Nancy Victory, nominee for NTIA dir., received friendly reception before sparsely attended, brief Senate Commerce Committee nomination hearing Wed., despite recent discussions with govt. ethics officials about potential conflicts of interest. Only 3 Senators were in attendance: Dorgan (D-N.D.), Allen (R- Va.) and Burns (R-Mont.). Victory, until recently attorney with Wiley, Rein & Fielding, told panel that in recent weeks she has met with Office of Govt. Ethics and White House ethics experts to discuss concerns about potential conflicts of interest. Any stock in telecom companies that she had once owned she no longer owns, Victory said in response to questions, particularly from Dorgan. “To the extent that there may be other stocks to sell,” Victory said she will do so. Among stocks that Victory and her husband Michael Senkowski, also Wiley, Rein & Fielding attorney, have reportedly owned included shares in Verizon, Motorola and AT&T. Firms are among those with interest in outcome of 3rd generation wireless proceeding. Wall St. Journal reported Wed. that Senkowski has told govt. ethics officials that he wouldn’t represent companies that have business before NTIA as long as his wife holds post there. NTIA is overseeing 3G policy decisions regarding spectrum such as 1.7 GHz occupied by Dept. of Defense users. Victory told committee that in discussions with govt. ethics experts, they went through, in detail, her and her husband’s investments and personal relationships with industry companies. Victory said that White House ethics experts identified only one matter that she would have to contend with, ultra wideband (UWB) proceeding. Wiley, Rein & Fielding has represented UWB developer Time Domain at FCC in ongoing proceeding. Victory’s own past ties to wireless industry include work that she has done as outside counsel for PCIA. NTIA and FCC have been working through technical details of upcoming rulemaking on UWB, which, aside from 3G, is among biggest issues that NTIA faces. Despite many questions about ethics and her stance on issues such as 3G, all 3 Senators expressed intention to support her nomination. Dorgan asked her “are your intentions to be an activist over there” on broadcast ownership issues. He noted approvingly that former NTIA Dir. Larry Irving had taken up ownership issue every time it was raised by FCC. “I hope I have the opportunity to be an activist,” Victory said. However, she avoided answering question in any detail and instead laid out some of other top issues she expected to tackle as administrator: (1) Spectrum allocation, in which she expressed hope that she could work with industry to increase efficiency of spectrum use. (2) Broadband deployment. Victory said she believed in competition as required by Telecom Act. But regarding rural areas and various legislative proposals to hasten deployment in those areas, she said that may require “a little extra attention.” But she didn’t specify any particular legislative proposals. Regarding reallocation of military spectrum at 1.7 GHz for 3G, she said there are “tremendous emotions on all sides” and valid concerns, as well. Victory said her role would be to encourage dialog between parties and then assess “our most viable options in the time frames needed.” Burns asked her if she knew or could predict what wireless industry would look like in 5 years. Victory said if she knew, “I wouldn’t be vying in this position, I'd be investing in the stock market.”

Senate Commerce Committee’s communications subcommittee took first run on Senate side Tues. on difficult spectrum allocations decisions that remain unresolved for 3rd generation wireless. Panel members questioned govt. officials closely on how efficiently both military and commercial operators are using existing spectrum allocations. Echoing Pentagon concerns raised at House hearing last week (CD July 25 p1), Linton Wells, acting asst. secy. of defense for command, control, communications and intelligence, continued to outline obstacles to relocation of military users before 2010 for terrestrial systems and 2017 for satellite systems. Without choosing sides between whether incumbent commercial or military users should be moved, Subcommittee Chmn. Inouye (D-Hawaii) stressed need for compromise. “If the only option is to relocate the Defense Department, we must find comparable spectrum, develop a migration time frame that allows the Defense Department to maintain its operations as it vacates the spectrum and ensure that the Department’s costs are reimbursed,” Inouye said. Like other panel members, he emphasized need to reach solution that wouldn’t degrade military readiness.

Five Wireless Communications Service (WCS) licensees urged FCC Fri. to not act on special temporary authority (STA) request submitted by XM Radio to operate 778 high-power terrestrial repeaters. July 12 request by XM covered repeaters operating at powers of 2 kw up to 40 kw in 61 markets. In recent months, WCS licensees have raised concerns at Commission about potential interference to their operations if satellite digital audio radio service (SDARS) licensees are permitted to operate terrestrial repeaters at more than 2 kw. XM Radio and Sirius Satellite Radio have disputed concerns in ex parte filings, saying WCS operators such as AT&T Wireless had designed front end of receivers to tune to entire 2320-2345 MHz band and that SDARS operators shouldn’t have to bear costs for that engineering oversight. In latest ex parte filing, WCS licensees AT&T Wireless, BellSouth, Metricom, Verizon Wireless and WorldCom asked agency to not act on XM’s request until all stakeholders had chance to “analyze fully the significant blanketing interference issues it presents.” They said XM’s request marked first time that it had provided information on “more than a handful of markets.” They said XM filed request and then announced that commercial operations would begin Sept. 12, “apparently assuming that the Commission would automatically grant that request.” Before FCC approves authorization, “serious” interference issues remain to be addressed,” WCS licensees said. “XM’s STA request is truly unprecedented,” they said. “XM apparently has constructed its entire nationwide terrestrial repeater network on the basis of an experimental authorization and in full knowledge that the Commission has not adopted service rules for these repeaters and has not had an opportunity to examine -- much less approve -- XM’s equipment designs.” WCS also contended that STA request was far different from data provided to FCC, including more than 5 times as many high-power repeaters as filings earlier this year had indicated.

FCC will issue further notice of proposed rulemaking “in the next month or 2” on cable ownership limits, Cable Services Bureau Chief Ken Ferree told reporters in his first media briefing Wed. U.S. Appeals Court, D.C., in March remanded ownership rules, which limit given provider to 30% of cable and DBS market, back to FCC. Ferree, referring to harsh language criticizing Commission’s decision-making in court decision, said: “We want to be very careful to support whatever we do the next time around… I will not have a case sent back with the kind of language that was in the last ownership reversal.” He also dismissed any link between cable consolidation and rising cable rates, and said bureau was working “feverishly” on open access issue.

Members of House Telecom Subcommittee urged Defense Dept. and wireless industry Tues. to work out differences on 3rd generation wireless spectrum, although military top brass continued to raise red flags on relocation, reimbursement, timing. Verizon Wireless CEO Denny Strigl used hearing to call on Congress to weigh in on settlement solution for C-block spectrum returned by U.S. Appeals Court, D.C., to NextWave. On 3G front, Rep. Pickering (R-Miss.) said he planned to introduce bill “as soon as possible,” quipping that all spectrum was “on the table” except for bands occupied by MMDS and Instructional TV Fixed Services licensees. Subcommittee Chmn. Upton (R-Mich.) said he foresaw markup in Oct. time frame, despite differences that appeared to be keeping cellular operators and Pentagon apart. While much of panel appeared to be interested in finding ways to use DoD-occupied spectrum at 1.7 GHz for mobile Internet applications, several members questioned impact on national security and continuing military operations. Rep. Harman (D- Cal.), addressing Pentagon “skepticism” about ability of military to move, said, “I would not agree that the right answer is ‘We just can’t.'” She said: “I would suggest that more attention needs to be paid to how to make that transition effective.” Nearly 3-hour hearing, first this year on 3G, also focused on Enhanced 911 progress and need for lifting spectrum cap.

Deregulation of telecom and energy is having major impact, both good and bad, on small businesses but their voice is being lost in clamor raised by industry and organized residential consumer interests, speakers said on NARUC panel on deregulation’s effects on small businesses. BettyJo Toccoli, president of Cal. Small Business Assn., said myths abound about small business customers, including that deregulation automatically confers benefits on small businesses, that they are driven solely by price and that they don’t need customer education. “All of these are misconceptions,” she said, that small businesses need to correct. Andy Librella, consultant with S&C Advertising & P.R. in San Antonio, said deregulation was being driven by politics, which in turn responded to money or votes. Political forces, he said, also are acting to deprive state commissions of resources they need to ensure fairness in deregulated markets. “If you [PUCs] offer a voice to small businesses, you gain an ally with voters who can help you get the budget you need to do your job.” Independent Business Assn. Exec. Dir. Gary Smith said small businesses accounted for 40% of jobs and most industry innovations, but had little political clout because they were too busy running their businesses to take time out to lobby. He said state commissions should encourage small business participation in deregulation process by working with state utility consumer advocacy offices, putting things in lay language, making hearing process more informal, recognizing that small businesses had unique needs not shared by residential customers or large businesses. Cynthia Marshall, Pacific Bell senior vp-regulatory, said deregulation had potential benefits of more choices, lower prices and better quality but also a dark side of “abuse and misuse of freedom by the carriers” such as slamming, quality problems, hidden charges, misleading ads. She said telecom carriers had responsibility to reach out to small businesses and learn their needs, but businesses had responsibility to work with industry, trade groups, regulators and legislators to make their needs known. William Gillis, former Wash. state regulator and now professor with Wash. State U., urged regulators to be careful when deregulating: “Don’t release regulation in market segments where competition is lacking, and don’t expect competition will solve all market problems.”

Citing foreign ownership and designated entity status, Alaska Native Wireless, VoiceStream and Verizon Wireless have challenged eligibility of NextWave to receive PCS licenses returned last month by U.S. Appeals Court, D.C. Carriers filed petition at FCC Thurs. challenging C- and F-block license cancellation that Appeals Court had overturned. Petition said D.C. Circuit addressed only Sec. 525 of U.S. Bankruptcy Code, meaning it covered only FCC’s cancellation of NextWave’s licenses because of failure to make payments on them. “Nothing in the court’s decision precludes the Commission from determining not to reinstate NextWave’s licenses on grounds in combination with, in addition to or unrelated to, its failure to make timely installment payments,” petition said. Carriers challenging eligibility all were successful bidders in Jan. re-auction of C- block licenses, most of which had belonged to NextWave. Largest U.S. carrier Verizon was largest bidder, winning $8.8 billion in spectrum. Carriers called on FCC to “conduct an investigation and audit” on NextWave’s eligibility as part of license remand ordered by D.C. Circuit. They also want public comment on their petition and issues uncovered by audit.

FCC said it wants to “refresh the record” on outstanding petitions for reconsideration of 1996 Local Competition Order that was held up for years in courts. Order implemented interconnection rules required by Telecom Act. Agency said remaining petitions dealt with 2 key issues: (1) IntraLATA toll dialing parity under Sec. 251(b)(3), and (2) Network change disclosure rules under Sec. 251(c)(5). “Because many of these petitions were filed some time ago, the passage of time and intervening developments may have rendered the records… stale,” agency said. In addition, some issues raised in those petitions “may have become moot or irrelevant in light of intervening events.” FCC asked parties that filed original petitions to identify in writing issues they still considered relevant. It said petitioners could add new information or arguments to original filings if they felt it was necessary. If parties don’t respond, FCC will consider old petitions withdrawn and will dismiss them. Deadline for petitioners to file updated information is 30 days after agency publishes notice in Federal Register.

FCC revised its colocation rules Thurs. in effort it said was designed to better balance needs of incumbents and competitors and provide “regulatory certainty.” Most of changes were in response to remand last year by U.S. Appeals Court, D.C., which questioned whether FCC adequately justified statutory basis for some of rules guiding colocation of competitive equipment in incumbent central offices. New rules:

For 5th time, FCC Wireless Bureau postponed Sept. 12 auction of Ch. 60-69 spectrum in 700 MHz band Wed., but it said wouldn’t set new date until Commission acted on pending petitions for reconsideration. Auction delay covers 747-762 MHz and 777-792 MHz bands now occupied by analog broadcasters that don’t have to vacate band until 2006 or DTV penetration rate reaches 85%. Indefinite postponement marks first such delay under tenure of FCC Chmn. Powell. Way for delay was cleared in congressional budget resolution this year that addressed Bush Administration proposals for auction delays. Action came as industry and FCC officials increasingly acknowledged difficulty of clearing broadcasters from band by 2006.