Intelsat said it began an offer Thurs. to exchange its 5.25% and 6.5% senior notes due 2008 and 2013, respectively, for newly issued 5.25% and 6.5% senior notes due 2008 and 2013. Any notes not withdrawn by 5 p.m. Jan. 22 will be accepted for exchange, the company said. “The new notes have substantially the same terms as the original notes, except that the new notes have been registered under the Securities Act and will be freely tradeable,” the company said.
Country of origin cases
Adelphia is teaming with RemotePipes Inc. to allow Adelphia Internet customers dial-up Internet access while they travel, using RemotePipes’ “TollFreeISP” service platform. The new Adelphia TollFreeISP offering enables Power Link users to access the Internet while away from home from more than 10,000 locations throughout the U.S., P.R., Canada, and more than 100 countries worldwide. The service also includes 100% geographic coverage in 9 countries, including Belgium, Canada, France, Germany, the Netherlands, New Zealand, Switzerland, U.K. and the U.S., all on a “pay- as-you-go” basis. The new dial-up Internet services are available immediately to all Adelphia PowerLink customers via the Adelphia Power Page at www.adelphiapowerpage.com . Access costs vary based upon the type of access number used and country of origin. Local number access in the U.S., Canada and P.R. is priced as low as 49 cents per hour.
Viacom and Comcast announced an agreement for the carriage of Viacom’s cable TV networks, for new video-on- demand (VoD) products for Comcast subscribers and for analog and digital retransmission consent to Comcast systems for Viacom TV stations, terms not announced. The retransmission consent will make it possible for Comcast subscribers in markets of CBS-owned stations to receive the network’s high- definition TV programming, including CBS’s broadcast of the Super Bowl Feb. 1. The agreement also includes joint development of new VoD services with content from CBS News and the MTV Networks. The agreements, effective immediately, include extensions of existing carriage deals and renewal of expiring affiliate contracts. We were told the carriage deals ranged from 5 to 6 years, depending on the network. UBS Warburg analyst Aryeh Bourkoff estimated annual rate increases of 6-8%, well below his original prediction of 9.2% per subscriber. Under the deal, Viacom’s MTV Networks (including Spike TV, Comedy Central, CMT and the MTVN Digital Suite) and the BET Networks will continue to be available on Comcast systems. Comcast will augment its digital suite of services by launching Nicktoons and MTV Hits and increasing the distribution of MTV2, Nickelodeon GAS, VH1 Classic and VH1 Country. “This companywide agreement between 2 industry leaders is unprecedented,” Viacom COO Mel Karmazin said.
In an Instructional TV Fixed Service (ITFS) order that drew an unusually high level of interest from all 5 commissioners, the FCC turned down an application for review by the Savannah College of Art & Design (SCAD) and the Diocese of Savannah. In a licensing dispute dating from the 1990s, the order drew dissents from Comrs. Copps and Martin and 3 separate statements involving all commissioners. The diocese and SCAD filed the application for review in 1999, challenging a denial by the Video Services Div. of the former Mass Media Bureau of petitions for reconsideration. The licensing battle has involved applications for construction permits and licenses in the ITFS band for channels in Savannah and Bloomingdale, Ga. The FCC said the original applications were contingent on the Commission’s taking favorable action on a petition to deny filed against ITFS licensees that sought more time to construct their facilities under agency deadlines. In their challenges of the past Bureau decisions, SCAD and the diocese said the FCC shouldn’t have protected existing ITFS stations because their construction permits had expired before SCAD and the diocese applied for that spectrum. The FCC decision Wed. concluded that the existing ITFS authorizations had expired but hadn’t been cancelled. “We see no reason to revisit at this time the Mass Media Bureau’s decision to grant the reinstatement applications. Therefore the frequencies were unavailable to applicants filing for new licenses,” the agency said. It also said the Savannah applications violated FCC rules against applications contingent on action the agency hadn’t yet taken. “The reason for the rule against contingent applications is that it avoids burdening the Commission’s resources with applications that cannot be processed until the eligible contingencies are resolved,” it said. In his dissent, Copps called the decision “curious,” saying it didn’t allow the diocese or SCAD to use currently unused spectrum to serve students. He questioned why the FCC refused to let educators use the spectrum to provide a service to students after licensees had allowed those channels to lie fallow 6 years. “The FCC said that they needed proof that the dioceses and SCAD operations would not interfere with the nonexistent operations of the original permittees -- even though the original permittees had never built a system,” Copps said. When the former licensees’ permits were revoked, the diocese and SCAD were denied use of the spectrum because the agency’s filing window had closed, he said: “This is a perplexing result.” In a 4-page dissent, Martin said “neither the letter nor the spirit of the Commission’s regulations dictate[s] such a result.” He said he would have reversed the Bureau’s 1998 dismissal of the applications or its improper grant of an extension of time in 1996 to the original licensees. “It is within the Commission’s complete discretion to reverse the Bureau’s 1998 dismissal,” he said. It wasn’t valid in 1998 and now also is incompatible with the Wireless Bureau’s later cancellation of the original licenses, which was made retroactive to 1997, he said. Chmn. Powell said the outcome was the only one in line with the FCC’s rules, precedent and public interest. “The diocese and SCAD filed applications for ITFS channels that they knew were not available for licensing at that time because the Commission had previously assigned those channels to the Pembroke stations,” he said. He said he regretted “the procedural errors that were made in this case” but said the “facts of this case” bar the FCC from reinstating an application inconsistent with its rules.
In disputes involving broadcasters, cable operators and political candidates over the terms and conditions of ads, the FCC would rather act as a referee on the same day of the dispute than to have levy fines or inflict sanctions later in a formal complaint process, said Robert Baker, asst. chief, FCC Policy Div. Speaking at a teleseminar late Wed. sponsored by the Bcst. Cable Financial Management Assn. (BCFM), Baker said there had been a sea change at the FCC since the early 1990s, when the agency often would take weeks or months to settle a dispute and then do so with enforcement action.
The Fla. PSC unanimously approved proposals from the state’s 3 largest incumbent telcos for local rate increases totaling $335 million after the telcos agreed to spread the increases over 3-4 years rather than the 2 years originally proposed. But opponents vowed to appeal the decision to the state courts. Under the decision, BellSouth’s rates will rise $3.14 monthly in 3 annual steps and Verizon’s $4.73 over the same span. Sprint’s increase of $6.86 will be spread over 4 years. In return, the 3 telcos must cut their intrastate access charges about 75%. After the phase-in period, the telcos will be allowed to boost their local rates up to 20% per year. Opponents including the AARP, state Office of Public Counsel and state Attorney Gen. Charlie Crist said they would seek PSC reconsideration and, if that failed, would pursue legal appeals all the way to the Fla. Supreme Court. The opponents said low-volume toll users and people who used cellphones or calling cards for long distance wouldn’t see much, if any, benefit from the lower long distance rates expected to result from the access charge cuts, but they would see the higher local phone rates. Opponents also said the higher local rates might force poor people to give up their phone service. The 3 telcos countered that their proposals met the standards spelled out in the law, including benefiting residential consumers and luring more telecom competitors into the state. They said their proposals also would encourage deployment of broadband and other advanced telecom services. The first step of the increases is to occur early next year, but it could be put on hold if opponents took the issue to court. The increases were authorized under a 2003 state law intended to create more competition that ultimately would drive down local phone prices and expand consumers’ options. After PSC hearings on the increases last week, the 3 telcos amended their proposal to draw out their timeline for implementing their boosts and changed the size of the steps. They also redefined Lifeline eligibility to 135% of the federal poverty line instead of 125%, to expand the number of low-income customers who would be insulated from the rate increases for the next 3 years.
The FCC International Bureau’s recent public notice on fixed satellite service (FSS) applications is another example that the bureau is “fully aware of [the] principle of due process and its obligation not to apply new policies retroactively,” Globalstar said. In a letter, the company continued to petition the Commission to review a Jan. decision to revoke the company’s 2 GHz mobile satellite service (MSS) license. The decision had held that Globalstar’s construction contract didn’t meet FCC milestones because it incorporated future dates the Commission hadn’t approved, the company said: “Rather than giving [Globalstar] an opportunity to cure its contract to conform with the original milestone schedule, the Bureau simply canceled the licenses for failure of the contract to conform to the original milestone schedule.” However, the Commission’s notice on FSS applications said future applications that didn’t comply with rules would be dismissed, while existing, noncompliant applications would survive if amended, Globalstar said: “Had the Bureau applied this correct approach for implementation of a new policy to [Globalstar] and its satellite construction contract, it would have granted [Globalstar’s] request for a reasonable period of time consistent with past practice… to bring its contract into compliance with the milestones set forth in [Globalstar’s] 2 GHz MSS authorization, rather than canceling [the] licenses.”
Indicating the complexity of setting voice-over-Internet protocol (VoIP) rules, major federal law enforcers asked the FCC to set CALEA rules that would “ensure that no new loophole is created that allows criminals, terrorists and spies to use VoIP services to avoid lawfully authorized surveillance.” At the same time, the Electronic Privacy Information Center (EPIC) said the FCC should “ensure the establishment of strong privacy safeguards” for VoIP.” And SBC said the FCC shouldn’t allow AT&T to avoid access charges for phone calls that traveled partly over an IP backbone.
The Commerce Dept. said information technology (IT) was helping lead a revitalizing economy, but the lagging telecom sector continued to trail. In releasing its “Digital Economy 2003” report Tues., Undersecy. of Technology Philip Bond said growth in the macro-economic sector was driven by IT spending. He said the report showed “promising signs for the tech sector.” Undersecy. of Economic Affairs Kathleen Cooper said that after “two tough years, we are seeing signs of renewed strength.” Of the 2.9% of “real U.S. economic growth” predicted for 2003, IT-producing industries were expected to contribute 0.8 percentage points, said the report, based on data through the 3rd quarter. IT industries are expected to supply 8% of gross domestic product (GDP), the report said, and the growth rate of the IT sector is estimated at 6.4%. Performance varied by IT sector, and the struggling telecom sector continued to lag. While IT service industries and computer and semiconductor manufacturers were rebounding from their moderate pace in the early 2000s, communications and other telecom equipment manufacturers were continuing to fight for sales, the report said. IT unemployment continued to remain a problem. Since 2000, the sector has lost 11.2% of its jobs, compared with 2% of the overall economy. IT job loss, originally concentrated in manufacturing and low-skill positions, has spread to almost all levels. One growing problem -- IT outsourcing to other countries -- isn’t tracked in the report. Cooper said Commerce was working on developing better statistics on outsourcing and probably would work more closely with the Labor Dept. to determine how it was affecting the IT economy.
In the fight over must-carry, Mediacom argues that a tractor pull is much more important than home shopping -- at least in Iowa. Mediacom officials last week met with legal advisers to FCC Chmn. Powell and Comrs. Abernathy, Adelstein, Martin and Copps, holding out Paxson’s KFPX in Newton (Des Moines) as an example of why broadcasters shouldn’t be given multicasting must-carry and cable operators should be left in control of their bandwidth. Mediacom submitted a copy of a programming schedule that showed hours of paid programming and shopping. It also listed its local origination programming, which included, among other things, the local Hiawatha Hog Wild Parade, city council meetings, the girls’ high school volleyball championships, the Iowa Little League championships and truck and tractor pulls. A call to Paxson seeking comment wasn’t returned by our deadline.