LAS VEGAS -- The telecom industry should begin to lay the groundwork for major telecom legislation, possibly in 2005, several speakers and industry officials said at the USTA convention here Mon. USTA Pres. Walter McCormick didn’t commit to legislation, just to change: “We are talking about an objective” of letting the market, not govt., regulate the industry, he said in response to a question about legislation: “That can be achieved in a variety of ways. Legislation is just one.”
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DirecTV CEO Eddy Hartenstein confirmed reports that the company did offer Loral advance payments for DirecTV 8 and 9S of $25 million per satellite. His comments were made in a conference call discussing the 3rd-quarter financial results for Hughes Electronics. Hartenstein wouldn’t expand on the offer, but said the advance wouldn’t affect the overall price point of the original authorization to proceed and that it was subject to court approval. The DirecTV offer responded to a court filing last week by EchoStar proposing to buy both satellites and DirecTV 7S from Loral as a part of the company’s current bankruptcy proceeding (CD Oct 14 p9). Responding to questions on whether the company had a contingency plan if the uncompleted satellites were sold to EchoStar, COO Roxanne Austin said that while plans did exist, revealing them would put the company at a competitive disadvantage. Meanwhile, Hughes Electronics, taking a $65 million charge for new accounting rules, reported its 3rd- quarter loss widened to $23 million from $13.6 million a year ago. Results then included a $158 million gain on the sale of 8.8 million shares of stock in Thomson Multimedia. Revenue increased to $2.57 billion from $2.19 billion as subsidiary DirecTV gained 326,000 subscribers to bring its total to 10.3 million as of Sept. 30, up 12% from a year ago. Average monthly revenue per subscriber increased $4.50 to $63.70, largely on the strength of a subscription price increase in March along with fees charged customers with multiple set-top boxes. DirecTV Latin America, which has been operating under bankruptcy protection since March, said revenue rose 6.2% to $155 million as a result of the consolidation of local operating companies in Puerto Rico and Venezuela. Hartenstein also discussed briefly the News Corp.’s proposed acquisition of Hughes Electronics and DirecTV, saying the companies still hadn’t received requests for additional information from the FCC’s Media Bureau following the Commission’s decision Fri. to stop the clock on its review of the deal (CD Oct 14 p3). Separately, Hughes subsidiary PanAmSat also announced its 3rd-quarter results, saying revenue increased to $210.1 million from $199.1 million a year ago. EBITDA rose to $151.5 million from $145.4 million, the company said, as did net income, up $196,000 to $20.9 million.
The Wash. State Dept. of Social & Health Services said that as of Jan. 1, it would block calls to its toll-free client inquiry numbers placed from payphones in order to save money. The agency said calls by clients seeking information about their electronic benefit transfer (EBT) accounts from payphones were costing $150,000 extra per year, with that extra expense expected to climb to $250,000 per year next year under a new agency contract for telephone services. After Jan. 1, calls to the toll-free number from payphones will be blocked. The policy won’t affect calls from residences, govt. offices or cellphones. The EBT cards function like debit cards, allowing clients to access their cash and food benefits. The agency said 8% of the calls to the EBT inquiry number originated from payphones. The U.S. Dept. of Agriculture approved the state agency’s plan as a pilot program whose results would be evaluated next Aug.
You would be hard-pressed to find a full-power TV station without a Web site, but it’s only slightly easier to find TV stations making significant money from those sites. Most TV stations are missing opportunities to improve their bottom line by building up their Internet presence, TV executives, media consultants and analysts said. But that is likely to change over the next couple of years, they said.
AOL said it was adding closed captions to select streaming media content, saying it was the first to provide such captioning for the hearing impaired on online content. The captions already are appearing on some AOL-originated content, with CNN news content to be added later this fall, it said. The captions are a result of a 2-year R&D project with WGBH Media Access Group, it said. The captions are similar to those on TV, appearing directly beneath the video clip and corresponding to the audio content when the CC button is clicked on.
Public broadcasters opposed any proposal by the FCC to exempt news, public affairs and educational programming from the broadcast flag for DTV. In a letter to FCC Media Bureau Chief Kenneth Ferree, the Assn. of PTV Stations (APTS), PBS and CPB said any such exemption would “seriously impair” public broadcasters’ efforts to produce and distribute public service digital programming. Because public TV programming seldom is funded fully by the CPB or PBS, they said, PTV producers depended on their ability to hold and develop various nonbroadcast after-market rights in their programming. Without adequate digital copy protections, the value of the nonbroadcast rights would decrease, as would the ability of producers to fund their programming, they said. In the absence of reasonable digital copy protection standards, producers would find it difficult to clear the use of copyrighted music, film clips and photographs for inclusion in original productions, making production even more difficult, the public broadcasters said. They said current law provided adequate protections while at the same time ensuring fair distribution of educational and public programming. Therefore, they said, there was “no reason to believe that the public interest will be harmed by simply extending the current rules to digital television.” The public broadcasters said they also were concerned that the FCC’s exempting news, public affairs and educational programming from the broadcast flag would “unnecessarily inject content analysis into what should be a content-neutral technological rule” and would create severe administrative burdens as the Commission would be asked to review and adjudicate on classifying certain kinds of programming as protected or exempt from the broadcast flag requirements.
The Fla. PSC plans hearings starting Dec. 10 on the revised petitions by BellSouth, Verizon and Sprint for local exchange rate increases of up to 60% to offset intrastate access charge reductions of up to 75%. The rate rebalancing was authorized by a 2003 state law. The state’s 3 largest incumbent telcos had proposed local boosts of $3-$7 monthly, to be implemented in 2 phases. The PSC dismissed the telcos’ initial applications because the rate increase steps would occur 12 months apart when the law specified a 24-month interval between the steps. The telcos’ refiled plans (Cases 0308-67, -68, -69) were identical to their original proposals except for the timing of the rate-increase steps. Initial briefs are due Oct. 31 and rebuttals Nov. 9. A final order is expected around Christmas.
In long-awaited guidance on wireless-to-wireless local number portability (LNP), the FCC said in an order Tues. a carrier couldn’t bar a subscriber from taking a number along when switching service if the user had an overdue bill. The Commission declined to require wireless carriers to negotiate interconnection agreements with one another for LNP and “encouraged” operators to complete simple ports within 2-1/2 hours of a customer request in line with an industry- established interval.
While mobile phones will surpass fixed lines in Europe, the “wired world will endure,” Yankee Group said in a report. It said although 20%-40% of voice traffic originated on mobile networks, and wireless revenue was on track to overtake the total fixed switched-access market, “this supremacy and growing consumer dependence on mobility will not lead to total displacement of fixed lines, at least until several barriers are overcome.” Bundling and targeted substitution packages have made mobile rates more competitive “to the extent that price inelasticity exists,” said Farid Yunus, Yankee Group Wireless/Mobile Europe senior analyst: “In more mature markets, there is no longer a specific price inflection point at which mobile phones displace fixed. Consumer surveys support this, with fixed lines remaining firmly entrenched in most households.” Yankee Group said mobile operators should focus on: (1) Revenue optimization, and not landline displacement, bringing more data content services to market while maintaining average revenue per voice minute. (2) Changing consumer perception of limited reliability, safety and monetary value, compared to fixed. (3) Creating more dependence on mobile phones, through personalization tools and traffic packages, spurring more use within homes and enterprises.
The FCC adopted revised rules for how certain facilities-based long distance providers known as switched- based resellers (SBRs) compensate payphone service providers (PSPs) for calls that originate on a payphone and are completed on the SBR’s network. The new rules, adopted Sept. 30 and released late Fri., require an SBR to establish its own call-tracking systems, have a 3rd party attest that the system accurately tracked payphone calls to completion and pay a PSP directly based on the SBR’s own tracking data. Other facilities-based long distance carriers in the call path, if any, must provide reports to the PSPs on which carriers are handling payphone-originated calls. The order was the result of a court remand of an earlier attempt by the FCC to set compensation rules. The U.S. Appeals Court, D.C., vacated and remanded the earlier order in Jan. on the procedural ground that parties weren’t given proper notice and opportunity to comment on the proceeding. In May, the FCC sought comments and said it determined the old rules could be improved. As a result, the new rules “address more specifically and effectively both the problems that PSPs have experienced in obtaining compensation from SBRs, and the problems that interexchange carriers have experienced prior to and after the adoption of [the earlier rules].” The Commission said the earlier order didn’t go far enough in resolving “fairness issues.” As a result: “We adopt new rules that squarely place liability on the primary economic beneficiary of the PSP services -- that carrier from whose switch a payphone call is completed. We further require carriers to provide PSPs more detailed information concerning the identity of that carrier when it is a SBR.” The court had stayed the order through Sept. 30 to give the FCC time to develop new rules, meaning the original rules now were vacated. However, the Commission said it couldn’t make the new rules effective immediately because time was needed to gain clearances from the Office of Management & Budget and to give carriers time to transition to the new regime. Thus, the FCC adopted interim rules -- which actually are the same as the old rules -- until “the first day of the first full quarter” after the new rules are approved and published. The old rules, “though less effective than the rules adopted today, provide a reasonable alternative to ensure continued compensation during the interim period,” the agency said.