Consumer electronics industry is lightly regulated and would prefer to stay that way, although industry groups recognize some regulation is helpful. Regulatory mandates could prove greater challenge than that faced by heavily-regulated industries such as telecom, industry officials said. Phone company faces regulation from states and federal agencies such as FCC, but because of global reach of consumer electronics, industry faces regulation from agencies worldwide, EIA Senior Vp-Govt. Relations Brian Kelly said. Consumer electronics is becoming more regulated and “biggest piece is going to be the environment… as environmentalists become more active on telling manufacturers how to build machines lead-free and mercury-free,” he said. Kelly predicted World Trade Organization (WTO) eventually would take lead in environmental mandates due to pressure from European Commission, Japanese govt. and, to lesser degree, U.S. govt.

Satellite radio operators XM and Sirius are facing major hurdles in beginning service, meeting financial requirements of their cash-intensive start-ups and gaining widespread acceptance, officials said. Neither is expected to hit subscriber targets by end of next year, and 2nd to market Sirius has delayed debut of its service until next year because of problems with chipset, Lehman Bros. analyst William Kidd said. Sirius continues to test its service and will “continue testing chipsets for some time,” spokeswoman said. Chipsets had been scheduled to be ready for receivers by late Sept. or early Oct. Sirius CEO David Margolese also announced resignation Tues. Kidd said he believed move was effort to restore investor confidence, but Sirius Senior Vp Doug Wilsterman said Margolese’s departure after 10 years as CEO was unrelated to latest delay in company’s commercial launch. Sirius will announce full range of plans in conference call Nov. 14.

FCC adopted new access charge regime for rural telephony Thurs. that departed from proposal offered by coalition of associations representing rural telcos. For one thing, new access rate system is mandatory while Multi-Assn. Group (MAG) had proposed making it optional for some carriers. Order adopted at agency’s agenda meeting also postponed action on incentive plan to encourage rural carriers to move from rate- of-return to price cap regulation. That component, also proposed by MAG, will be subject of further notice of proposed rulemaking, also adopted Thurs. Rural reform plan is attempt to convert implicit universal service subsidies, buried within access charges, to explicit funding, as required by Telecom Act. FCC said in news release it also sought to meet another goal in order: Aligning access rate structure more closely with how costs are incurred by “driving per-minute access charges toward lower, more cost- based levels.”

Japan Fair Trade Commission (JFTC) Comr. Shogo Itoda stressed at Washington lunch Thurs. that he would prefer to see more-independent role for his country’s antitrust agency and cleaner spinoff of NTT’s structural units into separate companies. Speaking at FCBA lunch, Itoda said 5-member JFTC now is part of Ministry of Home Affairs, which also wields telecom regulatory authority. “We firmly believe the JFTC should be separated from the business-controlling authorities and belong to the cabinet office, in order to show that its policy on competition is fair and neutral,” Itoda said. “We intend to make this happen as quickly as possible.” In other telecom areas, he took exception to U.S. concerns on interconnection rates that NTT charges. “Both American corporations which seek connections and NTT, which provides connections, are private firms,” he said. “Why should our governments negotiate about the rates imposed by private firms? Such rates should of course be set under the market mechanism.”

European Commission (EC) issued annual report on U.S. trade barriers that concluded that in communications services sector, “market access is still not fully ensured and this situation is not in line with the market access policy advocated by the U.S.” EC said there had been “gradual improvements” in several areas of telecom sector in last year, but cited continued concerns over legislation introduced by Sen. Hollings (D-S.C.) last year that would restrict foreign investment in U.S. telecom firms, “lengthy proceedings to allow transfer of licenses,” restrictions on satellite sector. Report said that since World Trade Organization (WTO) basic telecom agreement was reached in 1997, FCC had altered its rules on entry of foreign- affiliated carriers into U.S. Commission replaced its Effective Competitive Opportunity test but kept public interest criteria for evaluating investments by foreign operators of more than 25% in U.S. licenses. Report said public interest criteria were unclear and foreign operator could be denied license for motives such as “foreign policy concerns.” “Although the FCC expressed its intention to deny market access only on this basis in exceptional circumstances (which are not well defined) the discretion retained by the FCC remains of concern to the EU and raises concerns about the compatibility of the FCC rule with U.S. WTO commitments,” EC said. It cited more than 6 months it took Commission to clear VoiceStream, Deutsche Telekom and Powertel merger earlier this year as showing “that foreign investment in the U.S. still faces uncertainty and lengthy proceedings.” In other policy areas, report expressed concern about access to 3G wireless network capacity in U.S., which it said could be “restricted due to lack of availability of frequencies.” EC also said that in last few years, “European satellite carriers have encountered serious problems in serving the U.S. market.” Citing licensing proceedings at FCC involving Eutelsat, Inmarsat Ventures and New Skies Satellites, report said such cases indicated that “proceedings by the FCC on spectrum allocation and licensing are not always carried out in an objective, transparent, timely and nondiscriminatory manner and raise concerns regarding their compatibility with U.S. WTO commitments.” In some cases, “goodwill of the companies involved” has allowed positive outcomes, report said. Many of concerns outlined were raised by EC in last year’s trade barriers report. Among them were worries in European Union that Open-Market Reorganization for Betterment of Telecommunications Act (ORBIT), which addressed privatization of Inmarsat, Intelsat and their successors, contained criteria that applied “to no other competitor, foreign or domestic, and could lead the FCC to limit these entities’ access to the U.S. market.”

SCOTTSDALE -- FCC Comr. Abernathy confirmed Sun. what USTA members here already knew and didn’t like -- that rural access charge reform item on agenda for Commission’s Thurs. open meeting was different from what Assn. and other members of Multi-Assn. Group (MAG) had proposed. Speaking at USTA’s annual convention here, Abernathy acknowledged that MAG group had asked agency to postpone vote once it became known that FCC would adopt version that “departs from the way it was written” by telco associations. However, she said she believed “the Common Carrier Bureau had good reason” to make changes and while it’s “hard issue” she thought it would move forward Thurs. Asked from audience whether FCC had taken into consideration letter from Congress urging delay, Abernathy said Commissioners always considered such views but they also had obligation to follow law requiring action on rural access charge reform. Throughout convention that started Oct. 7 with traditional “Regulatory Sunday” program, USTA members and staff frequently brought up their dismay at FCC’s plan to go ahead with vote. MAG plan is “really important to rural telcos and yet the Commission staff has a better idea,” retorted USTA Pres. Walter McCormick in meeting with reporters Mon. FCC ought to take compromise by rural telcos “more seriously,” he said.

SCOTTSDALE -- Mood was somber as USTA kicked off its annual convention here Sun., shortly before U.S. began air attacks in Afghanistan. Attendees huddled around TV sets in hallways during breaks to keep up with news as speakers extolled telecom industry efforts to maintain infrastructure in face of terrorism threats. “We're focused on security,” new USTA Pres. Walter McCormick said at meeting with news media Mon. “There is a lot of talk about that among members here.” Other common topic of conversation was difficulty in traveling caused by heightened security at airports as well as cancelled and delayed flights. Several speakers and panelists had to cancel, and many attendees arrived later than planned. When several FCC staffers had to bow out late last week from their “Regulatory Sunday” appearances, USTA pressed into service FCC Comr. Abernathy’s common carrier adviser Matthew Brill. Originally coming to convention only to accompany Abernathy, who was lunch speaker Sun., Brill was asked to make hour-long presentation later that day in which he gave talk and answered questions. Surprisingly, convention attendance wasn’t affected too badly by security problems. USTA had expected 1,000 attendees and about 900 showed up, still more than last year.

Senate Judiciary Committee said it had reached “agreement in principle” with White House on wiretap-related legislation, but acknowledged that negotiations on bill’s language were continuing. Committee expected to release final draft version of Dept. of Justice (DoJ) counterterrorism proposal Thurs., Chmn. Leahy (D- Vt.) and ranking Republican Hatch (Utah) said in joint statement: “These have been complex and difficult negotiations, but after much hard effort we have completed work on this bipartisan agreement.” They said they “hope to transmit the bill to Majority Leader Daschle [D-S.D.] and Republican Leader Lott [Tenn.] on Thursday.”

Telecom networks could better withstand physical and cyberattacks if Congress and Administration instituted more stringent standards and encouraged more information sharing among networks, Qwest CEO Joseph Nacchio told Senate Governmental Affairs Committee at hearing Thurs. Nacchio, who also is vice chmn. of National Security Telecom Advisory Committee (NSTAC)composed of executives of telecom and information technology industries, recommended that NSTAC and National Security Council develop benchmarks and requirements for information security best practices in telecom industry. NSTAC provides advice to President on security and emergency preparedness.

Cable industry negotiators are working with House Judiciary Committee leaders to make last minute changes to “compromise” version of Dept. of Justice (DoJ) counterterrorism plan, knowledgeable industry source said. Although Committee Chmn. Sensenbrenner (R-Wis.) and ranking Democrat Conyers (Mich.) have already prepared legislation (HR-2975) that is scheduled today (Wed.) for possible referral to the full House, the industry is pressing committee to further clarify discrepancies in federal laws governing disclosure of subscriber records (CD Sept 26 p3), the source said.