Cingular Wireless petitioned U.S. Appeals Court, D.C., to review past FCC orders that kept in place commercial mobile radio service (CMRS) spectrum cap of 45 MHz in all but rural areas, where cap is 55 MHz. FCC in Nov. turned down 1999 petitions for reconsideration filed by CTIA and BellSouth, which since has finalized Cingular joint venture with SBC (CD Nov 9 p6). FCC at that time reiterated its plan to revisit spectrum cap issue as part of 2000 Biennial Review by late 2000, item that Commission appeared to be close to releasing late last week. Cingular said in petition that it was “aggrieved” by FCC decision not to eliminate or significantly scale back CMRS spectrum cap. “Relief is sought on the grounds that this finding is arbitrary and capricious, unsupported by substantial evidence and otherwise contrary to law,” Cingular said. It asked court to set aside FCC finding that spectrum cap should be retained or to vacate rule.
Terawave Communications announced $73 million infusion from investors. Two-year old fiber network access equipment supplier, based in Hayward, Cal., said it now was funded at $133 million.
NARUC recommended FCC not streamline its service quality reports. In comments filed Fri., NARUC said Commission’s current reports had shown “long-term negative trend in service quality.” Cutting back on information collection now would reduce ability of state and federal regulators to monitor such problems, group said. “In the absence of some compelling ILEC evidentiary showing that the reports are somehow unnecessary, it appears the proposal to reduce reporting requirements is premature,” NARUC said. FCC proposed reducing data collected from large ILECs as part of its biennial review process (CC Doc. 00-229).
Justice Dept.’s Telecom Task Force asked for input on how to improve its merger review process. Task force chief Donald Russell sent letter to 50 communications attorneys inviting them to March 1 private meeting to participate in “informal, off-the- record discussion.” Discussion topics listed in Jan. 10 letter: (1) Do initial task force investigations lead to “success in efficiently distinguishing between transactions which raise substantial competitive concerns and those which do not?” (2) How can task force best improve its “understanding of commercial or technological considerations relevant to our competitive analysis.” (3) How would attorneys compare task force merger review and processes with FTC, FCC, other sections of DoJ’s Antitrust Div., foreign antitrust agencies. (4) How could “second-request process be modified to promote the efficient and focused production of relevant information and documents.” Russell’s letter said those were just suggestions, and other issues can be raised at meeting. Russell said 2 moderators would help direct discussion: Verizon attorney John Thorne and Kevin Sullivan of King & Spaulding. Russell also encouraged attorneys to communicate with him directly, if they choose, by phone or e- mail. Letter went to Who’s Who of communications lawyers such as Richard Devlin of Sprint, James Rill of Howrey, Simon, Arnold & White, Mark Rosenblum of AT&T, Charles Rule of Covington & Burling, Michael Salsbury of WorldCom, Philip Verveer of Wilkie, Farr & Gallagher. Letter said all of them had worked for at least one client on important transaction reviewed by task force.
FCC asked for comment on Rural Task Force (RTF) proposal for reforming universal service program for rural telcos. Federal- State Joint Board forwarded plan to FCC Dec. 22 (CD Dec 26 p4). In proposed rulemaking issued Jan. 12, FCC said it sought comments on: (1) In general, whether RTF plan should be adopted “as a means of providing stability to rural carriers,” whether it provided “sufficient” universal service support. (2) Effect of plan on competition, how small ILECs and new entrants would be affected. (3) More specific implementation details such as proposed “safety valve mechanism” for providing additional support to rural carriers. For example, agency asked how that support should be distributed if rural carriers were eligible for more than proposed fund cap. (4) Implementation of RTF proposal to fix per-line support at a specific level in competitive study areas. (5) Implementation issues involving “safety net additive support.” Comments will be due 30 days after proposal is published in Federal Register, probably this week.
Broadcasters and cable should simplify video encoding to make captioning easier, said Steven Blumenschein, pres. of XOrbit Software. Firm developed UltraCast software, which it said eliminates need to reduplicate shows, and provides flexibility to modify captions without re-encoding tapes.
Now that FCC finally has approved AOL’s takeover of Time Warner (TW) with additional regulatory conditions, cable operators, consumer groups, phone companies, state and local regulators, ISPs, broadcasters, DBS providers, cable overbuilders and others already are girding for next big fights over extending those regulations to rest of cable industry. Likely new battle fronts include 2 separate FCC proceedings on cable open access issue and interactive TV (ITV) rules, each of which covers part of leading conditions imposed on AOL-TW by FTC and FCC. Another new battle front could be expected bill in new Congress that would create comprehensive regulatory scheme for all broadband services, whether delivered by cable, telephone, satellite or wireless technologies. “It’s going to be more diffuse,” said Precursor Group CEO Scott Cleland. “The progress will still be made but it will be more difficult to track.”
Financial News: J.P. Morgan Chase upgraded AT&T Corp. to long-term buy… Lehman Bros. predicted Time Warner Telecom, Winstar and XOXO would exceed its expectations in 4th quarter.
Iowa Utilities Board gave Qwest permission to geographically rebalance its retail basic business rates to reflect cost, revenue and market shifts arising from recent board decision to geographically deaverage Qwest’s unbundled loop rates into 3 cost zones. Qwest is to file tariff with new basic business rates by end of Feb. Loop deaveraging plan adopted by board Jan. 10 will create spread exceeding $26 between lowest and highest loop cost zones. Qwest said loop deaveraging without retail rate rebalancing would create artificial wholesale-retail price disparities that would give CLECs opportunities for uneconomic arbitrage that would unfairly damage Qwest’s position in urban markets while simultaneously discouraging rural competition. Board said Qwest’s case was valid for basic business services, but it said Qwest carried argument too far when it attempted to apply same principle to residential and nonbasic business services. Retail residential rates are below lowest deaveraged loop rate, board said, making uneconomic arbitrage impossible, and company under its price cap plan already had broad pricing flexibility for optional and discretionary business services. Board limited rate rebalancing to single-line and multiline business basic exchange, business trunk services, payphone access lines, Centrex and business ISDN services. Rebalancing will reduce rates in low-cost urban areas and increase them in higher cost suburban and rural areas, but board also put 20% limit on rate increases for any particular service.
Canadian Minister of Industry Brian Tobin planned auction of additional PCS spectrum Jan. 15. Qualified bidders reportedly include arm of Sprint PCS Canada Holdings, Bell Mobility subsidiary of BCE, Microcell, Rogers Wireless, Telus, Thunder Bay Telephone.