PHILADELPHIA: Judges gave mixed signals in their questions and reactions to attorneys as the 3rd U.S. Appeals Court, Philadelphia, Wed. heard oral arguments on the FCC’s designated entity order. Arguments unfolded over nearly 90 minutes in a case that will determine whether the long-awaited advanced wireless services auction will begin as expected Aug. 9. Lawyers watching the proceedings said the court’s direction was difficult to augur.
Wireless carriers using traffic studies as an alternative to paying USF safe harbor percentages must submit the studies to the Commission, the FCC decided. There was doubt last week as to whether the FCC would toughen its stance in this area, when the Commission approved a report and order and NPRM addressing interim steps the agency is taking to shore up the USF. Text of the order was released at our deadline. “We take an additional step to ensure the accuracy of reported revenue data,” the FCC said: “Mobile wireless providers have incentives to bias any traffic studies to minimize their amount of interstate and international end-user revenues and thereby minimize their fund contributions; there are no countervailing market forces to offset these incentives. Consequently, we now require any mobile wireless provider that uses a traffic study to determine its interstate end-user revenues for universal service contribution purposes to submit the study to the Commission and to USAC for review.” In the order the Commission also raised the wireless safe harbor from 28.5% to 37.1%. Carriers are allowed to submit traffic studies to show the actual percentage of interstate calls versus intrastate calls made by subscribers falls below the safe harbor.
Comr. Adelstein said Tues. he is “troubled” by several decisions the FCC made as it established rules for Aug.’s advanced wireless services auction (AWS), which could potentially “undercut” the auction. Adelstein called special attention to a decision requiring blind bidding, under which bidder identity likely won’t be known as the auction progresses, unless the auction meets a test for competitiveness.
Nextel cofounder Morgan O'Brien, chmn. of recently formed Cyren Call, accused the CTIA of “baloney” Tues. in a debate on Cyren Call’s push to dedicate 30 MHz of 700 MHz spectrum to a nationwide wireless network for public safety rather than sell the spectrum at auction. Carriers need the 700 MHz spectrum and have shown they are the nation’s most efficient users of spectrum, CTIA Asst. Vp Paul Garnett retorted.
Except for XM and Sirius, comments overwhelmingly support a request by Wireless Communications Service (WCS) license holders to delay buildout deadlines for companies that want to offer broadband wireless at 2.3 GHz, the WCS Coalition told the FCC. Unless the FCC agrees with the coalition, the WCS licensees face a July 2007 deadline for substantially building out networks using the spectrum, sold by the FCC in 1997 auction (CD June 13 p5).
The FCC is teeing up a notice of apparent liability (NAL) against a data broker for violating customer proprietary network information (CPNI) rules. It’s to be voted on at the FCC’s July 13 agenda meeting. The data broker item is expected to be the highlight of the meeting, which also will include a notice of proposed rulemaking on telecom relay services (TRS) and an order and NPRM addressing rules for wireless medical devices, sources said Fri.
NARUC pressed members of the Senate to vote for an amendment by Sen. Rockefeller (D-W.Va.) that would remove from Sen. Stevens’ (R-Alaska) legislation provisions further limiting state regulatory oversight of wireless carriers. NARUC began to circulate a letter from state regulators late Fri. The Rockefeller amendment is expected to be one of the most contentious amendments set for debate when the Commerce Committee’s markup of the bill gets under way again on Tues.
The Senate Commerce Committee narrowed the preemptions in its sweeping telecom reform bill, at least in regard to state control of VoIP, as it began debate of the legislation Thurs. The committee agreed to amendments by Sen. Sununu (R- N.H.) that clarify that Congress is limiting only economic regulation of VoIP by the states, and won’t in any way prohibit the ability of the states to protect consumers, including on privacy and by passing anti-child pornography laws. The committee is expected to continue the markup Tues., in a session likely to extend into Wed.
The FCC Wed. placed universal service obligations on VoIP providers, setting a “safe harbor” of 64.9% of interstate revenue for their payments -- a figure based on the percentage of interstate revenue wireline toll providers report. The FCC also raised the wireless safe harbor from 28.5% to 37.1%. As wireless carriers already can, VoIP operators will be able to submit traffic study data to show they should pay less than the safe harbor percentages. FCC officials declined to comment on whether they will impose new rules on how such studies should be done.
The sweeping telecom legislation scheduled for markup Thurs. appeared to be in peril, with senators on both sides of the aisle concerned about preemption language that would free wireless carriers from most state regulation, sources said Tues. According to some groups working the issue, state preemption in recent days replaced net neutrality as the most important issue in the legislation (CD June 20 p3).