FCC “tentatively concluded” at its agenda meeting Thurs. that DSL and other “telephone-based” Internet services should be reclassified as information services, action that could lead to less regulation for Bell company-provided broadband services although it was uncertain exactly what impact would be. Information services such as voice mail and e-mail traditionally operate under fewer regulations than do common carrier services. FCC said action could improve investment climate by eliminating regulatory uncertainty. It said it also could lead to more equitable regulatory treatment across different broadband platforms. Bells have been asking for long time for lessened regulation of their broadband services, saying that would make them more comparable to cable modem services.
Speakers at NARUC winter meeting panel on special access agreed impartial performance standards for special access were of vital interest to telecom suppliers and buyers. Chip Casteel, WorldCom dir.-regulatory affairs, said improving incumbent telco accountability for special access provisioning was critical to development of effective local competition. He said lack of universal special access performance metrics meant unpredictable provisioning, which would upset CLEC business planning. Casteel said long distance entry would give Bell companies incentives to retain their overwhelming dominance in special access market so they could offer customers one-stop shop. Melissa Newman of Qwest said major question in special access standards debate was “which is the ‘right’ standard.” She said if there were to be national minimum performance metrics, they should be few in number and uniform for all providers. She suggested most useful general measures would be order confirm time, percent completed on time, percent done correctly first time, outage restoration time. Carl Johnson of N.Y. PSC staff said that 6 years after passage of Telecom Act, Verizon still had more than 80% share of special access market. He said Verizon special access service quality generally had been good up until adoption of price cap regulation in 1995, after which time quality plummeted for variety of reasons and didn’t get back to anything approaching good until late in 2000. He said PSC requirements such as credits to wholesale and retail customers for late special access installations could address intrastate service, but bulk of special access was interstate and it was up to FCC to develop and enforce performance standards. Brian Moir, partner with Moir & Hardman, said bulk of dedicated service contracts between big users and carriers consisted of performance metrics and guarantees. Special access today, he said, is mostly for data circuits essential to customers’ business operations. Performance is key for biggest users, he said, and they tend to stay with biggest provider because they are more likely to get performance they must have.
Increased focus on broadband “in the last 3 to 4 months has made the issue bigger than Tauzin-Dingell,” Verizon Pres. Ivan Seidenberg said Tues. He made his comments to reporters following his keynote that opened the Comnet show in Washington. Position that govt. should make broadband deployment top priority, stated earlier this month by Silicon Valley advocacy group TechNet (CD Jan 16 p2), “is gaining momentum,” Seidenberg said. Referring to Bell-friendly broadband deregulation bill sponsored by House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.), he said he believed House planned floor vote in late Feb., and bill “still had the vast membership of the House that likes what it does.” Seidenberg predicted Senate would consider Tauzin-Dingell “as well as other approaches,” and that bill “would be a catalyst for broadening the debate.” While Verizon supports “most of” Tauzin-Dingell bill, it would accept any deregulatory relief, he said.
Motorola said it expected first quarter sales of $6-$6.2 billion, with loss of 11-14 cents per share in same period, excluding special items. Sales from continuing operations are expected to drop 5-10% for full year from 2001, although Motorola forecast it would return to profitability in 3rd quarter and turn profit for full year 2002. Company said analyst projections that earnings would reach 4 cents per share for full year “is not only achievable but can be exceeded.” It said if sales hit high end of its guidance range and wireless handset and semiconductor industries meet growth forecasts, company could earn 15 cents per share in 2002, excluding special items.
Launch of XM Satellite Radio has been full of surprises, Chmn. Gary Parsons told Solomon Smith Barney conference in Scottsdale Thurs. Company had expected subscribers to skew strongly toward men 18-34, core of the car stereo market. Instead, early buyers have come almost evenly from those aged 18-55, Parsons said. He attributed that to drawing power of XM’s several channels each of jazz, classical music, news. Older purchasers are helping make add-on hardware more popular than in-dash units because they aren’t inclined to rip existing music systems out of their cars, Parsons said.
Miniaturized wireless system program would be initiated under conference report (H.-Rpt. 107-350) on Dept. of Defense appropriations bill (HR-3338), which Senate 94-2 approved late last week. Conferees agreed to provide $5 million to create industry and academic partnership for development of such wireless systems. Report said goal of program would be “to reduce the size, weight, power consumption and cost of advanced wireless communication systems for covert and military intelligence operations.” It suggested program “utilize advances in 3-dimensional chip scale packaging and high-temperature superconductor transceiver performance” to accomplish task. House recently passed report for HR-3338.
Microtune said it had developed first silicon-based upconverter for video-on-demand (VoD) applications that shrank radio frequency (RF) electronics size of VCR unit into 3 miniature chips and reduced costs of sending thousands of simultaneous channels of real-time video to subscribers via existing cable network. Compared with typical alternatives, product reduces upconverter space 90%, power 40% and costs 80%, company said.
FCC said Time Warner Cable’s analog must-carry obligations didn’t require company to carry Gemstar-TV Guide International’s electronic program guide. Commission said decision didn’t preclude companies from entering into commercial agreements that would involve carriage, and companies said they were in negotiations to that end. Agency used 3-pronged test to determine whether material carried in vertical blanking interval (VBI) of local broadcasts was program-related and therefore required cable carriage: (1) Is information intended to be seen by same viewers who are watching main program? (2) Must information be available during same interval of time as main program? (3) Is information integral part of main program? Commission ruled 4-0 that answer to questions was “no” on all counts.
Eleven civil seizure warrants were issued to suspects in 6 states last week and DirecTV’s signal integrity group recovered “substantial amount” of illegal devices in raids as company continued to put further emphasis on its civil litigation strategy. DirecTV has significantly increased its enforcement efforts, making more than 60 criminal raids this year, but also has watched number of cases increase, Signals Integrity for DirecTV Pres. Larry Rissler said. DirecTV used civil seizure authority in at least 20 cases this year, he said. Search warrants were executed 3 times this year, resulting in recovery of $4.6 million in illegal devices, he said.
ANAHEIM -- Now that cable operators are supplying content digitally, industry must address issues of consumer misuse, speakers said in roundtable discussion at Western Cable Show here last week. Analyst Ed Willner said oft- repeated conflict in digital transmission was “that many MSOs contend that the moment the content has been stored, they can do with it as they please, the networks and studios be damned. So there’s a major controversy in when do the rights to transfer over.”