The FCC approved applications related to WorldCom’s reorganization out of bankruptcy as the newly formed MCI, including assignment or transfer of Sec. 214 authorization, Sec. 310 licenses and submarine cable landing licenses. The Commission said its approval was required for WorldCom’s debtor-in-possession reorganization and emergence from bankruptcy to move forward. Since petitioning for bankruptcy, MCI “has aggressively rid itself of the individuals who allegedly committed acts of corporate fraud and has substantially reformed the corporate structures and policies that enabled such alleged fraud to occur,” the agency said. “In the aftermath of public revelations concerning WorldCom’s accounting problems,” the Commission said it had reviewed the qualifications of WorldCom and MCI in the context of the license and authorization transfers to the newly formed MCI. “The Commission has an obligation to undertake its own independent assessment of whether an applicant has the basic qualifications to be a Commission licensee, but we see no reason here to second-guess the extensive corporate governance reforms made under the careful review and special expertise of expert agencies including the SEC and the federal courts that have been involved in proceedings related to WorldCom’s proposed reorganization.” On matters of corporate governance in the case, the FCC said it gave “due attention” to the extensive review of several other expert federal agencies and courts. “Although final decisions on liability for the acts committed under the prebankruptcy WorldCom continue to proceed in other fora, the applicants have established that granting their applications is in the public interest,” it said. As a threshold matter, the Commission said it had to determine whether the applicant was qualified to hold and transfer control of licenses under Sec. 310(d) of the Communications Act. It said the underlying public interest concerns in the broadcast arena, such as indecency regulation, didn’t apply with equal force to common carrier facilities, “where content is divorced from conduit.”

Cable operators generally were pleased with the conditions the FCC placed on News Corp.’s acquisition of Hughes Electronics and DirecTV, having feared the newly combined company would use its leverage to shut cable operators out of some programming. In a joint statement, Advance/Newhouse, Cable One, Cox and Insight said the arbitration mechanisms imposed by the FCC had “greatly reduced the danger that the transaction itself will do harm to consumer prices.” The 4 companies had joined forces in filing comments on the deal, and together they still worried that News Corp. would remain a “formidable presence.” EchoStar congratulated News Corp. on its purchase but said consumers can “count on” its own Dish Network to offer an alternative to “goliaths such as Time Warner, Comcast, and now News Corp.”

Crucial govt. agencies should have redundant telecom systems for emergencies, the Progress & Freedom Foundation (PFF) said. In a report, PFF Senior Fellow Randolph May said the Dept. of Homeland Security or General Services Administration should issue guidance by regulation, bulletin or guideline. “Many federal agency buildings and installation locations apparently do not currently have true telecommunications network redundancy installed in their buildings,” the report said: “Served by a single connection running through a single outside communications central office or switching hub, many are too vulnerable.” May said a Feb. 2003 White House white paper, “The National Strategy for the Physical Protection of Critical Infrastructure and Key Assets,” and a recent Markle Foundation report had called for more redundancy in federal buildings. May said some progress had been made upgrading and securing communications, but “more needs to be done, and it is especially important that the federal government itself takes steps to ensure that it has built into the communications networks upon which it relies sufficient redundancy to maintain the availability and continuity of communications in times of crisis.” Communications lines to buildings must be “physically separate, by a significant distance, from the facilities of the incumbent provider,” he said. There must be separate rights-of-way between the building and the routing center, and redundant services should use a physically separate switching or routing center, the report said. May told us that information about redundant systems at govt. buildings was difficult to find, and he didn’t know whether that was for security or whether the govt. had taken a comprehensive look at redundancy. May’s report did say the govt. should prioritize any efforts to establish redundant communications systems. For instance, the Center for Disease Control is a higher priority than the Consumer Product Safety Commission. The report said the 1996 Telecom Act and its encouragement of network sharing had had an impact on construction of redundant networks. May and PFF have argued in favor of deregulating local phone rates and abandoning RBOC sharing requirements, such as UNE-P (CD Dec 15 p1).

Touting benefits for homeland security, the FCC adopted rules Wed. for systems that provide a short-range, wireless link for Intelligent Transportation Systems (ITS). The service and licensing rules cover Dedicated Short-Range Communications (DSRC) at 5.9 GHz, including collision avoidance at intersections and electronic toll collection. The Transportation Dept. said the move would let research started in the mid-1990s continue, in part by freeing dedicated spectrum. Meanwhile, the FCC deferred a decision on a coordination issue involving the fixed satellite service until negotiations between govt. and industry conclude.

NARUC announced a 6-member task force to explore the potential for broadband over power lines (BPL) and the role of state regulators in advancing that technology. The work of the task force would complement the BPL investigations of the FCC and the Federal Energy Regulatory Commission (FERC), NARUC Pres. Stan Wise said. Mich. PSC Comr. Laura Chappelle, who will head the task force, told us the commissioners would be looking at a broad range of issues that would help regulators understand “what role, if any, legislators should play in the emergent technology.” To begin with, regulators wanted a better understanding of the current status of the technology, its potential uses, potential timetable for its rollout and how widespread it would be, she said. Only then would the task force get into the policy considerations such as the potential for improper cross-subsidization, universal service, the role of regulators when utilities use their physical assets and BPL’s real advantages to the underserved communities. Chappelle said that although several companies had begun pilot BPL programs, they weren’t widespread and results weren’t “apparent.” That probably was because companies were keeping quiet for competitive reasons, she said, or it was just that the technology was only now emerging: “I think they are at the real infancy stage.” Unlike voice-over-Internet protocol (VoIP), which was “booming a lot faster,” things with electricity move a little slowly, she said. And unlike BPL, there weren’t any known security concerns with VoIP, she said, although there were a lot of policy concerns. The Federal Emergency Management Agency (FEMA) had expressed concerns about interference to govt. communications from unlicensed BPL systems, she said, but it was just a concern: “I think it’s just ensuring that the high-frequency radio, especially in the context that FEMA uses, would be protected.” That’s something that state regulators would want to ensure and in order to do that “we would have to ask a lot of questions and do a lot of research to find out if there is a potential for interference and, if so, what does that involve and is there something that can be readily fixed through industry’s putting protective measures in place.” Although the task force wasn’t operating under a time frame, Chappelle said it would give NARUC some initial feedback so as to involve more regulators and govt. agencies in the deliberations.

The Alaska Supreme Court reversed and remanded an Alaska Regulatory Commission (ARC) decision to eliminate the rural competition exemption for Alaska Communications Systems (ACS) in Anchorage, Fairbanks and Juneau. The top state court (Case 5762) said the ARC incorrectly placed the burden of proof on ACS to show a need to keep the exemption, rather than on General Communications Inc. (GCI), a competitor that sought removal of the exemption. The case had its roots in a 1997 decision by the ARC’s predecessor agency, the Alaska PUC, to keep ACS’s rural exemption. GCI appealed and the case wound its way through the state courts including a 1999 remand that ended in ACS’s losing its rural exemption. When the PUC was terminated and replaced by the ARC, ACS asked the new agency to review its predecessor’s decision. The ARC in 1999 reaffirmed termination of ACS’s rural exemption, but ACS appealed, losing in the lower state courts. The state Supreme Court cited federal court rulings that removed the burden of proof from the incumbent. The court said the ARC should reconsider its ruling, with the burden of proof on GCI to show that ending ACS’ rural exemption wouldn’t impose undue economic burdens on the carrier, wouldn’t create serous technical problems and wouldn’t impair universal service. The court said the ARC was free to compile a new record and wasn’t bound by the record of the 1999 case.

A group of academics urged the FCC Tues. to produce a clear national regulatory structure soon to ensure voice- over-Internet protocol (VoIP) growth. Speaking via teleconference, authors of a report by the New Millennium Research Council (NMRC) called for the Commission to: (1) Subject VoIP applications that functioned like telephone services to certain telephony rules. (2) Regulate all VoIP service providers equally. (3) Ensure that statutory social responsibilities were met. All 6 authors said they hadn’t been compensated by any involved parties for submitting their papers to the NMRC.

Cable VoIP will provide the facilities-based phone competition sought for so long, Comcast CEO Brian Roberts told San Francisco’s Commonwealth Club, suggesting regulators would get out of the way rather than burden the incipient business. Policy-makers should maximize competition between converging industries, dismantle traditional regulation and handle unanticipated consequences as they occur, Roberts said in an appearance overshadowed by his industry’s recent Western Show. “It’s got to be challenging for regulators all over the country, and certainly at the Federal Communications Commission, to figure things out,” with industry boundaries breaking down fast, he said. Comcast will test VoIP in 3 markets in 2004, “to take it from pretty good to world class,” Roberts said: “We're not interested in businesses that are me-too. Our goal is to take it to a place it hasn’t been before. So, rather than be first, we'd rather be unique.” Comcast will differentiate itself from telcos with inexpensive deals on 4 lines, since they don’t cost the provider more than one, and video enhancement of service comparable with instant messaging, Internet chat or voice mail, he said. As for video-on-demand, Comcast is using the PVR’s rise and vulnerability to pirates to pry licensing deals out of programmers, he said. “If I were a big content company, I would be looking at the music experience and saying the customer wants what they want, when they want it… We've had resistance from the content companies licensing video-on-demand. [But cable is] totally secure, never been hacked… We've been using that to compel content owners to license video-on-demand, which is going to happen because it’s so much in their interests.” Uptake has “been fantastic” in Philadelphia testing, he said. With 800,000 set-top boxes enabled, the company received 1 million orders the week before Roberts spoke, and 50% of the customers had used the service the previous 30 days, he said. Some 200 pay-per-view movies are available, although “they may be 90 days after Blockbuster” has them. But Comcast wants to charge for as little on-demand programming as possible, to differentiate itself from satellite, and offers 1,000 hours of TV shows at no extra cost, Roberts said.

With scientific data inadequate to support federal Fish & Wildlife Service (FWS) voluntary guidelines on communications tower siting, PCIA said, some states already were using them “as a precedent.” A PCIA spokesman said that while the guidelines were “not official… some states have taken them as being a gospel, and we don’t like that.”

The FCC’s Network Reliability & Interoperability Council (NRIC) voted Fri. to adopt more than 300 best practices aimed at enhancing reliability and security of the U.S. telecom networks in times of emergency. Although the vote marked the last meeting of a 2-year initiative, members have until Dec. 12 to submit their written comments. “The set of homeland security best practices adopted by the Council will guide the industry in fulfilling its commitments with its customers and with one another -- to engineer and operate the most reliable, robust communications service network in the world,” FCC Chmn. Powell said.