay some CLEC access charges because they are so much higher than rates charged by ILECs for same service.
Three scholars of Annenberg Public Policy Center urged FCC to monitor technical quality of all high-speed data services and mandate that all high-speed ISPs disclose service quality. In recent ex parte filing on Commission’s open access inquiry, Hugh Donahue, Shawn O'Donnell and Josephine Ferrigno-Stack recommended that agency “articulate a specific policy for gathering and analyzing measures of such high-speed Internet service characteristics as cost, performance, down time, privacy, security and customer service.” They suggested FCC also seek “data on, and audits of, the less technical aspects of service quality (adherence to privacy and security policies, access to third-party arbitration of disputes or the responsiveness of customer service)” to complement its hard data on network performance. “Monitoring the norms suggested above would provide a baseline standard by which the Commission could assess the status of competition in the high-speed Internet marketplace,” they wrote. “The monitoring and disclosure of high-speed service quality enables the Commission to realize its policy of competitive neutrality among telephone, cable and wireless providers with the least intrusive regulatory policy upon the soundest bases in information.” Authors stressed that they were speaking for themselves, not Annenberg. In separate filing, Annenberg Dir. Kathleen Jamieson emphasized that authors’ views did not reflect those of Public Policy Center or its related School of Communications.
FCC spelled out for first time at Commission level, in order on VoiceStream-Deutsche Telekom (DT) merger released Fri., relationship between Communications Act provision that bars foreign govt. ownership and section that allow indirect govt. investment. In granting license transfers in Powertel- VoiceStream-DT merger, order stipulated that indirect ownership by foreign govt. should be addressed only under Sec. 310(b)(4) of Act, not Sec. 310(a), which bars direct govt. ownership. Sec. 310(b) allows for foreign govt. to hold greater than 25% stake in corporate license “unless the Commission finds that the public interest will be served by refusal or revocation of the license,” order said. While text of final order contained no surprises, language has been closely watched for road map that it will provide for similar deals in future.
U.S. Appeals Court, D.C., said Fri. FCC was correct in voiding tariff filed by Global NAPs (GNAPs) that sought compensation from Verizon for Internet-bound traffic. Global NAPs filed tariff in April 1999 after FCC ruled that Internet-bound traffic wasn’t subject to reciprocal compensation. Company then billed Verizon for $1.7 million for 15 days of service. Verizon refused to pay and filed complaint with FCC, saying tariff preempted state authority to determine intercarrier compensation for Internet-bound traffic and because it amounted to access charges for Internet traffic, which isn’t allowed. Issue began in 1998 when Mass. Dept. of Telecom & Energy (DTE) ruled that Verizon was required to pay reciprocal compensation for delivery of Internet-bound traffic to CLECs. However, in Feb. 1999, FCC held that Internet-bound calls to ISPs weren’t local in nature and thus not covered by reciprocal compensation agreements. In May, DTE vacated its requirement that Verizon pay ILECs for handling such calls. In April, while DTE proceeding still was under way, Global NAPs filed tariff of 0.8 cent per min. for delivery of such calls. In decision written by Judge David Sentelle (00-1136), appeals court said FCC was within its rights to invalidate that tariff for several reasons, including fact that it was filed before DTE had completed its determination whether Global NAPs still would be able to collect reciprocal compensation under interconnection agreements. Court concluded: “That GNAPs sought to game the existing rules, and lost, does not mean the FCC was arbitrary and capricious in its application of its own rules.” Judges Stephen Williams and Judith Rogers also were on panel.
Panasonic officials complained to FCC that delays in CableLabs’ OpenCable standards process were stymieing development of competitive digital cable set-top boxes and integrated DTV sets for retail sale. In new ex parte filing with Commission, Panasonic said “final implementation of important services such as electronic program guide (EPG) and impulse pay-per-view (IPPV) requires additional work in the CableLabs process,” delaying production of rival digital cable boxes. Panasonic officials, who gave FCC staffers tour of their DTV development lab in Westampton, N.J., said they were studying alternative means of testing and delivering EPG and IPPV services in their planned set-tops but said cable operators and CableLabs had not cooperated. Panasonic also complained that CableLabs’ PHILA license for digital copyright protection technology had device specifications that were “unnecessary and inappropriately rigid with respect to product features and thus preclude flexibility needed by manufacturers to develop innovative products of interest to consumers and helpful to the DTV transition.” Executives said they were eager to “develop ‘cable-ready’ products” and believed “such products would be well accepted by consumers” and would “provide additional revenue sources to cable operators.”