Ark. appeals court vacated and remanded 1999 PSC order approving sale of GTE assets to Century Tel. Ark. Court of Appeals, in 3-2 ruling on suit brought by Southwestern Bell and Alltel, said PSC erred in using 1985 access parity order requiring incumbent telcos to set same rates for intrastate and interstate access as basis for setting postpurchase intrastate access charges. At time of purchase, Century Tel asked FCC to convert interstate operations from price caps to rate-of-return regulation, which effectively doubled its interstate access charges. Plaintiffs argued corresponding increase in intrastate access charges was unjust, unreasonable and inconsistent with public interest. Appeals court majority (Case 99-220-U) said case record wasn’t developed sufficiently to decide whether application of access charge parity would result in just and reasonable intrastate access charges. Case was remanded to PSC with instructions to reconsider basis for intrastate access rates.
FCC said comments are due May 10 in inquiry on equal access obligations of LECs (CD March 4 p6), with replies June 10 (Doc. 02-39). Inquiry revisits rules set in early 1980s to assure that LECs give customers equal access to their presubscribed long distance carriers.
If Congress were willing to make statutory change, FTC Chmn. Timothy Muris said he would like agency to pursue consumer protection and deceptive advertising jurisdiction over common carriers. Speaking at Consumer Federation of America (CFA) meeting Fri., he acknowledged CFA’s interest in telecom issues, but said FTC hadn’t been able to address consumer protection concerns over common carriers because it lacked jurisdiction but said it “clearly” should have such jurisdiction. Muris said Congress exempted FTC from all common carrier issues, including consumer protection, when it gave jurisdiction to FCC, so FTC can’t deal with “simplest” of cases because of exemption. Although FCC has consumer protection responsibilities for common carrier, Muris emphasized that FTC was expert agency on consumer protection. When asked by Communications Daily if FCC would support relinquishing jurisdiction, Muris said: “I have no idea.”
Industrial Telecom Assn. (ITA) lauded FCC for keeping “an open mind” in seeking solutions to interference for public safety operators at 800 MHz. “I like the Commission’s approach in seeking information on ‘all available options and alternatives,'” ITA Pres. Laura Smith said. At agenda meeting March 14 (CD March 15 p3), Commission unanimously launched rulemaking seeking input on solutions to interference in band, including proposals floated by Nextel and National Assn. of Mfrs. Nextel White Paper has caused concerns in private wireless community on extent to which those licensees would be compelled to relocate without compensation. “The land mobile community will work together to create a measured solution to this problem that will not cause undue hardship for the more than 4,000 private wireless licensed systems that reside in the 800 MHz band,” Smith said.
Congressional pressure or pressure from ballot box is needed to slow trend toward media consolidation, consumer advocates said at Consumer Federation of America (CFA) conference in Washington. Mark Cooper, CFA research dir., and Gene Kimmelman, Consumers Union (CU) Washington office co-dir., expressed concerns about media consolidation that they said were likely to result from several proposed rule changes before FCC, including allowing cross-ownership of newspapers and TV stations and raising the media cross- ownership cap. Kimmelman said rule changes proposed by FCC Chmn. Powell went against intentions of Congress and Supreme Court rulings. Congressional decrees pushed FCC into making rules, he said, and courts had shown that First Amendment concerns elevated media consolidation beyond standard economic issues. “The chairman of the FCC doesn’t see the use for the rules,” Kimmelman said: “But that’s not what Congress believes.” He said recent announcement that Senate Commerce Committee would review merger review agreement between FTC and Justice Dept. (DoJ), which gave DoJ review authority over media mergers, showed Capitol Hill still was willing to scrutinize media merger issues. Cooper compared recent population trends with media ownership and said ownership rules are more necessary than ever despite Powell’s argument more TV channels and Internet access make ownership rules ineffective. Cooper said since the population has become more diverse, but TV programming hasn’t necessarily followed suite, a more diverse media ownership structure is more relevant now than in the 1970s when ownership rules were first enacted. “We need the rules more than ever,” Cooper said. “In fact, we need more rules, not fewer.” Relaxation of rules would create a “merger wave,” Cooper said. “If you let them, they will merge,” he said. Total ownership of TV and newspapers already had dropped to 600 now from 1,500 in 1965 and Cooper said it would fall to 400 if TV-newspaper cross-ownership were allowed. He said 6 companies, ABC, AOL, AT&T-Liberty, CBS, NBC and Fox already controlled nearly 2/3 of all TV. Cooper said Internet shouldn’t be treated as mass media because its reach was much more limited than many believed, adding that 57% of people in country didn’t have Internet in home while only 2% didn’t have TV. Cooper said high-speed Internet access service was highly concentrated market, leaving little room for competition. He said 50% of Internet content came from 4 companies.
FCC took first step Thurs. toward remedying interference problems for public safety users at 800 MHz by unanimously approving notice of proposed rulemaking (NPRM) that covered potential solutions. Proposal adopted at agenda meeting requested information on how much spectrum would be necessary to meet public safety needs. It seeks comments on band restructuring proposals by Nextel and National Assn. of Mfrs., as well as alternatives submitted by others. Most closely watched so far has been Nextel plan submitted to FCC last fall that would swap spectrum at 700 MHz, 800 MHz and 900 MHz for new capacity at 800 MHz and 2.1 GHz. NPRM tentatively concluded that increasing levels of harmful interference to public safety operations at 800 MHz “must be remedied.” Citing several recent moves Commission has taken to free up public safety spectrum, FCC Chmn. Powell said item showed “Commission’s redoubled commitment” to make sure users had adequate spectrum for critical needs in emergencies.
FCC opened proceeding Thurs. to determine whether fees charged by local phone companies for changing consumers’ presubscribed long distance carrier were priced properly. Known as presubscribed interexchange carrier (PIC) change charges, those fees are subject to $5 “safe harbor” cap within which rates are considered reasonable. FCC said most LECs charged at that level and it wanted to determine whether those fees reflected current costs of that function. Acting at agenda meeting, FCC said it was granting petition filed last year by CompTel that sought rulemaking to consider changing policy. Agency said it wanted comment on: (1) Whether to base PIC change charge on “examination of carrier cost” or whether FCC could “rely on market forces to ensure reasonable rates.” (2) Whether it should take into consideration “noncost factors” in determining reasonable charge. (3) Whether to establish “national safe harbor.” (4) “Whether carriers should submit individualized cost support with their tariffs, or whether the Commission should review rates solely through enforcement processes.” CompTel said FCC “is doing the right thing for consumers and competition” by opening notice of proposed rulemaking on issue. “It’s time these outdated policies and fee structures are revised to more accurately reflect actual costs,” CompTel said. Assn. said it was concerned that, as Bells entered long distance business, they be deterred from favoring their own long distance services by raising costs to consumers of switching to competitors.
FCC declared Thurs. that cable modem service interstate was “information service” and said Internet delivered over cable wasn’t subject to common carrier regulation that required unbundling or -- in cable parlance -- “open” or “forced” access. Ruling marked critical turn for cable, which has become country’s No. 1 provider of high-speed Internet access and feared that it would become subject to access requirements and vulnerable to new fees and taxes imposed by states and municipalities. In addition to declaratory ruling, which was passed in 3-1 vote, Commission issued Notice of Proposed Rulemaking (NPRM) to measure regulatory treatment of cable modem service against that of DSL. FCC last month made tentative conclusion that wireline- delivered broadband, too, was information service (CD Feb 15 p1). NPRM will examine which govt. agencies, if any -- FCC, state or local franchising authorities (LFAs) -- have power to regulate cable modem service and invited comment on whether, “in light of marketplace developments, it is necessary or appropriate at this time” to require multiple ISP access. Marjorie Green, assoc. chief of Cable Bureau, said in her presentation that some cable companies had begun offering multiple ISPs to customers on their own.
Citing tight capital markets, Dobson Communications CEO Everett Dobson told FCC Chmn. Powell Thurs. that Commission, by continuing to hold down payments for NextWave re-auction without interest, was “doing substantial and immediate harm to the public interest.” Dobson subsidiary DCC PCS had made $546 million in winning bids for 14 licenses in Jan. 2001 re- auction, results of which were overturned when U.S. Appeals Court, D.C., reversing FCC decision to cancel NextWave licenses for missed payment. Verizon Wireless last week also asked FCC again to “promptly” refund its entire $1.7 billion deposit from re-auction. U.S. Supreme Court agreed last week to hear oral argument in FCC’s appeal of D.C. Circuit ruling. Earlier this year, 12 winning bidders in re-auction, including Verizon and Dobson, had asked FCC for immediate refund of $3.1 billion in down payments after settlement agreement on licenses expired Dec. 31 when Congress failed to approve pact. While Verizon has sought full return of its down payment, Dobson said it believed both FCC and re-auction winners’ interests could be protected “by promptly refunding” all but 15% of each applicant’s down payments. “The Commission must be aware of the severe capital restrictions that currently face the wireless industry, many of whose members are Auction 35 winners,” Dobson wrote. Now most wireless carriers face capital market pressure to reduce leverage, he said. “Uncertain future” of NextWave spectrum means Wall St. is viewing this negatively by attributing little or no value to spectrum even though deposits are treated as expended funds, he said. “Indeed, in Wall Street’s view, the Auction 35 winners are, at this time, actually worse off for having won licenses in that auction.” Since carriers submitted joint request for return of down payments in Jan., they have collectively lost $29 million of additional interest and “unknown number of lost opportunities to expand existing services.”
Wash. legislature passed bill (HB-2031) that cuts taxes city govts. can levy on payphone providers. Bill sent to Gov. Gary Locke (D) limits local gross receipts taxes to 0.2%, same as for nonutility businesses such as retailers. Previously, cities could assess at utility business rate of up to 6%. Lower tax cap applies only to payphone operators that aren’t affiliated with incumbent telco providing payphone access lines. Legislature passed another telecom bill that would raise cap on local E-911 taxes to 50 cents monthly per line from 25 cents and adds new 20-cent state E- 911 tax. Bill would extend E-911 tax collection liability to include wireless carriers. Measure sent to Locke (HB-2592) also would allow E-911 account to be used for funding and operating wireless E-911 statewide. Companion bill that also passed (HB-2595) would give wireless carriers representation on state E-911 Advisory Council and prohibit state from imposing E-911 wireless location requirements beyond those set by FCC.