FCC Comr. Furchtgott-Roth expressed optimism Tues. that Commission would get its reciprocal compensation item out “shortly,” although he said he was disappointed with results. “This item has just a dreadful history,” he told reporters at monthly breakfast, referring to order that now is on circulation. FCC order vacated and remanded by U.S. Court of Appeals, D.C., reflected “a mistrust in state government” and belief “that the federal government could do things better,” Furchtgott-Roth said. Citing “unsubstantiated” rationale for federal jurisdiction over certain kinds of traffic, he said that 2 years later item is “frankly much the same result from the Commission.”

Completely different pictures of broadband world were painted by Bell companies and their ISP competitors in comments to FCC refreshing Computer III record (98-10, 95-20). Portraying themselves as underdogs in high-speed market, Bells asked Commission to repeal its Open Network Architecture (ONA) rules that require Bells to provide services on behalf of competing ISPs as well as requirement that they post on their Web sites list of available services. ISPs continued (CD April 17 p10) to warn that DSL competition was nearing extinction and to call for tougher rules.

Several large wireless interests marshaled new research from economists to bolster arguments to FCC for relaxing spectrum cap, proposal that raised concern of some small carriers and largest wireless reseller WorldCom. In proposed rulemaking earlier this year (CD Jan 23 p1), FCC reopened examination of whether spectrum cap and cellular cross-interest rule for commercial mobile radio service (CMRS) providers still were needed. Spectrum aggregation limits are 45 MHz in most markets, except rural areas, where cap is 55 MHz. In comments to date, CTIA, Sprint PCS and Verizon Wireless presented economic data to show how wireless competition had grown, although Sprint’s numbers indicated largest markets “remain concentrated.” As for cross-ownership rules, Verizon wrote: “Duopoly market structure -- the entire premise for this rule -- of course is gone.”

Mass. Attorney Gen. Thomas Reilly urged FCC to deny Verizon’s petition to offer long distance service in Mass., saying company’s prices for unbundled switching still were not based on Total Element Long-Run Incremental Costs (TELRIC). In April 9 letter to FCC, Reilly said he first raised concern about Verizon’s switching costs in comments he filed in Oct. “Instead of adopting permanent UNE [unbundled network element] rates that are demonstrably TELRIC-based,” Reilly said, “Verizon continues to rely on New York-based UNE prices that were not investigated by the [Mass. Dept. of Telecom & Energy], do not reflect Massachusetts costs and which are now the subject of an ongoing New York investigation.” Reilly also expressed concern that “Verizon does not provision its special access service… circuits to competitors on a neutral and nondiscriminatory basis.” CLECs need those circuits to provide high-speed, large capacity telephone service, he said. April 16 is deadline for FCC to act on Verizon’s petition.

Verizon filed for U.S. Supreme Court review of decision by 4th U.S. Appeals Court, Richmond, in continuing feud over whether 11th Amendment of U.S. Constitution gives states immunity from federal court review of their decisions in interconnection cases. Verizon’s April 5 petition asked high court to review 4th Circuit’s decision that state agencies such as Md. PSC maintained their immunity from federal court review even when they entered federal regulatory arena by arbitrating Telecom Act interconnection disputes. Request for review came on heels of similar appeal involving Ill. Commerce Commission and WorldCom that Supreme Court has agreed to hear. Verizon urged court to consider 2 cases in tandem because Md. case raised one issue not addressed in Ill. appeal -- conflict between 4th Circuit decision that federal courts have “no independent subject matter jurisdiction to review a state commission’s actions” and contrary decision by 6th U.S. Appeals Court, Cincinnati, involving Mich. PSC. Conflict over that wording doesn’t come up in Ill. case, Verizon said. Delaying 4th Circuit appeal “would significantly delay a final determination of jurisdictional and constitutional questions crucial to the integrity of the 1996 Act’s scheme,” Verizon said. Fourth Circuit decision arose from dispute over Md. PSC’s order requiring Verizon to pay reciprocal compensation for Internet-bound calls.

Broadband service providers (BSPs), new breed of cable and telco overbuilders heralded as future of communications industry less than year ago, have fallen on hard times. Stung by Wall St.’s abrupt refusal to pour more money into capital-intensive business since last summer, most BSPs have either scaled back their construction plans drastically in recent months or dropped out of market altogether. Even RCN Corp., ambitious “granddaddy” of overbuilders backed by billionaire Paul Allen, has cut back, turning its attention away from new regions to focus on areas where it already is building plant. “Everybody got crunched,” said Mark Haverkate, CEO of WideOpenWest (WOW), another leading BSP. “The [capital] markets have changed quite a bit.”

FCC would be required to conduct new e-rate rulemaking, altering program in ways that one supporter suspected could destroy it, under proposals tucked into President Bush’s budget proposal (CD April 10 p1). General provision in proposed Commerce Dept. budget would have Congress direct Commission to finish rulemaking by Sept. 30, 2002. However, e-rate foe thought program got boost when $2.25 billion in e-rate funds and similar amount for high-cost universal service money for first time were included as $4.5-billion line item (rising to $5.6 billion in FYs 2001 and 2002) in FCC budget.

U.S. Dist. Court, Mobile, Ala., upheld that city’s right-of- way construction ordinance against challenge by BellSouth. In decision released March 30, Senior U.S. Dist. Judge Richard Vollmer said BellSouth’s argument that ordinance was entry barrier “is not a realistic interpretation” of Telecom Act’s Sec. 253. All Mobile is doing is trying to manage its rights-of-way by setting standards for excavation of city streets and other construction, court said. Permit fee recovers city’s costs but isn’t intended to raise revenue, Vollmer said. “BellSouth cannot plausibly make a claim that the ordinance prohibits… the ability of BellSouth to provide telecommunications services,” he said. He acknowledged BS argument that applying for permit caused delay but said Telecom Act barred actions that outright prohibited companies from entering market, but didn’t bar “minor delays that may be incurred because BellSouth must now submit construction plans and obtain permits” before digging up city’s streets and rights-of- way.

Wireless carriers were split over how active FCC’s role should be in creating rules to protect privacy of location-based information of mobile customers. CTIA asked Commission last year for rulemaking to adopt proposed location information privacy principles, including notice, consent, security and integrity of consumer data. Association sought regulations to implement part of 1999 Wireless Communications & Public Safety Act. But largest U.S. mobile carrier Verizon Wireless told FCC in comments that while it supported 4 privacy principles proposed by CTIA, it didn’t believe new regulations were needed. Sprint PCS didn’t go quite so far, saying it supported adoption of principles via rule or policy statements but didn’t believe new, detailed regulations are needed. Cingular Wireless, Ericsson and Nokia largely supported CTIA petition for rulemaking. However, PCIA said FCC should examine issue, “but should be wary of adopting any new regulations that could suffocate exciting new technologies and services.”

Don’t expect FCC to be as eager to place issue-oriented conditions on merging companies as past Commissions, FCC Chmn. Powell told reporters in news conference Thurs. on telecom issues. He said FCC votes depended on all 5 commissioners but he wouldn’t be pushing for kind of conditions that were imposed on SBC- Ameritech, Bell Atlantic-GTE and other mergers. Powell held 2 news conferences for trade reporters Thurs., answering questions on video issues in morning session (see separate story) and telecom questions in afternoon.