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.
Interim step toward making rival XM Satellite and Sirius Satellite Radio digital audio radio services (DARS) systems interoperable could be achieved by early next year, although full- scale integration won’t occur for 4-5 years, Sirius CEO David Margolese told us. In interview at C.E. Unterberg, Towbin conference in N.Y.C., he said vehicles would be prewired for DARS reception and device would be installed in trunk to accept either Sirius or XM receiver. Interim step, which moves companies part way toward satisfying FCC mandate that competing DARS service be interoperable, is required under OEM agreements with Audi, Honda, Nissan and Toyota, Margolese said. However, XM spokeswoman said interim step wasn’t part of OEM pacts, but rather was “solution” companies were developing as bridge to integrated product. Full integration will require dual chipset, industry sources said.
FCC issued order Wed. requiring incumbent LECs to make their directory assistance databases accessible to competing directory providers. Agency said it was essential for competitive directory providers to have access to those updated databases. Because ILECs derive their databases from their telephone service order processes, they continue to maintain control over most listings, FCC said. Commission said access must be on nondiscriminatory basis and be available at reasonable rates. CLECs often don’t have resources to provide their own directory assistance so they depend on those alternative providers, FCC said in order. However, Commission said ILECs didn’t have to grant access to national or “nonlocal” directory assistance databases because ILECs didn’t have monopoly control over them. Agency also resolved some outstanding issues relating to access to subscriber information by Internet-based directory publishers. It said Internet publishers should have same nondiscriminatory access and reasonable rates as other directory providers. Commission also concluded that publishers of telephone directories on Internet shouldn’t be restricted in how they displayed or allowed customers to access such data. Like several other orders issued this week, this one was approved on Fri. and included then-FCC Chmn. Kennard’s vote.
Ex-FCC Chief of Staff Kathryn Brown will be honored at reception today (Jan. 25), 4-7 p.m., at Club at Franklin Square, 1300 I St. NW., sponsored by group of FCC staffers -- Joy Howell, 202-418-0505.
FCC Wireless Bureau’s Auctions Financing & Mkt. Analysis Branch denied waiver request by IVIDCO to be deemed eligible to participate in agency’s restructuring plan for 218-219 MHz. Company argued it had pending grace period or waiver request on file at Commission before it missed payment for 218-219 MHz licenses, resulting in automatic cancellation. However, Bureau granted IVIDCO request that it be able to examine grace period requests filed by current and former licensees. In 1999, FCC issued order that modified rules for 218-219 MHz, formerly Interactive Video & Data Service band, and created financial restructuring plan for eligible licensees. Ineligible licensees included those that weren’t current in their installment payments as of March 16, 1998.
FCC ruling on 700 MHz spectrum auction (CD Jan 24 p6) will “demonstrate to shareholders the value of the television spectrum,” Pax TV said. Chmn. Lowell Paxson said new rules would allow market to determine adequate compensation for broadcasters to vacate spectrum early. He said company, which owns 18 TV stations in band, plans to “take a leadership position and set the tone for negotiations with the wireless telecom winners in the upcoming auction in an effort to speed the transition to digital television and monetize the value of our spectrum.”