Following FCC approval last month of ultra-wideband (UWB) order, some industry attention is turning to question of how govt. agencies that use technology will be covered under what Commission and NTIA officials call “conservative” limits. One school of thought, industry source said, is that FCC could set similar limits for govt. operators in commercial bands as commercial users of UWB devices face in commercial and govt. bands. However, source said there also was provision in Communications Act that stated that FCC approval of radio frequency devices didn’t apply to those used by govt. Until commercial deployments of UWB enabled by order ramp up later this year, govt. agencies now constitute largest group of UWB users. Some of most serious concerns expressed to NTIA and FCC over potential for UWB to interfere with GPS and other safety-of-life systems came from agencies such as Pentagon and Transportation Dept. Following FCC release of order, which is now undergoing final editing and is expected out soon, NTIA still could update part of its manual addressing unlicensed devices. Process wouldn’t necessarily have to reflect same level of restrictions imposed by FCC’s Part 15 rules for UWB. How FCC addresses govt. users of UWB devices in final order is being watched closely by both industry and Capitol Hill.

Comcast and AT&T Broadband said their merger would accelerate deployment of facilities-based broadband across country and companies promised variety of public interest benefits, including increased competition, and new and improved video, data and telephony services. Comments came in 97-page merger application filed Fri. at FCC and made available Mon. Companies said their deployment of broadband would “benefit the nation at large by stimulating productivity gains and economic growth.” Efficiencies and cost savings achieved through merger would prompt company to deploy high definition TV, video-on-demand (VoD) and other interactive (iTV) services on wider scale, they said. In addition to FCC approval, companies also must get endorsement from Justice Department. They hope to close deal by end of year.

FCC Wireless Bureau dismissed petition by TPS Utilicom that challenged designated entity status of AT&T Wireless- backed Alaska Native Wireless (ANW). ANW, in which AT&T Wireless has noncontrolling equity stake of 39.9%, bid $2.9 billion in FCC’s Jan. 2001 re-auction of NextWave’s licenses, with results later overturned by U.S. Appeals Court, D.C. TPS had petitioned FCC to deny ANW’s license applications in re-auction, saying carrier hadn’t complied with rules for entrepreneur status and very small bidder status and its application lacked “requisite candor.” TPS contended AT&T Wireless exerted control over ANW, meaning larger carrier’s gross revenue and assets should have been included in ANW’s calculations to receive designated entity status. Wireless Bureau said it dismissed TPS’s petition for lack of standing. Even if petition were addressed on merits, “TPS Utilicom fails to raise any issues that would warrant denying the applications,” order said. Separately, Wireless Bureau Mon. granted ANW 15 PCS licenses that had been part of Jan. 2001 re-auction but hadn’t been involved in pending NextWave litigation. On standing issue, bureau’s order said TPS Utilicom hadn’t bid competitively for any of markets in which ANW was high bidder. It said company failed to show that awarding licenses to ANW would “somehow deprive it of a valid auction process with respect to the market for which it did bid.” Bureau concluded that TPS Utilicom had failed to demonstrate that AT&T Wireless had controlling interest in ANW “that would warrant the attribution of AT&T Wireless’s gross revenues and assets to Alaska Native Wireless.” It said TPS had failed to show ANW had acted with lack of candor. TPS Utilicom had argued that if AT&T Wireless’s interests in ANW were considered on fully diluted basis, which would include ownership of stocks, warrants and other instruments, then carrier would have 79.4% membership interest in ANW. But bureau said: “TPS Utilicom has misunderstood what constitutes de jure control under the Commission’s rules.” It said de jure control must be established by ownership of more than 50% of company’s voting interests. ANW investor Council Tree has 100% of voting rights in carrier, meaning it can make decisions without seeking vote of other member in limited partnership -- AT&T Wireless. Bureau also rejected arguments that AT&T Wireless had de facto control by dint of its nearly 80% fully diluted equity stake in ANW. “The Commission has made clear that there is no minimum equity requirement for controlling interest holders because that might hinder the ability of small businesses to acquire passive financing successfully and compete in the competitive communications marketplace,” order said. Washington attorney Raymond Quianzon, who represents TPS Utilicom, said carrier was mulling seeking review of FCC decision.

Main goal of recent surge in cable operator filings for rate relief is freedom to cut rates to discourage competitors, rather than freedom to raise fees, critics said. Surge has local regulators worried about protecting consumers not only from rate increases but also from operators’ “predatory pricing” strategy to discourage competitors. FCC filings for rate relief doubled in last year, which MSOs acknowledged was shift in strategy to compete more aggressively with DBS at local level (CD Jan 28 p1). “What’s driving these filings is the strategy to get out of the uniform rate provisions of the Cable Act,” said attorney James Baller, who represents cities. In at least 2 cases, cable operators had used rate relief orders to resort to predatory pricing to undermine competitors, he charged. When FCC makes determination on effective competition, it should look at pricing issues as well, Baller said. Some local regulators interviewed called on FCC to conduct full review of effectiveness of rate regulation in current form.

Supporters of Tauzin-Dingell data deregulation bill (HR- 1542) are maintaining their optimism about Senate approval of legislation, which House passed by 273-157 vote Wed. (CD Feb 28 p1). Despite vocal opposition from Senate Commerce Committee Chmn. Hollings (D-S.C.), who holds primary key to Senate review of bill, House Commerce Committee Chmn. Tauzin (R-La.) and ranking minority member Dingell (D-Mich.) celebrated controversial bill’s passage by expressing confidence that Senate skeptics would change their tune. Tauzin acknowledged battle lay ahead, but said significant House support of bill in addition to pressure from public would convince Senate “to give it a shot.” Tauzin-Dingell opponents and industry observers see things differently, predicting such support won’t materialize in other body. They also said if HR-1542 were brought up in Senate by attaching it to unrelated bill, there weren’t enough Senate supporters to block filibuster and prevent its death.

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.

Sen. Hollings (D-S.C.) told Attorney Gen. John Ashcroft Tues. that Congress never intended Justice Dept. (DoJ) and FTC to divide up merger review responsibilities. In an appropriations hearing on DoJ budget, Hollings asked Ashcroft why 2 agencies were considering such an agreement. Ashcroft said overlapping jurisdiction on merger reviews created too much delay when agencies must negotiate over which would review each case. Hollings specifically highlighted his concerns with Justice’s being given authority over media and telecom mergers. Two agencies were set to announce agreement in Jan., but canceled announcement after Hollings raised concerns. Since then, DoJ staff has met with Senate Commerce Committee (of which Hollings is chmn.) to discuss problems, while several consumer groups have expressed concerns about agreement.

Amendments to Tauzin-Dingell data deregulation bill (HR- 1542) that House Rules Committee was considering last night included measures that either would deregulate Bells or preserve CLEC access to Bells’ facilities in event that bill is passed. Rules Chmn. Dreier (R-Cal.) had scheduled hearing after our deadline that was expected to choose 4-5 amendments out of 25 submitted by Mon. Amendments figuring prominently included compromise measure that would increase role of Dept. of Justice in reviewing antitrust implications of communications industry disputes. Some congressional CLEC supporters had quietly given nod to proposal by House Commerce Committee Chmn. Tauzin (R-La.) and House Judiciary Committee Chmn. Sensenbrenner (R-Wis.) that would bolster Justice involvement in such disputes, House sources said. Although House proponents have dropped their push for even more stringent DoJ oversight than called for in Tauzin- Sensenbrenner measure, another amendment was submitted that would preserve regulatory protections for competitive access to Bells networks, sources said.

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.

Copyright Arbitration Royalty Panel (CARP) ruling setting rates for Internet radio broadcasting (CD Feb 21 p8) managed to aggravate all sides and is raising privacy issues as well, panelists said Thurs. at D.C. Bar Assn. discussion on Webcasting and digital music. Report set rates of 0.014 cents to 0.14 cents per Webcast performance, plus ephemeral license fee of 9%, depending on type of media. Webcasting fees will be retroactive to effective date of Digital Millennium Copyright Act (Oct. 1998), and first payments will be due around June if CARP report is accepted by Copyright Office.