Mich. PSC fined 2 interexchange carriers for slamming, with one also fined for cramming. PSC fined Accutel Communications $43,600 for slamming residence and real estate business office of suburban Detroit customer, with victim getting $2,000 of fine. PSC fined Advantage Plus Telecom total of $105,000 for slamming customer and cramming unauthorized services onto customer’s bill. Victim will get $4,000 of fine. PSC also directed companies to change their business practices to prevent repeat offense.
Loral spinoff Satmex received full payment from insurance carrier for claim on Solidaridad 1 satellite that malfunctioned and became total loss Aug. 27. Company said most of money would be used to launch replacement satellite. Amount of settlement wasn’t announced.
Ericsson outlined plans for strategic partnership with Singapore-based Flextronics to complete outsourcing of its mobile phone production. Ericsson said it would focus on technology, design and branding of handsets, with plans for its consumer products division to employ 7,000 by year-end, down from 18,000 at end of 2000. Companies said 4,200 Ericsson employees would join Flextronics. Under memorandum of understanding with Flextronics, company as of April 1 will take over Ericsson plants in Brazil, Malaysia, Sweden, U.K., and parts of Ericsson’s plant in Lynchburg, Va. “In light of a significant change in the world market for mobile phones, we have decided to fundamentally change the setup of our business,” said Jan Wareby, exec. vp-consumer products div. at Ericsson. Ericsson also released 4th-quarter and 2000 results, saying sales were up 27% in year to $28.32 billion and up 11% in quarter to $8.5 billion. Ericsson took additional restructuring charge of $830 million related to full outsourcing of its mobile phone production. Ericsson CEO Kurt Hellstrom said results in company’s mobile phone business had remained “unsatisfactory.” He said, “the losses are caused by delivery failure from key suppliers and an inadequate product mix in the entry-level market.” Ericsson expects lower sales for phones in first quarter than previously thought, with forecasts now set at increases of 15%. For 2001, Ericsson is projecting sales growth of 15-20% and operating margin of 6-8%.
Draft bill in Utah House would impose financing restrictions on municipally owned telecom and cable ventures to ensure cities couldn’t tap tax dollars to undercut private sector competitors. Bill by state Rep. Greg Curtis (R-Sandy) would bar cities from issuing bonds to finance purchase or construction of telecom or cable businesses, prohibit them from using their general tax revenue to subsidize municipal telecom/cable utilities, and require municipal telecom/cable utilities to pay same taxes, franchise fees and other assessments as are levied on private sector companies. “Municipal Cable and Telecom Services Act” hasn’t been assigned number. Curtis said his intent was to level playing field by ensuring localities didn’t use their favorable credit ratings and taxation powers to compete against private businesses that were in their jurisdictions. But municipal govt. interests said Curtis’s bill was unnecessary and would deny phone and cable customers price and service benefits from competition between municipal and private sectors.
Tex. PUC ordered automatic Lifeline enrollment for eligible low-income customers, starting March 1. PUC adopted automatic enrollment program rules Thurs. that involve local service providers and Tex. Dept. of Human Services (TDHS) in bringing Lifeline discounts to all eligible phone customers. Under program, TDHS will identify Lifeline-eligible customers and send their names to local phone company serving their location. Phone company automatically will enroll customers. Eligible customers include any household with income below 125% of federal poverty line, or receiving Medicaid, food stamps, Supplemental Security Income, low-income home energy assistance or federal public housing assistance. New customers meeting Lifeline eligibility standards also qualify for Link Up subsidies for their connection charges. PUC’s rules also direct PUC staff, local telcos and TDHS to develop future outreach programs targeting “working poor” who potentially could qualify for Lifeline and Link Up.
FCC’s closely watched C- and F-block auction closed Fri., raising $16.9 billion, of which more than half will be paid by Verizon Wireless. Verizon and designated entities that have ties to Cingular and AT&T Wireless accounted for 83% of net revenue in auction of 422 licenses that started Dec. 12. Verizon filled in spectrum gaps in critical N.Y.C. market. It bid $8.78 billion for 113 licenses, nearly $4.1 billion of that for two 10 MHz licenses in N.Y. Revenue from auction surpassed lower end analyst expectations of $11 billion and surpassed record of $9.6 billion raised in 1996 C-block auction. Industry observers said Fri. they expected some large carriers’ financial arrangements with designated entities would draw challenges after bidders filed more detailed information with FCC on ownership structures. More broadly, several sources said they expected close of auction to refocus attention on wireless spectrum cap.
Charter’s monthly service fee for its “whole house” inside wire maintenance plan covering all communications lines, including satellite, telephone and cable in customer’s residence, isn’t subject to cable rate regulation, FCC said. Responding to clarification sought by Charter, Cable Bureau said company’s plan would be in direct competition with monthly maintenance plans offered by LECs. Saying Charter would continue to offer consumers who didn’t opt for whole house plan regulated hourly service charge, bureau said it found that whole house plan was comparable with LEC-offered telephone maintenance plans and LEC’s plan would exert competitive market pressure on cable plan.
In comments filed with FCC, CTIA called draft agreement on streamlining wireless antenna colocation review procedures “a step in the wrong direction.” Nationwide program agreement (NPA) was drafted by staffs of FCC, Advisory Council on Historic Preservation (ACHP), National Conference of State Historic Preservation Officers. Point is to try to streamline reviews involving whether proposed transmission facility may affect historic properties. CTIA pointed out that if licensee determines after review that proposed facility doesn’t affect historic property, FCC isn’t required to conduct further processing. But under draft, “any person, whether qualified or not, at any time can allege at the FCC that the proposed colocation has an adverse effect on historic properties,” CTIA said. As result, Sec. 106 process under National Historic Preservation Act could be invoked to delay proposed antenna siting “based on nothing more than a mere allegation of an adverse effect,” CTIA argued. Draft proposal would allow colocations on wireless towers constructed on or before Dec. 31, 2000, without further review unless certain exceptions apply. Draft stipulates that attaching antenna can’t result in major increase in tower size. CTIA is calling on NPA to recognize that “colocations are generally in the public interest and are categorically unlikely” to adversely affect historic properties. Group said that would limit cases subject to review to scenarios where facility increases substantially in size, prior finding of unmitigated impact on historic properties or pending environmental review. Otherwise, CTIA said burden should be on ACHP and state or tribal historic preservation officers to provide evidence of impact on historic property. Late last year, issue of how to craft interim proposal for colocation generated disagreement among some state historic preservation officers, who have been addressing increased loads of applications for proposed colocations. MG
Fueled by postings on the Slashdot Web site, 67 opponents of Internet filtering had filed mostly one-page comments on FCC’s proposed implementation of Child Internet Protection (CHIP) Act by end of last week. Comment deadline isn’t until 15 days after proposal’s publication in the Federal Register. Virtually all of comments opposed mandatory filtering, but offered few counterproposals for how FCC should implement law. Several said Commission had authority to delay implementation in light of expected constitutional challenges. “I had no idea there would be that much interest,” said Liza Kessler of Leslie Harris & Assoc., who started ball rolling with Slashdot posting (which, she hastened to add, was “solely in my personal interest” and not on behalf of firm). “I don’t know of any other grass-roots efforts,” she said. Kessler said idea that FCC could forestall implementation is “interesting argument” but she wasn’t sure whether it held legal water. She will be filing on behalf of educational groups, and she said she expected most heated questions to revolve around whether any existing software met CHIP’s standards.
Excite@Home reported net loss of $5.43 billion in 4th quarter ended Dec. 31, despite 31% increase in revenue to $169.1 million and net operating loss of $36 million, as it took $5.4 billion noncash charge to write down assets from money-losing acquisitions. Excite@Home, which added 643,000 high-speed data subscribers in quarter to end year with 2.96 million, also reduced its revenue and earnings forecasts for first quarter 2001 and full year because of expected 30-35% drop in media and ad revenue. Broadband company also said it would “exit certain noncore businesses,” cutting its iMall e-commerce hosting and Enliven rich media advertising units, to slash costs and focus on broadband subscriptions and profitability. Excite@Home said it expected much lower loss of 24 cents per share this year after taking charges and carrying out changes, with most of that loss occurring in first half of year. It’s targeting growth in its broadband subscriber total to 3.9-4.0 million by midyear and 5.2 to 5.5 million by year-end.