Responding to request for information from FCC International Bureau, Deutsche Telekom (DT) and VoiceStream emphasized there’s “no substantial possibility” that Germany’s competitive or regulatory environment “could harm competition” in U.S. “There is nothing in the record to demonstrate that the merged company could engage in anticompetitive cross-subsidization or predation.” In connection with proposed merger of Germany’s DT, VoiceStream and Powertel, International Bureau Chief Donald Abelson sent list of 23 questions to DT and VoiceStream earlier this month. Questions included percentage of business and residential loops in Germany controlled by DT, how foreign holdings of DT were treated for regulatory purposes and whether govt. shareholders were bound to vote with majority of other owners. Bureau also asked about separate $5 billion investment that DT made in VoiceStream in advance of merger’s closing. Companies replied Germany doesn’t regulate DT’s foreign operations, including U.S. affiliates. They said carriers had several options for bypassing DT facilities when bringing traffic into Germany from European countries where there are landing stations for U.S.-Europe undersea cables: Carriers can route traffic to any point in Germany without using DT facilities. Variety of alternatives “makes clear that no bottleneck exists for international services in Germany,” companies said. Answers also addressed concerns raised by Sen. Hollings (D-S.C.) that $5 billion investment by DT amounted to 39% of VoiceStream’s capital stock. Hollings has contended DT’s current stake in VoiceStream should be assessed, based on Commission precedent, by comparing DT’s investment with VoiceStream’s total “paid-in capital.” Companies said: “This argument is simply wrong.” They said Hollings misinterpreted past decisions of FCC in determining amount of “alien beneficial ownership.” One of cases cited as precedent is FCC order granting Fox TV stations permanent waiver of 25% limit on alien ownership of stations based on ownership of Australia-based News Corp. Unlike transactions at stake in Fox and NextWave cases, companies told bureau “share ownership is the only accurate means to evaluate alien beneficial ownership of VoiceStream.” Paid-in capital analysis would “greatly overstate” actual amount of alien beneficial ownership, companies said.
In his first meeting with reporters as FCC chmn., Michael Powell was very upfront on several issues -- such as consumer protection, cable rates and 35% TV station ownership cap -- which has lead to both praise and criticism for positions he took (CD Feb 7 p2). On plus side, NBC Washington Vp Robert Okun predicted Powell would be “an assertive chairman with a market-oriented agenda, which is very refreshing.” Washington attorney Richard Wiley, who chaired FCC 1974-1977, called Powell’s statements “very learned, very erudite… He laid out his philosophy in very candid terms.”
FCC Comr. Tristani is expected to announce plans soon to leave agency so she can run for office in her home state of N.M. She wasn’t available for comment Thurs. because she was traveling, but one of her aides said Tristani didn’t dispute Albuquerque Tribune report that she planned to return to N.M. by end of year so she could campaign for political office. Tristani told Tribune she hadn’t decided whether to run for Senate, governorship or House seat of Rep. Wilson (R-N.M.). One source said he expected her to make announcement in 2-3 weeks. Her term ends in June 2003, although she has said she would like to leave sooner. If she leaves, Chmn. Powell will be only holdover from previous Commission. Chmn. Kennard has left and Comrs. Ness and Furchtgott-Roth have said they will depart as soon as President Bush names replacements.
Rep. Gillmor (R-O.) reintroduced bill to study FCC reform (HR-646). It’s same as one (HR-5570) he floated at end of last session (CD Nov 2 p5) and has Reps. Deal (R-Ga.), Ehrlich (R-Md.), Largent (R-Okla.), Pickering (R-Miss.), Stearns (R-Fla.) and Wilson (R-N.M.) as initial co-sponsors. Gillmor was given task of drafting bill by Republicans on House Commerce Committee, and Democrats have complained that they haven’t been privy to drafting (CD Nov 3 p7). Bill would create 7-member commission to study FCC, returning report within 6 months.
“No question about it,” attorney David Honig responded when asked whether civil rights groups would seek en banc rehearing by 3-judge panel of U.S. Appeals Court, D.C., order throwing out FCC’s new EEO rules as unconstitutional (CD Jan 17 p1). Honig is attorney for Minority Media & Telecom Council and 29 other groups “representing virtually the entire civil rights movement,” he said. At National Religious Bcstrs. convention in Dallas earlier this week, FCC Mass Media Bureau Chief Roy Stewart said Commission still was considering whether to ask court for rehearing. Broadcast attorney predicted agency would seek en banc court reconsideration but said odds were “100-to-1” against court granting petition.
Cleaning up some unfinished business from its AT&T-MediaOne merger approval last year, FCC rejected application for review filed by Media Access Project, Consumers Union and Consumer Federation of America. In 4-page order issued Thurs., Commission denied bid by consumer groups to gain access to handwritten staff notes, e-mail messages, staff summaries of ex parte meetings, memos and other documents in agency’s merger consideration. Order said staff members had resolved some of consumer advocates’ objections by making some of documents available. It also found further discretionary disclosure of records “not appropriate here” because they “would foreseeably harm the institutional interest underlying the deliberative process privilege” and “would actually inhibit candor in the decision-making process.”
Eschelon Telecom filed complaint against AT&T at FCC for not paying interstate access charges. Eschelon said it also has taken action against AT&T in Hennepin County Dist. Court, Minn., for not paying intrastate access charges. Eschelon said AT&T owes it $131,380 in intrastate charges in Minn. and $248,900 in interstate charges. AT&T and other IXCs have been at odds with some CLECs over size of access charges they levy, issue that FCC is looking into.
National Exchange Carrier Assn. (NECA) said FCC shouldn’t require ILECs to provide number pooling until they could recover their costs. In Feb. 14 comments on FCC’s notice of proposed rulemaking (99-200), NECA said number pooling costs should be recovered through existing means, including interstate access charges, and should be available to carriers that aren’t local number portability capable. If FCC decides to subject carriers to number pooling rules before cost recovery is determined, rural carriers should be exempt because “they will be disproportionately affected by the implementation expense of number pooling,” NECA said. National Telephone Coop Assn. (NTCA) said rural LECs that weren’t capable of providing local number portability (LNP) should be exempted from 1,000-number block pooling. NTCA said it opposed FCC’s proposal to require rural LECs to become LNP-capable so they could provide pooling. “Rural LECs have not caused the numbering exhaust problem,” NTCA said. Imposing LNP and pooling on them “would not provide any meaningful extension to the life of the North American Numbering Plan.” Meanwhile, Assn. of Communications Enterprises (ASCENT) urged FCC not to adopt market- based allocation system for numbers, one idea mentioned in agency’s proposal on numbering resources. ASCENT said Commission didn’t have statutory authority to institute such system, whether by auction or otherwise, for giving out numbers. Assn., which represents resellers, said market-based system wouldn’t necessarily reflect cost of numbering administration, and providing numbers only to those willing to pay for them wouldn’t ensure competitive neutrality.
Dept. of Defense (DoD) and wireless industry remain apart on some technical issues regarding how bands occupied by military users could be altered for 3rd-generation uses. Govt. and industry officials, at meeting hosted by NTIA Thurs., emphasized that analyses of bands that could be used for additional 3G spectrum were continuing, with final FCC and NTIA reports due late next month. “We still have a lot of work to do,” Motorola’s Steve Sharkey said. “We have at least an idea of where the paths to move forward are.” Meanwhile, Congressional Budget Office (CBO) raised budget projections for proceeds from FCC spectrum auctions through 2007, with rosier outlook attributed to interest in 3G.
FCC asked for comments by March 16 on Ariz. Corp. Commission (ACC) proposal to set service area for Smith Bagley mobile phone company that’s different from study areas of 3 rural telcos it overlaps. Changing service area definition can make it easier for wireless providers to gain designation as eligible telecom carriers (ETCs), which in turn makes them eligible for universal service support. ACC proposes to define Smith Bagley’s service area as that portion of its existing cellular contour that encompasses tribal lands in Ariz., which is area Smith Bagley plans to serve as local telco. FCC issued call for comments Thurs. in response to Smith Bagley petition for FCC’s consent (DA 01-409, CC Doc. 96-45).