States and municipalities are expressing concern that legislation designed to prevent taxes on access to Internet service eventually could restrict local govt. regulation of telephony and cable service. NARUC, the National Governors Assn. (NGA), National Assn. of Telecom Officers & Advisors (NATOA) and the TeleCommUninty Alliance (TCUA) are among the local interests expressing concern about S-150, the proposed Internet Tax Non-Discrimination Act.
Country of origin cases
The U.S. Appeals Court, D.C., spent nearly an hour Thurs. quizzing attorneys for the FCC and 2 carriers on whether the agency had acted appropriately in a case involving the right of wireless carriers to levy access charges on long distance companies. Although the issue could have a significant impact on the intercarrier compensation regime, the oral argument focused mainly on technical issues of how the FCC made its decision, whether various parties had standing to appeal and whether the appeals were even ripe. At issue was a request by the U.S. Dist. Court, Kansas City, for an FCC opinion on whether wireless carriers could seek access charges for completing long distance calls, in the same way wireline LECs do. The case originated from a dispute between Sprint PCS and AT&T in which Sprint PCS had sought payment for terminating AT&T long distance traffic bound for Sprint PCS customers. The dispute went to the federal district court in Mo., which sought FCC input. The Commission ruled last year that Sprint PCS wasn’t prohibited from charging AT&T access fees but only if there were a contract requiring such payments. The FCC said that until the court determined whether there was a contract between the 2 companies (there was a question whether there might be an implied contract), it was premature to decide a 2nd question of the reasonableness of the rate charged. Both sides appealed: (1) AT&T objected to the FCC’s opening the door for access fees by wireless providers and questioned whether the Commission was right in determining that such payment could be governed by contracts enforced under state laws. AT&T attorney David Carpenter at the oral argument said the FCC had “changed the rules of the game” by not exerting preemption over state law. “All the FCC did was muddy the waters,” Carpenter told the 3-judge panel of Harry Edwards, Merrick Garland and Douglas Ginsburg. (2) Sprint objected to 2 paragraphs in the FCC order that it said would make it hard to collect access charges in the future. Attorney Andrew McBride, representing Sprint PCS and Verizon Wireless, said the problem involved the order’s language stating that wireless carriers recovered their costs from end users. That language since has caused some long distance companies to sue Sprint for return of access charges they already had paid, McBride said. Those suits argue that the FCC language indicated “we already have been compensated through end-user rates,” McBride said. He said that made wireless providers “the most unhappy winners” in any agency proceeding. Those graphs “undercut the rest of the Commission’s order,” he said. FCC attorney John Ingle told the court the agency’s role in this dispute was “relatively minor.”
Europe’s first HDTV channel, Euro 1080, will be broadcast via SES Astra’s satellite at 19.2 degrees E, Astra said. The company will partner with Belgium-based TV facilities provider Alfacam for the broadcasts, which will begin in Jan. Alfacam successfully completed trial broadcasts via the Astra satellite at the recent International Broadcasting Convention in Amsterdam, Alfacam Gen. Mgr. Gabriel Fehervari said. Euro1080 will have 2 programming offerings: (1) Main Channel, which will be distributed to households as a free-to-view TV channel with 4 hours of original programming. Main Channel also will be available in pubs, sports bars, conference centers, airports and other small venues. (2) Event Channel, which will provide music, sports, shows, cultural events and documentaries to e-cinemas in Europe.
CenturyTel officials met with the FCC Wireless Bureau late last week to urge the agency not to move too quickly on wireline-wireless local number portability (LNP). “CenturyTel urged the Commission not to mandate wireline- wireless local number portability via a declaratory ruling, but rather to conduct a full-fledged rulemaking to allow a full airing of the issues and evidence,” the company said Mon. in an ex parte filing on the Oct. 17 meeting. The company told Wireline Bureau Chief William Maher and others that further analysis was needed “to ensure that call completion, correct call routing and cost recovery issues are properly addressed.” CenturyTel said wireless LNP in general imposed a variety of problems on rural telephone companies, including: (1) High costs that “would result in customer rate increases and plant investment cut-backs that would outweigh any benefits received by rural customers.” (2) “The likelihood of dropped calls from the customers of small ILECs [without LNP capabilities] to wireless customers whose numbers have been ported.” There already are problems with dropped calls originating from rural LECs in areas where 1,000-block pooling has been implemented, the company said. “Because wireless local number portability is being implemented for the benefit of wireless competition, CenturyTel urged that the wireless customer’s former wireless service provider be required to perform the local number portability database query and transit the call to the new wireless service provider, without charge to CenturyTel or its customers.”
Intelsat isn’t barred from using “Loral-type” satellite assets to deliver direct-to-home (DTH) services in the U.S., CEO Conny Kullman told analysts in an earnings conference call Tues. He made the remark in declining direct comment on Intelsat’s $1.1 billion bid for Loral Space & Communications’ 6 N. American satellites that’s scheduled for a hearing today (Oct. 22) in U.S. Bankruptcy Court, N.Y.C.
Although Webcasters are likely to be left out of an expected World Intellectual Property Organization (WIPO) treaty extending copyright protection to broadcast electronic signals carrying radio and TV programs, support may be growing for their inclusion in some later protocol, we're told. As delegates to WIPO’s Standing Committee on Copyright & Related Rights (SCCR) prepare to meet Nov. 3-5 in Geneva, the issue of protecting Webcaster broadcast rights remains “so divisive” it could get in the way of a broadcast treaty, said Michael McEwen, secy. gen. of the North American Bcstrs. Assn. (NABA), which takes part in SCCR meetings as an observer. Some say that, despite the fact that the U.S. delegation is the only one openly calling for inclusion of Webcasters, there’s some indication others may be quietly moving in that direction.
Industry comments on whether the FCC should retain the “pick-&-choose” rule were predictable: In the comments filed Oct. 16, CLECs urged the agency to retain it; ILECs said it should be eliminated. The rule allows CLECs to opt into parts of interconnection agreements that Bells have negotiated with other CLECs. The rule tends to stymie the give and take of negotiations, BellSouth said. Congress envisioned “genuine commercial negotiations” between carriers but the pick-&-choose rule has deterred that because of the possibility that other carriers can opt into parts of the contract. ALTS said the rule shouldn’t be changed because “the ILECs still wield monopoly control over essential, bottleneck facilities and insurmountable bargaining leverage over their wholesale clients, who also happen to be their chief rivals for end-user retail customers.” ALTS said “abandonment of, or otherwise altering, the pick-&-choose rule would allow ILECs to negotiate sweetheart deals with preferred carriers and structure those contracts in such a way as to prevent other carriers from opting into them.” Mpower, a CLEC which 2 years ago proposed an alternative to the pick-&-choose route, said the telecom market still isn’t competitive enough to drop pick-&-choose in favor of its Flex Contract proposal. Mpower told the FCC it dropped its petition earlier this month because “given telecommunications market conditions, adequate market incentives do not exist for its Flex Contract proposal to succeed.” The Ohio PUC said it agreed with the FCC that the rule “could stifle innovation and flexibility for the provision of interconnection services… In addition to generating significant disincentives and intransigence on behalf of the ILEC not to make any concessions to accommodate a particular CLEC need or situation, the current rule could also work to the detriment of a [CLEC] that entered into the initial contract by providing subsequent carriers with competitive advantages. That is, since the CLEC entering into the original contract with the ILEC most likely compromised on some issues to gain some ILEC concessions, a new competing carrier could enter the same market and take advantage of the ILEC concession without entering into the same obligations as the original competing carrier.” The PUC said the solution was to give states the authority to determine when a provision could be made available to another carrier: “A contract should only be made portable in similar situations and markets as determined by the individual state commissions.” On the other hand, the Cal. PUC said it didn’t think “modification of the existing pick-&-choose rule is warranted at this time” because at least in Cal. it “has worked quite well in providing the incentive and impetus for CLECs to enter into interconnection agreements with an ILEC in order to compete in local markets.” Without the pick-&- choose option, “smaller carriers would likely adopt the ‘one- size-fits-all’ standardized agreement and then be compelled to incur the substantial cost of negotiation and/or arbitration for the customized provisions that they would require,” the Cal. PUC said.
In response to a court remand, the FCC Thurs. modified the mechanism that determines how much federal universal service support can go to large “nonrural” telephone companies such as the Bells. The 10th U.S. Appeals Court, Denver, had ordered the Commission to: (1) Define more precisely how its support mechanism satisfied the statutory requirement to achieve “reasonably comparable” phone rates between rural and urban areas. (2) Better justify the cost benchmark used to determine support amounts. (3) Develop a mechanism to induce states to assist in implementing the goals of universal service.
Space Systems/Loral said it received an authorization to proceed (ATP) from PanAmSat on the design and construction of its Galaxy 16. The C-/Ku-band satellite will have 48 transponders and is scheduled for delivery Dec. 31, 2005, Loral said. PanAmSat will pay Loral more than $100 million for the satellite, $25 million of which will be included in an advance payment. The ATP needs the approval of the bankruptcy court to be complete, Loral said. As for EchoStar’s most recent offer to Loral to purchase the DirecTV 7S and ATP’s for DirecTV 8 and 9S (CD Oct 14 p9), Loral said it intended to follow through with the original DirecTV and PanAmSat offers.
The German Federal Cabinet approved a draft Telecom Act Wed., raising concerns among competitive carriers there. The draft now moves to the Second Chamber of the German Federal Parliament (Bundesrat), which is expected to vote on it before the end of the year, after which it goes to the First Chamber (Bundestag) for final approval. The Cabinet decision follows a warning Germany received from the European Commission (EC) last week that it would impose legal sanctions on the country for failing to implement the rules on time. The goal of the draft is to overhaul market regulation, in particular of the incumbent carrier Deutsche Telekom (DT), and to implement 5 European Union (EU) directives into national law.