Northpoint filed FCC application late Wed. to construct 2 DBS satellites and operate as satellite-terrestrial system that would make it “stronger competitor” to merged EchoStar- DirecTV DBS companies, CEO Sophia Collier said Thurs. “With a terrestrial system, we were a good competitor,” but with merged DBS companies it would be “hard for us to compete.” Despite industry speculation that Northpoint decided to integrate system because of concerns about auction, Collier said it wasn’t “a legal reason, but a business reason” that caused Northpoint to alter its business model. She said major system upgrade would allow Northpoint to increase capacity significantly, provide faster broadband service and incorporate modular set-top box architecture that would allow outside developers to offer new services once FCC approved license. Northpoint made public no details about satellites or financing, but said it would be financed by affiliates and founders.

Creation of “Center for Civilian Homeland Security Technology Evaluation” is new component of NET Guard bill introduced Wed. by Senate Commerce Technology Subcommittee Chmn. Wyden (D-Ore.) and Sen. Allen (R-Va.), as expected (CD March 20 p6). Center would serve as clearinghouse and testbed for new technologies to protect critical infrastructures. As proposed by Wyden last Oct., bill also would create National Guard of IT and telecom professionals to respond quickly to terrorist attacks or natural disasters; they would be certified by federal dir. appointed by President. “This country has already mobilized the military, the government and law enforcement to fight terrorism, but America has yet to tap the tremendous technology and science talents of the private sector,” Wyden said: “This legislation invites a generation raised on information technologies to help their fellow citizens when crisis strikes.” He said many professionals sought to help after Sept. 11 attacks but lacked credentials to gain access to critical areas. Allen said: “This legislation will help remove whatever shackles there are on private enterprise so that government and the American people can benefit from their innovations, expertise, creativity and generosity.” Bill also would provide for 7 grants of $5 million each to fund pilot communications programs for first responders. Allen and Wyden said House Science Committee Chmn. Boehlert (R-N.Y.) is expected to introduce companion legislation in House. Wyden has hinted he will introduce companion legislation for HR-3394, proposed Cybersecurity Research & Development Act by Boehlert that passed House last month.

ORLANDO -- One theme that emerged at CTIA Wireless 2002 here this week was need for more flexible federal spectrum policy, although govt. and industry officials pointed to new crop of questions raised by regulatory changes in that direction. “It’s an important concept and I congratulate the FCC for introducing it,” said Brian Fontes, vp-federal relations, Cingular Wireless. “However, I express a great deal of caution as you address the issue of flexibility that it doesn’t have the effect of reallocation,” he said on panel discussion. Flexible allocation issues have involved secondary markets proceeding at FCC, Spectrum Policy Task Force recently created by Commission and pending proceedings such as New ICO petition to deploy terrestrial services in mobile satellite service spectrum.

U.S. Dist. Court, Roanoke (Va.), denied Cox Cable’s motion to dismiss class action suit brought by subscribers challenging MSO’s passthrough of franchise fees on cable modem service. Plaintiff Kimberly Bova argued that passthrough of franchise fees violated Communications Act because cable modem service was “telecommunications” service and under Act Cox couldn’t charge franchise fees for telecom services. Bova said Cox continued to collect franchise fees on Internet service even after 9th U.S. Appeals Court, San Francisco, ruling that it was telecom service. Cox said its high-speed Internet service was either cable service or information service, so its franchise fees were legal. MSO also said FCC had exclusive jurisdiction to determine propriety of passthrough of cable franchise fees and Act didn’t provide private right of action for subscriber challenge. Chief Judge Samuel Wilson said court denied Cox’s motion to dismiss on substantive grounds because it found that plaintiff “has stated a claim upon relief can be granted.” He said ruling didn’t cover jurisdictional issues raised by Cox.

Sen. Hollings (D-S.C.) directly threatened funding for FTC in tense appropriations hearing with FTC Chmn. Timothy Muris Tues. that focused on recent merger review agreement between FTC and Justice Dept. (DoJ). Hollings, Senate Appropriations Commerce Subcommittee chmn., expressed concern with agreement because DoJ would be given authority to review all media, cable and Internet mergers. Muris argued that DoJ already had significantly more experience than FTC in such mergers and under current “clearance” agreements Justice already would be granted authority to review media mergers. But Hollings questioned authority of FTC to make change and said he would use budget request as leverage. By law, agencies are required to have any budget restructuring approved by Appropriations Committee under process called “reprogramming,” Hollings said, and he would use that vehicle to influence change. He said if budget cuts didn’t get FTC’s attention, pay cuts would. However, Muris said change wouldn’t require reprogramming by FTC. Hollings spokesman said Appropriations Committee could decide whether reprogramming had taken place and act accordingly, despite agency’s representation to committee.

ORLANDO -- FCC and NTIA officials at CTIA Wireless 2002 show here Sun. cautioned that tough spectrum policy choices lay ahead in light of new homeland security considerations, including re-evaluation of how well current priority access service (PAS) rules are working. Panelists on homeland security roundtable repeatedly stressed importance of making sure public safety community had adequate spectrum and that existing allocations were being used efficiently. Several officials also pointed to complicated govt. jurisdictional issues raised by factors such as PAS, particularly as some states contemplate legislation on their own version of wireless priority access. While Administration hasn’t formulated stance on what should be done with priority access service, “the concern that we would [do so] is against classification of network where you could have displacement of emergency calls from individuals because of priority access calls coming from government,” said NTIA Deputy Asst. Dir. Michael Gallagher.

U.S. Dist. Court, Seattle, judge denied request by Microsoft to block San Diego software company from calling itself Lindows.com and its Linux-based programs LindowsOS. Microsoft’s complaint charged Lindows.com with trademark infringement and unfair competition under Lanham Act. Software giant argued use of names Lindows.com and LindowsOS traded off goodwill of Windows trademark and would cause confusion among prospective buyers of Windows products and dilute ability of Microsoft’s trademark to distinguish its products from competing products. Judge John Coughenour said “at most, Microsoft has raised serious questions about the validity of its trademark, but has fallen short” of showing Lindows.com should be prevented from using names as part of its business. He also said “there is indirect evidence that Microsoft considered Windows to be generic at the time it began using the trademark” -- so much so that when company first released Windows in 1985 it referred to operating system as “Microsoft Windows 1.0.” That, he said, “suggests that in order to distinguish the product name from the generic class of GUI products in the market, Microsoft needed to add the company trademark to the product name.” Coughenour said “it is also telling” that Microsoft still marketed Windows as “Microsoft Windows.” In conclusion, he said: “The court also finds that the balance of hardships does not tip sharply in favor of Microsoft.” Commenting on ruling, Lindows.com CEO Michael Robertson said: “We're obviously satisfied with the court’s ruling. Our hope is that we can move beyond the courtroom and focus on our goal of bringing choice back to the PC business. Microsoft constantly appeals for the ‘right to innovate.’ I hope they will allow us to roll out our… operating system, which will cost a third of Microsoft’s products, without further impedance.” But he said: “We've shown we can defend ourselves against a much larger corporation and we'll continue to battle in a trial if necessary.” Robertson is no stranger to court battles: He was founder and former CEO of Web music service MP3.com, which fought major record labels for months. It was unclear Mon. whether Microsoft planned to continue battle. Microsoft spokesman didn’t return call for comment by our deadline.

If Congress were willing to make statutory change, FTC Chmn. Timothy Muris said he would like agency to pursue consumer protection and deceptive advertising jurisdiction over common carriers. Speaking at Consumer Federation of America (CFA) meeting Fri., he acknowledged CFA’s interest in telecom issues, but said FTC hadn’t been able to address consumer protection concerns over common carriers because it lacked jurisdiction but said it “clearly” should have such jurisdiction. Muris said Congress exempted FTC from all common carrier issues, including consumer protection, when it gave jurisdiction to FCC, so FTC can’t deal with “simplest” of cases because of exemption. Although FCC has consumer protection responsibilities for common carrier, Muris emphasized that FTC was expert agency on consumer protection. When asked by Communications Daily if FCC would support relinquishing jurisdiction, Muris said: “I have no idea.”

FCC opened proceeding Thurs. to determine whether fees charged by local phone companies for changing consumers’ presubscribed long distance carrier were priced properly. Known as presubscribed interexchange carrier (PIC) change charges, those fees are subject to $5 “safe harbor” cap within which rates are considered reasonable. FCC said most LECs charged at that level and it wanted to determine whether those fees reflected current costs of that function. Acting at agenda meeting, FCC said it was granting petition filed last year by CompTel that sought rulemaking to consider changing policy. Agency said it wanted comment on: (1) Whether to base PIC change charge on “examination of carrier cost” or whether FCC could “rely on market forces to ensure reasonable rates.” (2) Whether it should take into consideration “noncost factors” in determining reasonable charge. (3) Whether to establish “national safe harbor.” (4) “Whether carriers should submit individualized cost support with their tariffs, or whether the Commission should review rates solely through enforcement processes.” CompTel said FCC “is doing the right thing for consumers and competition” by opening notice of proposed rulemaking on issue. “It’s time these outdated policies and fee structures are revised to more accurately reflect actual costs,” CompTel said. Assn. said it was concerned that, as Bells entered long distance business, they be deterred from favoring their own long distance services by raising costs to consumers of switching to competitors.

FCC declared Thurs. that cable modem service interstate was “information service” and said Internet delivered over cable wasn’t subject to common carrier regulation that required unbundling or -- in cable parlance -- “open” or “forced” access. Ruling marked critical turn for cable, which has become country’s No. 1 provider of high-speed Internet access and feared that it would become subject to access requirements and vulnerable to new fees and taxes imposed by states and municipalities. In addition to declaratory ruling, which was passed in 3-1 vote, Commission issued Notice of Proposed Rulemaking (NPRM) to measure regulatory treatment of cable modem service against that of DSL. FCC last month made tentative conclusion that wireline- delivered broadband, too, was information service (CD Feb 15 p1). NPRM will examine which govt. agencies, if any -- FCC, state or local franchising authorities (LFAs) -- have power to regulate cable modem service and invited comment on whether, “in light of marketplace developments, it is necessary or appropriate at this time” to require multiple ISP access. Marjorie Green, assoc. chief of Cable Bureau, said in her presentation that some cable companies had begun offering multiple ISPs to customers on their own.