News Corp. Chmn. Rupert Murdoch said at Sky Forum in N.Y. that company could live “with or without” DirecTV or entity in U.S. market. Reiterating familiar theme during negotiations with Hughes Electronics and GM, Murdoch said “although the U.S. is an important part” of strategy to develop global satellite broadband company, Sky Global is “viable without a U.S. presence.” He said U.S. presence was nice to have, but it wasn’t necessary to the overall success of the operation.” Moments later, Murdoch wouldn’t comment directly on status of talks despite widespread reports Hughes no longer was interested in selling DirecTV unit and had backed out of deal. However, News Corp. spokesman said as Murdoch was being ushered out side door followed by throng of reporters: “We're still talking to DirecTV. The deal is not off, but the talks are going very slow.”
FCC gave 3-6-month extensions of DTV construction deadlines to all 23 applicants in decision released Thurs. Only applications that were opposed were those of 4 Denver stations, where Canyon Area Residents for Environment wanted DTV licenses rescinded entirely. Commission gave 3-month extensions to 4 stations that indicated that was all they needed, 6 months to rest. FCC Comr. Furchtgott-Roth said extensions should be up to May 2002. NAB, meanwhile, said WAVY-TV Norfolk, Va., began DTV broadcasting, increasing total to 186 stations in 64 markets.
Shares of Lucent closed up $1.17 to $7.92 following precipitous drop to 52-week low of 5.50 Wed. on heels of bankruptcy rumor quicky squashed by company. Rumor, spread in part by Internet chat boards, was credible to enough investors to trigger 30% plunge in early morning trading. Incident highlighted Lucent’s financial situation, which is far short of Chapter 11, but still precarious.
Don’t expect FCC to be as eager to place issue-oriented conditions on merging companies as past Commissions, FCC Chmn. Powell told reporters in news conference Thurs. on telecom issues. He said FCC votes depended on all 5 commissioners but he wouldn’t be pushing for kind of conditions that were imposed on SBC- Ameritech, Bell Atlantic-GTE and other mergers. Powell held 2 news conferences for trade reporters Thurs., answering questions on video issues in morning session (see separate story) and telecom questions in afternoon.
Sen. Brownback (R-Kan.) reintroduced bill that would lift FCC cap on amount of spectrum companies could be licensed to use in any one market. Wall St. analyst predicted FCC would lift or modify cap long before bill could be signed into law, in light of FCC Chmn. Powell’s free-market position and likelihood Commission would act by September on NPRM that raised question whether there was need to maintain caps. “This is Brownback’s] way of saying: ‘This is what I want you to do,'” analyst said. CTIA spokesman said bill showed support on Hill for removal of spectrum caps, which limit ownership total to 45 MHz in major markets and 55 MHz in smaller markets. National Telecom Co-op Assn. said that if caps were modified, whether by FCC or Congress, it was important to keep in mind needs of small carriers. “What has happened in auctions of the past is that small companies have been shut out,” spokeswoman said.
SBC filed Sec. 271 petition at FCC Wed. seeking approval to enter long distance market in Mo. Bid by SBC unit Southwestern Bell Telephone to provide interLATA long distance service came after Mo. PSC voted 5-0 March 6 to endorse application, finding it in public interest after 2-1/2 year review. “In its final order, the state commission concluded that there could be little doubt that SBC’s entry into Missouri’s long distance market will increase consumer choice for long distance service in the state,” SBC Senior Vp-FCC Priscilla Hill-Ardoin said.
FCC’s Mass Media Bureau rejected emergency petition by Verizon Wireless that sought delay in actions on 2-way service applications for Multipoint Distribution Service (MDS) and Instructional TV Fixed Service (ITFS) licensees. Verizon last week (CD March 30 p1) had asked FCC to hold off on applications until decisions were made on additional spectrum for 3rd generation wireless services. FCC is studying bands, including 2.5 GHz occupied by MDS and ITFS systems, for additional spectrum, with NTIA analyzing military-occupied spectrum in 1.7 GHz (CD April 2 p1). But bureau concluded that Verizon hadn’t met legal requirements that would justify stay on processing applications, which are expected to be granted shortly. Bureau said Verizon hadn’t shown it would be irreparably harmed without stay. “Rather, Verizon’s vague arguments espouse conjecture about events that may or may not occur,” order said. Verizon “speculates” on issues, such as 2500-2690 MHz band potentially being reallocated to accommodate 3G and that rollout of 2-way services could increase costs of any reallocation, order said. “Significantly, Verizon has not requested that the Commission similarly restrict licensees’ use of other spectrum that is being considered for possible 3G use,” bureau said. Stay could “irreparably injure” MDS and ITFS licensees that are poised to deploy services “and potentially disadvantage these licensees with regard to other broadband services, such as DSL service,” FCC said. Wireless Communications Assn. had objected to emergency petition, calling it anticompetitive.
Creation of “a multibillion-dollar” Digital Opportunity Investment Trust -- with much of proceeds earmarked for public broadcasting -- is recommended in 2-year study to be released today (Thurs.). Fund would be financed by proceeds from future spectrum auctions, which Congressional Budget Office estimated would produce $18 billion over next several years. Authors of report are Newton Minow, FCC chmn. in Kennedy Administration, and Lawrence Grossman, former pres. of PBS and NBC News. Recommendations in report would require approval by Congress for use of federal money before fund could be established.
Senate Antitrust Subcommittee members criticized cable operators for raising prices faster than general inflation rate and withholding local sports and other popular programming from DBS and cable overbuilders. In hearing on cable competition Wed., they also questioned why retail market for competitive digital cable set-top boxes hadn’t developed, more than 5 years after passage of 1996 Telecom Act. In addition, senators lashed out at 3 largest MSOs -- AT&T, AOL Time Warner and Comcast -- for declining invitations to testify, focusing most of their heat on Comcast.
Citicasters faces $25,000 fine for taking control of WBTJ(FM) Hubbard, O., without prior FCC approval, Commission’s Enforcement Bureau said. Citicasters, which was operating station under time brokerage agreement, obtained temporary restraining order from court blocking owner Stop 26-Riverbend Inc. from preempting Citicasters programming, which Bureau said meant “unauthorized assumption of control.”