FCC and Dept. of Justice urged 11th U.S. Appeals Court, Atlanta, to reject BellSouth’s request for dismissal of antitrust suit by Intermedia Communications. In amicus brief, FCC and DoJ disagreed with BellSouth that remedies in Telecom Act foreclosed antitrust claims. Case hinges on decision last year by 7th U.S. Appeals Court, Chicago, in Goldwasser vs. Ameritech that also dealt with conflict between Telecom Act and antitrust law. “The court should reject any argument that [Telecom Act] creates implied antitrust immunity,” DoJ-FCC said in brief filed March 28. Intermedia suit charged BellSouth with violating antitrust laws by not providing interconnection on reasonable terms.
Competition agreement should be part of next round of World Trade Organization (WTO) talks, European Union (EU) Competition Comr. Mario Monti said Fri. He raised issue with FCC Chmn. Powell and Dept. of Justice (DoJ) officials, he said, and planned to discuss it with U.S. Trade Representative Robert Zoellick. EU considers such accord “very important,” Monti said. As more countries create competition authorities, it would be good to include in WTO some agreement on “core principles” such as transparency, nondiscrimination between national and foreign companies, and due process, he said. Competition agreement could include concept of peer review process to ensure that laws passed by WTO members were in line with those principles, as well as some way to foster bilateral cooperation between different antitrust authorities, Monti said. It’s becoming increasingly clear, he said, that growing number of countries now back inclusion of competition framework within WTO that would support introduction and enforcement of competition laws. It’s also important to be clear on what “we do not want” in next round, he said, including having WTO review antitrust decisions made by member states’ respective regulatory bodies. Asked whether he sensed any change in U.S. opposition to competition agreement, Monti said that neither FCC nor DoJ was “particularly inclined” during his meetings to outline future U.S. policies. Other items EU intends to press for, he said, are further strengthening of bilateral cooperation in antitrust matters and global competition forum. European Commission clears “vast majority” of mergers and acquisitions in one month, Monti said, citing Boeing’s recent acquisition of Hughes’s satellite company. That speed and predictability is greatly appreciated by business community, he said.
FCC Common Carrier Bureau requested comment on letters filed by Verizon and Birch Telecom that raised questions about “most- favored-nation” (MFN) conditions in Bell Atlantic/GTE and SBC/Ameritech merger orders. MFN provisions allow competitors to opt into any parts of any interconnection agreement negotiated between incumbent and other competitive LEC. Verizon asked Bureau Feb. 20 to rule that its MFN requirement didn’t apply to any provisions involving intercarrier compensation for Internet-bound traffic. Birch filed related letter March 6 asking Bureau to interpret SBC merger condition as permitting it to incorporate provision relating to reciprocal compensation from existing agreement with Sage Telecom, approved by Tex. PUC, into its current or future interconnection agreements in Okla., Tex., Kan., Mo. Comments are due April 30, replies May 14 (CC 98-141).
NTIA and FCC released final reports Fri. providing details on challenges to sharing, segmenting or clearing Dept. of Defense- occupied bands and MMDS and ITFS spectrum, setting stage for what some see as need for high-level 3-way talks on possible compromise among FCC, Pentagon and Commerce Dept. DoD evaluation, appendix to NTIA report, said terrestrial military systems couldn’t vacate 1.7 GHz until 2010 and legacy space systems would need access until 2017, dates much later than timelines in federal 3G studies. Still, several industry sources said they were heartened by what they called realistic relocation cost estimates that NTIA provided for 3 options, which range from $2.2 billion to $4.5 billion. NTIA report laid out 3 options for band sharing or segmentation, including recently emerged alternative that involves out-of-band pairing and phased-in migration of incumbents. Despite alternatives, “this does not necessarily mean that the government band is the right choice for 3G,” Naval Rear Adm. Robert Nutwell said at NTIA briefing. He called on wireless industry to make “better case” for 3G spectrum needs.
FCC released order adopted March 22 that eliminated restriction on carriers bundling CPE and enhanced services at discounted prices (CD March 26 p4). It also clarified that all facilities-based carriers could offer bundled packages of enhanced services and basic telecom service at single price. Commission said action repealed regulatory requirements that “no longer make sense in light of current technological, market and legal conditions.” Requirements date back to 1980 Computer 2 order. (CC 96-61).
FCC review of broadcast station ownership caps won’t focus solely on market concentration rule, but also will take programming diversity into consideration, Chmn. Powell said March 29. He told House Telecom Subcommittee that Commission in May also would review broadcast-newspaper cross-ownership restrictions. NAB spokesman said it was “delighted that the FCC is going to expeditiously review” cross-ownership issue.
House Telecom Subcommittee Chmn. Upton (R-Mich.) is sympathetic to FCC pleas for more and better-trained engineers and equipment, he told us last week. Upton said he and Commerce Committee Chmn. Tauzin (R-La.) planned to spend half-day at Commission soon to “kick the tires” and reach their own assessment of state of FCC’s equipment and personnel. He said Rep. Wolf (R- Va.), newly installed as House Appropriations’ Commerce-Justice Subcommittee chmn., also has been seen as sympathetic, although he hasn’t talked with Wolf yet. Wolf’s views should become known shortly, since his subcommittee plans hearing on FCC appropriations Thurs. (April 5), 10 a.m., Rm. 2362, Rayburn Bldg. Upton also said he expected President Bush to name full contingent of FCC commissioners by end of May, although confirmations could take some time after that.
Charging that FTC strayed far from antitrust law, antitrust attorney representing AOL in its takeover of Time Warner (TW) criticized agency’s year-long merger review that led to its AOL-TW consent decree. Speaking at American Bar Assn. conference in Washington Fri., Jones, Day, Reavis & Pogue partner Joe Sims said FTC pushed for merger conditions that had nothing to do with any real antitrust violations. He also contended that agency based its open access and interactive TV (ITV) conditions on almost entirely unsupported theoretical “claims” that new AOL TW colossus already controlled high-speed data, ITV and instant messaging (IM) markets and would move quickly to quash competition in them. “I think what you see here is the antitrust equivalent of throwing deep,” Sims said, making football analogy. “When you throw deep, you end up with a lot of interceptions and incompletions.”
FCC Common Carrier Bureau seeks comment on Verizon request to eliminate reporting requirements under Bell Atlantic/Nynex merger order. Order required merged company to submit quarterly reports for monitoring service it provided to competitive LECs. Verizon said reporting requirements adopted in later Bell Atlantic/GTE merger order largely replace those in Bell Atlantic/Nynex order. Comments are due April 19, replies April 30.
Contentious issue for NAB is charge at FCC by Network Affiliate Stations Alliance (NASA) that TV networks are engaged in “unlawful tactics and practices” (CD March 9 p2) and issue is receiving wide discussion in industry circles. And, while subject isn’t on agenda for Wed. telephone conference of NAB TV board, question whether Assn. should file comments at FCC in support of NASA will be argued, we're told. “That’s the scuttlebutt going around at Monterey” last week during NAB Futures Summit, said TV dir. who attended Cal. sessions.