The FCC Mon. partly granted the Cal. PUC’s request for an easing of the so-called “contamination threshold rule” for 1,000-block number pooling. The FCC’s rules require that service providers donate for pooling purposes any 1,000- blocks with 10% or less contamination. Contamination arises when at least one telephone number within a block of phone numbers isn’t available for assignment to end users. The Cal. PUC wanted to raise the threshold to 25%, meaning pooling would be required for all blocks with 25% or less contamination. The FCC said the PUC hadn’t demonstrated justification for raising the contamination threshold throughout the state but did justify raising it in the 310 and 909 area codes on an interim basis. Such action will give the PUC more time to implement area code relief in those 2 codes, the FCC said. Pooling is used to conserve telephone numbers to avoid a shortage in a particular area code. Comr. Abernathy dissented in part, saying she shared the Commission’s desire to give flexibility to state commissions on numbering issues but felt that “granting an unconditional waiver in this case is inconsistent with the public interest.” She said she would have been willing to grant the request “if it were conditioned on prompt implementation of area code relief… Raising the contamination threshold is a Band-Aid that according to the North American Numbering Council will extend the life of those area codes by only 1 to 2 months… When the inevitable train wreck occurs, this Commission unfortunately will bear part of the blame.” Comr. Copps issued a concurring statement saying he didn’t think the decision went far enough in giving the state commissioners “the deference they deserve.” He said he would have preferred to grant the petition “in a less area code restricted fashion.” Copps said he also wished the Commission had acted more quickly: “I fear that we may have jeopardized the ability of the [PUC] to provide some of the relief sought, through the slow regulatory speed with which we resolved this matter.”

A federal appeals court in Chicago rejected requests by 2 state legislators and a labor union to file amicus briefs supporting SBC’s appeal of an injunction blocking implementation of a 2003 Ill. state law that would have doubled SBC’s unbundled loop rates. The 7th U.S. Appeals Court, Chicago, ruled the amicus briefs from the CWA, Ill. House Speaker Michael Madigan (D-Chicago) and Senate Pres. Emil Jones (D-Chicago) “essentially cover the same ground the appellants do,” and raised no novel factual or legal issues. The amicus briefs argued that the lower court had misread state and federal law in concluding that SB-885 conflicted with the federal Telecom Act.

The First Amendment Coalition, an ad hoc group of broadcast licensees and public interest groups, challenged the FCC on its Notice of Apparent Liability (NAL) and Forfeiture against Infinity Bcstg. The group, which includes Citadel Communications and Radio One, specifically asked that the Commission rescind statements directed at all broadcasters threatening potential license revocations for “serious violations” of agency indecency policies. The FCC in April proposed a statutory maximum fine of $27,500 against Infinity after its WKRK(FM) Detroit aired graphic descriptions of sexual acts at a time when children could have been listening (CD April 4 p3). The Coalition asked the Commission to begin a Notice of Inquiry (NOI) to examine the fundamental constitutional issues raised by its indecency rules. It said it believed the FCC had begun to shift the burden of proof in its evaluation of indecency complaints. The Coalition said the key factor that thus far had prevented the agency’s indecency policy from being “a constitutional catastrophe” had been the Commission’s restraint in forcing the issue. “But the agency’s reluctance to act as a board of censors appears to be waning, as demonstrated by the Infinity NAL and other recent actions,” the group said.

The Justice Dept. (DoJ) supported the Bipartisan Campaign Reform Act(BCRA) act, including its requirements for broadcasters, in an amicus brief to the U.S. Supreme Court. The DoJ filed the supporting brief in the case of McConnell v. Federal Election Commission (FEC), in which Sen. McConnell (R-Ky.) is challenging the campaign finance laws pushed by Sens. McCain (R-Ariz.) and Feingold (D-Wis.). Justice broadly defended the scope and limitations of the BCRA. “Limits on contributions are subject to relatively relaxed constitutional scrutiny,” the brief said. “In light of the national parties’ demonstrated ability to raise large sums of hard money, there is no meaningful danger that the soft-money ban will prevent effective advocacy.” The brief said all of the electioneering communications provisions in the BCRA were constitutional. “BCRA’s primary definition of ‘electioneering communications’ is not only clear and objective, but is supported by empirical evidence showing that advertisements that clearly identify federal candidates and are broadcast shortly before an election to the candidate’s own electorate are highly likely to influence electoral outcomes,” the brief said. “The objective factors identified by Congress in [BCRA] will pose little or no obstacle to entities that are interested in financing ‘genuine’ issue advertisements, but are carefully calibrated to capture so-called ’sham’ issue advertisements.” McConnell lacks standing to challenge the “lowest unit charged” provisions of the BCRA, the DoJ said. For one, his next election isn’t until 2008, but Justice said the provision is constitutional anyway. “The FCC has long required that the sponsor of every broadcast advertisement be identified in the advertisement itself,” the DoJ brief said: “BCRA simply provides for identification of the relevant sponsor in an especially clear and unmistakable manner.” It also said the BCRA could require stations to keep records of requests to purchase broadcast time for certain categories of political advertising.

Verizon Internet Services’s warnings about the dangers of RIAA’s sweeping Digital Millennium Copyright Act (DMCA) subpoena blitz have been borne out, Verizon Vp-Assoc. Gen. Counsel-Internet Policy Sarah Deutsch said Fri. Pacific Bell Internet Services’ filing of a lawsuit last week challenging the issuance of hundreds of DMCA subpoenas and/or DMCA notices by RIAA, MediaSentry and Titan Media prove Verizon’s point -- so far unsuccessfully argued in federal court in D.C. -- that the DMCA Sec. 512(h) subpoena process is unconstitutional and will be abused, Deutsch told us. “These are not hypothetical arguments,” she said.

Pacific Bell Internet Services late Wed. challenged RIAA’s attempt to force disclosure of the identity of alleged online file swappers. In a lawsuit filed in U.S. Dist. Court, San Francisco, Pac Bell requested a declaration that Digital Millennium Copyright Act (DMCA) subpoenas served on it by RIAA were overly broad and should have been issued by a Cal., not D.C., court, AP reported. The suit raises constitutional issues as well, the AP said. “This is old news,” an RIAA spokeswoman said. Pac Bell is simply recycling many of the same arguments raised (by Verizon Internet Services) and shot down twice by a D.C. federal court, the spokeswoman said. RIAA contacted SBC (which purchased Pac Bell) to discuss the matter but was “rebuked,” she said. The “procedural gambit” won’t change the underlying fact that when people engage in copyright infringement online, they're not anonymous and ISPs must reveal who they are, the spokeswoman said.

Acknowledging that public broadcasters were faced with a “very difficult fight” to prevent steep cuts in federal funding for their programs, the Assn. for Public TV Stations (APTS) has begun a coordinated effort with stations to mobilize grass-roots support. “We have received some very adverse numbers in the House on almost all of our programs and we are in a very difficult fight to prevent our programs from being cut,” APTS Pres. John Lawson said. One of the challenges for public broadcasters is to link the growing concern among legislators for locally controlled media with the need to back funding for public TV, he said in an interview.

An amici curiae brief filed July 25 by 6 CLECs at the U.S. Supreme Court in the pending Trinko v. Bell Atlantic case raises “compelling” arguments that indicate Bell companies could face “substantial antitrust risk,” Kaufman Bros. analysts said in a report Mon. The case, related to Goldwasser v. Ameritech, is the latest in a continuing legal debate on whether Telecom Act interconnection violations can be addressed through antitrust suits. The brief, filed by Allegiance Telecom, ATX Communications, Focal Communications, ICG Communications, Pac-West Telecom and U.S. LEC, argued that courts did have authority to establish antitrust remedies of Telecom Act violations. “Congress expressly directed that the antitrust laws continue to govern local telephone markets by including an antitrust savings clause in the ‘96 Act,” the brief said. The CLECs also argued that: (1) “The conduct alleged in this case is not simply a passive refusal to deal, but affirmative activity by a monopolist creating a public misperception that its competitors’ service is technically deficient.” (2) “Verizon lacks a legitimate business justification for its conduct.” The Trinko case stems from a 2nd U.S. Appeals Court, N.Y., decision last year that was one of few that upheld CLEC efforts to gain antitrust remedies for Telecom Act violations. The 2nd Circuit reversed a lower court’s dismissal of antitrust claims against Verizon’s predecessor Bell Atlantic. The plaintiff, the Law Office of Curtis Trinko, alleged that Verizon’s denial of access to competitors hurt the plaintiff and other consumers. The Kaufman Bros. report said antitrust risk wasn’t properly factored into consensus views of the Bells’ financial situation: “We continue to recommend investors avoid the Bells, in part due to this budding issue which could represent billions of dollars of off-balance- sheet exposure.”

AT&T urged the U.S. Bankruptcy Court, N.Y., Mon. not to approve MCI/WorldCom’s bankruptcy reorganization plan in light of the charges that emerged this weekend of alleged access charge fraud by MCI. AT&T told the court that MCI’s reorganization plan, if approved, would deprive AT&T of the ability to file racketeering and fraud charges against MCI, which it planned to do.

Wireless carriers are stepping up their calls for the FCC to rule on questions involving intercarrier compensation by mobile operators and LECs, citing the rising number of wireless termination tariffs filed by wireline carriers. While wireless carriers want the Commission to rule those tariffs are illegal, rural LECs have urged the agency to uphold their lawfulness, defending them as cost-based and voluntary because they apply only when there’s not a negotiated agreement.