U.S. Trade Representative (USTR)

Rural telephone company executives at a convention in Washington applauded loudly Mon. when FCC Comr. Adelstein promised he would fight to defeat a proposal to limit universal service funding to one “primary” line. “I hope it’s dead on arrival at the FCC,” Adelstein said of the proposal by the Federal-State Joint Board on Universal Service. Limits on universal service funding would put consumers in rural areas “at a disadvantage,” he told the National Telecom Co-op Assn. (NTCA). Such limits would “undercut investment in rural America,” he said.

“Voluntary standards may work more efficiently” in addressing challenges of expanding 911 and E911 access to VoIP users, FCC Chmn. Powell told the FCC’s Internet-Based Communications Solutions Summit Thurs. in Washington. “It may be that a mandated solution is the wrong choice, when voluntary standards may work more efficiently,” he said: “It may also be that regulatory action is necessary to help actors in the marketplace reach the right resolution. We don’t know answers to these questions yet.”

The Washington Trade Daily (WTD) reports that the AFL-CIO has filed a Section 301 petition with the U.S. Trade Representative (USTR) urging bilateral negotiations with China to correct what it believes are China's inadequate labor practices and laws. The AFL-CIO asserts that these practices and laws are tantamount to unfair trade practices. (WTD Pub 03/17/04, www.washingtontradedaily.com)

Tower Records emerged from bankruptcy protection with new ownership that sharply reduces the role of the founding Solomon family in the Sacramento-based chain. After a 40-min. hearing, U.S. Bankruptcy Court Judge Peter Walsh, Wilmington, Del., approved the reorganization plan that transfers majority ownership to a group on insurance companies, pension funds and other investors. In gaining a majority stake in Tower, bondholders forgave $80 million in debt, wrapping up a bankruptcy proceeding that lasted just 35 days. The Solomons are left with 15% ownership and Russell Solomon, who founded the chain in 1960, will remain a consultant to chain as chmn. emeritus. The Solomons didn’t attend the hearing, but Tower CEO Allen Rodriguez told the Sacramento Bee the family was pleased with the outcome: “Sometimes you have to lose something to save something.” Representatives of the 3 biggest bondholders -- American International Group, Barclays Bank and Highland Capital Management -- will get 3 seats on a new board, while Solomon takes the 4th. The board is to meet for the first time Fri. The bondholders cancelled Tower’s debt and took $30 million in new bonds, as well as 85% ownership. Discussions on Tower’s future began last spring when it defaulted on bonds after skipping a $5.2 million payment. Tower has been for sale since last May and bondholders are said to be interested in cashing out. About 90 of Tower’s remaining 93 stores are profitable and the chain will close a few locations, including one in Berkeley, Cal. Tower will still face tough competition from national music chains; though the company has reduced its reliance on music sales, they still account for about 60% of revenue. The chain has increased its focus on DVDs and is a partner in the proposed Internet music service Echo, announced a year ago but yet to launch. Tower, which once operated more than 200 stores, lost a $225 million the past 5 years. It restructured several times in recent years, including closing its stores in international markets and selling off its chain in Japan. It also shut a chain of book stores.

The State Department has issued a press release announcing that the U.S. has signed an Open Skies civil aviation agreement with Madagascar. According to the press release, this agreement provides for open routes, capacity, frequencies, designations, and pricing, as well as opportunities for cooperative marketing agreements, including code-sharing. The press release also states that the agreement includes all-cargo seventh freedom rights, allowing airlines to perform international cargo operations with no connection to their homeland. (State Department press release, dated 03/10/04, available at http://www.state.gov/r/pa/prs/ps/2004/30328.htm.)

The FCC Media Security & Reliability Council (MSRC), formed in the wake of Sept. 11, Tues. released a final report under its current 2-year charter. It recommended “best practices” intended to ensure dissemination of news and information in a crisis. The recommendations included such things as advance emergency plans, physical security in some cases, and backup power and communications systems.

Susan Eid, ex-aide to FCC Chmn. Powell, named Hughes vp- govt. relations… Adam Golodner, ex-DoJ Antitrust Div., joins Cisco as dir.-global security & technology policy, in D.C. office… Robert Smith joins Assn. of Public Safety Communications Officials Institute as emergency medical dispatch manager… Travel Channel named Bill Margol, ex-TNT, vp-production… Geraldine Laybourne, Oxygen Media, joins Insight Communications board… Robert Urso, KEI Pearson, joins Optelecom board… Amy Meadows, ex-Dallas Social Venture Partners, becomes exec. dir., Belo Foundation… Jan Haswell named creative dir., WBRE-TV Wilkes-Barre/Scranton… Larry Thorpe, ex-Sony, joins Canon as national mktg. executive for broadcast and communications division… New McLeod USA board members: David Checketts, Sports Capital Partners, and former NFL quarterback Roger Staubach… David Nicholas, ex-Pioneer New Media, named N2 Broadband vp- worldwide sales… Broadband Services promoted Joshua Ginsberg-Margo to vp-product mktg… Frank Keeling, ex- Vodafone, named RealNetworks vp-international… Spanish Bcstg. System promoted Jackie Nosti-Cambo to vp-gen. mgr., Miami cluster… Per Lauridsen, ex-AOL Mobile, becomes OZ Communications managing dir.-Europe.

The FCC’s emphasis on VoIP is fine but the FCC should first make sure the underlying broadband infrastructure is deployed throughout the country, FCC Comr. Copps said Wed. at a symposium sponsored by Mich. State U.’s Quello Center. “No matter how enthusiastic the rhetoric [about VoIP], IP technologies will only reach their potential if the infrastructure is there,” he said. “We should be thinking larger thoughts,” Copps said: “If we ever needed a national conference on how to deal with disruptive technology it’s now.”