AT&T-COMCAST CARRIAGE RULING DUE BEFORE MERGER CASE, ABERNATHY SAYS

Abernathy said question with which Commission was grappling was whether Internet service provider agreement was “relevant to the scope of our merger review.” Asked whether FCC staff already had seen carriage agreement through kind of document-sharing arrangement with Justice Dept., Abernathy’s legal adviser, Stacy Robinson, said all would be explained in order, when it was issued. Abernathy said she believed FCC was likely to make its decision before DoJ decided whether it wanted to file lawsuit to stop merger. Since deadline has elapsed under Hart-Scott-Rodino Act, merger could move forward unless DoJ takes affirmative steps, such as lawsuit, to stop it.

On FCC’s proceeding on media ownership, Abernathy said, commissioners still expected order to come out in spring, probably in May, despite calls by consumer groups and others for extension of time to comment. Thus far, Media Bureau hasn’t recommended that Commission hold hearings, which consumer groups have requested, she said. “I know Commissioner Copps talked about it, so the bureau is looking into whether or not that adds information that we can’t otherwise collect… It’s not something that I've looked at and thought was critical to the analysis but I'm going to wait and see, based on the bureau’s analysis, what they recommend.” She said ownership rules must embrace competition, localism and diversity and recognize that marketplace had changed “dramatically” since original rules were adopted. “It’s definitely too early to say where we're going to end up” with Commission’s review of those rules, Abernathy said.

Asked about reported deadlock among commissioners on question whether “primary” video meant one programming stream in digital world, she said having 5th commissioner would help but she still believed current 4 commissioners would be able to reach consensus. She said discussions were continuing. Comrs. Martin and Copps reportedly believe primary doesn’t mean just one service. FCC Chmn. Powell has said it would be difficult to sway him from his support of 2001 ruling that primary video was one service. Abernathy said Mon.: “I think that primary video is ambiguous enough that you can take the word video and it can mean multiple bits of data, and so our job now is to take that statute and apply it in the context of a digital world,” weighing that with congressional intent and demands of Constitution’s First Amendment. Regardless of how Commission vote comes out, she said she expected issue to land in court.

Commission is scheduled to release new EEO rules at its agenda meeting Thurs., and Abernathy said staff had “done a really good job at building a case” for new set of rules. “I hope, I pray, I believe that they are legally defensible, and I think that they serve the underlying goals. That’s about as much as I can say” before meeting.

Separately, Abernathy praised initiative of Direct Mktg. Assn. (DMA) that would provide telemarketers with list of wireless phone numbers to not call. DMA guidelines for complying with Telephone Consumer Protection Act (TCPA) say that unless recipient has given advance permission, marketers can’t knowingly call phone number, including mobile phone. DMA started wireless telephone suppression service that includes 280 million numbers now used or set aside for wireless phones. While lauding DMA, Abernathy said future challenge would be presented by wireless number portability, which carriers must begin implementing Nov. 23, 2003. Once those numbers begin porting, it will be more difficult to differentiate between wireless and wired phone numbers. “As we're moving ahead toward wireless number portability, then the difficulty of identifying and isolating the calls that are wireless so that you don’t get telemarketing calls becomes much more complex,” she said. “So at the FCC we're thinking about it.” Commission in Sept. sought comment on how to update telemarketing rules, including possibility of national do-not-call list. At time, agency expressed concern about possibility of telemarketing calls to wireless phones by autodialers in violation of agency’s current ban. “One of the things that we are hoping to do is get ahead of this problem” in advance of implementation of wireless number portability, Abernathy said.

On possibility of granting relief on outstanding obligations of NextWave re-auction winners, Abernathy said one of pending questions before FCC was whether bidders granted relief should be able to bid on same spectrum when it was auctioned again. “Depending on how we frame the ultimate question and how many people wanted to opt out, I'm not going to take that off the table,” she said, meaning bidders granted relief should be able to come back and compete for spectrum. “This is a very unique situation,” she said. “They bid many years ago and generally when you go into an auction to bid you expect to receive a product at the end. In this case, they weren’t able to because of all the litigation that was involved.” FCC in Sept. floated options, without reaching tentative conclusions, for allowing NextWave re-auction winners to opt out of bid commitments, teeing up questions such as whether applicants taking advantage of potential relief should be barred from rebidding on licenses in subsequent auctions. Nextel argued they should be barred from re-acquiring licenses for at least 3 years. Abernathy said FCC would announce decision on those alternatives shortly.

In response to question, Abernathy said it didn’t appear that wireless merger guidelines issued by FCC would be helpful once spectrum cap sunset Jan. 1. Agency last fall agreed to repeal spectrum cap by Jan. 1, raising it to 55 MHz in all markets in interim. That produced internal discussion at FCC on whether Wireless Bureau should issue wireless merger guidelines. Industry has urged FCC to look to Justice Dept. merger guidelines as template for evaluating competitive issues in proposed wireless mergers. As to possibility of Commission’s issuing its own guidelines, Abernathy said: “There’s some question about whether they're helpful in any way, shape or form because necessarily, when you move away from a cap, then you are going to case-specific analysis.” Lack of guidelines means more intensive work for FCC and means industry doesn’t have “specific safety valves” that bright-line approach provides, she said. “We really are in the fact-specific, case-specific mode where we are going to have to analyze each and every one of these,” she said.

On unbundled network element (UNE) proceeding, Abernathy reiterated that FCC order should be issued in next several months. “Any way that you look at it, I think that there is significant pressure on the FCC to get something out on our UNE proceeding by January,” she said. U.S. Appeals Court, D.C., in Sept. declined to rehear its 2 decisions that remanded Commission’s orders on line sharing and UNEs (CD Sept 6 p1). It had agreed to stay orders until Jan. 2, 2003. (Line-sharing order would be vacated if FCC didn’t act by that date under decision but there’s some ambiguity about how vacating language applied to rest of areas covered by decision). Abernathy said she was at meeting last week in Detroit with regulators from 12 states that covered issues related to UNE platforms (UNE-P). “It’s fair to say that it’s all on the table,” she said. “We have dueling economists on both sides [of the debate] who will explain why it’s not reasonable to have UNE-P and others who will explain why it is.”