U.S. Appeals Court, D.C., judges hammered FCC Tues. on whether agency’s latest reciprocal compensation order (CD April 20/01 p1) was properly grounded in Telecom Act. D.C. Circuit is same court that remanded FCC’s earlier attempt to set limits on reciprocal compensation for ISP-bound dial-up traffic. In challenge brought by WorldCom and other CLECs, 3-judge panel questioned Commission’s reliance on what Judge David Sentelle called “grandfathering provision” of Act to justify decision that ISP-bound traffic wasn’t subject to Act’s reciprocal compensation requirements. If court determines FCC can’t rely on Sec. 251(g), “don’t we have to remand again?” Sentelle asked. FCC attorney John Rogovin said that was “unappealing” result. Judges said they read Sec. 251(g) as attempt by Congress to make sure preexisting policies weren’t affected adversely by Telecom Act’s changes. They questioned how that type of holding clause could be used to make forward-looking changes in law, as FCC did in crafting its latest reciprocal compensation regime.

As FCC gears up for Thurs. vote on ultra-wideband (UWB),several lawmakers urged Commission to not let date slip again on item. Agency had deferred vote at Dec. agenda meeting in response to letter from Commerce Secy. Donald Evans seeking more time to evaluate safety-of-life and other issues. Among apparent concerns of some on Capitol Hill and in private sector is lack of transparency in parts of negotiating process between NTIA and FCC. Because of high stakes nature of UWB proceeding, several industry observers said it had brought to forefront natural tension between FCC’s regulatory role over commercial spectrum and NTIA’s purview over govt. bands.

FCC continued crackdown on milestone compliance for satellite companies, requiring 8 Ka-band licensees to produce documentation of contracts by Feb. 8 deadline. In Jan. 28 letter from Tom Tycz, chief of International Bureau Satellite & Radiocommunication Div., Ka-band licensees Astrolink, EchoStar, Hughes, Loral, Motorola, PanAmSat, Teledesic and WB Holdings were given until deadline to show proof milestones had been met with noncontingent contracts for construction of satellites. All of companies except Hughes and Motorola said they had met milestones. Hughes wasn’t available for comment. Motorola filed request for waiver while application to transfer license to Teledesic was pending. FCC said at start of rulemaking that companies failing to meet milestones would lose licenses.

Six years after Telecom Act was signed, consumers still are waiting for better phone and cable services, Consumers Union and Consumer Federation of America said in yearly update. They said most Americans continued to have only one choice of cable company and phone company, their bills were more expensive and harder to understand, advertisements for “cheap” long distance plans hid monthly fees that erased savings for many consumers, and complaints about service continued to stack up. Groups said lawmakers deregulated industry before competition existed and based their decision on Act on “naive assumption” that companies wanted to enter each other’s markets and compete. “Relaxing the government oversight of cable and phone monopolies has allowed them to merge, consolidate their control of core markets and begin to expand their monopoly power into adjacent markets,” update said. Groups urged President Bush and Congress to fix law to protect consumers from price gouging and shoddy service. They said 8 major companies were providing local phone service in 1996, each to different area of country, while today there were 4, and nation’s largest long distance providers -- AT&T, MCI WorldCom, and Sprint -- had either raised or planned to raise their basic long distance rates in coming weeks. Between 1996 and Dec. 2001, cable rates increased 36% -- almost 3 times rate of inflation, consumer groups said, and 95% of American households had only one choice for cable company. Among 5% that have cable competition, rates are 14% to 20% cheaper, update said. Meanwhile, 2001 survey by Consumer Reports showed cable companies received low marks for service. So far, satellite TV has failed to compete with cable, groups contended. Update said both cable and long distance phone companies had upgraded their infrastructure to offer high-speed Internet, but said leading cable companies had increased monthly charges 12-33% per month in last year, while telephone providers of DSL had raised rates as much as 25%.

Cal. PUC objected to CTIA’s characterization of its position on wireless number pooling requirements. CTIA Pres. Tom Wheeler wrote to NARUC Chmn. William Nugent last month trying to find common ground on number pooling issue, asking whether requiring wireless number pooling and local number portability (LNP) on same day wasn’t “a bridge too far” (CD Feb 1 p5). Large wireless carriers have asked Commission to forbear on wireless LNP deadline of Nov. 24, saying Telecom Act doesn’t require mobile carriers to implement portability capabilities and resources associated with requirement could be spent elsewhere. Wheeler cited Cal. PUC filing at FCC in Nov. warning aggressive schedule for wireless number pooling could create problems with service quality or call completion. He said both CTIA and NARUC shared concerns about number pooling going smoothly. But Cal. PUC Deputy Gen. Counsel Helen Mickiewicz told Wheeler in Feb. 5 letter that he unfairly had connected concerns she raised about pooling schedule to wireless LNP. She said CTIA letter contended PUC had warned that aggressive schedule for wireless number pooling could affect service quality or call completion. “I can only conclude from your misuse of the quote that you have not read the pleading,” Mickiewicz wrote. “The alternative is that you have intentionally misrepresented the CPUC’s statements to infer erroneously that California supports FCC forbearance from the mandate that the wireless industry deploy local number portability technology by Nov. 24, 2002.” She said CPUC filing referred only to number of area codes that FCC Common Carrier Bureau included in first quarter proposed schedule for rollout of national number pooling. PUC said need to place more than one area code per month into pooling could pose burden for carriers. As result, CPUC said it wasn’t opposed to revising first quarter schedule to reduce to 3 the number of area codes that would be included. By time of wireless LNP’s scheduled Nov. start, national pooling deployment will be in its 3rd quarter, she told Wheeler. “Even if our comments are construed to address the pooling rollout beyond the first quarter, we can identify no connection between the number of area codes pooled per quarter and the beginning of wireless pooling.” NARUC’s Nugent also responded to CTIA letter Jan. 31. “Once consumers pay for the network infrastructure for pooling, NARUC believes the incremental cost of the additional back office systems needed to offer portability to subscribers is more than offset by the competitive benefits,” he said. In latest back-and-forth between state PUCs and wireless industry, Wheeler sent NARUC’s Nugent follow-up letter Feb. 7 saying recent exchange of letters pointed to “strong agreement” between CTIA and NARUC on importance of implementing number pooling. “Unfortunately, your letter also confirms our divergent views on the appropriateness of number porting in the competitive wireless market,” Wheeler said. He said wireless LNP offered “terrible trio” of consumer options, including higher phone bills, less investment in continued network improvements or both of those factors. Impact of extending LNP to wireless carriers could open industry and regulators to “backlash” from consumers, media and govt., Wheeler said.

Parallel deregulation bills introduced in Hawaii House and Senate would establish price cap regulation system for Verizon Hawaii, state’s only incumbent telco. Legislation (HB-2255 and SB-2864/SB-2874) would establish indexed cap system that Verizon, currently under rate-of-return regulation, could elect. Alternative system would cap basic local service at rates in effect at time of election, with annual adjustment for inflation as measured by Gross Domestic Product Price Index. Inflation adjustment would be limited to maximum of $2 annually during first 3 years of program unless exogenous factors including terrorist acts substantially changed carrier’s costs. Access charges would be capped, with carrier allowed to raise basic local rates to offset PUC-ordered access charge reductions. Retail rates could be cut by any amount as long as they stayed above long- run incremental cost. Rates for nonbasic and competitive services would be deregulated, except for ban on below-cost pricing. There would be no explicit prerequisites or trade- offs for election of price caps. Verizon supports legislation while Hawaii PUC hasn’t yet taken stand. Another new Hawaii bill (SB-2272) would shift regulatory jurisdiction over cable TV from state Dept. of Commerce & Consumer Affairs to state’s counties. Bill would require cable TV operators to pay gross receipts surcharge to counties.

Although he signed FCC filing on Transportation Dept.- funded research on ultra-wideband, Stanford U. Prof. Bradford Parkinson said he wasn’t involved in conducting study, meaning his corporate ties to GPS developer Trimble posed no conflict. In Sept. 2000, Parkinson, who is widely viewed as “Father of GPS,” jointly submitted to FCC ex parte filing with other Stanford researchers outlining preliminary results of UWB tests conducted by GPS Research Lab at Stanford and funded by DoT. “We urge the Commission to proceed with great caution and deliberation,” said filing by 4 professors, including Parkinson, that described research challenges of analyzing UWB-to-GPS interference. But Parkinson said Mon. his role in research, which had been among studies cited by federal agencies concerned about potential of UWB emissions to cause harmful interference to GPS, was to evaluate results after test phase was complete. He said Assoc. Prof. Per Enge oversaw research itself.

NTIA released report Fri. outlined need for more spectrum for critical infrastructure providers in energy, water and railroad sectors, concluding that urgency of those issues might have changed following Sept. 11 terrorist attacks. Report to Congress, required by fiscal 2001 appropriations act that covered Commerce Dept., catalogued congestion that infrastructure providers faced in land mobile portion of spectrum. “It is of utmost importance that the Federal Communications Commission revisit these critical issues in order to accommodate the increasing role these industries play in maintaining quality of life,” report said. It cited continued use of spectrum as “essential to the current and future operations of these industries.” NTIA said industry feedback it received in preparing report pointed to spectrum that was “either congested or quickly approaching critical mass, thus leading to problems of interference.” NTIA said industry consensus called for additional spectrum, citing lack of bands available for new users. Report has been closely watched by private wireless industry who have raised concerns about Nextel proposal pending at FCC that would reconfigure some public safety, private wireless and commercial operators at 700, 800 and 900 MHz.

Ill. Commerce Commission (ICC) decided to reopen record on proposed $224 million settlement of cases involving savings in SBC acquisition of Ameritech after latter’s competitors raised substantive objections. Under proposal by Ameritech and state consumer advocates, company would make one-time refund of about $50 per line and ICC in return would terminate all proceedings relating to passthrough of merger savings to carrier’s customers. ICC acted after administrative law judge handling matter (Case 98-0252) said interexchange carriers and CLECs provided evidence that settlement might violate conditions of 1999 ICC order that approved deal. Settlement was made by Ameritech, Ill. Citizens Utility Board, Ill. Attorney Gen. Office, Cook County States’ Attorney, City of Chicago. ALJ Eve Moran said joint filing by 6 Ameritech local and toll competitors contained evidence that settlement would violate Condition 26 of order approving deal, which requires that other carriers that depend on Ameritech for local network access share in any savings through updated cost-based access and interconnection rates. Carriers’ filing argued that settlement on table was invalid because it offered nothing to IXCs and CLECs. ICC said that since there was no statutory deadline for ruling on settlement proposal, it could reopen case to address matters that might have been overlooked. ICC is expected to consider competitors’ issue in Feb. 6 status conference on settlement.

FCC is “very sympathetic to regulation parity” between broadband services provided by cable companies and telcos “but there are limits to what the Commission can do,” Comr. Martin said Wed. in Comnet session in Washington. In What’s Ahead in Communication Policy and Regulation he said 2 deployment models were “regulated very differently.” Citing current cable open access proceeding at FCC, Martin said he was “hesitant to apply legacy regulations” to cable industry: “I am worried about regulating up.” When Commission opens proceeding and then fails to reach decision, uncertainty created can dampen investments in new technology, he said: “The Commission needs to be careful with regulatory parity” and “not impose new burdens on new technology.” Regulatory parity should be implemented “with very subtle tools,” otherwise it could “slow deployments [in markets] where cable has been very successful,” he said.