The FCC seems near agreement on imposition of roaming extensions on Verizon Wireless as a merger condition following the carrier’s acquisition of Alltel. The merger is set for a vote Tuesday, though discussions continue at the FCC. The key issue is how long Verizon Wireless extends roaming agreements small carriers primarily have with Alltel after the merger is finalized. Verizon Wireless agreed to a two-year extension to win Department of Justice clearance of the merger.
Other commissioners have rejected FCC Chairman Kevin Martin’s proposal for a revised spectrum screen as part of the order approving the Sprint Nextel-Clearwire WiMAX transaction, we've learned. An order circulated by Martin proposed adding EBS/BRS holdings to the types of spectrum the FCC includes in its screen, but the other four commissioners oppose that, FCC officials said. As a result, a revised screen likely won’t be part of a final order on the deal, set for a vote Tuesday.
Hill opposition to intercarrier compensation proposals continued Thursday, with letters from House and Senate members sent to FCC Chairman Kevin Martin. Legislators complained about a lack of openness about the process in addition to criticisms over substance. “Fundamental fairness suggests that the public at least have the chance to read the full proposed order prior to Commission consideration,” said Rep. Joe Barton, R-Texas, ranking member of the House Commerce Committee. “It is clear that the FCC process … falls short of what is required,” said a letter signed by Senate Commerce Committee members from both parties. Federal law requires agencies to provide for public participation “through adequate notification and the opportunity for interested parties to provide comment,” said Sens. Olympia Snowe, R-Maine, Clair McCaskill, D-Mo., and Amy Klobuchar, D- Minn. The proposals for intercarrier compensation and universal service could “dramatically change the landscape of the telecommunications industry,” the letter said. “It would be negligent on the FCC’s part to introduce such regulatory uncertainty when the country is facing such uncertain economic times.” Barton said the USF proposal “misses the mark,” although the cap on high-cost spending is a “good start.” But it “locks in incumbent providers rather than bring competition to rural America,” Barton said. Based on an FCC briefing, Barton said, the suggested order would require only an incumbent rural wireline provider to face a competitive auction if it declines the subsidy to provide broadband throughout its study area. “This means the rural provider could continue to get the subsidy even if another provider could offer service more efficiently,” he said. He also criticized the proposal as failing to overhaul “inappropriate voice subsidies.” There’s “no end in sight” to a program that has cost Americans $51 billion over 10 years, Barton said.
Universal service revenue should go to expand broadband services, former FCC Chairman Reed Hundt said Thursday. Speaking on behalf of Sen. Barack Obama’s presidential campaign at a New America Foundation briefing, he unexpectedly had the floor to himself when the technology adviser for Sen. John McCain’s campaign canceled. Hundt said the USF program needs to shift gears in line with new modes of communication. Spectrum policy would be a major focus in an Obama administration, he said. Obama has no position on whether to auction government-held spectrum, he said. Net neutrality rules also would be an Obama priority, he said. Hundt wouldn’t give a list of candidates for FCC chairman, but said he wouldn’t take the job again.
FCC Chairman Kevin Martin’s push to act on a complex Nov. 4 agenda has fueled intense lobbying, letter writing, phone calls and meetings with advisors, according to interviews with analysts, lobbyists and Hill staffers. The activity level, common in administrations whose ends are near, is heightened by high-profile issues affecting a wide array of players. The “order of magnitude” is big in a compressed time period, said Stifel Nicolaus analyst Blair Levin.
Two trade association for small rural carriers said they back the FCC’s overhaul plan for the Universal Service Fund and intercarrier compensation, after FCC Chairman Kevin Martin agreed to several concessions for rate-of-return carriers. The Western Telecommunications Alliance and the Organization for the Promotion and Advancement of Small Telecommunications Companies approved the plan after “numerous direct conversations” with Martin, including a conference call Tuesday night ending around 7:45 p.m., directly before the start of sunshine. The National Telecommunications Cooperative Association called the endorsement “very risky and dangerous.”
Implementing draft FCC rules on universal service fees could destroy the telematics industry, ATX Group said in a Wednesday press release. Proposals to set a fixed monthly fee of $1 per phone number would raise location-based emergency communications costs to a point where the business wouldn’t make sense, ATX Group said. The commission doesn’t see that most such services are used only in the rare instance of an emergency and are priced accordingly, the company said. “We just don’t think it makes sense to assess fees on these services in the same manner the FCC would like to impose fees for traditional telephone or cell phone service.” ATX Group told the FCC in an Oct. 28 filing that in “virtually all circumstances, the USF fee will exceed the cost of the airtime,” which would “choke off” services the commission “has recognized as critical to improving emergency response.”
Revamping universal service as the FCC proposes “could result in no support” for “improving and expanding rural wireless infrastructure,” the Rural Cellular Association and the Alliance of Rural CMRS Carriers said Wednesday. The groups want the FCC to put its plan out for comment. “Lack of information … has been very frustrating for RCA and its 100 wireless carrier members, and the group is apprehensive about any proposal to reform the USF program, especially one that no one outside the commission has seen,” RCA said. The public “has had to rely on press conferences and consulting with those being briefed by the Commission to determine the proposed rules since Chairman [Kevin] Martin’s plan has not been circulated outside the FCC,” the group added.
With the proper revisions, major cable and wireless associations said, they would back FCC Chairman Kevin Martin’s plan to overhaul the Universal Service Fund and intercarrier compensation. Meanwhile, Qwest, congressmen and consumer advocates took sides. The FCC plans to vote Nov. 4 on the Martin plan. Sunshine was to have gone into effect Tuesday (CD Oct 28 p2).
Any FCC intercarrier compensation and Universal Service Fund decision is unlikely to affect a merger between CenturyTel and Embarq, Embarq CEO Tom Gerke said in a Monday conference call. CenturyTel announced it will acquire Embarq for $11.6 billion, including assumption of debt. The deal is expected to close Q2. Analysts agreed they see few regulatory hurdles.