Christine Varney’s pending departure as head of the Department of Justice’s Antitrust Division injects another note of uncertainty into the government’s review of AT&T’s $39 billion buy of T-Mobile, said industry and government officials. Still, with the review fairly far along, officials disagree on whether change at the top of the division will have much effect on the ultimate outcome of the review.

The FCC must remedy paperwork problems and other shortfalls in its cross-ownership and diversity rules (CD Dec 19/07 p1) in the current media ownership review, the 3rd U.S. Circuit Court of Appeals ruled 2-1 Thursday. It threw out those rules, sending them back to the commission to be reworked in the ongoing review. The Philadelphia court noted that the agency is curing some of the old paperwork flaws in the current review. Industry and agency officials told us that can be accomplished fairly easily. A question is whether the 3rd Circuit will rule on the issue once the paperwork problems are remedied, said President John Sturm of the Newspaper Association of America, a petitioner in the case. The court earlier tossed out previous rules promulgated by a different FCC chairman appointed by President George W. Bush. All members of the three-judge panel upheld other rules.

Rep. Cliff Stearns, R-Fla., is moving ahead with legislation to update the Regulatory Flexibility Act (RFA) and require independent agencies, such as the FCC, to review past regulations, the House Commerce Oversight Subcommittee chairman said after a hearing Thursday. The FCC is one agency that’s not doing enough to reduce regulation, Stearns and other subcommittee Republicans said. FCC Commissioner Robert McDowell, testifying alongside commissioners from the FTC and other independent agencies, agreed that the FCC should be more deregulatory.

The potential sale of Hulu to any of the dozen reported would-be buyers of the online video company, a list that includes the likes of Google, Microsoft, Yahoo and AT&T, raises few antitrust concerns, industry executives and lawyers said this week. Though some of the potential buyers already enjoy a large online video market share -- Google’s YouTube is the top online video site according to comScore data -- and their own online video platforms, most industry officials we spoke to welcomed a sale that would dissociate Hulu from its current owners: News Corp., Disney and Comcast’s NBCUniversal.

Internet access subscribers could have their service cut off if they ignore repeated “alerts” that copyright infringement has been detected on their accounts, though ISPs participating in a new “Copyright Alert System” unveiled Thursday emphasized they were unlikely to do that. But measures short of cutoff, such as throttling down to 256 kbps or “restriction” of access for some period, are explicitly laid out in a memorandum of understanding between ISPs and content providers dated July 6 and marked “final,” provided to us by the RIAA. (What appears to be an identical copy is circulating online.) Some digital rights groups gave a cautious nod to the new system while voicing concern that the ambiguity in the agreement could lead to termination or suspension of service without judicial review.

FCC Commissioner Robert McDowell is concerned about part of draft rules on complaints from independent programmers that they were discriminated against on the basis of affiliation by channels owned by cable operators, said agency and industry officials. NCTA stepped up its lobbying against part of the item, after cable operators expressed concerns earlier. McDowell is said to be concerned about the standstill provision of the draft Media Bureau order. It would require cable operators to continue carrying indies while their complaint is pending and after the bureau determined a prima face case was made.

The White House has yet to say who will step in to fill the role formerly played by Phil Weiser, overseeing high-tech and telecom issues for the executive branch, now that he’s returned to the University of Colorado Law School (CD June 1 p22). The White House also recently lost a second official with strong telecom experience, Scott Deutchman, deputy for telecom policy to federal Chief Technology Officer Aneesh Chopra.

With increasing trouble completing long-distance calls and other connection problems in Oregon, the state’s Public Utility Commission will investigate the issue and expects to move quickly on it, Commissioner Susan Ackerman told us. Major concerns are impacts on businesses and emergency calls, she said. The problem appears to be caused by using the least-expensive routing practices, Ackerman said. The investigation is early on and more work needs to be done, she said. There’s a potentially big business impact because many firms reply on high-quality connections for long-distance calls and faxes, she said.

TIA and Sprint Nextel said the FCC should clarify, as Harris County, Texas, has asked, that the commission does not endorse any procurement model for building an interoperable public safety broadband network using 700 MHz spectrum. The Public Safety Bureau sought comment June 15 on Harris County’s petition seeking further clarity (http://xrl.us/bky799), and comments were due Tuesday.

The FCC would approve FM translators in radio markets with an eye toward how many low-power FM (LPFM) stations could be started in each market, under a draft order (CD July 6 p11) to be voted on Tuesday, commission and industry officials said. They said the rulemaking notice proposes a market-by-market approach to processing the remaining applications from a 2003 application window for FM translators. Such an approach has been backed by LPFM proponents. AM stations would get a boost because the draft rulemaking is said to propose that they can use FM translators awarded in recent years as part of Auction 83. The rulemaking also asks about issuing new LPFM licenses.