CTIA and Verizon Wireless jointly petitioned U.S. Appeals Court, D.C., last week in challenge to how FCC applied forbearance standard when it granted one-year extension last month on wireless local number portability (LNP). Issue had come up at time that FCC adopted order, with Comr. Martin voting for one-year extension but dissenting on extent to which order addressed forbearance standard.

House Judiciary Committee ranking Democrat Conyers (Mich.) raised possibility Dept. of Justice (DoJ) “may have given misleading information to Congress” on electronic surveillance and foreign agent investigations (CD Aug 23 p5). Conyers said in letter Fri. to Attorney Gen. John Ashcroft that he had “grave concerns” with DoJ’s response to committee’s information request on Foreign Intelligence Surveillance Act (FISA) investigations.

Financial turmoil and accounting problems afflicting telecom and other utility industries are causing state regulators and lawmakers around country to take action designed to spot financial trouble early and are putting policies in place to deal with consequences of telecom bankruptcy and other finance-related disruptions.

Controversy in several states about Qwest’s “secret” contracts with some CLECs (CD July 23 p7, June 3 p3) appears now to be complicating FCC’s review of Qwest’s first Sec. 271 petition, due for Commission action by Sept. 11. As part of its review of Qwest’s Sec. 271 petition for Colo., Ia., Ida., N.D. and Neb., FCC late Wed. asked for comment by Aug. 28 on company’s offer to file those previously unfiled contracts for review by relevant state regulators, post them on Web site and make their terms available to other CLECs. Qwest has been criticized by state regulators for not filing all of its CLEC contracts for approval as required by Sec. 252 of Telecom Act. In disputes with PUCs that have been going on for months, Qwest has maintained that those contracts don’t need to be filed because they aren’t directly related to Telecom Act’s interconnection rules. Issue has led to accusations that those unfiled contracts involve deals Qwest made with CLECs to win their support for Sec. 271 entry.

Everyone, including FCC, appeared to get something out of announcement Wed. that AOL Time Warner and AT&T had reached agreement on how to dissolve their complex partnership called Time Warner Entertainment (TWE). Comcast got ability to merge with AT&T Broadband with perhaps one less regulatory complication and means to sell off TWE partnership’s cable assets, reducing debt in process. AOL-TW got entre into broadband world, securing carriage deal for AOL that could put it in millions of high-speed Internet homes and end criticism that AOL was stuck in dial-up world. FCC got example of private industry finding answers to prickly regulatory questions involving cable ownership and multiple ISP access. Agreement comes as FCC weighs rules that would limit horizontal and vertical reach of cable companies and that would impose so-called “open access” provisions on cable companies.

Forum of state lawmakers is considering 3 draft telecom bills for introduction in fall when many legislatures return for sessions. American Legislative Exchange Council’s (ALEC) Telecom & Information Technology (IT) unanimously approved proposed bill at recent annual meeting that will be considered by its board in late Sept. If approved, members will be encouraged to introduce bills that would: (1) Reform rights-of-way (ROW) management to limit what states could charge for access. (2) Establish protections for industry against municipalities that offered competing telecom services. (3) Establish statewide standards for cellphone driver safety legislation. ALEC describes itself as bipartisan association of conservative state lawmakers who focus on principals of limited govt., free markets, federalism, individual liberty. Aug. annual meeting in Orlando drew 2,500, including 1,000 state lawmakers. Task force meeting drew 45 state legislators.

AT&T Wireless, Cingular and Verizon Wireless made joint filing at FCC Thurs., citing steps taken by several mobile satellite service (MSS) licensees that they said required Commission to take fresh look at MSS license grants, spectrum allocation and rules. They said those actions had “further undermined the premises on which their [MSS] licenses were granted and the FCC’s decision not to reexamine the original satellite-only allocation.” Wireless carriers have expressed concern about New ICO’s flexible use proposal that would allow it to provide ancillary terrestrial wireless service in MSS band. “It is now even clearer that the Commission cannot act in the MSS flex docket unless and until it first revisits the satellite-only allocation decision and the MSS license grants, both of which have been pending review for some time,” 3 carriers said. Specifically, wireless operators cited as “new developments": (1) Requests filed by 3 MSS licensees to waive or extend MSS construction milestones, “even though the Commission has proposed to strengthen those milestones in a pending rulemaking.” Filing said there were “serious questions” whether some MSS licensees had entered into noncontingent contracts for system construction. (2) Filings by 2 MSS licensees to transfer unbuilt licenses and spectrum to ICO Global Communications, “notwithstanding that the milestone and antitrafficking rules preclude such efforts.” (3) Globalstar receipt of experimental licenses to conduct 6 months of tests on ancillary terrestrial service without notifying other parties in those proceedings. Wireless carriers said FCC’s Office of Engineering & Technology, when granting experimental license, had not required that detailed report be filed in record. “Given the many new interrelated issues as to the viability of MSS as a satellite-only service and the licenses grants based thereon, the carriers submit that the Commission must return to the starting point and revisit the license grants, spectrum allocation and service rules,” filing said. Carriers said that any action in MSS flexibility proceeding would be “premature” until new issues that they raised were resolved. If FCC acts otherwise, “it will be acting contrary to its market-oriented policies of not picking winners and losers and of awarding spectrum based on its highest and best use,” filing said.

In reply brief at U.S. Supreme Court filed late Mon., FCC disagreed with what it called NextWave’s efforts to treat regulatory license conditions as dischargeable debts under U.S. Bankruptcy Code, saying that would “inappropriately convert” Sec. 525 of Code into barrier to regulatory goals. High court is set to hear oral argument Oct. 8 on FCC’s appeal of U.S. Appeals Court, D.C., ruling that overturned results of Jan. 2001 re-auction of NextWave’s PCS licenses and returned spectrum to bankrupt carrier. Commission took exception to contention raised by Urban Comm, another bankrupt C-block bidder, that it altered its position as market conditions changed. FCC stressed Sec. 525 of U.S. Bankruptcy Code doesn’t bar agencies from ever cancelling licenses of debtor. Rather, Sec. 525 prohibits govt. agencies from revoking licenses of debtor or bankrupt entity solely because they haven’t paid dischargeable debt, Commission argued. FCC told court that all that Sec. 525 bars agencies from doing is revoking licenses only because debtor has not paid debt that is dischargeable under Bankruptcy Code. Instead, FCC said it cancelled NextWave’s licenses for regulatory reasons, specifically its assessment of public interest. “Nor were the licenses cancelled because respondents failed to pay a debt ’that is dischargeable’ in bankruptcy,'” FCC said. “The full and timely payment condition is a critical regulatory term of FCC licenses. It is not a debt, let alone dischargeable in bankruptcy.” Commission had cancelled NextWave licenses after carrier failed to make installment payment. NextWave had told Supreme Court in June that Commission’s revocation of its PCS licenses for missed payment was “obvious” Bankruptcy Code violation, because Code doesn’t contain regulatory exception for FCC. But Commission countered Mon. that NextWave doesn’t explain “how the auction system can be reconciled with a regime in which a winning bidder can have its bid altered in bankruptcy, or hoard FCC licenses indefinitely in the hope that the market will eventually support its bid.” Agency stressed Sec. 309(j) of Communications Act requires prompt utilization of spectrum without administrative or judicial delays and that Bankruptcy Code “generally avoids intrusion on agency regulatory activities.” FCC argued that it cancelled NextWave’s licenses partly because it failed to make payment, but that this wasn’t only reason. “It also occurred because the FCC, after considering respondents’ circumstances, concluded that further relaxation of the regulatory conditions of full and timely payment would injure the public interest,” FCC said. Alaska Native Wireless filed friend-of-court brief that echoed public interest spectrum issues raised by Commission. “NextWave focuses only on its own interest in reaping a perceived windfall in order to solve its financial woes, all the while seeking to blame the FCC for those problems and its inability to yet provide service to a single customer with the spectrum,” said Arctic Slope, which, along with AT&T Wireless, is among backers of Alaska Native Wireless (ANW). ANW was 2nd largest bidder in NextWave re-auction behind Verizon Wireless. It argued that NextWave shouldn’t have had expectation that it would be able to keep licenses without meeting all regulatory obligations.

FCC approved order that within 5 years will lift requirement that cellular carriers continue to provide analog service, as long as hearing aid devices are compatible with digital networks by then. FCC Comr. Copps dissented in part, citing concerns over issues such as current lack of hearing assistance technology that worked with digital networks. “The majority finds that the analog standard is no longer ‘necessary’ even though compatible services are not yet available,” he said of item, which was part of Commission biennial review proceeding. Comr. Martin voted for order, but voiced concern that it didn’t discuss meaning of term “necessary” as covered under FCC’s biennial review obligations. FCC said point of its order was to eliminate certain requirements for cellular carriers that no longer were necessary because they dated back to duopoly era of cellphone service when it started in 1980s. Other changes in order involve elimination of cellular channelization provisions, removal of manufacturing requirements on electronic serial numbers and rules on cellular antitrafficking.

Telephone companies’ DSL service is subject to Title II constraints “for a multitude of reasons related to their unique history, system architecture and past conduct -- none of which apply to cable,” NCTA said in reply comments to FCC on regulatory treatment to Internet over cable. “Imposing those constraints -- and the costs associated with them -- on cable for no other reason than to achieve regulatory parity will… make consumers unequivocally worse off by raising the price or lowering the quality of cable modem and DSL service. SBC Communications urged FCC to establish uniform national regulatory policy for all broadband services, whether delivered over DSL or cable. “Companies that provide similar services should be regulated the same,” SBC Senior Vp-FCC Priscilla Hill-Ardoin said. “Unfortunately, the current regulatory imbalance has had a negative effect on investment in new DSL networks and has dealt a blow to real competition.” SBC agreed with NCTA’s position that mandatory ISP access imposed costs that affected broadband deployment but said that if FCC decided mandatory access requirements were appropriate, they should apply to all broadband providers. NCTA said Commission had no ancillary authority under Communications Act to impose multiple ISP requirement on cable modem service and that arguments by ISPs and “self- styled consumer representatives” provided no evidence that cable companies ever in any way would restrict Internet content. National Assn. of Deaf (NAD) said Commission had failed to consider in its NPRM needs of those with disabilities. Specifically, Assn. said it was concerned that cable companies offering one or other ISP would keep NAD members from being able to communicate with one another because lack of interoperability of instant messaging (IM) services of various providers. “Many NAD members use IM services as equivalents to voice, telephony, voice mail, and similar voice-based services. Indeed, in key respects, IM has become for many NAD members, an indispensable tool.” NAD said FCC’s NPRM effectively would exempt cable modem service from equal access provisions of Communications Act. American Foundation for the Blind said cable modem should be classified as telecom service in order to ensure access to people with disabilities. City Council of New Orleans told Commission that it couldn’t preclude state and local authorities from regulating cable modem service and facilities and that local govt. should be able to charge rent to rights-of-way (ROW). Other municipalities, including Portland, Me., Corpus Christi, Tex., and Des Moines, Ia., made similar arguments that cable modem service placed additional burden on ROW, that consumers would continue to call with complaints and that local govt. should have power to address customer service issues.