The FCC’s proposed regulatory fee structure for fiscal year 2005 creates “an enormous disparity” between fees paid by cable operators and those paid by DBS providers, NCTA said March 8. One of several communications groups commenting to the agency about the fee structure, NCTA noted that cable and DBS “compete head-to-head for customers,” with DBS subscribership growing at double digit rates, while the fee structure treats them differently. Cable pays per subscriber, while DBS companies pay facility-based fees on their geostationary space stations, NCTA said: “And that facility-based fee, which has not increased as DBS subscribership has grown, is far smaller than the amount paid by cable operators.” Cingular Wireless questioned the FCC’s plan to assess commercial wireless carriers fees using data from the agency’s Numbering Resource Utilization Forecast (NRUF) form rather than carriers’ “actual subscriber counts, as revealed in their billing systems and reported in Securities and Exchange Commission financial filings, which is the most accurate source for such data.” XO Communications said the FCC has “improperly” treated Local Multipoint Distribution Service (LMDS) in a different way than similar microwave services. “The FCC proposes to assess fees on LMDS licensees based on the amount of spectrum associated with each authorization” instead of the past practice of assessing LMDS licensees based on Multipoint Distribution Service authorizations, XO said. “The FCC should assess fees on LMDS licensees consistent with the fees assessed with other upperband, geographically licensed microwave services such as the 24 GHz and 39 GHz services,” XO said. Law firm Blooston, Mordkofsky, Dickens, Duffy & Prendergast said the FCC’s plan to calculate the LMDS regulatory fee on a “per MHz basis” would cause an 87% increase for Block A LMDS licensees, or $505 per call sign: “Such a substantial increase (or indeed any increase) is not appropriate for LMDS licensees at this time, since LMDS equipment has been slow to develop, and most systems are not yet constructed.” The Satellite Industry Assn. (SIA) said it supported the FCC proposal to replace the current international bearer circuit regulatory fee with a flat fee collected from holders of Sec. 214 authorizations and cable landing licensees. If the agency decides to use an alternative plan from Tyco, “all non-common carrier facilities must be treated the same way,” SIA said.
The Food and Drug Administration (FDA) has issued a notice announcing the availability of a March 2005 version of its Compliance Policy Guide (Guide or CPG) on the FDA and U.S. Customs and Border Protection (CBP) strategy for enforcing the requirements of the interim final rule for submitting prior notice (PN) for imported food.
In an unusual move, the FCC said it will act at its agenda meeting March 10 on a “consent agenda” in which 14 items will be voted on at once rather than be presented individually. Also on the agenda are truth-in-billing and a 3600 MHz proceeding. The meeting is Chmn. Powell’s last in his post.
Samsung, breaking ranks with joint venture partner Sony, said it will fund construction of a separate 7th- generation (7G) LCD production line that’s expected to start manufacturing 32W-46W sizes in 2006. Samsung will spend about $2 billion to build a clean room and purchase equipment for a production line in Tanjeong, S. Korea, that will have monthly capacity for 45,000 substrates.
Critical infrastructure (CI) industries urged the FCC to change its 800 MHz rules to avoid potential harm to CI incumbents in that band. Several associations -- including the United Telecom Council (UTC), National Rural Electric Co- op Assn., American Petroleum Institute, Edison Electric Institute, Assn. of Metropolitan Water Agencies, American Water Works Assn. and American Public Power Assn. -- filed a reply to petitions for clarification and reconsideration with the FCC addressing issues that affect CI licensees in both the 800 MHz and 900 MHz private land mobile frequency bands. Separately, the Transition Administrator (TA) gave the FCC a revised table illustrating the proposed timing and sequencing of the 800 MHz reconfiguration “waves” to include dates for Wave 4.
Viacom reported an $18 billion loss in the 4th quarter ending Dec. 31, reflecting a steeply falling market in radio and outdoor advertising. The report comes a month after Chmn. Sumner Redstone announced plans to divest some of its radio stations in smaller markets (CD Jan 13 p2). Radio’s $11 billion loss, including a $10.9 billion writeoff of good will and intangibles, compares to income of $252 million a year ago. The firm also wrote off $7 billion in its outdoor advertising segment. Overall, Viacom reported a revenue gain of 6% from $5.9 billion to $6.3 billion during the quarter, led by double-digit increases in the Cable Networks segment. For the year, revenue increased 8% to $22.5 billion from $20.8 billion. Ad revenue was up 11%, led by growth of 21% in Cable Networks and 11% in TV. Fourth-quarter revenue for cable was up 15% to $1.9 billion from $1.7 billion; TV was up 5% to $2.2 billion and radio was unchanged at $551 million. Operating income for cable was up 9% to $691 million and broadcast was up 22% to $295 million. For the year, Cable Networks revenue increased 17% to $6.6 billion from $5.6 billion, driven by a 21% increase in ad revenue and 8% gain in affiliate fees. Leaders in ad revenue include MTV, Comedy Central, Nickelodeon, VH1, TV Land, Spike TV and BET. Broadcast TV revenue increased 10% to $8.5 billion and operating income was up 25% to $1.5 billion. CBS and UPN networks were the leaders in ad revenue with political advertising and Super Bowl XXXVIII helping bolster revenue. TV license revenue was slightly higher due to Everybody Loves Raymond and cable availability of CSI and Star Trek: Deep Space Nine. Radio revenue was essentially flat at $2.1 billion and excluding the $11 billion charge operating income was down 6 % to $918 million from $975 million, driven by slim 1% growth in advertising revenue and higher expense for talent and sports rights.
The U.S. Appeals Court, D.C., questioned whether the FCC overstepped its authority in enacting broadcast flag requirements for DTV when Congress had withheld from the Commission power to control TV receiver designs. During oral argument Tues., 2 of the 3 panel judges appeared to scold the FCC for exceeding its statutory boundaries in setting broadcast flag rules designed to prevent retransmission of video content over the Internet and are supposed to take effect July 1. “You're out there in the whole world regulating. Are washing machines next?” asked Judge Harry Edwards.
The U.S. Appeals Court, D.C., questioned whether the FCC overstepped its authority in enacting broadcast flag requirements for DTV when Congress had withheld from the Commission power to control TV receiver designs. During oral argument Tues., 2 of the 3 panel judges appeared to scold the FCC for exceeding its statutory boundaries in setting broadcast flag rules designed to prevent retransmission of video content over the Internet and are supposed to take effect July 1. “You're out there in the whole world regulating. Are washing machines next?” asked Judge Harry Edwards.
The U.S. Appeals Court, D.C., questioned whether the FCC overstepped its authority in enacting broadcast flag requirements for DTV when Congress had withheld from the Commission power to control TV receiver designs. During oral argument Tues., 2 of the 3 panel judges appeared to scold the FCC for exceeding its statutory boundaries in setting broadcast flag rules designed to prevent retransmission of video content over the Internet and are supposed to take effect July 1. “You're out there in the whole world regulating. Are washing machines next?” asked Judge Harry Edwards.
The U.S. Appeals Court, D.C., ruled in favor of the FCC in the National Science & Technology Network (NSTN) v. FCC case (03-1376). The FCC in 2000 granted NSTN 9 private land mobile radio licenses, but Mobile Relay Assoc. (MRA) challenged those licenses shortly after they were issued. In 2001, more than 18 months after NSTN received the licenses, the Commission’s Public Safety & Critical Infrastructure Div. ruled on the MRA’s petition. It found 6 of the 9 licenses had been based on “defective” applications and set them aside. The remaining 3 licenses became void automatically due to NSTN’s failure to build the authorized stations within 12 months of license approval. The Commission found on review that all 9 licenses had lapsed due to lack of construction and dismissed NSTN’s application for review. NSTN appealed the Commission’s order to the D.C. Appeals Court. “The Commission’s regulations are clear,” said the court’s opinion: “Once a broadcast license is approved, systems must be ‘placed in operation within 12 months from the date of the grant or the authorization cancels automatically and must be returned to the Commission.’ A licensee may apply for an extension of this one-year deadline, but such requests ‘must be filed prior to the expiration of the construction period.’ NSTN admits that it neither completed construction within 12 months, nor requested an extension during this period.” The court said these arguments NSTN offered to excuse its inaction weren’t persuasive: (1) It couldn’t begin construction because the required equipment wasn’t commercially available, and so the FCC should have exempted NSTN and all similarly-situated applicants from the one-year construction requirement. “This amounts to an argument that the Commission’s rules should be different,” the court said, but “NSTN must comply with the rules as they are, and not the rules as it believes they should be.” (2) It didn’t apply for an extension because the FCC would have refused. But the court said: “Failure to pursue administrative remedies will be excused for futility only upon a showing that an adverse decision was a certainty… Far from meeting this demanding standard, NSTN offers up no reasonable basis for its belief.”