BellSouth (BS) filed with FCC Fri. for Sec. 271 approval in Fla. and Tenn., last 2 states in its territory not yet approved for long distance service. States represent 8.8 million BS customers and 38% of its network. Filing came 2 days after FCC approved BellSouth Sec. 271 applications for Ala., Ky., Miss., S.C., and N.C. Wed. BS has been providing long distance to Ga. and La. since May. Fla. PSC endorsed Sec. 271 application Sept. 9 and Tenn. Regulatory Authority approved it Aug. 26. BellSouth said it had invested $2 billion to meet FCC long distance requirements, which included 14-point market-opening checklist. “The fact is that local competition in Florida and Tennessee is very healthy as competitors serve some 1.6 million customer lines in these 2 states combined,” BS Pres.-Regulatory & External Affairs Margaret Greene said. “This level of activity is absolute proof that we have taken the steps needed to assure that we are in compliance with the law.” BellSouth spokesman said Sec. 271 approval of all BellSouth states would be beneficial in several ways: (1) Approval of all states would make marketing easier in areas close to state borders. (2) Network would be easier to manage when all states could operate under Sec. 271 rules. Telecom Act of 1996 gives FCC 90 days to rule on Sec. 271 applications. Companies must show they have opened lines to local competition. SBC also filed Sec. 271 application Fri., for Cal. (see separate story), so agency staggered deadlines somewhat, for example by requiring SBC comments Oct. 9, BellSouth Oct. 10. However, it must act on both Dec. 19.
PanAmSat purchase of Eutelsat could complicate EchoStar’s plan to take over DirecTV and further consolidate satellite industry, analysts and industry officials say. Wall St. Journal reported PanAmSat and Intelsat had made separate pitches for Eutelsat. No agreements have been reached and talks reportedly still are in preliminary stages, sources said. Intelsat reportedly has offered $3.5-$4 billion. PanAmSat has yet to make formal bid, report said, but it has war chest of $1 billion, which could “make bidding easier,” satellite analyst said. Talks between PanAmSat and Eutelsat are just beginning, Journal said.
Despite WorldCom debacle and weakness in information and communication technology (ICT) market, FCC isn’t ready to give up on idea that competition is best way to drive innovation and consumer services, FCC Comr. Martin said Thurs. Some business models have survived, and FCC still is trying to work out how market will shake out, he said in panel discussion on ICT at U.S.-Ireland Business Summit in Washington. Telecom Act of 1996 wasn’t massive failure, said Deputy Secy. of Commerce Sam Bodman. U.S. “isn’t perfect, for sure,” he said, but over time its system has proved “pretty resilient.” He predicted increasing efforts by FCC and NTIA to “clarify” regulatory framework in which ICT industry operated and to brush aside impediments in order to give investors more certainty. While he’s not pleased with current state of industry, Bodman said, he thinks it will recover.
FTC and U.S. Postal Inspection Service (USPIS) started new national fraud prevention campaign to help senior citizens, who are increasingly becoming targets of telemarketing fraud, FTC said Mon. In conjunction with USPIS fraud prevention efforts, U.S. Senate passed resolution, introduced by Sens. Levin (D-Mich.) and Collins (R-Me.), designating week of Aug. 25 as “National Fraud Against Senior Citizens Awareness Week.” Chief Postal Inspector Lee Heath said: “Fraud complaints are on the rise, and more people aged 60 and over are becoming victims.” According to Alliance Against Fraud in Telemarketing & Electronic Commerce, senior citizens account for 26% of telemarketing fraud victims. National Consumers League said illegal telemarketing operations cheated citizens out of at least $40 billion annually. It said significant number of illegal contest and prize scams originated in Canada. USPIS said it had shut down 40 illegal telemarketing operations this year (43% over last year) and stopped 80 deceptive mailing operations (up 40%). During awareness week USPIS is providing fraud-awareness posters to more than 38,000 post office lobbies, placing half-page ads in selected metropolitan markets and mailing fraud-awareness information to 3 million households of seniors.
Legg Mason said in research note Wed. that while govt. won in 70% of cases before U.S. Supreme Court, there were some vulnerabilities in govt.’s legal argument in NextWave case that “could tip the balance in NextWave’s favor.” Firm also said it appeared unlikely that winners of Jan. 2001 NextWave re-auction ultimately would have to pay for spectrum at total $16 billion set in that bidding. Pending high court review, FCC has refunded all but 15% of deposits paid by winning bidders, who would be required to pay full amount they bid on spectrum if court reversed U.S. Appeals Court, D.C., decision that had ruled against Commission’s cancellation of NextWave licenses for missed payment. Meanwhile, Wall St. Journal editorial Wed. took FCC to task over “ongoing NextWave spectrum fiasco,” arguing Commission decision to not release re-auction winners from their bid obligations “is paying havoc with an industry already in chaos.” Editorial said Verizon Wireless had $8.7 billion liability, “money it can’t effectively touch because of the 10-day future payment obligation.” It said FCC booked $4.8 billion that NextWave bid on those PCS licenses in federal budget in 1997 and then booked $16 billion from 2001 re- auction, as well, minus money lost from NextWave. “Chairman Michael Powell keeps promising a telecom revival, but this FCC money-grubbing doesn’t help,” editorial said. “The re- auction is tying up much-needed investment capital.” Journal referred to recent study by American Enterprise Institute economist Gregory Sidak that concluded that if released, $16 billion in NextWave re-auction overhang would increase gross domestic product by $19-$52 billion. Separately, Legg Mason cited mounting pressure for FCC to remove $16 billion re- auction overhang. CTIA and group of economists have urged FCC to cancel auction or allow winning bidders to opt out of obligations, citing drag on carrier finances. “Although the FCC may not act until after the Supreme Court decision, we believe that the FCC will find it increasingly difficult to stand by an abstract commitment to the integrity of the auction process in the face of mounting claims that such a position stands in the way of contributing to economic recovery,” Legg Mason said. Analyst report said it believed re-auction winners ultimately wouldn’t be compelled to pay prices set in bidding. Among vulnerabilities in arguments in case govt. has laid out to Supreme Court, Legg Mason cited: (1) Congress has carved out exceptions for other govt. actions taken to promote regulatory objectives, but not for spectrum auctions. (2) Justices may follow reasoning of D.C. Circuit, which focused on Sec. 525 of U.S. Bankruptcy Code, which stipulates federal agency can’t cancel license solely for nonpayment of debt dischargeable in bankruptcy. “It’s difficult to argue that the FCC cancelled the license for a reason other than solely because of NextWave’s failure to pay a dischargeable debt.” (3) High court could conclude that FCC created tension between Communications Act and bankruptcy law “by permitting the C-block auction winners to pay off unguaranteed debts in installments over 10 years.” However, report said that among factors that weighed in govt.’s favor in Supreme Court case was strong argument that D.C. Circuit’s decision placed Sec. 525 in conflict with Communications Act provision directing FCC to allocate spectrum by auction. Sidak study, set for Mon. release, is expected to say economic stimulus of releasing carriers from re-auction would free $12-$38 billion by end of 2005, date by which NextWave- related litigation is expected to play out if FCC wins at Supreme Court because of outstanding issues that would be taken up at D.C. Circuit.
Attorneys general in 10 states have begun civil investigation into EchoStar for allegedly failing to comply with consumer protection laws, company said in SEC filing. Attorneys gen. in Fla. and Conn. started probe in April into possible violations of laws governing call response times, advertising, customer agreement disclosures, consumer complaints, rebates, refunds and cancellation fees, filing said. Conn. and Fla. attorneys gen. since have been joined by those from 8 other states. EchoStar CEO Charles Ergen, in conference call with analysts, defended company’s customer service practices: “I'm willing to put our customer practices up against anyone. We're not perfect, and we're still learning. We can certainly do a better job, and there’s certainly some helpful suggestions in our discussions with the state attorneys general.” EchoStar executive said investigation was prompted by consumer complaints, although spokesman declined comment on how many were involved. Many of complaints involved consumers confused on how to get refund on programming or equipment, spokesman said. EchoStar also disclosed that EchoStar-6 satellite had experienced “abnormalities” that resulted in loss of solar array string in Aug. It had lost 2 other strings in 2001. EchoStar-6 has 112 solar array strings, 106 of which are required for bird to remain at full power. EchoStar-5 also lost solar array string in July and now has 95 of 96 available with 92 required for full power. Another 8 transponders failed on EchoStar-4 in quarter bringing total to 38 of 44 available. Transponders on EchoStar-4 started to fail in 1998 and EchoStar reduced its life to 4 years in 2000. EchoStar also said in-orbit insurance policies for EchoStar-1 through EchoStar-7 satellite had expired and it had reserved $168 million to cover them. EchoStar filed insurance claim of $219.3 million for EchoStar-4 in 1998. Insurance carriers offered $88 million to settle claim, which EchoStar refused in filing claim with American Arbitration Assn. for breach of contract.
Some 400 Colo. residents requested forms for filing deceptive sales complaints against Qwest from Colo. Attorney Gen. day after AG announced that, as part of settlement of complaints, Qwest would be held liable for those filed between now and mid-Dec. (CD Aug 15 p6). Any complaints filed would be in addition to 1,800 from local exchange, wireless and Internet access customers already included in settlement and would have to be verified as genuine. AG also clarified that Qwest wouldn’t be required to pay restitution for improper charges incurred more than 12 months before complaint was filed. Settlement requires Qwest to pay $1 million fine, which will be used for consumer education and to monitor and enforce settlement terms over next 5 years. Qwest also must refrain from any further offenses and file quarterly compliance reports with AG. Settlement closed out complaint case in which Qwest was accused of improper tactics such as steering customers away from lower priced service options, cramming unauthorized services on bills, failing to fully disclose pricing and terms, failing to respond promptly when customers complained. Qwest since 1999 has settled deceptive sales complaints in 12 other states, including $3.3 million accord in July on Fla. slamming charges. Qwest in Cal. is fighting PUC assessment of $38 million fine for slamming and cramming complaints.
Just as independent ISPs have many groups that claim to speak for them in Washington, those groups also vary in their funding. One relies on informal donations including that of at least one prominent CLEC, another has formal membership dues structure while 3rd is political action committee. Donation group and PAC lobby for Bell interconnection while dues organization is seeking to work with Bells after deregulation. This story is 2nd of 3-part series by our affiliated Washington Internet Daily that examined 3 dozen Internet and telecom advocacy groups.
Hughes Global Services will lease HGS-3 satellite to Pakistan for 5 years in $30 million deal that includes operation and leasing of 34 transponders, companies said. Pakistan said it signed lease contract because of concerns about losing another orbital slot. It renamed satellite Paksat 1, Hughes said: Paksat 1 was launched in 1996 as Palapa C1. Hughes said it took control of satellite after battery-charging anomaly made it unusable for intended application. Paksat 1, which has 30 C-band and Ku-band transponders, will provide commercial services such as Internet backbone, remote Internet access, business communications, broadcast services and thin route telephony, Hughes said. Pakistan said it had lost 4 of 5 slots originally allocated to it in 1984 by ITU. Science & Technology Minister Atta-ur-Rehman said Pakistan had until April 19, 2003, to gain access to satellite or lose slot at 38 degrees E. HGS-3, now being used by Turkey under name of Anatolia 1, will be moved to Pakistan’s 38 degrees E slot from 50 degrees E location by end of Dec.
BOSTON -- One of hottest topics in fixed wireless arena for World Radio Conference (WRC) in 2003 is potential global harmonization for wireless access systems at 5 GHz, said Veena Rawat, deputy dir.-gen., spectrum engineering branch of Industry Canada. “It will be one of the most controversial, one of the most difficult items,” Rawat said in Thurs. panel at Wireless Communications Assn. conference here. One fundamental point of debate is whether those systems should have primary or secondary use of band, she said. While there has been interest in fixed wireless sector for creating global harmonization for wireless access services in that spectrum, Linda Wellstein, partner with Wilkinson, Barker, Knauer, said NTIA had raised interference concerns as part of WRC planning process in U.S.