Language in the FCC’s roaming order, released last week after approval at an Aug. 7 meeting, could spell trouble for carriers who bought spectrum in the advanced wireless services auction (AWS) and now must wait for the spectrum to be cleared to build out their systems, officials said. The sweeping wording of the text was broader than some feared, based on comments at the FCC meeting (CD Aug 8 p1).
The San Francisco-based Ninth Circuit Court of Appeals said courts in California can try class-action cases brought against AT&T without violating federal law. But the decision was viewed Friday as having little significance outside of California, which has 18 percent of the nation’s population. The decision came in Shroyer v. New Cingular Wireless Services. The court effectively threw out a provision in the contracts subscribers sign that says they agree to arbitrate all dispute and claims rather than take AT&T to court. “In sum, we hold that Cingular’s class arbitration waiver is unconscionable under California law, and that refusing to enforce such a provision, as California courts would, is not expressly or impliedly preempted by the Federal Arbitration Act,” said the opinion by Judge Stephen Reinhardt. The case was the most recent from California, where state courts have refused to enforce arbitration provisions in consumer contracts. The opinion was strictly procedural and did not touch on the merits of the case against AT&T. “The decision is limited to contracts in California that have the same provisions as the Cingular contract that was before the court,” CTIA General Counsel Mike Altschul told us. “Beginning with a case involving Discover Bank a few years ago, the California courts have been narrowing the scope of arbitration clauses in consumer contracts. At least for now, the effect of this decision is limited to contracts that are governed by California law and it’s also limited to the specific language that Cingular had in its contracts at the time.” Altschul added: “"Carriers and their customers benefit from the streamlined procedures of arbitration. Today’s decision provides a roadmap for carriers who wish to adopt contract provisions that support arbitration as an alternative to costly litigation.”
A federal judge’s rejection of an FTC attempt to block Whole Foods’ takeover of Wild Oats could have implications for the XM-Sirius merger, Stifel Nicolaus said Friday in a research report. The decision by Judge Paul Friedman of the U.S. District Court for the District of Columbia, is likely to be appealed by the FTC. “We believe the ruling is a modest positive for the pending XM-Sirius and Google-DoubleClick transactions, which are under heavy scrutiny” by federal agencies, Stifel Nicolas said. “While mergers are very fact-specific and the judge’s opinion has not yet been made public, we suspect the Whole Foods decision will give XM-Sirius and Google-DoubleClick some new legal ammo to argue for defining their relevant markets broadly, which could reduce antitrust concerns about potential anti-competitive effects. At a minimum, it gives the reviewing agencies some food for thought.” In a June research report, Janco Partners had flagged the Whole Food case as having implications for the XM-Sirius merger. Janco analyst April Horace, who wrote that report, told us she didn’t write a follow up note because an appeal is likely. If the decision withstands appeal, it could have implications for the review of the satellite merger, she said. FTC Competition Director Jeffrey Schmidt said he regretted that the court had overturned the commission’s decision. “We respect the Court’s decision, which we currently are reviewing,” he said. “We brought this challenge because the evidence before us showed that the merger would most likely result in higher prices and reduced choices for consumers who shop at premium natural and organic supermarkets.”
Controversial FCC tests of devices designed to use broadcast white spaces to access the Internet provide data but not firm conclusions about whether they will interfere with TV broadcasts, cable reception or wireless microphones, Office of Engineering and Technology Chief Julius Knapp said Thursday during a presentation at the commission’s lab in Columbia, Md. No decisions have been made about further testing, including of a Microsoft device that failed the tests and the company later said was broken. “They're not an end,” Knapp said of the tests. “They didn’t draw conclusions as to whether this is feasible. They were intended to inform the process.”
FCC Chairman Kevin Martin circulated an order that would put an abrupt end to M2Z’s effort to build a free, nationwide wireless broadband network in the 2.1 GHz band. Martin has asked fellow commissioners for a quick vote. Meanwhile, M2Z put the FCC on notice that it will seek a writ of mandamus in federal court that would force the FCC to act on its petition. M2Z will tell the court that the FCC was statutorily required to make a public interest determination on its license application by May 5, 2007 but hasn’t issued it.
XM and Sirius told the FCC a March 1997 order authorizing each to provide satellite radio in no way can be interpreted as blocking their merger. Not surprisingly, the NAB disagreed strongly, as it continues to lead opposition to the merger.
CTIA and USTelecom separately asked the FCC to scuttle or make major changes to a rule requiring that carriers install a backup power source for central offices, cellsites and other critical facilities tied to the power grid (CD Aug 3 p2). The stipulation was based on findings in the FCC Katrina Panel’s report. The commission recently delayed by 60 days the Aug. 10 deadline (CD Aug 3 p2) for the requirement, opening the door to further agency review.
Microsoft blamed a broken scanner for sub-par performance of a device designed to operate in the broadcast white spaces without interfering with TV broadcasts. The FCC shouldn’t jump to conclusions since the gear normally prevents interference, Microsoft said. The device failed crucial tests by the Office of Engineering and Technology, according to a report released July 31 (CD Aug 2 p6)). The FCC is expected to give the tests significant weight in deciding whether to allow unlicensed, mobile devices to operate in the band. The idea has the strong support of high tech companies and the vehement opposition of broadcasters.
FCC Chairman Kevin Martin late last week began circulating on the eighth floor an order approving a proposal by FiberTower to allow smaller antennas for 11-GHz transmissions. The proposal has raised interference concerns in the satellite industry, especially from Mobile Satellite Ventures. But supporters say use of the 2-foot antennas will help carriers expand their networks as they offer 3G and 4G services, especially after the coming 700 MHz auction.
BALTIMORE -- The FCC is close to an agreement with Canada that will resolve 800 MHz rebanding issues for public safety licensees along the border, David Furth, associate chief of the FCC Public Safety Bureau, said Thursday at the Association of Public Safety Communications Officials meeting. He said an agreement with Mexico will be more difficult to reach. FCC Chairman Kevin Martin cited border questions as among the most difficult to resolve as the rebanding continues (CD Aug 8 p2). Those issues were characterized as some of the toughest to work through when the completed order was discussed at the APCO meeting in Montreal three years ago (CD Aug 10/04 p2).