FCC asked for comment on Rural Task Force (RTF) proposal for reforming universal service program for rural telcos. Federal- State Joint Board forwarded plan to FCC Dec. 22 (CD Dec 26 p4). In proposed rulemaking issued Jan. 12, FCC said it sought comments on: (1) In general, whether RTF plan should be adopted “as a means of providing stability to rural carriers,” whether it provided “sufficient” universal service support. (2) Effect of plan on competition, how small ILECs and new entrants would be affected. (3) More specific implementation details such as proposed “safety valve mechanism” for providing additional support to rural carriers. For example, agency asked how that support should be distributed if rural carriers were eligible for more than proposed fund cap. (4) Implementation of RTF proposal to fix per-line support at a specific level in competitive study areas. (5) Implementation issues involving “safety net additive support.” Comments will be due 30 days after proposal is published in Federal Register, probably this week.
Now that FCC finally has approved AOL’s takeover of Time Warner (TW) with additional regulatory conditions, cable operators, consumer groups, phone companies, state and local regulators, ISPs, broadcasters, DBS providers, cable overbuilders and others already are girding for next big fights over extending those regulations to rest of cable industry. Likely new battle fronts include 2 separate FCC proceedings on cable open access issue and interactive TV (ITV) rules, each of which covers part of leading conditions imposed on AOL-TW by FTC and FCC. Another new battle front could be expected bill in new Congress that would create comprehensive regulatory scheme for all broadband services, whether delivered by cable, telephone, satellite or wireless technologies. “It’s going to be more diffuse,” said Precursor Group CEO Scott Cleland. “The progress will still be made but it will be more difficult to track.”
FCC declined Fri. to preempt Mo. law (HB 620) that prohibits political subdivisions such as municipalities from providing telecom services or facilities, concluding that term “entity” in Sec. 253(a) of Communications Act wasn’t intended to include political subdivisions of state but rather appeared to prohibit restrictions on market entry that apply to independent entities subject to state regulation. Acting on preemption petition filed by Mo. Assn. of Municipal Utilities, City Utilities of Springfield and others, Commission said that if municipally owned utility sought to provide telecom service or facility as independent corporate entity that was separate from state, “we could reach a different result under Section 252(a).” Mo. municipalities argued that even if Commission were correct in concluding that Congress didn’t clearly intend to include municipalities that didn’t own and operate electric utilities within scope of Sec. 253, Congress did clearly intend term “any entity” to apply to power companies owned by municipalities. As it found in Texas Preemption Order, FCC said, “any entity” was not intended to include political subdivisions of state. Commission urged states to refrain from enacting absolute prohibitions on ability of municipal entities to provide telecom service. Municipally owned utilities have potential to become major competitors in telecom industry, it said, and their entry could further goal of Act to bring benefits of competition to all Americans, particularly those living in small or rural communities. As for concerns of taxpayer protection from economic risks of entry and possible regulatory bias that municipalities’ entry raise, Commission said such issues could be dealt with successfully through measures that were much less restrictive than outright ban on entry. For instance, there could be nondiscrimination requirements that require municipal entity to operate in manner that’s separate from municipality, “thereby permitting consumers to reap the benefits of increased competition.” FCC also rejected municipalities’ contention that even if municipally owned utilities were political subdivisions of state, legislative history of Sec. 253 (a) demonstrated that Congress clearly intended “any entity” to cover municipal electric utilities. “Other than indicating that municipal energy utilities may make their facilities available to carriers, the legislative history that the petitioners cite does not distinguish between publicly owned and privately owned utilities,” Commission said. In joint statement, FCC Chmn. Kennard and Comr. Tristani said they voted reluctantly to preempt petition because they believed “HB- 620 effectively eliminates municipally owned utilities as a promising class of local communications competitors in Missouri.” Commission was constrained in authority to preempt by decision by U.S. Appeals Court, D.C., City of Abilene, and U.S. Supreme Court’s decision in Gregory v. Ashcroft, they said. Referring to letters from many members of Congress that said it was intent of Congress when it enacted Sec. 253 to enable any entity, regardless of form of ownership or control, to enter telecom market, they urged Congress to consider amending language in section to clearly address municipally owned entities. In separate statement, Comr. Ness urges states to adopt less restrictive measures, such as separation or nondiscriminatory requirements, to protect utility ratepayers or address any perceived unfair competitive advantage.
Ohio PUC ordered state’s 4 largest incumbent telcos to reduce their intrastate access charges to interstate levels set by FCC July 1 when it implemented CALLS Coalition’s access and universal service reform plan for large telcos. PUC directed Ameritech, Cincinnati Bell, Sprint and Verizon, which put interstate CALLS into effect July 1, to file new access tariffs by end of Jan. Agency ordered interexchange carriers to follow promptly with their plans for passing their access savings across the board to their customers. In past, Ohio set intrastate access charges by mirroring structure and rates of interstate access charges, but PUC in June 30 decision halted mirroring until it had chance to review impacts on state if access rate reductions required by CALLS plan were put into effect on intrastate basis. PUC concluded that resumption of interstate access mirroring rather than company-by-company PUC access charge reviews would be most sensible way to promote policy goals of lower interexchange rates, elimination of implicit subsidies, efficient competition and investment and regulatory certainty for telecom industry. For state’s smaller incumbents, PUC said it wouldn’t change anything until FCC decided on interstate access and universal service reforms pending for rural telcos. For CLECs, PUC said their access charges would remain capped at their present levels, with cuts permitted. Increases, however, will require full cost support.
FCC turned down Motorola petition for reconsideration in 700 MHz order that modified agency’s service rules. Rule change allowed base station transmitters to operate in both lower and upper commercial 700 MHz band after Commission concluded alteration wouldn’t be likely to cause additional interference for public safety operators. FCC said change would provide for broadest possible spectrum use and expand participation in 700 MHz bidding. Agency rules had required commercial base stations to transmit in lower block frequencies of 747-762 MHz and corresponding mobile stations to transmit in upper block of 777- 792 MHz. Responding to several reconsideration petitions, Commission later altered policy in effort not to limit scope of new offerings in bands. Specifically, FCC said in order released Fri. that modification would let licensees configure systems to avoid potential interference to mobile receivers operating in lower block frequencies from TV stations in Ch. 56-59. Motorola petition cited concerns that change allowing base stations to operate in both upper and lower commercial bands would cause interference. Interference concerns stemmed from base station transmitters in upper block potentially creating problems for public safety base station receivers in nearby 794-806 MHz. Latest order said Commission was “unpersuaded” by new technical analysis submitted by Motorola. Adaptive Broadband Corp., ArrayComm, BellSouth and TRW had all opposed Motorola petition.
Without actually announcing his resignation or future plans, FCC Chmn. Kennard said farewell to fellow commissioners and agency staffers at Commission’s open meeting Thurs. In packed, emotional session filled with others’ tributes to his warmth, good humor and commitment to helping minorities, disabled and native Americans, Kennard acknowledged he was chairing his last FCC meeting and wished his successor “a great deal of success.” Choked up and admittedly “overwhelmed” at times, Kennard repeatedly thanked staffers and commissioners for their support and hard work and said he had been “proud and very privileged” to head Commission.
FCC denied Small Business in Telecom (SBT) petitions to deny applications of Radiofone Nationwide and Harbor Wireless, winners of 700 MHz guard band auctions. Action Thurs. also held that SBT had no standing as petitioner and that petitions, which asserted that applicants should have disclosed personal income of controlling interest holders for purposes of determining qualification for bidding credit as very small business, lacked merit.
At last min., FCC once again delayed votes on 3 digital TV items scheduled for consideration at its open meeting Thurs. Commission, which first postponed action on DTV issues last month, didn’t indicate reason for latest delay. But, in his swan song meeting at Commission, FCC Chmn. Kennard pledged that agency would act on all 3 items no later than Jan. 17, just before he’s expected to step down from his post in favor of Republican successor (see separate story, this issue).
Seven states have requested more delegated authority from FCC to allow them to implement number conservation measures. FCC is seeking comments on requests of Ind., Minn., Mo., Okla., Tenn., Vt., W.Va. Comments are due Feb. 12, replies Feb. 28 (CC 96-98, 99-200).
VisionStar’s proposed transfer of Ka-band satellite license to holding company jointly owned with EchoStar is part of long- range goal to provide high-speed Internet service to rural and remote areas of U.S., CEO Shant Houvnanian told us. “We want to bring 2-way high-speed Internet service to the dark side of the digital divide.” Role of EchoStar also will increase if FCC approves, Houvnanian said. “They will get a larger ownership stake, but I will still be the significant shareholder.” VisionStar/EchoStar partnership filed application with FCC Dec. 15 to transfer control of orbital slot at 113 degrees W over Continental U.S. from VisionStar control (CD Jan 9 p8). Houvnanian said he owns 51%, EchoStar 49% of VisionStar/EchoStar. “I've personally invested a lot of money in this project to keep it going,” he said. “This is a complete start-up” company. VisionStar is one of several companies allocated Ka-band slots in May 1997 by Commission (CD May 23 p5) that have yet to launch satellite or service. Houvnanian said since contracting with Orbital to build satellites, VisionStar had exercised option in contract that allowed it to contract with Lockheed Martin to expand scope of service by building larger satellites.