FCC Chmn. Powell is uncomfortable with ownership caps when their primary purpose is to guard against anticompetitive behavior, he said at Precursor Group dinner in Washington late Thurs. Cap used for that purpose can “catch some it shouldn’t and let some go it shouldn’t,” he said in answer to question. Furthermore, “once it’s on the books, it takes forever to get it off” even if it’s obviously outdated. He said, for example, that 35% national ownership cap for broadcasters was 30 years old and conditions had changed since it was adopted. Antitrust process is better deterrent for anticompetitive behavior, he said. In answer to another question, Powell said that in general he believed “if you can’t prove a reason to continue a rule, it shouldn’t stay.” He said he didn’t buy “it does no harm” argument. In speech to institutional investors and others attending dinner, Powell said he was tired of “hand-wringing” over success of Telecom Act, still firmly believed in market over regulation to stimulate new services and wondered whether oligopolies were as bad as monopolies. He said he thought concern about effectiveness of Telecom Act was based on “exaggerated expectations.” When “bottom fell out” recently in CLEC business, blame was placed on Act instead of looking at fallacy of “Field of Dreams approach” taken by new entrants and investors, he said. They assumed that if they built something, “they will come” and threw money at startups, Powell said. But sometimes people “sniff it and go home.” Regulatory intervention isn’t answer, he said. “Way too many companies seek regulatory changes rather than using that same energy in the market.” He said he believed there was role for enforcement but “only where there’s clear evidence of abusive control.” There’s no such thing as natural monopoly, “but I'm not sure there’s not a natural oligopoly,” Powell said. If there’s heavy concentration of 3 or 4 companies, “is that okay or does there have to be a place for the small guy?” He said “my sympathies say yes” but then he looked at what happened when Wal- Mart came to rural America: “We lost something when we couldn’t go to the corner drug store but it wasn’t prices or choice.”

Luisa Lancetti named vp-regulatory affairs, Sprint PCS, Washington…. Deborah Kilmer, ex-Commerce Dept., named vp-govt. relations, CPB… Changes in NAB board: Alex Snipe, Glory Communications, representing district 6 (N.C., S.C.) and John Barger, Victoria Radio Works, representing district 18 (southern Tex.) join board, replacing David Alpert and John Cullen respectively… James Neissa, ex-Credit Suisse First Boston, appointed co-head, mergers and acquisitions, UBS Warburg… Changes at North American Bcstrs. Assn.: Jose Suarez, TV Azteca, elected pres., replacing Bruce Cowie, CTV; Andrew Setos, News Technology Group and Peter Smith, NBC, appointed vice pres… Madie Gustafson, ex-AT&T Broadband, named partner, Cole, Raywid & Braverman… Douglas Butler, ex-Post Perfect, appointed dir.- engineering, A.F. Assoc.

FCC’s limits on cable horizontal and vertical ownership don’t meet the requirement of burdening speech as little as necessary, unanimous U.S. Appeals Court, D.C., said in reversing and remanding limits to Commission. FCC rules say no MSO can own cable systems with more than 30% of national cable subscribers, and programming in which MSO has attributable interest can fill no more than 40% of channels on cable system. Appeals court also said FCC should consider growth of DBS in setting ownership limits.

White House officials acted to quell criticism on Hill about merits of Administration’s spectrum auction plan and failure to notify Hill staffers that proposal was coming (CD March 2 p1). Administration talked with office of House Commerce Committee Chmn. Tauzin (R-La.) and appeared to soothe situation somewhat, Tauzin spokesman Ken Johnson said. “The idea of spectrum fees [for broadcasters keeping analog spectrum] is probably DOA,” he said, but Tauzin staffers were finding on rest of package that “there appears to be some merit to parts of it… It certainly opens the door to at least some discussion.” Johnson said several Committee staffers were preparing to brief Tauzin fully on issue today (Mon.), at which point he could be ready to take position, “consulting with [Telecom] Subcommittee Chmn. Upton” [R-Mich.]. “The Administration has indeed been in contact with our office,” said spokesman for Senate Communications Subcommittee Chmn. Burns (R-Mont.), who has ambitious spectrum plans of his own. “We're confident that everything is going to be worked out,” he said: “There’s a lot of communication going on right now.” Spokesman said Burns wasn’t ruling out plan to delay spectrum auctions. “We're willing to work with the Administration and see what can be done,” he said, adding that “the devil will be in the details.” It wasn’t clear last week that broadcasters would be able to take unified position. “We're still studying the proposal,” NAB spokesman said. Source said some broadcasters with lower audiences (Paxson was mentioned) might “want to get out early” from analog spectrum and “get their money from the wireless carriers.” On other hand, we're told, for stations whose primary asset is large audience, such as CBS affiliates, it may be attractive to delay loss of analog spectrum as long as possible.

KAME-TV Reno faces $50,000 fine for repeated violations of ad limits in children’s TV, FCC said in notice of apparent liability. Station admitted violating limits 301 times in 1997 and 1998. Commission said station also failed to establish effective program to ensure compliance.

FCC Enforcement Bureau fined 2 telecom carriers for not contributing to universal service program: (1) It issued final order telling N. American Telephone Network to pay $55,000. Agency said it wasn’t convinced by company’s response to notice of apparent liability (NAL) issued earlier. (2) It proposed $46,700 fine against Advanced Telecom Network.

Major broadcast networks that used electronic newsroom captioning to satisfy closed-captioning requirements in 1997 may continue to use technique, FCC said in clarification letter to CBS. Instead of live captioning, technique essentially uses scripts of newscasts as closed captions. Commission said technique meets its “no-backsliding” requirement.

U.S. Copyright Office (CO) expects to open inquiry into copyright compulsory licensing for streaming media within next week, said CO attorney Bill Roberts. Inquiry is first step in potentially setting rules that will “determine a lot of how music is delivered in the future over the Internet,” Roberts told Precursor Group conference in Washington Fri. CO expects to allow about 45 days for comments, 30 days for replies, then decide whether to proceed to rulemaking or issue final rule, he said.

Ill. legislature formed special subcommittee in each chamber to consider telecom bills meant to extend, replace or supplement current Ill. Telecom Act that expires July 1. New telecom rewrite subcommittees of Senate Environment & Energy Committee and House Telecom Committee will hold separate hearings March 7 on various pieces of telecom legislation. Proposals on table range from Ameritech-backed bills (SB-134 and HB-492) that would deregulate almost all of company’s operations and services, to WorldCom- backed bills (SB-928 and HB-3243) that would require full structural separation of Ameritech’s retail and wholesale operations. Other bills being considered include SB-1055 to codify into state law federal Telecom Act’s competitive interconnection obligations on incumbents and extend rest of current Ill. Telecom Act until 2006, HB-1005 to simply extend current law 5 more years, HB-2156 to establish state universal service fund, SB-415 to largely deregulate depreciation and allow incumbent telcos to refer customers to their competitive affiliates, SB-595 to require open cable access for high-speed Internet services, SB-605 to remove competitive carriers from state service quality regulation and make it illegal under state law for incumbents to deny CLECs unbundled network elements. Legislature’s current session is scheduled to adjourn around end of May.

FCC’s EEO rules shouldn’t have been overturned entirely just because U.S. Appeals Court, D.C., objected to one portion of them (CD Jan 17 p1), Commission said in petition for rehearing or en banc hearing. Petition, filed Fri., said federal agency was entitled to have provisions treated as severable “when it clearly states its intent and when such intent is rational.” Minority Media & Telecom Council and civil rights groups also were expected to file notices of appeal after our deadline Fri. FCC said it could institute proceeding to set EEO rules without “offending provision,” but that would waste agency’s resources and could lead to additional litigation. Commission said so-called “Option B” rejected by court wasn’t essential to its EEO rules, but was “adopted at the request of broadcasters to provide them with additional flexibility.” FCC Comr. Tristani supported petition, but said she was “disappointed” that agency declined to seek review of entire Appeals Court decision, rather than just bid to retain Option A.