The regulatory treatment of voice-over-Internet protocol (VoIP) shouldn’t be “detrimental to the underlying network,” OPASTCO said in a statement it submitted Mon. for the record to the FCC’s VoIP Forum Dec. 1 (CD Dec 2 p1). “Disparate regulatory treatment that favors one method of providing voice service over another not only violates the principles of technological and competitive neutrality, it can place at risk the reliability of carriers’ underlying networks,” it said. OPASTCO expressed concern that although “at some point” most VoIP service providers “avail themselves of the highly reliable public switched telephone network (PSTN) to originate, transport or complete voice calls,” they “offer little or no financial support for the growth and upkeep costs of the PSTN.” It said long-term “favorable” regulatory treatment of VoIP service providers would “undermine the reliability of the nation’s ubiquitous telecommunications network.” It also expressed concern about the future of the Universal Service Fund (USF), saying if VoIP providers were exempted from contributing to the USF, “customers of other providers will have to pay more in order to sustain the integrity of the Fund. This places the Fund’s future viability at risk, and runs counter to Section 254(b)(5) of the 1996 Act, which calls for ’specific, predictable and sufficient’ mechanisms to preserve and advance universal service.” OPASTCO argued that the adoption of VoIP technology shouldn’t absolve any service provider of the obligation to compensate LECs adequately for access to the local loop. It criticized VoIP providers’ refusal to pay access charges, saying the VoIP technology did “not reduce the costs incurred by small carriers when they provide access services for these calls.” It said that although VoIP providers claimed to compensate LECs for access costs through the rates they paid as end users, such rates were “not designed to recover LECs’ costs of providing access.” OPASTCO said since many members obtained more than 60% of their operating revenue from access charges and universal service support mechanisms, “without adequate cost recovery from these revenue sources, the ability of small LECs to continue providing basic services at affordable rates would be seriously compromised” and would inhibit them from investing in the network upgrades necessary to provide advanced services. OPASTCO urged the Commission to “adhere to the principles of competitive and technological neutrality in order to avoid government policy, rather than consumer choices, determine the winners and losers in the marketplace. Clearly, services that provide direct substitutes for each other should not be subject to different regulatory classification.”
Country of origin cases
Saying its role as a newly converged regulator marked a good time to gauge the state of the nation’s telecom industry, the U.K. Office of Communications (OFCOM) said it would begin a 3-part review in Jan. The sector-wide assessment is the first in 13 years, OFCOM said, and it could lead to regulation rollbacks. British Telecom (BT), which holds the lion’s share of the markets for residential and business access and wholesale call origination, said it welcomed the review. A users’ group urged OFCOM to enforce existing initiatives before establishing out new ones.
BellSouth asked the FCC to extend the comment filing deadline of Dec. 30 on rate center disparity issues involving wireline-to-wireless local number portability (LNP) and of the reply date of Jan. 9. It asked the Commission to change those dates to Jan. 30 and Feb. 20. The FCC ruled last month that wireline carriers must port numbers to wireless carriers whose coverage area overlapped the rate center in which the wireline number was assigned as long as the mobile operator kept the original rate center designation. The further notice for which BellSouth sought more comment time involved wireless-to-wireline porting. The notice asks for comments on how long it would take to port a number from a wireline to a wireless phone. The agency held off on adopting a mandatory porting interval until it received more feedback. It also asked how it could ease wireless-to-wireline porting in cases where the rate center associated with the wireless number was different from the rate center in which the wireline carrier wanted to serve the customer. BellSouth said the existing comment period didn’t provide enough time for commenters over the holiday season. For BellSouth, and most other commenters, most experts “critical to providing information for inclusion the record” will be on vacation during most of the pleading cycle, it said. BellSouth also said the FCC had asked the N. American Numbering Council (NANC) to provide input on modifying the porting interval for intermodal porting. NANC next meets Jan. 13 and could release its recommendation in an extended pleading cycle, BS said.
Interference from winners of the multichannel video distribution & data service (MVDDS) still is an issue for DBS operators, an EchoStar spokesman said, despite the company’s indirect bid to participate in the auction. EchoStar is a 49.9% owner of South.Com LLC, one of several companies whose applications originally were rejected as incomplete. Applicants were invited to resubmit applications with the correct information and upfront payments by Mon. (CD Dec 2 p12). The spokesman said none of the companies, including South.Com, had presented any solutions to the interference issues: “Whoever the successful bidders are, they will have to deal with the interference.” Analyst Stephen Blum of Tellus Venture said EchoStar’s involvement wasn’t a surprise: “By going in with this company, they could get the spectrum for cheap.” EchoStar also could be planning to make a really high bid for the spectrum, Blum said, leaving the winner with less capital to launch a business: “The only risk is that [EchoStar] could end up bidding so high and then get stuck with it.”
The FCC late Thurs. turned down challenges by wireless carriers to changes the Commission had made to clarify its Enhanced 911 orders, including the definition of a valid request by a public safety answering point (PSAP). The Commission concluded that changes in its rules didn’t substantively alter carriers’ obligations under the E911 rules and that adequate notice had been given. The changes involved the so-called Richardson, Tex., order, in which Richardson originally had asked the FCC to spell out when PSAP requests for E911 Phase 2 service were valid. The agency said such requests were valid if any upgrades needed on a PSAP network would be completed within 6 months and if a PSAP had made a timely request to an LEC for trunking and other facilities. Cingular and Sprint PCS had asked the FCC to address their concerns about their obligations if a PSAP’s readiness to receive Phase 2 data were delayed. Instead of granting their petition for more stringent criteria to substantiate a PSAP request, the FCC included certain time frames and procedures clarifying the obligations of each party. They included a 15-day window after a PSAP service request was entered, during which a carrier could request documentation. T-Mobile USA, Nextel and Cingular Wireless challenged those changes, arguing that the FCC hadn’t adequately considered the complexities of when a PSAP or wireless operator was ready to deploy Phase 2 caller location information. “We disagree with Cingular that the Commission ‘cloaked’ its decisions as a clarification where none was needed and ‘conjured up an ambiguity even though none existed,'” the FCC said. “Rather, the Commission’s action was required to overcome the impasse that ensued when T- Mobile denied Richardson’s service request as invalid because Richardson was not fully capable of receiving and using the data at the time of its request,” the agency said. Comr. Martin supported the order but said in a separate statement he was concerned with its analysis of the FCC’s compliance with a U.S. Appeals Court, D.C., decision in Sprint v. FCC. That ruling held that the Commission had failed to provide proper notice for a rule clarification under the Administrative Procedure Act when its only notice was a bureau-level public notice, he wrote. “In this order, we conclude that a Bureau-level public notice did provide adequate notice, because, unlike in Sprint, the notice was published in the Federal Register and contained an initial regulatory flexibility analysis,” Martin said. “While I think this analysis is not unreasonable, we should avoid these issues. Ultimately, the Commission itself is responsible for the actions taken by the agency.” A better future course is to issue Commission-level notices, he said. “A full Commission-level notice is the vehicle explicitly called for by Sprint and would plainly satisfy the court’s concerns.”
The next step toward resolving the Internet tax moratorium in the Senate will be an up-or-down vote on the proposed bill and an opposing amendment, not a compromise, a key Hill staffer said Wed. Frank Cavaliere, adviser to S-150 sponsor Sen. Allen (R-Va.), told the National Conference of State Legislatures that “there is not a compromise out there, there will not be a compromise.” “We would still like to see a compromise reached,” said Rachel Welch, counsel for Senate Commerce Committee ranking Democrat Hollings (S.C.), but she said based on Cavaliere’s comments “we may have gotten to a point where there is an unbridgeable divide.”
Discovery said it’s creating a new division, Discovery Media Services, that will encompass the Miami and Silver Spring, Md.-based Discovery Production Group, the Discovery TV Operations Group and the TV Technology Group. Marcos Obadia, senior vp and gen. mgr., Discovery Production Group, was named exec. vp, Discovery Media Services. The new division will provide production and postproduction and will be responsible for network operations services for all of Discovery’s networks and originating services for all of its U.S. networks. In Jan. 2005, the new division is to introduce a new multichannel network origination facility for Discovery Networks in Sterling, Va., the company said. That facility will be able to perform production work for 15 U.S. networks, in addition to BBC America.
A pending rulemaking on orbital debris has satellite industry groups that could be affected expressing concerns about the outcome, sources said. They are worried by the fact that the industry hasn’t had much input into a decision that’s expected to be a part of the next FCC agenda, they said. The Commission didn’t return calls for comment. The item, introduced nearly a year ago, originally was part of the space station licensing order docket and had been added to the April agenda meeting, only to be pulled prior to the session. A staffer would say only that the item would be addressed in a separate docket (CD April 24 p6). One source said the issue primarily would affect geostationary satellites that move or are moved out of working orbits using station-keeping fuel. Currently, the satellites are boosted up and out of orbit, but the questions is how far up should they go, the source said: “You end up putting a satellite into its retirement earlier and truncate its useful life. The Commission’s interest at the time [it was introduced] was to find a standard that was greater than the current practice.” The source said it was unclear how a current international standard would be interpreted and whether existing satellites or birds under construction would be grandfathered, all of which were financial considerations: “Generally, something like this is preceded by informal dialog. Obviously, if we don’t have advanced notice, we can’t inform them from all [our] practical business experience.” Another source said there was a sense of dismay that the issue had been “sprung on the industry… We would like to have an opportunity to work with the Commission because we share their concerns.”
An FCC source told us a decision to approve the News Corp. acquisition of Hughes Electronics and DirecTV could be made before the end of the year. Confirming reports that staffers had made a recommendation to approve the deal with conditions, the source said the item hadn’t been voted on by the commissioners but there was no intention of waiting if an agreement were reached. The source said all of the proposals News Corp. and Hughes made in the original application would be required but additional conditions were likely.
One down, one to go. Cox announced a new 6-year-deal to keep Fox Sports Net on Cox systems, while negotiations with ESPN in a public tug-of-war over carriage costs continued. Terms of the Cox-Fox renewal weren’t disclosed, but sources said the deal allowed annual rate increases of 7-10%. A Cox spokeswoman said that range “points to the value of ESPN and its wholesale rates because we deliver twice the audience of all regional sports networks combined.” ESPN in the past has increased its rates as much as 20% per year, but industry sources have said the network has floated a proposal to drop to 11% per year, tied to conditions including carriage of ESPN HD.