321 de minimis

Some wireless technology developers are recommending FCC set aside 5 GHz of spectrum or more when Commission finalizes proposal for service rules for spectrum at 92 GHz. Expectation is that as early as this fall FCC will launch rulemaking, although industry already has been bouncing ideas off Commission for what developers would like to see in that spectrum. On issue whether band should be made available on unlicensed basis or via licenses, panel organized by Wireless Communications Assn. (WCA) has floated idea of hybrid approach that would license some segments and allow others to be unlicensed at more restricted power levels, said Donny Burt, vp-advanced technology, e-xpedient/CAVU. Among “last mile” technologies that can be offered in that band, developers said, are gigabit ethernet-based systems that can connect buildings and extend metropolitan area networks.

Verizon outlined series of interim funding and “credit enhancements” for Genuity Thurs. that total $2 billion. Verizon said financing agreements were in line with FCC order approving Bell Atlantic-GTE merger last June. Verizon bolstered its credit agreement with Genuity, increasing principal amount that Genuity may borrow to $900 million from $500 million. It also extended to Dec. 31 maturity date of all borrowing under credit pact, from original date of May 31. It’s furnishing Genuity with credit enhancements that will provide access to long-term capital sources with maturities of up to 5 years. In joint statement, Verizon co- CEOs Charles Lee and Ivan Seidenberg said recent FCC approval of company’s application to sell long distance in Mass. moved company “one step closer to clearing the necessary regulatory hurdles that will allow us to bring Genuity back into the Verizon family.” They said: “Genuity is facing the same challenges that many other companies are experiencing due to the economic slowdown and this support gives it additional financial stability to strengthen its ability to grow and compete.” Genuity also reported first-quarter results, disclosing plans to trim its work force 12% (more than 600 employees. Chmn.-CEO Paul Gudonis said company hit its revenue and earnings targets. But he said: “We have seen enterprise customers extend the time to make buying decisions as they justify the return on investment associated with their IT spending plans. This has resulted in slower new order growth in the current period.” Genuity said revenue was up 20.8% in first quarter to $299.5 million but net loss deepened 39% to $291.3 million. Domestic revenue from AOL dropped 20% from year-ago period and was flat with 4th quarter of last year. Genuity attributed trend to contractual price reductions reached late in 1999 that took effect Sept. 1. It said total AOL revenue now made up 32% of its total, down from 46% year ago.

Ore. Gov. John Kitzhaber decided to replace Ore. PUC Chmn. Ron Eachus as soon as his replacement, Roy Hemmingway, can be confirmed. Kitzhaber originally intended to allow Eachus to stay in office through end of year but decided to move up his departure after Eachus publicly rebuked Kitzhaber for his selection of appointees. Eachus’s term expired in March. Kitzhaber originally had named state Sen. Lee Beyer (D-Springfield) to replace Eachus at year’s end, allowing time for Beyer to finish out current legislative session and thereby preserve partisan balance. Hemmingway, Kitzhaber’s chief energy adviser, originally was named to replace another departing PUC member, Comr. Roger Hamilton. Kitzhaber switched appointments to put Hemmingway in Eachus’s spot after Eachus publicly criticized governor.

FCC late last week stood by its earlier decision that Bell companies couldn’t provide interLATA information services without obtaining Sec. 271 authorization. Agency had agreed late last year to reconsider whether Sec. 271 requirements applied to information services (CD Dec 4 p5) after Verizon and Qwest sought court intervention. FCC requested, and was granted, voluntary remand from U.S. Appeals Court, D.C., to reconsider 1996 order because Bells raised arguments that hadn’t been considered originally. Bell companies argued that Telecom Act’s definition of “interLATA services,” which are subject to Sec. 271 requirements, included only telecom, not information, services. FCC in order released April 27 (CC Doc. 96-149), said it still believed “interLATA services” as used in Sec. 271 “encompasses interLATA information services as well as interLATA telecommunications services.” Agency reiterated its view that interLATA information services couldn’t be provided without interLATA transmission component and thus fall within definition of prohibited services. Although Bells had argued that agency’s 1998 universal service report to Congress conflicted with that conclusion, FCC said it didn’t agree. Bells had contended that report defined telecom and information services as exclusive categories, with provider of information services “using” rather than “providing” telecom services. Agency concluded: “Although the Act is not a model of clarity in many respects, our examination of the statutory terms, structure, history and purposes all lead to the conclusion that a BOC’s bundling of interLATA transmission with an information service offering constitutes the provision of an ‘interLATA service’ in the context of Sec. 271.” Bells say they want to offer Internet access and other information services in more competitive way. Because of Sec. 271 restrictions, they or their customers have to contract with long distance companies to act as middlemen carrying portion of transmission that goes to Internet backbone node from Bell company’s server.

British Telecom (BT) confirmed Tues. that it was talking with Vodafone on possible sale of BT’s 20% stake in Japan Telecom and J-Phone Group. Japan Telecom, 3rd largest telco in that country, owns wireless unit J-Phone and regional wireless operating companies. In brief statement, BT said discussions also included potential acquisition of company’s stake in Spanish wireless carrier Airtel. Financial Times reported that sale of Japan Telecom investment could produce as much as $4.3 billion for BT, which is trying to pare down $43 billion debt. “These discussions may or may not result in an agreement being reached,” BT said. Announcement came one day after AT&T finalized separate deal with Vodafone in which it received $1.35 billion in cash for 10% stake in Japan Telecom. AT&T originally bought stake in 1999 in deal in which it and Concert venture partner BT jointly held 30% of carrier.

Teligent announced that Chmn.-CEO Alex Mandl had stepped down and said his duties would be performed by 2 people from IDT, facilities-based carrier that on April 17 purchased 33.7% of company that had been held by AT&T’s Liberty Media. Yoav Krill, IDT managing dir.-European Div., has been appointed Teligent COO and acting CEO, and Howard Jonas, IDT chmn.-CEO, as Teligent chmn. Company also announced it received waiver from Chase Manhattan Bank that gives it until May 15 to meet certain funding requirements. Teligent originally was required to provide by April 30 documentation of vendor financing of at least $250 million and convertible notes of at least $100 million. It buried Mandl’s departure at end of news release announcing debt extension, saying only that he “will not continue” as Teligent chmn. Teligent stock rose 49% to 70 cents at market close.

AT&T filed agency-level protest with General Services Administration (GSA) over $1.5 billion FTS 2001 contract, arguing that delays in long distance contract and waived performance requirements warranted overturning agreements with Sprint and WorldCom. Move marks first time AT&T, which held previous FTS 2000 contract along with Sprint, has protested FTS 2001. It lost bid for new contract in early 1999, but chose not to challenge contract awards then. In filing with GSA contract officer late Fri., AT&T cited General Accounting Office (GAO) report released last week that outlined reasons for repeated delays in transition to FTS 2001. AT&T argued that GSA “dramatically and improperly” relaxed critical management and technical requirements, unfairly altering original field of competition for contracts. Referring to GAO findings, AT&T characterized transition as “so poorly managed that GSA does not even know for certain which services have been transitioned to the FTS 2001 contract.”

Sprint PCS appears to be in best position among major wireless carriers to comply with FCC’s Oct. 1 deadline for Enhanced 911 Phase 2 implementation, Pulver.com research report said. Report said carriers that were first to implement more specific location information requirements of Phase 2 were likely to exploit that position in advertising. It also said: (1) Verizon Wireless hadn’t asked for waiver of E911 Phase 2 requirements, so it didn’t appear to be off track for implementation. (2) It’s difficult to judge whether Cingular Wireless will meet deadline because carrier has raised possibility of waiver request but hasn’t asked for one. (3) “AT&T Wireless seems to have the least coherent location strategy.” Carrier has requested waiver on accuracy for Mobile Assisted Network Location System technology, report said. (4) Nextel’s initial deployment of Phase 2 is likely to start in Oct. 2002, one year behind original FCC schedule. Report said Sprint PCS appeared to be in best position because it provided detailed implementation information to FCC last Nov. and since then had made several supplier announcements. “Even if one of the major carriers will be ready on Oct. 1, 2001, to fully comply with the FCC E911 directive, the others would have no choice but move quickly and catch up,” Pulver report said.

LAS VEGAS Underlying demand for Internet, including streaming media, is “continuing to grow at a very astonishing pace,” despite “dot.bomb,” WorldCom Senior Vp Vinton Cerf said. He and other speakers at NAB convention here Wed. predicted collapse of Internet stock prices would have little impact on Internet’s long-term growth or on its eventual role as competitor for broadcast TV.

LAS VEGAS -- With CE manufacturers closing in on first licensing agreement with Hollywood studio for Digital Transmission Content Protection (DTCP), PC industry and some content owners again are voicing support for alternative display interface with rival copy protection scheme that they say is better suited for uncompressed video signals.