NORTHPOINT STILL BELIEVES IT HAS MUSCLE TO WIN SPECTRUM BATTLE
Northpoint Broadwave USA, widely seen as company with strong backing from outgoing Democrats, believes it has enough political muscle with Republican leaders at FCC, Administration and on Hill to obtain license for its terrestrial service, which would provide video and data services by sharing satellite spectrum. Industry rivals, including Satellite Bcstg. & Communications (SBCA, EchoStar and DirecTV, have accused Northpoint of using its close ties with former FCC Chmn. William Kennard, a Democrat, and Clinton-Gore Administration to gain acceptance for its service, which would compete with satellites. “A rose is a rose by any other name and there is no question on how they got their foot in the door,” said SBCA VP Andy Paul.
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Northpoint CEO Sophia Collier is one of leaders of Democratic Party in New Hampshire and Vp Toni Bush, former partner at Skadden, Arps, Slate, Meagher & Flom, once was a leading Democratic candidate for FCC chmn. post and is stepdaughter of Clinton confidant Vernon Jordan. Despite change of Administration, Bush said company had strong backing of Republicans, citing many among 150 Hill supporters who had written letters in support of company, including Senate Commerce Committee Chmn. McCain (R-Ariz), Senate Appropriation Committee Chmn. Stevens (R-Alaska), Sens. Specter (R-Pa.), Hutchinson (R-Tex.), Nickles (R-Okla.), DeWine (R-O.) and Frist (R-Tenn.,) and Reps. Bono (R-Cal.) and Largent (R-Okla.) and Energy Secy. Spencer Abraham and Attorney Gen. nominee John Ashcroft. In addition, Northpoint founder Bonnie Newman was former staffer in administration of former President Bush and Northpoint principal is Tex. heiress Katherine (Chula) Reynolds whose family was major fundraiser and supporter of Bush while he was Tex. governor.
Toni Bush said company had support on both sides of aisle and, with evenly divided House and Senate, it was “going to take bipartisan support to get anything done” in 107th Congress: “The reason we have a lot of that support is because we want to provide services to rural areas where many of the representatives have constituents and where DBS has a problem.”
“Republicans tend to be procompetition rather than proregulation” and that would enhance Northpoint chances, Bush said. She also pointed out that as commissioner, new FCC Chmn. Powell (R) and Comr. Furchtgott-Roth (R) voted in favor of allowing companies such as Northpoint to use spectrum now occupied by DBS. Bush said Northpoint also had backing of NAB, which supported company’s efforts in comments to Commission on opening satellite spectrum to terrestrial operators. She said political party wasn’t as important as providing new consumer product that would offer viable competition for cable operators: “This seems to be a major concern of [House Commerce Committee Chmn. Rep.] Tauzin [R-La.] so we believe we have something valuable to offer.”
However, SBCA Senior Vp Margaret Parone told us it was “too early to call which way the regulatory winds are apt to blow” in new Administration and at FCC. SBCA and DBS companies believe Northpoint service will hurt consumers by causing interference to satellite signals, but FCC has opened door for that and other terrestrial multimedia services with rulemaking and order (CD Dec 1 p1). Congressional mandate requires independent tests to be completed by Feb. 19. Both sides met last week at Commission and agreed testing was critical step in resolving issue. Testing firm Mitrin will conduct tests for FCC in Bedford, Mass. Final comments are due March 12. If SBCA doesn’t have “smoking gun” and tests for interference prove “conclusively” that Northpoint system doesn’t interfere, company could receive license by next fall or early 2002, industry source said. License would bring end to Northpoint’s 7-year fight at FCC to use 12.2-12.7 GHz. Parone said “testing will prove our theory is true” about potential interference.