Federal Communications Commission (FCC)

Court decision Tues. overturning FCC’s cable-TV station cross-ownership ban (CD Feb 20 p1) could have significant effect on how biennial review process is conducted, FCC Chmn. Powell said Wed. In somewhat unusual action, U.S. Appeals Court, D.C., acted not on any new FCC order but on agency’s decision to retain existing rule, in decision made during biennial review. Telecom Act requires FCC to review existing regulations every 2 years to determine whether they remain necessary.

Calling Enron “America’s most corrupt company,” the United Church of Christ (UCC) challenged FCC Enforcement Bureau decision fining company $7,500 for failing to get FCC approval when it bought firms with private radio and microwave licenses. Last month, FCC said it had completed investigation of Enron’s failure to obtain regulatory approvals of those licenses, problem that bankrupt energy giant had informed Commission about in 1998 (CD Jan 17 p9). At time, Enron said responsibility for getting licenses was decentralized among its subsidiaries, which in some cases didn’t know such approvals were needed. FCC handled Enron violations with “a stunningly light hand,” UCC attorney Andrew Schwartzman said. He said “stealthy manner” in which FCC handled case “reduces confidence in Commission processes.” Deals, collectively, were “big deal,” Schwartzman said, and involved “public health and safety, so this has to be taken seriously.” Entire compliance process and early termination of investigation are “highly questionable,” he said.

Congressional speakers told NARUC major changes in federal law aren’t necessary for rural broadband development, even as NARUC and leading state regulators began new drive to discredit pending Tauzin-Dingell broadband deregulation bill coming up for crucial vote soon. Rep. Wilson (R-N.M.) said bringing broadband to rural areas wouldn’t require wholesale changes in Telecom Act and goal could be accomplished with modest changes in universal service support system, coupled with relief from prohibitively costly and burdensome right- of-way access requirements.

As FCC gears up for Thurs. vote on ultra-wideband (UWB),several lawmakers urged Commission to not let date slip again on item. Agency had deferred vote at Dec. agenda meeting in response to letter from Commerce Secy. Donald Evans seeking more time to evaluate safety-of-life and other issues. Among apparent concerns of some on Capitol Hill and in private sector is lack of transparency in parts of negotiating process between NTIA and FCC. Because of high stakes nature of UWB proceeding, several industry observers said it had brought to forefront natural tension between FCC’s regulatory role over commercial spectrum and NTIA’s purview over govt. bands.

Federal and state regulatory policies are impeding consolidation of rural telephone lines, growing movement led by mid-sized companies such as CenturyTel and Citizens Communications, panelists said at Legg Mason investment conference in N.Y. on rural telephony Thurs. From regulators to rural operators, speakers said consolidation is latest trend in rural phone business, stoked by divestiture of lines by Bells such as Verizon and Qwest. Verizon has divested hundreds of thousands of former GTE lines throughout country, many of them acquired by consolidators, while others such as Qwest continue long-time trend to eliminate unprofitable exchanges. In addition, consolidators buy up small telcos run by families that no longer want to be in business. Consolidators generally can make more money from rural lines than Bells can because they have more access to universal service funding and their smaller size enables them to act more flexibly, panelists said.

Broadband is being deployed “in a reasonable and timely manner,” FCC said in its 3rd annual report to Congress on availability of advanced telecom services. Report, which was issued Thurs. and includes data through June 30, 2001, said market for advanced services continued to grow, with both availability and subscribership increasing significantly. Report said number of subscribers had increased to almost 10 million, despite widespread economic downturn. Chmn. Powell said Commission wouldn’t flag in its efforts to promote broadband, despite positive steps cited in report. “It is one of our highest priorities and is never far from our thoughts as we decide communications policy,” Powell said.

House Commerce Committee Chmn. Tauzin (R-La.) told investment community Wed. that he was enthusiastic about ultra-wideband (UWB) wireless technology and hoped FCC would look at it carefully. Proposal to permit UWB products to operate as unlicensed Part 15 devices is expected to be on FCC agenda at Feb. 14 meeting, he said in speech at Precursor Group conference in Washington. Tauzin said he visited UWB company Time Domain and was impressed by its founder Larry Fullerton, “an interesting guy who has been called the new Marconi.” Tauzin told investors UWB was trend to watch, explaining how technology goes through walls, could result in high-tech home security systems, communications devices for military, disaster recovery aids. “My hope, my prayer, to the Commission is to give it a good look,” he said. Tauzin said that taking up “twin issues” of privacy and security were among his Committee’s most important tasks this year. “The first battle line” is copyright, he said, “how to provide a digital product without losing value… coupled with security needs.” He said other “things to watch” were: (1) Efforts to develop privacy policy that would “enhance private efforts to self-regulate. (2) Broadband deployment. (3) Digital TV transition. (4) “Increasing capacity of wireless communications.” He also made pitch for Tauzin- Dingell bill, saying it was “not about pleasing the Bells” but rather was designed to “complete the Telecom Act.” Act didn’t contemplate growth in data communications and Internet, he said. As it is now, Act stymies development of high-speed data transmission because of restrictions on Bells, he said. Act’s mistake was to put FCC in charge of deciding when Bells could provide interLATA communication, which is required to offer broadband effectively, Tauzin said. Decision was left to “these bureaucrats whose raison d'etre is to regulate,” he said. “We left it to them to eliminate regulations, what were we doing? The FCC has become an agent for the past.” He said he thought Tauzin- Dingell would pass House and “then we will go and deal with Mr. Hollings [Sen. Hollings (D-S.C.) and chmn. of Senate Commerce Committee]), who has a different view.” Talking with reporters later, Tauzin said if Committee’s meetings with industry leaders on DTV transition didn’t result in agreement soon (CD Nov 30 p6), legislation to resolve issue probably would be introduced in April-May time frame. He said there had been progress in last 2 meetings and another was planned later this month. Meanwhile, spokesman for House Commerce Committee said it appeared House leadership would schedule vote on Tauzin-Dingell on either Feb. 27 or 28, slightly sooner than March projection given when bill was pulled from floor in Dec.

Now that wireless is becoming alternative communications technology, rather than accessory, policymakers and industry must grapple with issues such as service quality and regulatory parity, panelists said at Precursor Group conference in Washington Wed. Brian Fontes, vp-federal regulations for Cingular Wireless, said one emerging theme at FCC was emphasis on flexibility, which historically had served wireless industry well. “The concept of flexibility is increasingly useful and important,” he said: “The problem is how do you define flexibility.” Several panelists described industry as being at crossroads between regulations designed for less competitive wireline environment and industry that has grown so big that regulatory oversight still is needed. “We have to be mindful to not over- regulate,” NTIA Deputy Asst. Secy. Michael Gallagher said. “There is a tendency when an appliance has reached that level of importance in society to then say well, there needs to be a firmer hand.”

Although he signed FCC filing on Transportation Dept.- funded research on ultra-wideband, Stanford U. Prof. Bradford Parkinson said he wasn’t involved in conducting study, meaning his corporate ties to GPS developer Trimble posed no conflict. In Sept. 2000, Parkinson, who is widely viewed as “Father of GPS,” jointly submitted to FCC ex parte filing with other Stanford researchers outlining preliminary results of UWB tests conducted by GPS Research Lab at Stanford and funded by DoT. “We urge the Commission to proceed with great caution and deliberation,” said filing by 4 professors, including Parkinson, that described research challenges of analyzing UWB-to-GPS interference. But Parkinson said Mon. his role in research, which had been among studies cited by federal agencies concerned about potential of UWB emissions to cause harmful interference to GPS, was to evaluate results after test phase was complete. He said Assoc. Prof. Per Enge oversaw research itself.

NTIA released report Fri. outlined need for more spectrum for critical infrastructure providers in energy, water and railroad sectors, concluding that urgency of those issues might have changed following Sept. 11 terrorist attacks. Report to Congress, required by fiscal 2001 appropriations act that covered Commerce Dept., catalogued congestion that infrastructure providers faced in land mobile portion of spectrum. “It is of utmost importance that the Federal Communications Commission revisit these critical issues in order to accommodate the increasing role these industries play in maintaining quality of life,” report said. It cited continued use of spectrum as “essential to the current and future operations of these industries.” NTIA said industry feedback it received in preparing report pointed to spectrum that was “either congested or quickly approaching critical mass, thus leading to problems of interference.” NTIA said industry consensus called for additional spectrum, citing lack of bands available for new users. Report has been closely watched by private wireless industry who have raised concerns about Nextel proposal pending at FCC that would reconfigure some public safety, private wireless and commercial operators at 700, 800 and 900 MHz.