Three-judge panel of U.S. Appeals Court, D.C., handed ILECs pair of unanimous victories Fri., remanding FCC orders on line-sharing requirements and unbundled network elements (UNEs). On FCC’s UNE order, which responded to U.S. Supreme Court remand of agency’s rules, court said it mandated unbundling in every geographic market without regard “to the state of competitive impairment in any particular market.” Ruling concluded FCC “nowhere appears to have considered the advantage CLECs enjoy in being free of any duty to provide underpriced service to rural and/or residential customers and thus of any need to make up the difference elsewhere.” Line- sharing case focused on requirements that ILECs unbundle portion of copper loops so they could offer competitive DSL Internet access to CLECs. Court sided with ILEC arguments that FCC had failed to consider broadband competition in larger context of not just DSL choices, but alternatives provided by cable and satellite. Both CLECs and incumbents said ruling was likely to help shape upcoming FCC decisions, including Commission’s UNE review.

FCC released orders on private land mobile radio (PLMR) services that declined to restrict new citizens band (CB) radio service to industrial/business pool users under Part 90 of Communications Act. Part 90 contains rules for PLMR services for public safety entities, state and local govts. and other users of 2-way radio systems. Commission affirmed decision to license 5 VHF frequencies formally used for low- power industrial/business use by putting them in new CB service under Part 95 called multi-use radio service (MURS). “The general public is licensed by rule to use MURS for communications related to personal or business activities,” Commission said. FCC also clarified that MURS was 2-way, short-distance voice or data communications service “intended for transmissions that do not typically require long duty cycles.” FCC updated airport terminal use list, which identifies airports at which certain 450 MHz band frequencies are used by nearby stations for servicing and supplying planes. In separate order, FCC adopted proposal of American Automobile Assn. to revise power limit on certain frequencies now reserved for low-power operations for cargo handling at docksides. Order didn’t accept AAA proposal to require all applicants to obtain AAA’s concurrence before using those frequencies. Agency also adopted proposal to eliminate eligibility restriction on school and park operations in public safety pool. Motorola, RadioShack and Industrial Telecom Assn. had petitioned for reconsideration of MURS policies, arguing FCC had decided to include general consumers in class of licensed users even though notice had proposed only to eliminate licensing requirement for eligible business and industrial users. Concern of Motorola and others was that expanding use of those frequencies to general public would increase interference and congestion for business communications. As result, Motorola and ITA asked that that spectrum be returned to Part 90 PLMR services. Concerns over congestion and other issues “do not adequately address or appropriately balance the sharing issues raised on reconsideration,” FCC concluded. Rather than abolishing MURS, Commission said it was adopting technical restrictions to address those concerns.

FCC has primary responsibility for encouraging broadband penetration and FCC Chmn. Powell “is whipping the snail as fast as he can whip it,” said Bruce Mehlman, assistant Commerce Secy., Office of Technology Policy, at Fiber-to-the-Home Council meeting in Reston, Va., Wed. Powell, meanwhile, was hosting “international policymakers” discussion on broadband at Commission hq, hoping to whip up interest.

Key “threshold” question to ancillary terrestrial component request by mobile satellite service (MSS) licensees is whether such sharing is technically feasible, FCC Comr. Abernathy said at National Spectrum Managers Assn. conference Tues. “If it is, the Commission should hold an auction to allow those rights to evolve to the most highly valued use, and that includes potentially being bought by the satellite licensees who have the satellite rights,” Abernathy told conference in Arlington, Va. She said MSS licensee New ICO had asked FCC for approval to develop terrestrial spectrum using bands allocated to MSS. Sprint PCS and Cingular Wireless submitted new technical data to Commission last week that contended MSS operators didn’t plan to share spectrum between MSS and ATC, but wanted to separate band into one segment for each, conclusion to which ICO objected. In other areas, Abernathy told reporters after her speech that Commission decision on 700 MHz auction probably still was several days away.

Comcast and AT&T Broadband defended their merger to FCC, saying combination of nation’s first- and 3rd-largest cable companies would be in public interest, wouldn’t violate Communications Act and would “have no anticompetitive effects in any relevant market.” In turnabout, American Cable Assn. (ACA) jumped on board in favor of merger, telling FCC that deal wouldn’t threaten livelihood of country’s more than 900 small and rural cable operators. Comcast and AT&T Broadband, in 328 pages of reply comments, said dozens of people and entities who filed opposing comments last month (CD April 30 p1) based their assertions on “unfounded fears, rank speculation and thinly disguised pursuit of private agendas.” Opponents, who included coalition of 38 national and state groups such as Consumer Federation of America, said proposed $72 billion merger would create corporate behemoth that would raise prices, offer fewer choices in programming, preclude competition on Internet and among Internet service providers (ISPs), dictate technology standards, put customer service needs last. But companies rejected those arguments and said they already had proved otherwise.

FCC has primary responsibility for encouraging broadband penetration, and FCC Chmn. Powell “is whipping the snail as fast as he can whip it,” said Bruce Mehlman, assistant Commerce Secy., Office of Technology Policy, at Fiber-to-the- Home Council meeting Wed. in Reston, Va. Powell, meanwhile, made it clear that FCC was willing to take on that responsibility, telling audience at unrelated event that FCC’s job was to lead in broadband policy development, even though that’s unusual role for regulatory agency. Powell was hosting “international policymakers” discussion on broadband at FCC hq, hoping to increase interest.

Supporters of Senate Commerce Committee Chmn. Hollings’ (D-S.C.) broadband legislation on Wed. highlighted lackluster demand for high-speed Internet as reason why his more limited bill made more sense than House’s Tauzin-Dingell version. ILEC deregulation legislation, such as Tauzin-Dingell (HR- 1542) and Breaux-Nickles (S-2430), doesn’t address demand issues and would further stifle broadband competition, said witnesses who included Reps. Markey (D-Mass.) and Cannon (R- Utah), 3 state telecom regulators and Pa. state senator. Hollings asked: “We are at a crucial juncture in telecommunications policy -- are we going to hold steadfast to the goal of competition and allow it to continue guiding our decision making, or are we going to allow groups with other objectives in mind to guide our actions?” Opponents of Tauzin-Dingell told Hollings and committee there was no “crisis” in broadband deployment that needed legislative fix. Hollings’ bill (S-2448) is designed to help fund broadband rollout to rural areas. No witnesses spoke in favor of HR- 1542, S-2430 or similar regulatory approaches.

Microsoft lost its appeal to block San Diego software company from calling itself Lindows.com and its Linux-based programs LindowsOS. In 7-page ruling, U.S. Dist. Court, Seattle, Judge John Coughenour said his March 15 ruling denying request by Microsoft to shut down Lindows was appropriate.

Spatialight said first-quarter loss widened to $2.1 million from $1.4 million as start-up microdisplay company failed to generate any revenue. Company had net capital deficiency of $708,659 as of March 31, raising “substantial doubt” about its ability to continue as “going concern,” according to SEC filing. During 2002, Spatialight will meet working capital and other cash requirements by exercise of warrants by existing investors with ties to 2 members of company’s board. It also has stock subscriptions receivable of $2 million, SEC filing said. Cash expenditures are expected to run $400,000 per month this year, not including any revenue generated from technical trials that are under way. Spatialight has signed licensing agreements for its liquid-crystal-on-silicon (LCoS) technology with 4 Chinese manufacturers including, most recently, Shanghai Audio & Video. Acting CEO Robert Olin, whose Argyle Capital Management Corp., owns 3.5 million shares (13.7% of outstanding common), wasn’t paid salary in 2001, but received options for 1.2 million shares. Top shareholder is Estate of Isidore Becker, which controls 3.8 million shares (14.8%). EMagin said first-quarter loss narrowed to $6.4 million from $9.7 million as revenue tumbled to $158,027 from $2 million as company struggled, temporarily closing microdisplay facility and laying off 57 workers in cost-saving move last fall. It has since hired back 11 after gaining $1 million in equity financing. EMagin also was continuing negotiations with Travelers Insurance Co. at our deadline on $1 million note that matures today (Mon.). EMagin entered agreement with Travelers last Aug. under which latter provided $1 million loan. Company is trying to settle note with different debt or equity security since it doesn’t have enough money to pay note at maturity, it said in SEC filing. Company also reached agreement to sell 1.2 million shares to Rohm, generating $1 million in proceeds. Under agreement, companies also are to enter pact within 180 days of closing of stock sale to jointly develop and market organic light-emitting diode (OLED) technologies.

Man who founded Adelphia Communications in 1952 stepped down as pres., chmn. and CEO Wed., saying his resignation would help struggling company. “After much thought and prayer about what will best serve the needs of the company and our stakeholders, including our shareholders, employees, customers and communities, I have concluded that Adelphia needs fresh, independent leadership,” 77-year-old John Rigas said. Erland Kailbourne, former chmn.-CEO of Fleet National Bank-N.Y. Region, was named chmn. and interim CEO. Kailbourne is chmn. of company’s audit committee and has acted as independent dir. since 1999. “I welcome this opportunity to help Adelphia meet its current challenges,” he said. Rigas will stay on as chmn. emeritus, keeping seat on board and continuing to represent company with cable industry and other constituencies. “I am confident that the changes under way at Adelphia are the beginning of a process that, under the leadership of Erkie Kailbourne, will restore the credibility and rebuild the value of this fine company,” said Rigas, who is on board of NCTA, C-SPAN, and Cable Ad Bureau. His resignation came day after Adelphia’s 2nd-largest shareholder, Leonard Tow, announced in filing at SEC that he was trying to wrest 3 board seats away from Rigas family by exercising options he had held since selling his cable systems to family in 1999 (CD May 15 p12).