E-rate supporters are preparing concerted opposition to provision in President Bush’s education reform package that would roll e-rate into larger technology plan and potentially alter its funding structure. Program to subsidize school and library Internet connections currently is funded at $2.4 billion annually through surcharges on long distance bills, called “Gore tax” by its detractors since former Vice President pushed hard for its inclusion in Telecom Act and for program to be funded at high level by FCC. Moving program into Education Dept. and requiring annual appropriations “would be a major step backwards, and I will fight it aggressively,” Sen. Rockefeller (D-W.Va.) said. “It would utterly change the program,” said spokesman for Sen. Snowe (R-Me.).
LAS VEGAS -- Programming for children under FCC’s 3-hour mandate is “a terrible financial business for broadcasters… and we don’t think the government should tell us to run 3 hours of kids programming,” Madelyn Bonnot of Emmis Communications told NATPE panel here on “Kid-Friendly TV.” With exception of Tom Lynch of program company bearing his name, other panelists seemed to agree with Bonnot. “We have to be in there [kid programming],” Lynch said. “It’s a public service. They're public airwaves.” All that’s needed, he said, is a hit children’s show.
Verizon Senior Vp Thomas Tauke told reporters Thurs. that company was seeking lobbying support from cable industry for new deregulated form of broadband policy that both telcos and cable could live with. He emphasized that no formal coalition had been formed, although 2 sides have had “discussions.” Tauke said he envisioned 3rd “basket” of regulations, separate from traditional cable and telephony models, that would apply only to broadband services. Under that scenario, broadband networks would be lightly regulated, along wireless telephony model, he said.
Rural Telecommunications Group (RTG) “adamantly” objected to request by Verizon Wireless to postpone start of 700 MHz auction scheduled for March 6. RTG argued carrier hadn’t provided FCC with “extraordinary or unforeseen reason to postpone” auction by at least 2 months, or ideally until Sept. 6. “The Commission should not establish auction deadlines that comport with the business plans of any private company; and, stripped to its essence, Verizon urges the Commission to delay the 700 MHz auction merely for Verizon’s business convenience,” RTG told agency.
LAS VEGAS -- It’s “increasingly likely” that NAACP will start boycott soon against one of Big 4 TV networks (unnamed) and its advertisers because of what Assn. Pres. Kweisi Mfume called networks’ “snail’s pace” in their diversity efforts after they all signed agreements last year to increase those efforts (CD Jan 10/00 p1). At appearance before NATPE convention here Mon. afternoon, he also called for return of financial syndication (finsyn) rule that prohibited networks from having financial interests in syndicating programming, and for legislation requiring networks to air 3 hours weekly of programs written, starring and produced by minorities. As justification for latter, he cited FCC’s 3-hour kid TV rule.
Qwest Communications reported strong results Wed. including 10% rise in revenue to $5 billion for 4th quarter that ended Dec. 31, with Internet and data services revenue growing almost 40%. Net income excluding one-time charges increased 44% to $270 million (16 cents per share), 2 cents higher than Wall St. expected. Qwest CEO Joseph Nacchio said he also was happy with “trend lines” that indicated company would meet future goals. “We spent capital in the right places” such as improved local exchange phone service in old U S West territory, he said. U S West is “no longer the worst operating telephone company in the country,” Nacchio said. “We put improved customer service on top of our priorities, we put capital there and we're seeing results.” Qwest’s results reflected some savings through synergies from merger with U S West but “most synergies will be ahead” in 2001, he said. In earnings conference call, Nacchio touched on company’s Sec. 271 strategy. He said he was heartened by FCC’s recent approval of SBC’s “multiple-state” application for Sec. 271 authority in Okla. and Kan. because Qwest also plans to file multiple applications once it gets started. With joint testing under way in 13 of its 14 states “you can expect multiple applications.” Nacchio said Qwest “probably will be the last to get the first state but the first to get the last state” approved by FCC. He said his first state probably would be Colo.
FCC issued call for comments Wed. on use of unbundled network elements (UNEs) to provide exchange access service. Agency said it wanted more information to help it determine whether ILECs should make combinations of UNEs available to other carriers that wanted to use them instead of tariffed access service. Agency said last year it planned to seek comment in early 2001. Among questions: “Is the exchange access market economically and technically distinct from the local exchange market” and if so “are requesting carriers impaired in their ability to provide special access services without access to loop-transport combinations.” Comments are due 30 days after notice is published in Federal Register. (CC Doc. 96-98).
Request by Verizon Wireless last week that FCC postpone 700 MHz auction received broader wireless industry backing Wed., with submission of comments by Cellular Telecommunications & Internet Assn. (CTIA) supporting postponement. CTIA reiterated arguments made by Verizon that delay until Sept. 6 was warranted, in part to allow enough separation between current PCS auction and start of 700 MHz bidding. CTIA also cited factors such as additional time needed by bidders to prepare for first FCC auction that would use combinatorial bidding. “Conducting the auction under the existing uncertainty would devalue the 700 MHz spectrum and increase the likelihood that the American public would not realize the full economic and public benefits of a 700 MHz auction,” CTIA said.
“We need to move the process of Sec. 271 into high gear,” new House Commerce Committee Chmn. Tauzin (R-La.) told us in Wed. interview on his priorities for House session that begins Jan. 30. On none of his core issues was Tauzin ready to propose specific legislation. He said panel would explore several options for getting Bell companies into long distance, depending on FCC cooperation. Tauzin also said he still was unsure how much legislation would be required to reform FCC and how much new agency Chmn. Powell could accomplish on his own. He said he would ask Committee “literally to do a top-down review of the digital [TV] transition,” which he said was “really off track now.”
As expected, FCC has embarked on reexamination of whether there is continued need for spectrum cap and cellular cross- interest rule for commercial mobile radio service providers. Notice of proposed rulemaking (NPRM) issued late Wed. (CD Jan 23 p1), but approved by FCC last Fri., seeks comment on whether wireless market has changed significantly since last time agency examined issue in 1999, when it decided to keep spectrum limits intact to safeguard competition. Point is to examine whether competition has grown to extent that spectrum restrictions can be lifted or relaxed, NPRM said. Questions in notice included role FCC plays in examining market impact of wireless deals vs. purview of Dept. of Justice.