AT&T late last week offered proposal to FCC aimed at reducing CLEC access charges to level charged by incumbent LECs within year’s time. Plan is 2nd one proposed to agency, which is expected to act in 2-3 months to rein in CLEC prices that can be 14 times what ILECs charge long distance companies. AT&T has proposed that FCC immediately reduce originating and terminating access charges to 1.2 cents, which carrier said still would be twice what incumbent LECs charge, and then drop rates further over year. ALTS 2 months ago proposed another plan to reduce rates to 2.5 cents per min. on either end, which Assn. said would be 60% reduction from 4.27 cents CLECs now charge on average.
Notable CROSS rulings
Walt Disney Co. took issue with bid by Network Affiliated Stations Alliance (NASA) for FCC inquiry into allegedly “unlawful network tactics and practices” (CD March 9 p2). In letter to FCC Asst. Gen. Counsel John Riffer Mon., Disney attorney Erwin Krasnow called NASA petition “questionable procedurally, substantively flawed and ill timed” and said it should be dismissed. Noting that competition to broadcasters from cable, DBS, wireless cable and Internet services had emerged in last 2 decades, Krasnow argued that “there is absolutely no reason to revisit the issue of network power given that the Commission previously considered and consistently rejected similar allegations at times when broadcast networks had far fewer competitors than today.” He also said it was “curious that the petition is spearheaded by the very same affiliates who own television stations and daily newspapers and who are pressing hard for repeal of the newspaper/broadcast cross- ownership rule.” He urged FCC to reject petition without even waiting for public comments.
Group of companies that provide competitive transport services to CLECs asked FCC to rule that Sec. 224 of Telecom Act permits them to extend fiber to CLECs colocated in ILEC central offices. Coalition of Competitive Fiber Providers (CCFP) asked agency in petition Thurs. to rule that Sec. 224, which requires ILECs to provide access to duct, conduit or rights-of-way, applies to central office facilities. Patrick Donovan, attorney representing coalition, said petition was significant because it raised issue on Sec. 224 that hadn’t been addressed before and could make it easier for competitive fiber providers to serve CLECs. It also could solve CLEC-ILEC cross-connect issue pending as part of U.S. Appeals Court, D.C., remand of FCC’s colocation order. FCC is considering whether CLECs can cross-connect in ILEC central offices under Sec. 251 of Act. Petition provides additional basis -- Sec. 224 -- for FCC to make affirmative decision, Donovan said. Coalition is composed of American Fiber Systems, Fiber Technologies, Global Metro Networks, Telergy, Telseon Carrier Services. Petition said FCC’s definition of conduit and duct was broad enough to encompass all wiring distribution systems used in ILEC central offices.
Pa. Commonwealth Court upheld Pa. PUC decision giving Armstrong Communications authority to provide competitive local exchange service in Citizens Telecom territory despite granting rural competition exemption to Citizens. Court in consolidated Doc. 1359-CD was deciding on cross-petitions in which Armstrong sought order overturning PUC’s rural exemption for Citizens, while Citizens sought to upset PUC’s certification of Armstrong. Court’s decisions hinged on PUC’s interpretation of clause in Telecom Act Sec. 251 that created exception for rural competition exemption for telecom affiliates of incumbent cable TV companies that were facing competition from cable affiliate of incumbent telco before passage of Telecom Act. In current case, PUC ruled that while cable TV competition between Citizens and Armstrong didn’t actually begin until 3 months after Telecom Act’s passage, Citizens was making final preparations for competitive cable foray against Armstrong months before Act’s Feb. 1996 passage so it could be considered to be “providing” competitive video programming. Court deferred to PUC’s interpretation, saying nothing in case record showed decision to be irrational or arbitrary.
Four carriers filed petitions to deny or delay awards of certain FCC C-block licenses won in $17 billion auction of 422 licenses in Jan. Despite some expectation that petitions to deny would focus on financial backing of designated entities by larger carriers, only one challenge centers on these arrangements. Three others urge FCC to first allow courts or agency itself to make final decisions on licenses previously cancelled for non-payment. NextWave filed petition asking agency to delay spectrum awards until U.S. Court of Appeals, D.C., issues opinion on its licenses cancelled for non-payment and subject of lengthy court proceedings. Notable absence among petitioners was Allegheny Communications, which has been vocal critic of arrangements such as Cingular’s 85% stake in designated entity Salmon PCS. Allegheny, which was widely expected to file petition to deny, instead struck $15 million deal with AT&T Wireless Fri. for PCS licenses in Tex., making challenge unnecessary because company will receive spectrum it sought, attorney said. Besides NextWave, carriers that filed petitions were 21st Century Telesis, TPS Utilicom and Southern Communications Systems.
House Telecom Subcommittee Chmn. Upton (R-Mich.) and Senate Commerce Committee ranking Democrat Hollings (S.C.) highlighted differences Mon. between what legislative approaches could be expected this year from party leaders on ownership caps and programming content regulation. Speaking at NAB state leadership conference in Washington, Upton also said he opposed White House proposal (CD March 2 p1) to require lease fees for broadcasters keeping analog spectrum beyond 2006 digital TV transition deadline.
ORLANDO -- Panel of Washington insiders told CEOs of competitive telecom companies here Mon. that they must become more involved in lobbying against Bell-sponsored data LATA relief because there was better chance than ever that such legislation could pass. Speaking at CompTel’s annual convention, panelists came close to pleading with competitive entrepreneurs, who traditionally are less likely than Bell CEOs to get involved in policy issues. They warned that their businesses could be at stake; that House, at least, was likely to pass data deregulation legislation this session and that Bells were very good lobbyists. “You need to make clear why this legislation could be a danger to this industry,” said Gary Slaiman, Washington attorney and former aide to Senate Judiciary Committee. Earl Comstock, Washington lawyer and former legislative counsel to Sen. Stevens (R-Alaska), told group, “Bell CEOs are engaged, they come to Washington. Your industry CEOs don’t often come to Washington and you have a complicated message.”
If communications lobbyists could go back in time and rewrite Telecom Act, Bell companies would be first to grab their pens, with broadcasters close behind, according to interviews by staff of Communications Daily. We asked industry representatives, Capitol Hill officials and others what they would change if they could rewrite Act with benefit of 5 years’ hindsight. Cable representatives appeared least likely to want change, having won deregulation, capital and entry into telecom business through Act. Views of CLEC interests ranged from structural separation for Bell companies to stricter enforcement.
Designed in part to stem loss of potential revenue from franchise fee on cable modem service, Portland, Ore., released draft telecom ordinance that seeks, among other things, to plug franchise loopholes engendered by 9th U.S. Appeals Court, San Francisco, decision classifying cable-delivered Internet service as telecom service. City’s incumbent cable provider AT&T has insisted that it doesn’t require telecom franchise for its cable modem service while asking cities in 9th Circuit jurisdiction to waive franchise fees on high-speed Internet service, citing court ruling. Portland has been relying on separate provisions in City Charter and City Code for procedural requirements governing its various telecom franchising, licensing and permitting policies, said Comr. Erik Sten. Proposed alternative would enable city to respond flexibly to “new demands or situations arising from, among other things, rapid growth in technology, digital convergence, cross-platform competition and new or other newly competitive lines of business” such as telephony over cable facilities, Sten told City Council. To be covered under ordinance’s classification of telecom providers would be franchised cable operators using cable facilities for provision of telecom or any other noncable service not otherwise authorized by underlying cable franchise agreement. Anyone who owned or controlled telecom system or facility located in rights-of-way would have to obtain from city current, valid franchise or license. Saying there had been very little industry input into draft ordinance, AT&T spokeswoman said: “The company is very clear that Excite @Home service is cable modem service and it doesn’t intend to get a telecom franchise.” In response to AT&T request for waiver of cable modem franchise fees, David Olson, dir. of Mt Hood (Ore.) Cable Regulatory Commission (MHCRC), which handles cable franchising and regulatory matters for 6 local govts.,including Portland, wrote company that while AT&T was relying on 9th Circuit ruling to maintain @Home service wasn’t cable service and therefore not subject to franchise fee, none of MHCRC franchises under which company operates authorizes it to provide any services other than cable services. As result, Olson said, AT&T is required to obtain additional local authority from each MHCRC jurisdiction to provide telecom or other noncable services. If AT&T believes otherwise, he said, it should provide legal rationale by March 1.
In cases where enforcement of ban on cross-ownership doesn’t promote goals of increasing competition in marketplace, waiver of rules will be entertained, FCC said in granting petition for waiver filed by Michael Sovern, member of AT&T board and trustee of Educational Bcstg. Corp. (EBC), licensee of noncommerical educational station WNET (Ch. 13) N.Y.-Newark. He said WNET’s predicted Grade B contour overlapped Cablevison systems (serving N.Y.C. metropolitan area) in which AT&T had 33% noncontrolling stock interest, with 8.9% voting interest. Sovern said he sought waiver of cross-ownership rules because of his attributable interest in both WNET and Cablevision. Neither he nor AT&T has authority to direct programming decisions of Cablevision, he said. Also, with AT&T’s acquisition of MediaOne, it acquired 25.5% noncontrolling interest in Time Warner Entertainment, whose cable systems also overlapped WNET contour. But since WNET is noncommercial, it wouldn’t compete with other broadcast stations carried on Cablevison or Time Warner cable systems, he said. Commission said it has determined that waiver of TV cable cross- ownership rule is particularly appropriate where TV stations involved are noncommercial.