CTIA Pres. Steve Largent said Wed. that wireless-to- wireless porting had to go forward at the same time as wireline-to-wireless local number portability (LNP), expressing concern about possible Bell company forays on Capitol Hill. Largent said his group wasn’t planning to battle LNP on the Hill but expressed concern the Bells might try to delay the wireline-to-wireless piece through court or Hill action. “I have witnessed first hand the incredible muscle they have to push regulators and legislators around,” he said of LEC lobbying efforts. “We want to see simultaneous implementation,” Largent told a media breakfast.

Uncertainty over how much revenue taxing the Internet backbone would raise stalled discussions on congressional passage of a moratorium on discriminatory Internet and access taxes. Hill staff involved in the negotiations said backbone taxes were the unresolved issue; supporters of a permanent moratorium want backbone transactions tax-exempt and detractors disagree. Acknowledging the impasse, Senate Commerce Committee Chmn. McCain (R-Ariz.) took to the floor Mon. to say he hoped for a resolution “before we leave for Christmas break.”

Acting in a long-standing controversy in Ill. over setting TELRIC rates (CD June 10 p12), a federal appeals court Mon. affirmed a lower court’s decision to bar the Ill. Commerce Commission (ICC) from following guidance included in a state law aimed at raising the rates. Upholding a decision by a U.S. Dist. Court in Chicago, the 7th U.S. Appeals Court, Chicago, said the ICC now could open a proceeding to change TELRIC rates but couldn’t be guided by the changes in costing factors specified in the state law. The law had changed the depreciation and network fill factors to produce higher rates, a move that was supported by SBC Ameritech but strongly opposed by CLECs. The 7th Circuit decision written by Judge Frank Easterbrook indicated annoyance with the whole process, including the fact that the appeal brought by AT&T and MCI originally was known as Voices for Choices v. Illinois Bell: “AT&T tried to give the suit a public- interest patina by making ‘Voices for Choices’ -- which despite its name is a trade association rather than a consumers’ group -- the lead plaintiff… We have changed the caption to reflect the real parties in interest.” The new caption is AT&T Communications v. Illinois Bell. The appeals court also complained that the CLECs had filed suit too soon after the state law was passed, before the ICC “had applied the statute and announced new rates,” which “has caused unnecessary troubles.” Easterbrook wrote: “Congress provided for federal judicial review of rates set by state commissions; it did not provide for review of individual factors that influence those rates.” On the legality of the state’s action in general, the appeals court said state legislatures weren’t barred from playing any role at all in ratemaking, although the Telecom Act named the PUC as the regulator and arbitrator. However, the court said, the legislature can’t unilaterally preempt the PUC as the primary regulator: “An attempt by the state legislature to set rates by itself would transgress the federal statute.” The state law clearly errs in one particular way, the appeals court said: “The state law, as the ICC understood and applied it, does require these factors to be used in isolation. The ICC took as set in stone all ingredients of ratemaking from 1997 and it adjusted the rate only by changing fill factors and asset lives. That approach conflicts with the 1996 Act and the TELRIC methodology and is therefore preempted… A rate for unbundled network elements generated by combining some factors that are 6 years out of date with 2 other factors that are not forward-looking cannot possibly satisfy the requirements of federal law.” SBC contended in oral argument that the problem could be solved in a future ratemaking, the court said, “but the possibility of repair in the future is no warrant for promulgating today a rate that deviates from the TELRIC standard.” The bottom line is that “the injunction still bars from the ICC from using [the state law] to set rates,” the court said. “If the elected branches of state government want the Commission to proceed along these lines, they must enact new legislation that addresses fill factors and asset lives as elements of a comprehensive process.” The court urged the ICC to move quickly to set a new rate because “a rate that is long out of date, as this 1997 rate is, frustrates the goals of TELRIC every bit as much as does a rate generated under the flawed state legislation.”

The FCC again turned down a challenge by 2 environmental groups that had sought review of a Jan. 2002 Wireless Bureau order that dismissed 29 objections and petitions to deny that they had filed on tower siting proposals. But Comr. Copps, in a separate statement, cautioned that just because those groups weren’t found to have standing in these cases, that didn’t mean an environmental group always would lack standing under such scenarios. Friends of the Earth (FOE) and Forest Conservation Council sought full FCC review of the bureau decision, which concluded that the groups lacked standing to file the petitions. FOE and the Forest Council had argued that the Commission hadn’t resolved the issues they raised in 29 applications to register antenna structures at the FCC. They asked the FCC to reject the applications because the environmental assessments attached to them didn’t support a finding of “no significant impact” under FCC rules and the National Environmental Policy Act. But the bureau’s Commercial Wireless Div. concluded the groups hadn’t made a showing that the proposed structures would cause them an injury. The Commission order released Mon. said the groups had failed to present arguments in their challenge that would lead it to overturn the division’s order. “We agree with the division that, given the lack of specificity in the petitions and the failure to show a nexus to any injury, the petitions were appropriately dismissed,” the FCC said. It said the groups also had failed to show “associational standing,” which required associations to submit affidavits from local residents or competitors to establish standing. The order said they had failed to provide letters from local residents near the areas where the proposed towers would be built. Copps, who also approved the item, stressed in his separate statement that the order didn’t conclude that the FOE and Forest Conservation Council petitions had “substantive flaws.” He said it held that the groups hadn’t made the showings needed to demonstrate they were interested parties and didn’t have “alleged injury with enough specificity… This does not mean that an environmental group will always lack standing in these cases. A petitioner will be deemed to have standing so long as a sufficient showing of both injury and causation is made.” He outlined possible scenarios in which standing could be found, including a bird watcher who lived or visited the area of a proposed tower and who could assert harm if birds were killed. Such a petitioner also would have to show evidence of, for example, a direct link between the individual tower structures and bird kills. “This could be done if the petitioner demonstrates that bird kills resulted when similar existing towers were built in other areas similar to the proposed site,” Copps wrote.

In a long-awaited wireline-to-wireless local number portability (LNP) order, the FCC said Mon. that wireline carriers must port numbers to wireless carriers whose coverage area overlapped the rate center in which the wireline number was assigned as long as the mobile operator kept the original rate center designation. In an order that appeared to be a blow to many arguments raised by USTA and some rural LECs, the Commission said wireline-to-wireless porting must occur in most cases, but it limited porting in the rarer other direction -- wireless to wireline -- to within a rate center until certain questions were answered in a further notice.

CHARLOTTESVILLE, Va. -- FCC Chmn. Powell Fri. pushed for greater participation in the Commission’s universal service rural health care program to ensure that “the quality of health care available to Americans is not dependent upon their geographic location.” In a visit to the U. of Va. Office of Telemedicine (UVT), he said the Commission was expected to vote on at its agenda meeting Nov. 13 on an order designed to attract more applicants for the available funds by “unlock[ing] the potential” of the program: “The item… will encourage the development of public [and] private partnerships and other creative solutions to meet the needs of rural communities and increase participation in the rural health care program.”

The Senate decided Fri. to postpone a vote on legislation to make permanent the moratorium on discriminatory Internet taxes and access taxes as it became increasingly clear that support for the bill’s language as written was eroding rapidly. Just off the Senate floor, key players in the Internet tax debate negotiated furiously in an attempt to reach an agreement on new language -- at one point in midday Sen. Wyden (D-Ore.) took to the floor with a prediction that a conclusion might be reached that hour -- but in the end the gulf was too broad to cross, and senators and staff vowed to work over the weekend in hopes of a vote today (Mon.) or tomorrow, Veterans Day.

NARUC urged the FCC to turn down petitions and other claims by wireline carriers that would delay or suspend local number portability (LNP) requirements involving wireline-to- wireless porting. The claims are “either facially or procedurally deficient and should be denied,” NARUC Gen. Counsel Bradford Ramsay told FCC Chmn. Powell in a letter. The Commission is expected to issue as early as today (Mon.) an order addressing remaining wireless-to-wireline LNP implementation issues. Wireless carriers face a Nov. 24 deadline for deploying LNP in the top 100 markets. One question in advance of the order’s release has been whether the FCC would take more time to decide the technical feasibility of certain aspects of wireless-to-wireline LNP, including scenarios in which a wireline customer took his or her number to a wireless carrier and then wanted to port it back to a LEC. Rural carriers and some other ILECs have raised concerns about the technical feasibility of porting wireless numbers outside a rate center. NARUC cited petitions filed by rural carriers including Franklin Telephone Co. and Inter-Community Telephone Co. seeking a waiver of obligations to provide LNP to requesting wireless carriers. NARUC said the waiver requests argued that those carriers qualified as so-called “2% carriers” under Sec. 251(f) of the Communications Act. The carriers said they fell under an exemption from certain requirements for rural phone companies involving the LNP obligations of LECs. NARUC urged the FCC to reject such claims. It said any claims for an exemption under Sec. 251(f) should be directed to state PUCs. That section controls whether a 2% carrier can receive an exemption to provide number portability under FCC requirements. “Under Sec. 251(f), the states may, but are not required, to suspend compliance with the existing LNP rules during the pendency of any petition,” NARUC said. It said LECS’ filings on wireless LNP compliance failed to make a case for delaying wireline LNP responsibilities. Since July 2002, LECs have been on notice that wireless carriers must start offering LNP Nov. 24, 2003. “The companies claim that the public interest would not be served by requiring them to implement LNP because there is no evidence that their customers wish to replace their wireline service with wireless service,” NARUC said. “The relevant question, however, is not whether the LEC customers wish to replace their wireline service with wireless, but rather whether they wish to port their wireline numbers to wireless carriers.” Porting of all wireline numbers to within any particular wireless provider’s local calling area now is technically feasible, NARUC said. “The same network infrastructure being used for pooling can be used for porting regardless of the rate center designation,” it said.

House Judiciary Committee Chmn. Sensenbrenner (R-Wis.) said Thurs. that any effort to exempt Bell companies from antitrust laws would result in a “swift and decisive legislative response from the Judiciary Committee and Congress.” Speaking at a Phoenix Center conference in D.C., he said if the U.S. Supreme Court circumvented antitrust oversight with its decision in the Verizon vs. Trinko case, he would respond with legislation.

General satisfaction was voiced by concerned parties we canvassed over the FCC’s ruling (CED Nov 5 p1) to implement a “broadcast flag” designed to prevent unauthorized distribution of DTV content.