The FCC Wireline Bureau resolved disputes over the rates that Verizon Va. could charge AT&T and WorldCom for access to UNEs, interconnection and resale. While the Telecom Act gives the states responsibility for applying those rules through arbitration proceedings, the FCC said that in this case it was acting on delegated authority in place of the Va. State Corp. Commission for the narrow purpose of this arbitration proceeding. At stake were issues related to the application of the FCC’s pricing rules now in effect, including the appropriate cost models to use to implement the rules and the appropriate assumptions to use in cost models. The order, issued late Fri., came before the Federal Register publication Mon. of the FCC’s Triennial UNE Review Order. As a result, the order said its analysis “of the issues raised in this proceeding does not reflect any rule changes resulting from the Triennial Review Order. However, we do take account of that order’s limited clarification of existing rules regarding cost of capital and depreciation.” The bureau said the FCC had held extensive hearings at which both CLECs and Verizon had an opportunity to present evidence on those issues. The dispute arose when Verizon was seeking long distance authority from the FCC in Va., which the Commission granted last fall. Verizon defended its Sec. 271 petition against AT&T charges that Verizon’s facilities policy discriminated against CLECs and that its benchmarking of UNE switching rates wasn’t done properly. The order set recurring rates for unbundled loops and directed the participants to submit compliance filings consistent with the order on all other recurring and nonrecurring charges (NRCs) that were at issue and for the resale discount. “We will issue a subsequent order to address those compliance filings and to establish recurring charges for non-loop UNEs, NRCs and the resale discount,” the FCC said. AT&T had argued that the FCC should reject additional evidence Verizon submitted last Sept. AT&T contended it wouldn’t be appropriate to accept new evidence 316 days after hearings had concluded and that challengers wouldn’t have a chance to respond to Verizon’s new evidence without reopening the proceeding. The FCC turned down Verizon’s request to offer new evidence, siding with AT&T and WorldCom arguments that “rate cases must end, or rates would never be set.” The FCC said: “This is not the rare situation where something new and unexpected has occurred, rather it is the norm.”

AT&T filed a lawsuit against MCI/WorldCom and Onvoy in U.S. Dist. Court, Alexandria, Va., Tues. seeking damages for what it charged were violations of the civil provisions of the federal Racketeering Influenced & Corrupt Organization (RICO) Act and other laws. It also filed an objection to the MCI/WorldCom Official Committee of Unsecured Creditors’ request for discovery in U.S. Bankruptcy Court, Manhattan. AT&T said it sought post-(bankruptcy) petition damages resulting from MCI/WorldCom’s continuing business operations.

GM, Hughes and News Corp. asked the FCC Thurs. to “quickly dismiss” concerns raised by certain groups about the News Corp.’s proposed acquisition of Hughes. In a letter to the Commission, they said: (1) NAB’s argument that News Corp. would bypass its Fox affiliate broadcasters by distributing a national feed were “far from a model of clarity.” Because Fox’s contracts with sports leagues cover over-the-air broadcast rights, efforts to distribute programming via national feed would exclude the more popular sports programming, they said: “If a bypass strategy were profitable, the parties already would be pursuing it via contract.” While the NAB has said a contract would be too complicated, it hasn’t explained why, the letter said. (2) The Center for Digital Democracy (CDD) recently asked the Commission to analyze the contents of newspaper and magazine articles to learn about News Corp.’s intentions, but such “conclusory assertions, of course, fall woefully short of CDD’s obligation to set forth specific allegations ’supported by affidavit of a person or persons with personal knowledge thereof.'” (3) Wyser-Pratte Management Co. said the deal would result in the “inequitable treatment of holders of GM Class H common stock,” but a license transfer was not appropriate for that claim. (4) The National Hispanic Media Coalition (NHMC) said a decision on the proposed transaction should be delayed until the broadcast ownership rules had been released. The request is “unrelated,” “groundless” and “moot given that the Broadcast Ownership Report and Order was issued July 2, 2003. (5) Maranatha’s concern that DirecTV might choose to increase its local program offerings using a 2-dish system should be addressed in existing Commission rules, which say that 2-dish systems can be deployed only in a legal (nondiscriminatory) way. (6) Sun Microsystems asked the FCC to require DirecTV to migrate to a set-top box standard if the transaction were approved, but imposing “such a condition would conflict with the Commission’s well- established policy against picking winners and losers among competing technologies and its preference to let the markets decide such issues.” Migration to a standard might “serve Sun’s individual interest” but “falls well outside the scope of this proceeding.” Separately, the CDD criticized the requests and urged the “Commission to engage in an objective and in-depth inquiry.” It said the FCC couldn’t ignore its questions to fulfill its “public interest mandate” to review the proposed transaction: “We are astonished -- but not surprised -- that News Corp., et al., would implore the FCC not to conduct a serious analysis. As one of the signers of their Aug. 28 letter is a former chair of the agency, they especially should know better [than] to urge the Commission to ignore the public interest requirements of the Communications Act.” The CDD said it questioned “whether the parties are truly afraid of serious analysis and public disclosure.” Communications attorney Richard Wiley was among the signers.

If telecom executives were to choose our next President, George W. Bush apparently would win in a walk. With only 5 months remaining before the Iowa caucuses, telecom executives are giving in significant amounts to the Bush reelection effort, with Democrats such as Sens. Kerry (D-Mass.) and Lieberman (D-Conn.) trailing, according to an analysis of 70,000 individual donations reported to the Federal Election Commission (FEC). Lieberman’s poor performance among telecom executives contrasts with his impressive performance among Internet-related executives, highlighted in today’s Washington Internet Daily. These 2 stories conclude a 5-part series (CD Aug 27 p4, Aug 28 p3).

There’s a lot of money being recruited for presidential campaigns from mass media executives, but no consensus on where that money should flow, according to an examination by our affiliated publication Washington Internet Daily of about 69,000 campaign donations to 2004 presidential candidates. The data are current through June 30 and were filed by the campaigns at the Federal Election Commission (FEC).

CTIA warned FCC Chmn. Powell it would seek a writ of mandamus from the courts if the Commission failed to provide guidance by Sept. 1 on implementation of wireless local number portability (LNP). Carriers face a Nov. 24 deadline for implementing wireless LNP in the top 100 Metropolitan Statistical Areas. CTIA had urged the Commission to provide answers on implementation issues by Sept. 1. “Recent statements by the chief of the Wireless Telecommunications Bureau [John Muleta] unfortunately suggest that the Commission may not address the critical issues raised in the petitions until after September 1, 2003,” CTIA Vp-Gen. Counsel Michael Altschul wrote to Powell Mon. CTIA has 2 petitions before the FCC: (1) A request for a formal declaration on whether historic wireline rate center boundaries can be used by carriers to limit customers’ ability to take their number along when switching carriers. (2) A request for a declaration on whether carriers can delay a customer’s ability to port a phone number by several days and can impose “unwieldy and unnecessary negotiation processes for the purpose of testing and agreeing to the terms and conditions of number portability.” CTIA stressed the FCC must answer questions on carrier responsibilities in time to meet “operational realities.” Altschul wrote: “Until the Commission resolves the implementation issues addressed in CTIA’s petitions, it will be impossible for carriers -- or for the Commission -- to communicate with consumers about their rights and opportunities with respect to LNP.” Unless the FCC releases “definitive requirements” on LNP implementation for wireless and wireline carriers by Sept. 1, CTIA said it would be “left with no choice but to seek a writ of mandamus.” It said courts had ruled that agencies must issue decisions in reasonable time frames: “Considering the number of years these issues have been pending before the Commission, coupled with the extensive cost and the potential for great consumer confusion associated with LNP, it is readily apparent that further delay would exceed any reasonable deference owed the agency under the Communications Act and the Administrative Procedure Act.” Also pending before the FCC is a petition by Alltel, AT&T Wireless, Cingular Wireless, Nextel and Sprint on a July 3 letter from Wireless Bureau Chief Muleta on LNP implementation issues. The carriers took issue with how the letter treated nonporting conditions when a carrier let a customer take a number to another provider. Verizon Wireless, which opposed the petition, has argued a carrier shouldn’t be able to refuse to port a number if a customer owed an early termination fee or had an outstanding balance. Muleta has said the bureau would answer remaining LNP questions well in advance of the Nov. 24 deadline. He said Tues. through a spokeswoman: “Wireless carriers have had over 6 years to prepare for the Commission’s upcoming local number portability deadline. We intend to address CTIA’s remaining concerns well in advance of November 24. We are working to ensure there is a smooth and efficient process in place for consumers. In the meantime, wireless carriers need to be working toward that date.”

Fla. Gov. Jeb Bush (R) and his Cabinet unanimously approved Tues. a long-awaited plan designed to encourage telecom companies to safeguard coral reef systems by using designated gaps in the reefs to install and connect cables to information networks in S. America and the Caribbean. The new guidelines were developed by the Fla. Dept. of Environmental Protection (DEP) following a request by Bush and his Cabinet in Dec. The rule will go into effect 20 days after filing with the Dept. of State.

With less than 5 months to go before the Ia. presidential caucus, companies and executives in 3 key industries -- telecom, mass media and Internet -- have begun giving aggressively to the 10 major presidential campaigns. The hard-money donations are more notable than ever this election cycle as it’s the first since the passage of the Bipartisan Campaign Reform Act (BCRA). That law banned soft- money donations to political parties but doubled the hard- money amount individuals could give to candidates. Our affiliated publication, Washington Internet Daily (WID), reviewed the roughly 70,000 individual donations recorded by the Federal Election Commission (FEC) to the 10 campaigns as of the most recent filing date of June 30, and focused mostly on donations of $1,000 or more. This is the first of a 5- part series.

Some mobile operators warned the FCC to take caution when considering additional spectrum for unlicensed technology as an underlay to licensed services. In comments on an FCC staff working paper on unlicensed spectrum, Cingular Wireless said the report and related proceedings “demonstrate a continuing focus on unlicensed devices, despite questionable authority to condone unlicensed operations and the significant risk of harm such devices pose as an underlay to licensed services.”

The FCC said Fri. it had issued a stop work order to AT&T, Verizon and T-Mobile to investigate allegations that the 3 carriers were in violation of federal environmental law in constructing antennas on a water tower in Bay Head, N.J. The Commission said this was the 2nd time that it had shut down work at the site due to environmental concerns.