FCC gave regulators in 4 states conditional approval to institute 1,000-number pooling trials and rationing to ease telephone number shortages. Common Carrier Bureau said La. PSC, Md. PSC, Mass. Dept. of Telecom & Energy and N.J. Board of Public Utilities could implement such trials but, at first, N.J. could do so only in 201 (Jersey City) area. FCC gave N.J. authority to institute pooling in 732 (Freehold) and 973 (Newark) areas only after it implemented new area codes to relieve them. FCC said 732 and 973 didn’t have enough numbers to last even one year and, even with pooling, there wouldn’t be enough NXX codes to fulfill needs of some carriers. NXX is what traditionally is considered first 3 digits of local phone number -- in other words, 3 digits that come after area code.
Despite increasing competition from DBS providers and cable overbuilders, cable operators boosted their average monthly rates 5.8% in year ending July 1, 2000, according to latest annual price survey by FCC. That increase, which was identical for both monopoly cable operators and ones facing effective competition in their markets, exceeds respective 4.5% and 5.2% boosts by 2 groups of cable systems in Commission’s 1999 price report. It also exceeds nation’s general inflation rate of 3.7% for that period by wide margin, as well as 4.7% cable inflation rate calculated by U.S. Bureau of Labor Statistics for same period. But latest increase still is less than that in agency’s 1997 and 1998 price reports.
Center for Public Integrity has raised questions about FCC Chmn. Powell’s having possible conflict of interest. In article running on its Web site, CPI says Powell worked on GTE interconnection issues as attorney for O'Melveny & Myers but didn’t seek ethics review upon joining agency. Code of Federal Regulations requires new employees to seek guidance from agency ethics officers if there has been questionable contact within past year. FCC spokesman said Powell became commissioner in late 1997, 11 months after having worked on GTE case, and during that one- month overlap there were no issues before FCC that raised possible conflict with GTE. Powell was chief of staff at Dept. of Justice’s Antitrust Div. in 11 months before joining FCC. At law firm, Powell’s work for GTE consisted of being on team that worked on company’s interconnection arbitrations.
Original C-block bidder Airadigm is awaiting answer to petition for reinstatement of its PCS licenses, which FCC cancelled after carrier missed payment after entering bankruptcy in July 1999. Petition still is pending before agency nearly one month from oral argument before U.S. Appeals Court, D.C., March 15 in litigation involving NextWave, bankrupt C-block bidder that also had its licenses cancelled for nonpayment. Airadigm has pointed out that only similarity between it and NextWave is that both are C-block bidders that entered Chapter 11 protection and missed installment payment for licenses. Because of disparities such as fact that Airadigm is offering service and NextWave isn’t, question is whether 2 carriers potentially could be treated differently by Commission. Proceeding raises complex web of legal issues for FCC, making outcome uncertain, industry observers said. At press time, item on Airadigm petition wasn’t yet circulating on 8th floor. Meanwhile, group of large carriers asked Commission to put off Airadigm decision longer, citing how circumstances had changed since NextWave litigation began.
USTA opposed challenges filed by AT&T and WorldCom to FCC’s decision to give BellSouth pricing flexibility. In Feb. 13 filing with FCC, USTA said U.S. Appeals Court, D.C., recently “put a stop to [AT&T’s and WorldCom’s] relentless self-serving attacks” on Commission’s pricing flexibility rules by upholding agency’s rules against challenge by WorldCom (CD Feb 5 p2). FCC “should be applauded for implementing a policy that relies on market forces rather than regulation,” USTA said. Assn. disagreed in particular with WorldCom claim that it was incorrect of BellSouth to include packet-based data services in its petition because such services weren’t subject to pricing flexibility. USTA said rules allowed pricing flexibility for new packet-based services, not just packet-switched access services that already existed at time price cap rules were adopted. However, Assn. of Communications Enterprises (ASCENT) said BellSouth didn’t satisfy FCC’s requirements for pricing flexibility, yet agency gave company “broad-reaching” relief. ASCENT complained that “despite the lack of specificity in BellSouth’s revenue data,” FCC staff “accepted BellSouth’s summary revenue figures and bare assertions as conclusory evidence that the incumbent LEC faces sufficient competition.”
CableLabs, seeking to influence regulatory debate over anticopying encryption technology for digital cable set-top boxes, urged FCC Chmn. Powell to stay course on issue and continue allowing cable industry to impose copy protection requirements on set-top manufacturers. In 3-page letter to Powell last week, CableLabs Pres. Richard Green argued that, without such copy protection capability in cable boxes, “content providers would likely withhold high-quality digital content from cable operators.” He also contended that content providers might favor such cable rivals as DBS providers, “who are not encumbered by the FCC’s separate security requirement and therefore can impose copy protection and other requirements on their receiver manufacturers without being subject to FCC review.” To buttress latter point, Green cited recent story in Communications Daily that reported on agreement between DirecTV and satellite set-top makers to downgrade HDTV signals to ease content owners’ fears of unauthorized program copying. He said FCC “made the correct call” in its Sept. 18 declaratory ruling that cable copy protection requirements were consistent with Commission’s navigation device rules. Such recent developments as DirecTV deal, he said, “demonstrate the wisdom of the Commission’s decision to abstain from involvement in copy protection matters which could have significant ramifications in the competitive marketplace.” Green also stressed that CableLabs’ PHILA (POD-Host Interface License Agreement) requires only that digital cable set-tops have capability to protect digital content -- it doesn’t force cable operators actually to use copy control mechanisms. “The cable industry strongly supports customers’ desires to record programs for various purposes including time-shifting,” he wrote. “However, in the digital world, copies are technically perfect and can be transmitted instantly around the world without restriction. Therefore, a copyright holder must have the technical capability available to ensure that digital copies are made and used responsibly.”
Vt. Public Service Board (PSB) issued revised pole attachment rules that essentially reflected FCC formula for all certified cable and telecom providers. Revised rules require pole-owning utility (POU) to establish single pole rental rate for all attaching entities, including cable and CLECs. That’s in contrast to many other states where surcharge is levied on telecom providers, said attorney Paul Glist, who represented New England Cable Assn. before PSB. In deciding not to adopt 2nd less favorable rate formula for telecom providers, board followed example of Cal., only other state to do so, he said. New rules also make major improvements in area of “make-ready” (work necessary to make pole available for attachment of additional facilities). They bar POUs from denying access based on insufficient capacity where make-ready can be used to increase or create additional capacity. Other changes include: (1) Rules permit attaching parties to use outside contractors to increase capacity on POU plant when utility can’t. (2) Fixed time limits are set for completion of make-ready. (3) Utility is obliged to seek least-cost alternatives such as pole top extenders while executing its own make-ready. (4) No additional application or payment is required for attaching entity such as cable operator to overlash (add fiber, for example) its plant to existing attachments and only one day’s notice to utility is required. State legislature, which is doing economic impact study, must approve new rules, Glist said.
FCC Chmn. Powell will use his first open meeting Feb. 22 for presentations by various bureaus and there won’t be any votes. FCC spokesman said new format was planned only for this meeting, although Powell has left door open for doing it again in future. Agency said meeting would consist of 2 panel discussions in which bureau chiefs would make presentations on current regulatory issues and internal management procedures. Each panel will be followed by questions and dialogue with commissioners, spokesman said. Powell said event will enable commissioners to “take stock of how well we are organized to be as responsive as possible.” News conference will be held at end of meeting, he said. FCC Comr. Furchtgott-Roth said special meeting format was good “demarcation point” between old and new Commissions. Agency still will issue “sunshine notice” because public notice is needed any time 4 commissioners meet, spokesman said.
FCC Comr. Furchtgott-Roth plans to work for think tank for several months after he leaves FCC, giving him time to write book and “look around the private sector” for new job, he told reporters Tues. at his monthly breakfast briefing. However, he said he probably would remain at FCC for “many months” before President Bush appointed replacement. Asked what kind of book he will write, he said it would be “telecommunications-related and based on my experience here.” He predicted that Chmn. Powell would be “outstanding chairman” who would lead “a more restrained Commission, more tied to the law.” Furchtgott-Roth said he expected Powell to concentrate on management issues, giving industry more “predictability” and speeding decisions on license applications and other petitions. However, he said he didn’t know whether Powell would go as far as setting specific time frame for license reviews. On other topics, he said he had been assured that agency would gear up soon to resume work on reciprocal compensation. “The last piece of paper” he received involving reciprocal compensation language was in early Dec., he said. On wireless issues teed up at agency, Furchtgott-Roth said he expected it would address license transfers connected to VoiceStream, Powertel and Deutsche Telekom merger “shortly.” Applications were filed in Oct. and “we're over 90 days now,” he said. “It should have been taken care of.” Asked about concerns raised by some over designated entities backed by larger carriers in recently completed C- and F-block auction, Furchtgott-Roth said Commission had “fact-specific rules” on ownership. Agency policy allows challenges to ownership provisions after long forms are filed following close of auction. Difficulty in allowing such challenges before start of auction is that pool of bidders was substantial, making certification of such ownership issues ahead of bidding time-consuming, he said.
Motorola executives recently lobbied FCC Chmn. Powell and Comrs. Ness and Furchtgott-Roth to get rid of Commission’s Jan. 1, 2005, deadline for cable operators to stop offering integrated cable set-top boxes, according to ex parte filings. Meeting with Powell, Ness, Furchtgott-Roth and their cable advisers Jan. 29, Motorola officials argued that deadline should be eliminated so consumers could “continue to have the option of leasing lower cost equipment” from MSOs. Noting that ban was enacted when it appeared that integrated set-top boxes (STBs) couldn’t be sold at retail, they also contended that there now were “multiple business models, including Motorola’s new line of retail-only STBs with embedded security, advanced functionality and POD slots.” Motorola officials also pressed Powell, Ness and Furchtgott-Roth not to move up 2005 deadline, arguing that “would have no positive effect on retail sale of STBs and would negatively impact consumers.” Despite CE retailers’ claims of incomplete cable set- top standards and unfair competition, company officials said “Open Cable specs are sufficient to allow competitors to offer full function STBs.” They also said retailers’ complaints “are motivated by their desire for a larger, monthly revenue stream.”