WorldCom made largest Chapter 11 filing in U.S. history late Sun., leading FCC Chmn. Powell to issue statement providing reassurances that his agency didn’t believe action would “lead to an immediate disruption of service to consumers or threaten the operation of WorldCom’s Internet backbone facilities.” FCC Deputy Gen. Counsel John Rogovin filed appearance Mon. at U.S. Bankruptcy Court, N.Y., action characterized by spokeswoman as assuring that Commission was official party in proceeding. She said Rogovin’s role would be to make judge aware, during bankruptcy proceeding, of importance of continued service to customers, including federal govt., and need to protect universal service funding, wireless licenses and Internet. Justice Dept. (DoJ) also took action, filing motion requesting independent examiner be appointed to investigate company’s financial affairs.

Short-message service (SMS) developer Target Wireless filed petition with Federal Election Commission asking for exemption from disclosure requirement for federal candidates who use text messaging over wireless phones to pitch their campaigns. Target Wireless said FEC was expected to take up its petition, which would apply to congressional and presidential candidates, Aug. 15. Because maximum character capacity for each SMS text message sent to digital phones can’t exceed 160 characters, petition said that fine print of current federal disclosure requirements, which include who is paying for message, would take up all the available message space and leave no room for candidate’s main message. Target Wireless Pres. Craig Krueger said such messages would be made available only on “opt-in” basis so that wireless subscribers wouldn’t be spammed by unwanted political ads. He told us that presidential candidate in 2000 had expressed interest in using SMS as advertising tool but viewed disclosure requirements as making that medium impractical. He declined to disclose which presidential hopeful had explored this possibility, although he said it was one of 2 major party candidates. Company is relying on precedent of FEC’s already having granted exceptions to disclosure requirements on ground of limited space for bumper stickers, skywriting, water towers and novelty items such as pens and pencils. Point of petition is to allow candidates to “leverage new communications vehicles to promote their candidate,” Krueger said. Company petitioned FEC in May for advisory petition concerning exemption request for SMS messages on digital phones. Target Wireless told FEC that it has standing to make request because it plans activities starting in 2002 to deliver political messages to “hard-to-reach mobile audience.” FEC filing outlined potential activities that included Target acting as broker of wireless ads between political parties or candidates and content providers such as broadcasters like CNN and Fox. Under this scenario, Target said it would receive commission for placing wireless ad. Another possibility would be Target acting as broker between content provider and wireless networks to facilitate relationship between candidates and content providers, company told FEC. In such cases, Target said it could broker arrangement between content provider and wireless carrier. Another possibility raised by company is that it would be agent for candidates seeking federal office. “Target Wireless has had discussions with political candidates about wireless advertising, but has been unable to proceed further because of the uncertainty of the application of the FEC’s disclaimer exemption to such communications,” filing said. Target Wireless’s petition to FEC argued: “Because wireless devices can receive and communicate messages to a massive mobile audience with consistent regularity, wireless can be used … as an advertising tool that is capable of reaching a unique, mobile audience for which traditional cable and modem-based applications are not well-suited to deliver.”

Mo. Gov. Bob Holden (D) signed 2 telecom bills. First is SB-795, which authorizes St. Louis County to levy special tax on real estate to support establishment, operation and maintenance of emergency telecom system for police, fire and rescue units. Funds will be placed in special account to be administered by city Emergency Communications System Commission. Holden also signed HB-1890, which amends state wireless taxation laws to conform to federal Mobile Telecom Sourcing Act. Measure makes wireless services taxable at customer’s place of primary use, typically home or workplace, regardless of where call actually is placed.

Wash. state regulators refused to reconsider their July 1 decision to endorse Qwest’s Sec. 271 bid for interLATA long distance entry. Wash. Utilities & Transportation Commission denied petitions for reconsideration filed by AT&T and Covad Communications. Carriers wanted WUTC to reconsider its support in light of criminal investigation into Qwest business conduct by U.S. Attorney and 2nd probe by House Energy & Commerce Committee. They contended pending criminal probe, congressional investigation plus charges that Qwest made secret deals with its competitors to remove their opposition to its regulatory initiatives all were highly relevant to company’s compliance with Telecom Act. WUTC disagreed, saying federal investigations into Qwest corporate and financial practices weren’t relevant to central Telecom Act question whether Qwest’s local markets were fully and irreversibly open to competition. WUTC said it wasn’t persuaded that unfiled Qwest-CLEC agreements in Wash. affected openness of Qwest’s local markets. AT&T had planned similar reconsideration petitions in Mont., Utah and Wyo., whose votes last week to support Qwest prompted carrier to file its July 12 applications at FCC. But AT&T said it had changed its plans and would take its concerns directly to FCC.

State regulators Wed. reiterated their position that they be free to modify any FCC national list of unbundled network elements (UNEs) that incumbent telcos must offer to their competitors. In teleconference with reporters, several regulators also called for establishment of federal-state joint conference on UNEs to ensure FCC and states didn’t start working at cross purposes. Wed. was deadline for reply comments in FCC’s triennial UNE review. In comments filed late in day, consumer groups and CLECs also urged Commission not to reduce number of mandatory national UNEs or allow any new restrictions on UNE availability. ILECs on other hand, said it was clear that UNEs weren’t as vital as they once were.

FCC Chmn. Powell, in news conference after Tues. agenda meeting, described how Commission was adjusting to economic environment in which telecom bankruptcies were becoming more common. Commission has been examining procedures that allow it to pass information on to other federal agencies “should something come coincidentally into our possession that would raise questions about violations of securities and banking laws,” he said. To that end, FCC is examining proposing formal memoranda of understanding with SEC and potentially other agencies that would help to make routine process by which such information was made available. Powell said such MOU arrangements had been made in other policy areas, including EEOC-related issues. Addressing WorldCom’s scandal, Powell told reporters it didn’t appear that “the possibility of significant disruption of services is imminent. We don’t think the current financial troubles, even if they lead to a bankruptcy situation, present a catastrophic situation for consumers.”

Senate Commerce Committee appeared to support Jonathan Adelstein for open FCC Democratic seat after cordial hearing Tues. Committee hasn’t set date for vote, spokesman said. Adelstein, telecom aide to Senate Majority Leader Daschle (D- S.D.), emphasized rural issues during hearing, particularly deployment of broadband, maintenance of universal service fund and improved management of spectrum. “We can’t deploy broadband fast enough,” Adelstein said. Commerce Committee Ranking Republican McCain (Ariz.), whose possible hold had threatened to delay confirmation, called Adelstein “a fine young man.” McCain has threatened holds on all nominations until candidate for Federal Election Commission is approved.

SAN FRANCISCO -- Internet not only is undercutting rural telcos’ regulatory-based revenue sources, but also is shifting their policy focus away from states, industry conference heard here Mon. As e-mail, instant messaging and Web-based services, along with cell calls, increasingly supplant wireline voice and fax communications, local incumbents’ access revenues plunge correspondingly, compounding regulatory reductions in access rates, Chmn. Robert Riordan told convention of OPASTCO.

Public safety groups and Motorola urged FCC to adopt channelization plan that could accommodate 802.11 technologies in part of 4.9 GHz recently allocated to public safety operations. But several commenters on proposal that would clear way for high-speed digital technologies for emergency communications in band differed on who should be eligible to use that spectrum beyond “traditional” public safety entities. Representing critical infrastructure providers such as utilities, United Telecom Council (UTC) said FCC should adopt eligibility definition that would include entities such as pipelines and railroads that coordinate with public safety during emergencies. However, Assn. of Public-Safety Communications Officials (APCO) backed narrower definition that would prevent fire, police and emergency medical entities from having to compete with others for that spectrum. One point of agreement across broad range of comments was that 50 MHz allocation in further notice approved by FCC in Feb. was important for homeland security, but still fell far short of spectrum needed for public safety operations.

When granting additional flexibility for spectrum use, several wireless carriers and equipment makers urged FCC this week not to change rules in “midstream” for incumbent licensees that already had paid billions for licenses. Wireless and satellite companies, new technology developers, broadcasters and public interest groups filed close to 200 comments on questions from agency’s Spectrum Policy Task Force. Relatively high number of comments poured into Commission despite Office of Engineering & Technology’s refusal of several requests to provide extension of July 8 deadline. Public notice last month raised policy questions ranging from potential need to redefine harmful interference to whether rural spectrum should be covered under policy different from urban areas (CD June 7 p1). Some developers of emerging technologies stressed need for FCC to provide clarity in its Part 15 rules for unlicensed devices and to furnish more spectrum as demands increased. Several large carriers, including Sprint and Cingular, urged FCC to keep intact auctions of exclusive allocations and said market- based tools such as auctions worked only if license-holders had clearly defined rights.