Ill. Commerce Commission last week ordered Ameritech to pay $30 million penalty for its failure to meet state’s outage restoration target in 2000. Ill. Commerce Commission Chmn. Richard Mathias said company’s promises in fall had led agency to expect Ameritech would be in compliance with service outage standard for month of Dec., “but they weren’t.” Ameritech said heavy snows in Dec. caused company to end month with 93% instead of 95% completions of problems.
Hughes Electronics said Tues. its 4th-quarter revenue increased 21.3% to $2 billion from $1.69 billion a year ago. It also said its operating loss dropped to $121.2 million from $371.8 million year earlier. For year, Hughes had total revenue of $7.2 billion, up from $5.5 billion in year. Loss from continuing operations narrowed to $60.3 million from $283.7 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $153.8 million, beating analysts’ projections. Company also said it had added 527,000 net subscribers in 4th quarter, with backlog of 110,000 who have purchased systems and are waiting for installations. “This report increases the stakes and makes the company more attractive to buyers,” analyst said: “There were concerns that they were starting to lose momentum to cable, but this reaffirms that they are still growing.” GM is in talks with Rupert Murdoch over possible sale of Hughes Electronics for price industry reports say is $40 billion (CD Dec 27 p2).
WorldCom asked Mo. PSC to suspend its review of Southwestern Bell Telephone (SBT) Sec. 271 interLATA long distance bid. WorldCom said Jan. 8 decision by 8th U.S. Appeals Court, St. Louis, striking down PSC- approved interconnection agreements based on total element long run incremental costs (TELRIC) meant local exchange competitors had no legal access to SBT’s network. WorldCom contended it was impossible to have legal interconnection agreements based on illegal prices. It said most other CLECs in Mo. based their interconnection agreements on AT&T- SBT contract, so court’s action also voided those agreements, meaning SBT couldn’t be in compliance with Sec. 271 checklist. SBT said it would continue to honor rates company agreed to before its long distance application, but some CLECs and Mo. Office of Public Counsel said competitors were in position of relying on SBT’s oral promises, with nothing in writing that was enforceable. Court’s decision was on an SBT appeal of PSC arbitration decision in interconnection pricing dispute that upheld AT&T’s position favoring TELRIC-based prices. Mo. PSC is considering asking for clarification from court, but also could ask that decision be stayed pending appeal to U.S. Supreme Court.
Verizon resubmitted its application to FCC Tues. to offer long distance service in Mass. under Sec. 271 of Telecom Act. Verizon Senior Vp Thomas Tauke said new version incorporated company’s original application “and adds further evidence demonstrating that the company provides competitors nondiscriminatory access to DSL-capable telephone lines.” Verizon filed original petition Sept. 22 but withdrew it Dec. 18 after FCC Common Carrier Bureau said it didn’t have enough information to substantiate Verizon’s claim that it offered competitors nondiscriminatory access to DSL lines. Similar concerns were expressed by Dept. of Justice in Oct.
AT&T said it would buy out Comcast and Cox minority stakes in Excite@Home, trading $2.9 billion of its own stock for its cable partners’ highly priced shares in Excite@Home. AT&T, which agreed last March to buy 60 million Excite@Home shares held by Cox and Comcast to consolidate its control of Excite@Home, reportedly sought to avoid large stock payout by offering some of its cable systems to 2 MSOs. But Comcast and Cox showed little interest in those properties, preferring to get AT&T stock at its currently deflated price. With transaction, AT&T said it would boost its economic interest in Excite@Home to 38% from current 23% and its voting interest to 79% from 74%. In return, Comcast and Cox will receive new, attractively priced stock warrants in Excite@Home and will continue to offer its high-speed data service through June 2006, including exclusively until June 2002. But 2 MSOs will retain right to end exclusive deals as well as entire distribution arrangement starting in Dec., as long as they're willing to forfeit warrants.
Datacasting company iBlast said it began field tests of its broadcast data service at TV stations KTLA L.A., KICU-TV San Jose, KGTV San Diego, KPNX Phoenix-Mesa, WOFL Orlando. IBlast expects to deliver data to PCs via network of 225 stations when it starts commercial service. Data being delivered include video clips, software, MP3 audio, games, other broadband content. Field tests are to last through March and company expects to reach 50% of U.S. households by end of year.
FCC proposed $327,000 in fines against American Tower Corp. (ATC), AT&T Wireless, SpectraSite and Telecorp Communications Tues. for violations of agency’s antenna structure rules. Commission ordered Enforcement Bureau to conduct “additional, more thorough investigation” of ATC compliance with rules. Largest, single proposed fine is against ATC for failing to properly light one antenna during construction, not registering 2 existing structures, failing to notify FCC of ownership changes on 24, not posting registration number on 9 other towers. To ensure air safety, tower owners must meet requirements on lighting, proximity of antenna structures to airports and monitoring to ensure lighting systems work properly. Commission called ATC’s violations of rules, which are designed in conjunction with FAA to ensure towers don’t pose hazards to aircraft, “serious.” FCC actions resulted from “routine investigations and inspections” by field offices of Enforcement Bureau, agency said. Enforcement Bureau also proposed $80,000 in fines to Telecorp, $18,000 for AT&T Wireless and $17,000 for SpectraSite for similar violations of antenna structure rules. Fines against those companies involved failure to light towers properly, failure to post registration numbers and failure to provide updates on ownership changes. As for ATC, FCC said its field agents “repeatedly notified” company about noncompliance. “The Commission expressed concern that in spite of notifications to ATC regarding its noncompliance and statements by ATC representatives that they would address the issue, Enforcement Bureau field agents continue to find violations of the antenna structure rules,” FCC said. In notice of apparent liability for forfeiture for ATC, Commission said most incidents involving failure to notify agency of ownership changes occurred after field representatives met with company officials. “Moreover, the fact that these violations occurred in various states across the country suggests that ATC has not engaged in a ’sweep’ of its antenna structures as its representatives stated that it would,” notice said. FCC said broader investigation of ATC was prompted by continued findings by field representatives of additional rule violations during routine inspections.
Regina Keeney, ex-chief policy counsel for Dell Computer and former chief of 3 FCC bureaus, moves to Lawler, Metzger & Milkman as partner… Jessica Wallace, legislative asst. to Rep. Tauzin (R-La.), is latest staffer to follow him to House Commerce Committee, where she will be telecom counsel… William Moll, ex-pres.-gen. mgr., WKRC-TV Cincinnati, appointed pres., Clear Channel TV, succeeding Ripperton Riordan, who plans to go into ministry… Ann Marie Cumming, NAB dir.- media relations, resigns to move to Germany with her husband, CIA official… Ann McGowan promoted to dir.-business development, Showtime Networks… Michael Norten, ex-WPGH-TV and WCWB Pittsburgh, appointed vp-sales and news, Video Networks… John deGarmo, ex-Scripps Networks, named senior vp-affiliate relations, Moviewatch… Stephen Castro, ex- NetStream, appointed regional sales dir.-San Francisco, NTT America… Glenda Davis, ex-Fujitsu Business Communications Systems, named pres.- CEO, MCK Communications… Bob Johnson promoted to vp-northeast, Nextel Communications.
AOL Time Warner, having completed its merger late Thurs. night following FCC’s approval, announced its new 16-member board. Company said new board -- 8 members each from AOL’s and Time Warner’s old 11- member boards -- would meet for first time later this week. New board consists of: (1) XO Communications Chmn.-CEO Daniel Akerson. (2) Barksdale Group partner James Barksdale. (3) Hilton Hotels Pres.-CEO Stephen Bollenbach. (4) AOL Time Warner Chmn. Steve Case. (5) Kleiner, Perkins, Caufield & Byers partner Frank Caufield. (6) CGLS Fund partner Miles Gilburne. (7) Hills & Co. Chmn.-CEO Carla Hills. (8) AOL Time Warner CEO Gerald Levin. (9) Colgate-Palmolive Chmn.-CEO Reuben Mark. (10) Former Philip Morris Chmn.-CEO Michael Miles. (11) AOL Time Warner Vice Chmn. Kenneth Novack. (12) AOL Time Warner Co-COO Richard Parsons. (13) AOL Time Warner Co-COO Robert Pittman. (14) Fannie Mae Chmn.-CEO Franklin Raines. (15) AOL Time Warner Vice Chmn. Ted Turner. (16) Vincent Enterprises Chmn. Francis Vincent. In one interesting footnote to FCC’s approval of takeover, consumer groups that had fought for strong regulatory conditions on deal ended up urging Commission to okay it even though they and other critics didn’t gain interoperability of AOL’s current instant messaging (IM) services. New ex parte filing from last week reveals that Media Access Project’s Andrew Schwartzman and Consumers Union’s Gene Kimmelman pressed Comr. Tristani, last holdout in IM fight, to vote for approval because agency had won as much as it could. Despite their strong support for “full interoperability of instant messaging services,” Schwartzman and Kimmelman said, “the net value of the relief the Commission could provide to consumers and the public from a properly crafted decision justified acceptance of an order which did not provide full interoperability.” Sources said consumer advocates also probably feared what might happen if merger review lingered beyond Democratic Chmn. Kennard’s tenure, which will end Fri.
Qwest said its customer service improved in 2000 with 98% of its installation commitments met when promised, representing best results in last 5 years, and 95% of its repair commitments met on time, best since 1996. In addition, more than 80% of service outages were repaired in less than 24 hours, up from 63% year ago, company said. It also announced line-sharing agreements with 4 competitors -- Contact Communications, Multiband Communications, New Edge Networks, NorthPoint Communications. Qwest said agreements would broaden availability of high-speed Internet and broadband services in its territory.