The ITU’s Telecom World 2003 is set to open in Geneva next week on a far more modest scale than in 1999, with companies such as Deutsche Telekom, Lucent and Motorola not exhibiting. “It’s just tough,” an industry source said. The show, held every 4 years, has generated criticism in the past for lavish exhibits, including a multistory building constructed by Deutsche Telekom in 1995. But this year’s biggest controversy appears to be the increased attention focused on the ailing finances of the ITU itself.
Country of origin cases
EchoStar DBS closed its previously announced notes offering of $2.5 billion, it said. The offering, originally cited at $1.5 billion, was made in 3 parts (CD Sept 22 p10).
Wireline Bureau Chief William Maher told an FCBA lunch Fri. his bureau was interested in intercarrier compensation changes that were more cost-based and “less open to arbitrage.” Fraud allegations against MCI on least cost routing have focused attention on the complexity of the intercarrier compensation regime and the importance that investments not be based on “unintended disparities among compensation regimes,” he told the FCBA Wireless Committee. He also echoed plans outlined by Chmn. Powell last week for a voice-over-IP (VoIP) proceeding and said he was interested in “competitive neutrality” when it came to local number portability among wireline and wireless carriers.
The FCC Wireline Bureau is seeking comment on requests by 3 rural LECS that have sought separate waivers from rules that require wireline carriers to provide local number portability to a wireless carrier that requests it by Nov. 24. The bureau sought comments by Oct. 17, with replies due Oct. 24. The waiver requests were filed by Franklin Telephone Co., Inter-Community Telephone Co. and North Central Telephone Cooperative. Franklin cited the “current uncertainty regarding interpretation of porting rules, as well as implementation conundrums” as the reason for its request for relief. It said it was a rural telco with fewer than 10,000 access lines, meeting a criterion in the Communications Act that allows LECs with fewer than 2% of subscriber lines in the U.S. to petition a PUC for relief on number porting mandates. The company said it would incur significant costs and would need more than 6 months to equip its switch with porting capability. It also cited concerns with unresolved implementation problems. Franklin said it challenged the validity of a porting request received from Sprint PCS. It said it sought to obligate an LEC to port a wireline number to a wireless carrier that had the capability to allow a wireless subscriber to use the number beyond the boundaries of the original rate center. It deemed that type of obligation “location” or “geographic” portability, which Franklin said the FCC already had ruled wasn’t required statutorily. It said it planned to complete deployment in its affected switches within a year after the FCC clarification of its obligations. The company also said it would give the Commission quarterly progress reports during the temporary LNP extension to provide updates on the purchase and installation of required upgrades.
The FCC asked the Mktg. Assn. (DMA) Wed. for a copy of the national do-not-call (DNC) list and a list of all members who had downloaded it. The goal is to use the information to enforce compliance with the registry, FCC Chmn. Powell said in an earlier news conference that covered other issues as well (see other stories this issue). Powell told reporters the agency planned to be “extremely aggressive” in enforcing the DNC list and hoped to get from the DMA “the grist of what we need for effective enforcement.”
Cingular and NextWave filed applications with the FCC to assign licenses as part of a $1.4 billion proposed deal in which Cingular is buying spectrum from NextWave in 34 markets. The applications include a request that the FCC waive parts of its “unjust enrichment rules,” which require designated entities (DEs) to pay penalties if they sell a license to a non-DE during a restricted period to compensate for advantages such as bidding credits or installment payment plans. The U.S. Bankruptcy Court last week approved Cingular’s acquisition of 10 MHz of PCS spectrum in 32 markets and 20 MHz licenses in Tampa and El Paso. The companies filed 14 applications Fri. “Due to a complex set of circumstances, spectrum licensed to NextWave has not been used to deliver widespread commercial wireless communications to the public,” the applications said. “The proposed transaction will enable a portion of that spectrum to be put into immediate commercial use to benefit wireless consumers.” The companies said the transaction raised “no competitive concerns” for the FCC. It would cover the assignment by NextWave of all its interests in 10 or 20 MHz of spectrum to be disaggregated from 20 C-block PCS licenses and fourteen 10 MHz F-block licenses. The filings said the Justice Dept. had approved a term sheet allowed by the bankruptcy court, under which Cingular would pay the FCC $714 million for the licenses involved. Repayment terms for the rest of NextWave’s spectrum still must be worked out with the govt. The companies told the FCC the proposed deal would advance the public interest by: (1) Allowing spectrum that had been tied up in litigation for more than 5 years to be put into general commercial use. (2) Expanding the national footprint of Cingular by adding markets in which the carrier currently had no spectrum. (3) Allowing Cingular to expand network capacity in markets where it offered service. The companies’ applications cited unjust enrichment rules that applied to disaggregation of PCS spectrum. The unpaid principal associated with the licenses in this deal is about $687 million, they said. The term sheet spells out that in agreeing to accept the direct payment of $714 million, NextWave and the FCC relinquish all claims on the licenses. The filings said the govt. was agreeing to an amount that might differ from the sum it would otherwise receive under unjust enrichment rules “in less unique circumstances.” The payment to the FCC represents an amount greater than the aggregate unpaid balance of the original amounts NextWave bid for the spectrum, the filings said. The term sheet payment also “avoids the uncertainties” in having the claims related to those portions of the licenses resolved through bankruptcy proceedings, the companies said. As a result, partial waivers of unjust enrichment payment rules are justified, they said. They said “rigid application” of the unjust enrichment rules would prevent “rapid deployment” of services to the public over the spectrum covered by the designated licenses. Bidding credits weren’t an issue for most of the C-block licenses covered under this deal because the FCC hadn’t used bidding credits in the original C-block auctions, which were restricted to DE bidders.
LOS ANGELES -- As digital technology undermines traditional TV delivery systems, it will be the midmarket companies that will profit the most, speakers said at Digital Hollywood here. Tracy Dolgin, former pres., Fox Sports Net, and now managing dir. of Houlihan Lokey Howard Zukin, said: “The media business is under more flux than it ever has been in its history. For years, the big 6 troikas controlled the business because they controlled distribution… But now their physical distribution is going by the wayside… Those who aren’t encumbered by massive corporate infrastructure and can move faster will be the innovators.”
In a parade of rosy forecasts about the media business, one cloud kept darkening the skies at the Goldman Sachs Communacopia Conference in N.Y.C. Tues.: The increasing cost of sports programming and its effects on cable rates. Cox CEO James Robbins issued the opening shot, telling more than 500 analysts and investors that, while Cox’s future never had looked brighter, a rise in programming costs for ESPN and Fox Sports threatened to upset the expanded basic model for pay TV: “I don’t know where the train is going to end up, but we'll continue to keep you posted.”
The bond requirement for future satellite licensees still is a major concern among satellite manufacturers and operators, based on comments filed with the FCC on its new licensing order. A joint filing by 7 satellite companies says the Commission has “gone too far” in establishing the requirement and asks that it be eliminated. The bond proposal was a part of the Commission’s space station licensing order adopted in April that established new licensing methods (CD April 24 p6). The FCC has questioned whether the original proposal of $7.5 million bond for nongeostationary and $5 million for geostationary should be lowered and whether companies should have the option of establishing an escrow account instead.
The Coalition Provisional Authority (CPA) is expected to announce the winners of the 3 regional mobile licenses in Iraq by Oct. 1, officials said at a conference on Iraqi telecom hosted by Information Gatekeepers Inc. (IGI) Mon. in Washington. The selection process turned out “to be more complicated than they thought in terms of the number of bids and the structure,” said Dept. of Commerce Dir.-Wireless Communications Div. Linda Astor.