For 5th time, FCC Wireless Bureau postponed Sept. 12 auction of Ch. 60-69 spectrum in 700 MHz band Wed., but it said wouldn’t set new date until Commission acted on pending petitions for reconsideration. Auction delay covers 747-762 MHz and 777-792 MHz bands now occupied by analog broadcasters that don’t have to vacate band until 2006 or DTV penetration rate reaches 85%. Indefinite postponement marks first such delay under tenure of FCC Chmn. Powell. Way for delay was cleared in congressional budget resolution this year that addressed Bush Administration proposals for auction delays. Action came as industry and FCC officials increasingly acknowledged difficulty of clearing broadcasters from band by 2006.
Location-based technology for wireless handsets isn’t likely to be widespread for consumers until 2002, despite FCC deadline of Oct. for Phase 2 of Enhanced 911, Cahners In-Stat Group said. Research firm estimated revenue of location-based wireless services could grow to more than $13 billion in 2005 from current $37 million. It also projected cost of deploying such technology could range from “hundreds of millions” to more than $1 billion. Several carriers, including AT&T Wireless, Cingular and Nextel, have waiver petitions for Phase 2 of E911 pending before Commission.
Wireless location privacy bill by Sen. Edwards (D-N.C.) would require FCC to start and complete rulemaking proceeding to give consumers power over personal location information gleaned by wireless service providers. CTIA said it was supportive of provision in bill that would require consumer consent before service providers collected or disseminated such information. Spokesman said that if wireless phone users received calls that they didn’t want, they simply would turn off their phones: “It’s hard to make money if no one has their phones on.”
FCC Wireless Bureau requested comments on Cingular Wireless’s Phase 2 Enhanced 911 waiver request. Cingular had asked Commission for waiver to allow it to roll out hybrid network and handset-based technology called Enhanced Observed Time Difference of Arrival in its GSM network and switch-based technology similar to Mobile Assisted Network Location System for its TDMA network. Cingular is seeking waiver of Oct. 1 deployment deadline and relaxation of accuracy requirements on temporary basis (CD July 10 p5). Comments are due July 31, replies Aug. 10.
EchoStar will acquire majority of Gilat subsidiary Starband in deal that adds to EchoStar Internet service offerings while giving Starband cash and support it needs, companies said Wed. Plans call for EchoStar first to increase its stake in Starband 13% to 32%, ballooning to 60% once it begins construction of next generation satellite for Starband next year. Satellite analyst estimated deal to be worth $300 million: “Obviously this takes a big load off Gilat’s back.” Starband’s financial struggles have been widely documented since it opened 2-way Internet service in early, and EchoStar has been looking for ways to increase holdings and bundle Internet and DBS services. It wouldn’t comment on how Starband deal might affect talks for DBS rival DirecTV, which reportedly was close to finalizing agreement with News Corp.
Mich. PSC directed Verizon to explain by Aug. 11 why it wasn’t actively competing in local exchanges outside its territory and why there seemed to be little competition from other carriers in its exchanges. Directive grew out of petition by Verizon this spring seeking adjustment of boundary between its territory and Ameritech territory north of Lansing, with Ameritech’s consent. Verizon withdrew application in May, but petition raised questions among some PSC members as to why competitive market forces weren’t working in Verizon’s service area. PSC asked Verizon: (1) Why isn’t Verizon competing in Ameritech’s territory? (2) Why have competitors not entered Verizon’s exchanges? (3) Why hasn’t Verizon made possible in Mich. wide choice of local service providers that its affiliates made available in N.Y. and Mass.? (4) When will Verizon start competing in Detroit metro area, as required by FCC order approving Bell Atlantic-GTE merger that formed Verizon? (5) What can Verizon do to facilitate greater local competition in its territory? PSC said it wanted to give Verizon opportunity to explain how its conduct to date in Mich. had been consistent with procompetition mandates of state law.
Local competition might have developed more quickly without Telecom Act, former FCC official said Wed. at Washington symposium sponsored by think tank Phoenix Center. Telecom Act stymied experimentation by state regulators and put brakes on competition that already was developing under state tutelage, said Robert Atkinson, ex-FCC Common Carrier Bureau deputy chief. Atkinson, who was senior vp of pre-Telecom Act competitor Teleport Communications before joining Commission, said competition was developing long before Telecom Act through enforcement of AT&T divestiture agreement, known as Modified Final Judgment (MFJ). Issues such as colocation and reciprocal compensation had been solved, although “not perfectly,” when Act came on scene and froze market “because everything became a federal case,” said Atkinson, now exec. dir. of Columbia U.’s Institute for Tele-Information. States were much more able to experiment in competitive models in limited geographic areas, he said. Bells traded enforcement through Sec. 8(c) of MFJ for Act’s Sec. 271, resulting in “a 14- point logjam,” he said. Furthermore, Atkinson said, Telecom Act “over-encouraged investors,” leading to financial failures. Situation might be improved if FCC were willing to delegate some authority to state regulators to oversee local competition models, he said. More legislation generally won’t help, although Congress could help situation by giving FCC more enforcement power, not just through fines but through “the ultimate sanction, structural remedies, the potential atomic bomb,” he said. Most of all, Congress should resist micromanaging FCC: “Legislators are terrible at micromanagement.” Atkinson and Robert Berger, pres. of competitive CityNet and former WinStar official, also criticized Act as disincentive to facilities-based competition. Placing too low price on unbundled network elements (UNEs) saps value of those companies that have spent money to install their own lines, Atkinson said. Best price is one that enables competitors to “break even,” he said. “You shouldn’t be able to make money using a competitor’s facilities,” Atkinson said. Berger said Telecom Act gave false sense of “instant gratification” that encouraged investment based on time frames that were entirely too short.
Hawaii continued push for better DBS service by asking FCC to examine issue. State charged DBS companies with violating rules that require them to deliver services and packages to Hawaii and Alaska comparable to those in continental U.S. DBS providers have “failed to meet this standard,” Hawaii said in ex parte filing. Programming for Hawaii is “radically different and deficient” from mainland packages, FCC was told. EchoStar has made more progress toward programming equity and Hawaiian package is attracting interest, but “shortcomings still exist,” state said. EchoStar and DirecTV have new satellites planned that state officials hope will improve service, but only if FCC “makes it clear” they must improve service to Hawaii and Alaska.
SBC and USTA are out of order in suggesting that cable modem providers are obligated to make universal service contributions, NCTA said in comments filed Mon. with FCC. NCTA said proposals were made as part of more limited proceeding in which FCC sought comment on streamlining current process for assessing carrier contributions (CC Docs. 96-45, 98-171). ILEC proposals also “are based on the faulty premise that cable modem service is a telecommunications service and cable operators providing cable modem service are telecommunications carriers,” NCTA said, contending that they're not telecom providers.
Stephen McPherson promoted to pres., Touchstone TV… Jon Richmond, ex-Twentieth Century Fox and News Corp., named to the Fandango board… David Sappington named chief economist, FCC; Jonathan Levy named deputy chief economist… Rick Lane, ex-dir.- eCommerce and Internet Technology, U.S. Chamber of Commerce, appointed vp-govt. relations, News Corp… Bob Varettoni, exec. dir., Verizon Communications & Services Group, appointed exec. dir.-media relations… James de Castro, AMFM, named to board, Museum of Bcst. Communications.