SBC’s merger with AT&T undoubtedly will require some divestitures, analysts and others predicted Mon. as the companies announced the $16 billion transaction. SBC Chmn. Edward Whitacre told the news media he didn’t expect regulators to order spinoffs but others say such action may be inevitable, with reviews expected by state regulators, the FCC, the Dept. of Justice and possibly international regulatory bodies. The merger will eventually gain antitrust and regulatory clearance “but could be subject to significant divestitures, particularly in SBC’s region,” Legg Mason predicted in a report Mon. Regulatory attorney Andrew Lipman said there’s a “high probability” of regulators requiring “spinoffs and surgery.”

The Federal Motor Carrier Safety Administration (FMCSA) has issued a proposed rule in order to review and reconsider its 2003 hours-of-service (HOS) final rule concerning drivers and operators of property-carrying commercial motor vehicles (CMVs). This final rule, issued in April 2003 and amended in September 2003, was vacated by the U.S. Court of Appeals for the District of Columbia Circuit (Court of Appeals) in July 2004.

House Commerce Committee Vice-Chmn. Pickering (R- Miss.) speculated Wed. that the House could be done with comprehensive telecom legislation by the end of the year but that action on a Senate counterpart would take longer. Before it tackles telecom reform, Pickering said, the House Commerce Committee would try to move leftover bills that weren’t enacted last year, including those on broadcast decency, junk faxes and spyware.

House Commerce Committee Vice-Chmn. Pickering (R-Miss.) speculated Wed. that the House could be done with comprehensive telecom legislation by the end of the year but that action on a Senate counterpart would take longer. Before it tackles telecom reform, Pickering said, the House Commerce Committee would try to move leftover bills that weren’t enacted last year, including those on broadcast decency, junk faxes and spyware.

A long-simmering spat over DVD royalties seems to have boiled over into U.S. courts, with 2 Chinese makers of players reportedly suing the 3C patent pool on antitrust grounds for alleged unfair competition.

Buy.com registered with the SEC for an initial public offering (IPO) of up to $86.25 million in common stock. But the e-tailer -- one of Amazon.com’s largest rivals -- said the number of shares it will offer and the price range for each share sold hadn’t been determined.

Classifying cable modem service as a telecom service would “drastically change the regulatory environment for cable modem service,” Acting Solicitor Gen. Paul Clement said in a brief on the FCC’s behalf to the U.S. Supreme Court in the Brand X case (CD Jan 19 p13). Cable modem providers would be subject to common carrier pricing and filing requirements, and face new financial obligations such as contributions to universal service funds, which “could lead them to raise prices or forego new investment, particularly in rural or underserved areas,” the brief said. It also argued that the 9th U.S. Appeals Court, San Francisco, erred in refusing to review the FCC’s classification of cable modem service under the Chevron framework. The brief urged the Supreme Court to address the issue, noting that there’s “significant conflict in the circuits concerning the interaction of the Chevron doctrine… The court should reject the Ninth Circuit’s mistaken view that its own precedent predating the agency decision under review automatically precludes adherence to Chevron.”

With Congress set to return this week, govt. and industry sources are pondering its direction on communications issues. The topics Congress will address this session are generally agreed on, but a key question is when members will begin to tackle telecom and media issues. They may not be an early priority, with Social Security and tax reform getting most attention from the national media.

FCC Comr. Adelstein asked the Commission’s Enforcement Bureau to investigate whether conservative commentator Armstrong Williams broke the law by failing to disclose that the Bush Administration paid him $240,000 to promote the No Child Left Behind Act. At an FCC meeting Thurs., Adelstein said he has received a dozen complaints about Williams’ so-called “payola” practices. “I certainly hope the FCC will take action and fully investigate whether any laws have been broken,” Adelstein said.

European incumbent telcos are urging the European Commission (EC) not to rush into a decision on a harmonized, pan-European freephone service for services of “significant public interest.” Last April, the EC’s Communications Committee (COCOM) began considering the need for such a service. Last month, the committee reviewed a working document that took into account comments from several member states. The group said 4 key issues must be addressed before launching such a service: (1) Ensuring that calls are completed from fixed and mobile networks, PBXs, public pay phones and hotels. (2) Ensuring citizens aren’t charged for freephone calls. (3) Ensuring there are adequate commercial arrangements between operators. (4) Making sure a specific service can be reached by dialing the same number in all member states. COCOM proposed that member states reserve the number range beginning with “116” for a future harmonized freephone service. It recommended the service be “of social importance” and “useful for a majority of citizens” in all member states. The service should be “strongly related” to subjects such as public security or safety, consumer protection and medical/social care, COCOM said. The nature of the service should be information, assistance and hotlines, such as in cases of disaster. Finally, the group said, purely commercial and entertainment services should be barred from using a 116 number. COCOM recommended that access code 116 be administered under the authority of the European Conference of Posts & Telecoms. But incumbents want the EC to understand the issues better before acting. “This proposal raises a series of technical issues linked to interconnection, to costs and to the fact that numbers in this range may be already used in certain member states for other kinds of services (like charities in France),” a spokesman for the European Telecom Network Operators’ Assn. (ETNO) said. He said the main question is whether a pan-European freephone would give users any value over what they already have at the national level. Last Sept., ETNO strongly recommended that no decision on the use of 116 be made without industry-wide consultations.