A federal court affirmed a July 2004 Pa. PUC decision setting rates for Verizon’s unbundled network elements (UNE). Verizon appealed the rate order to the U.S. Dist. Court, Philadelphia, claiming the rates were so low as to be confiscatory and were unsupported by substantial evidence (Case 04-3886). The PUC in that order cut Verizon UNE rates in urban areas by 30% while raising them 25% in rural areas. The PUC also reduced Verizon’s DS-1 loop rates statewide, by an average 33%. It was the PUC’s 3rd attempt to set permanent UNE rates. Several CLECs intervened in the case, arguing that the PUC had set UNE rates too high, based on overstated Verizon costs. But the court concluded that the rates adopted by the PUC were consistent with the federal Telecom Act and the FCC’s TELRIC costing methodology.

BERKELEY, Cal. -- Comr. Adelstein characterized the FCC as “basically rewriting” the Telecom Act in 3 weeks with its DSL order. “There’s not much left of Title II after Friday,” he told the FCBA Seminar West here over the weekend, just after the FCC decision (CD Aug 8 p1).

The wireless industry and consumer groups clashed in comments over whether the FCC should grant a CTIA petition on early termination fees (ETFs). CTIA asked the FCC to confirm that ETFs in wireless carriers’ service contracts represent “rates charged” for CMRS, meaning they aren’t subject to state regulation under Sec. 332 of the Communications Act. The wireless industry, a longtime opponent of state regulation on all fronts, strongly supported that request. The highly competitive wireless marketplace results from Congress’s deregulatory model preempting local and state regulation, industry said. But consumer groups strongly opposed the petition, calling it “dubious” and procedurally defective.

The FCC approved the acquisition of Nextel by Sprint Wed., without requiring any divestitures in individual markets but with a more significant condition on 2.5 GHz spectrum than expected. The action came after the 2 companies committed a day before to service implementation milestones. The companies had agreed to offer service within 6 years in the 2.5 GHz band to at least 30 million Americans in at least 20 BTAs, at least 2 of which are rural communities outside the nation’s top 200 most populous BTAs.

The Bureau of Industry and Security (BIS) has issued a final rule, effective July 15, 2005, which revises certain entries on the Commerce Control List (CCL) that are controlled for national security reasons in Categories 1, 2, 3, 4, 5 Part I (telecommunications), 6, 7, 8, and 9, and definitions to conform with changes in the Wassenaar Arrangement's List of Dual-Use Goods and Technologies and Statements of Understanding maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (Wassenaar Arrangement).

Movie studios have filed a 6th round of lawsuits against online thieves nationwide, the MPAA announced Mon. In the wake of the Supreme Court’s unanimous decision that peer-to-peer (P2P) networks are liable for inducing others to engage in illegal swapping of movies online, the industry is aggressively pursuing pirates it accuses of violating copyright laws by stealing movies online. The complaints are part of a larger MPAA campaign to raise awareness about the consequences of movie piracy that began last Nov., officials said. The civil suits seek damages and injunctive relief. Under the Copyright Act, statutory damages can be as much as $30,000 for each film illegally copied or distributed, and as much as $150,000 per movie if the infringement is willful, the MPAA said. A criminal conviction can carry up to 5 years in prison, 10 years for repeat offenders.

Electronic Arts (EA) is confident a class action suit filed by disgruntled investors (CED March 30 p7) soon will be dismissed, and the company hopes to resolve complaints filed by employees over working conditions, the company told its annual meeting in Redwood City, Cal., last week.

The FCC seems inclined to address as a stand-alone item a Council Tree Communications petition proposing changes to the designated entity (DE) rules, separating it from the advanced wireless services (AWS) order, a knowledgeable source said. Complications caused by the petition prompted Chmn. Martin to delay the AWS order, originally expected to get a vote at the July agency meeting (CD July 19 p3). Council Tree wants the FCC to limit bidding eligibility for licenses in AWS Block D (1735-1740/2135-2140 MHz) to entities qualifying as small or very small businesses, or offer a 35% bidding credit there. It also wants the FCC to provide an additional 10% bidding credit for DEs serving underserved populations and keep large incumbent wireless carriers from entering any financial relationships with a DE if both have licenses with material geographic overlap. Council Tree also wants the FCC not to let individuals whose net worth exceeds $3 million to have a controlling interest in a DE. “The petition raises challenging procedural issues,” an FCC source said: “Another issue is if we decide to have a further notice, do we do it in this or other proceeding and how it may affect the timing of the [AWS] auction.” The possibility of separating DE issues from the AWS order “has been raised” on the 8th floor, but “it’s still a part of the debate [and] nothing has been decided,” the source said. Should the FCC decide to separate the Council Tree petition from the AWS order, it probably will announce that decision at the Aug. 4 meeting and act on the petition “at a later date,” another agency source said.

Canada’s recording industry embraced the country’s high court decision Thurs. not to hear a case involving imposition of extra fees on MP3 players. The justices decided Apple iPods and the like aren’t subject to a private copying levy because their embedded hard drives are “devices” rather than audio recording media. This means unauthorized file sharing to any hard drive -- including those on home computers -- is illegal, the Canadian Recording Industry Assn. (CRIA) said. Critics disagree, saying that debate is not over.

Liberal lawmakers Wed. floated legislation to put online pornography sites in the crosshairs a tack more commonly associated with the GOP, but this time with the Democratic tax-and-spend spin of threatening smut sellers with federal regulation. A duplicate of the Internet Safety and Child Protection Act, by Sen. Lincoln (D-Ark.) and backed by Sens. Lieberman (D-Conn.), Landrieu (D-La.) and other notables, was expected to be introduced in the House by Rep. Matheson (D-Utah) the same day.