U.S. Supreme Court agreed Mon. to hear oral argument in FCC’s appeal of D.C. Circuit’s NextWave ruling, creating another layer of uncertainty for spectrum on which carriers and govt. had failed to reach settlement late last year. Some industry observers said high court’s grant of certiorari in NextWave case could heighten incentives to reopen settlement talks over licenses that fetched $15.8 billion in Jan. 2001 re-auction. But several analysts and industry sources pointed out that FCC had strong legal interest in having Supreme Court uphold what it viewed as integrity of auction process under Communications Act compared with limitations of U.S. Bankruptcy Code. Valuations of licenses also are widely seen as lower than they were even several months ago as carriers’ stocks have been battered on Wall St. Grant of certiorari marks victory for FCC, which sought review of June decision by U.S. Appeals Court, D.C. D.C. Circuit had reversed agency’s decision to cancel NextWave’s licenses for missed payment, throwing results of $17 billion re-auction of those licenses into disarray. With high court’s decision to review that ruling, “the mess just got messier,” said Legg Mason analyst David Kaut: “There’s a new round of legal uncertainty.”

House 273-157 passed modified version of Tauzin-Dingell data deregulation bill (HR-1542) Wed. after unsuccessful move by congressional CLEC supporters to block what had been touted as competition-friendly amendment. One of most contentious issues of day stemmed from Rules Committee proposal Tues. night to allow floor debate on line-sharing amendment by Reps. Towns (D-N.Y.) and Buyer (R-Ind.), which industry opponents said was falsely presented as CLEC- friendly measure. Debate also was allowed on CLEC-backed amendment by Reps. Cannon (R-La.), Conyers (D-Mich.) and several other Tauzin-Dingell opponents including Telecom Subcommittee ranking minority member Markey (D-Mass.). However, rules approved by House Wed. morning allowed Towns- Buyer to be introduced as substitute to Cannon-Conyers, thereby removing any chance of movement on CLEC-supported measure.

In Further Notice of Proposed Rulemaking released Wed., FCC requested comment on issues such as who should be eligible to use 50 MHz of spectrum recently allocated at 4.9 GHz to public safety operations. At Feb. 14 agenda meeting, FCC approved order that allocated band to public safety uses such as high-speed digital technologies. Further NPRM seeks comment on: (1) Licensing and service rules for band. (2) Segmentation or channeling plans. (3) Impact of adjacent U.S. Navy operations. (4) Suggestions on how to use band in way that wouldn’t interfere with adjacent radio astronomy operations. Commission’s earlier tentative conclusions about band had been that additional spectrum exclusively for public safety didn’t need to be set aside at 4.9 GHz. Order approved by Commission reflected altered thinking, particularly given spectrum needs of public safety following Sept. 11 terrorist attacks. “The acts of terrorism committed against the United States on Sept. 11, 2001, reinforce the critical nature of the public safety community’s responsibilities to our nation’s safety and well-being,” FCC said. Among issues on which it seeks comment are whether eligibility standards for 4.9 GHz should be limited to state and local emergency workers and nongovt. public safety providers who work with govt. agencies. Item said there was no statutory language that required FCC to limit users to such operators. Commission seeks comment on whether broader description of public safety radio services should define eligibility in that band. That would broaden users beyond traditional public safety entities such as police and fire to others “whose facilities may be directly involved in an emergency and who provide essential services to the public at large,” FCC said. “We recognize that expanding the universe of users on this spectrum may result in congestion of the band, hindering the communications of emergency workers and causing the traditional public safety users to compete for valuable spectrum.” Commission said it was exploring “nontraditional means” of carrying out public safety use in band. One example would be allowing commercial licensees to use band to serve public safety agencies. NPRM seeks comment on how such arrangements could work. Another possibility, FCC said, would be to let commercial users be licensed on secondary basis. It also is exploring whether to allow federal govt. entities to use that spectrum.

Bipartisan group of House members is considering legislative remedy to hasten transition to digital TV conversion, House Commerce Committee Chmn. Tauzin (R-La.) said Mon. in keynote at NAB State Leadership Conference in Washington. He said committee was planning one more hearing to assess whether progress had been made in private sector negotiations among broadcasters, cable operators and consumer electronics manufacturers to develop best approach to broadly deliver DTV across America. If progress hasn’t been made on private sector solution on stalled issues such as cable carriage of DTV and provision of digital tuners by electronics manufacturers, “Democrats and Republicans will come to the table and offer legislation to speed up the proceedings,” Tauzin said.

Capitol Hill was awash with lobbyists Mon. as supporters and opponents of data deregulation Tauzin-Dingell (HR-1542) bill prepared for House floor debate beginning Wed. Along with visits to House members and staff, advocacy groups flooded Hill with letters and released still more reports arguing why bill would either boost competition in broadband or cripple it. Despite flurry of lobbying, most observers viewed bill’s passage in House as foregone conclusion, in part because wavering members felt safe in voting for it knowing that Senate Commerce Committee Chmn. Hollings (D- S.C.) had no intention of letting it advance in Senate. At NAB conference Mon., bill’s chief sponsor, House Commerce Committee Chmn. Tauzin (R-La.), predicted victory in House, “then a fight in the Senate, as you know” (see separate story).

Court decision Tues. overturning FCC’s cable-TV station cross-ownership ban (CD Feb 20 p1) could have significant effect on how biennial review process is conducted, FCC Chmn. Powell said Wed. In somewhat unusual action, U.S. Appeals Court, D.C., acted not on any new FCC order but on agency’s decision to retain existing rule, in decision made during biennial review. Telecom Act requires FCC to review existing regulations every 2 years to determine whether they remain necessary.

Calling Enron “America’s most corrupt company,” the United Church of Christ (UCC) challenged FCC Enforcement Bureau decision fining company $7,500 for failing to get FCC approval when it bought firms with private radio and microwave licenses. Last month, FCC said it had completed investigation of Enron’s failure to obtain regulatory approvals of those licenses, problem that bankrupt energy giant had informed Commission about in 1998 (CD Jan 17 p9). At time, Enron said responsibility for getting licenses was decentralized among its subsidiaries, which in some cases didn’t know such approvals were needed. FCC handled Enron violations with “a stunningly light hand,” UCC attorney Andrew Schwartzman said. He said “stealthy manner” in which FCC handled case “reduces confidence in Commission processes.” Deals, collectively, were “big deal,” Schwartzman said, and involved “public health and safety, so this has to be taken seriously.” Entire compliance process and early termination of investigation are “highly questionable,” he said.

Congressional speakers told NARUC major changes in federal law aren’t necessary for rural broadband development, even as NARUC and leading state regulators began new drive to discredit pending Tauzin-Dingell broadband deregulation bill coming up for crucial vote soon. Rep. Wilson (R-N.M.) said bringing broadband to rural areas wouldn’t require wholesale changes in Telecom Act and goal could be accomplished with modest changes in universal service support system, coupled with relief from prohibitively costly and burdensome right- of-way access requirements.

As FCC gears up for Thurs. vote on ultra-wideband (UWB),several lawmakers urged Commission to not let date slip again on item. Agency had deferred vote at Dec. agenda meeting in response to letter from Commerce Secy. Donald Evans seeking more time to evaluate safety-of-life and other issues. Among apparent concerns of some on Capitol Hill and in private sector is lack of transparency in parts of negotiating process between NTIA and FCC. Because of high stakes nature of UWB proceeding, several industry observers said it had brought to forefront natural tension between FCC’s regulatory role over commercial spectrum and NTIA’s purview over govt. bands.

Federal and state regulatory policies are impeding consolidation of rural telephone lines, growing movement led by mid-sized companies such as CenturyTel and Citizens Communications, panelists said at Legg Mason investment conference in N.Y. on rural telephony Thurs. From regulators to rural operators, speakers said consolidation is latest trend in rural phone business, stoked by divestiture of lines by Bells such as Verizon and Qwest. Verizon has divested hundreds of thousands of former GTE lines throughout country, many of them acquired by consolidators, while others such as Qwest continue long-time trend to eliminate unprofitable exchanges. In addition, consolidators buy up small telcos run by families that no longer want to be in business. Consolidators generally can make more money from rural lines than Bells can because they have more access to universal service funding and their smaller size enables them to act more flexibly, panelists said.