IBiquity Digital downplayed the impact of a decision by the National Radio Systems Committee (NRSC) suspending standard-setting efforts on in-band, on-channel (IBOC) digital radio because of problems with the system’s AM audio quality. IBiquity said it agreed with NRSC plan to delay the standards effort “temporarily” until the AM issue was resolved. The company emphasized the NRSC hadn’t expressed any concerns with IBOC’s “core system architecture or implementation,” including signal coverage, reception or functionality. It said the resolution would constitute a software upgrade and “no other changes to the system will be necessary. As such, we have an ongoing improvement plan and anticipate resolution of the AM audio quality issue as soon as possible.” The NRSC had been expected to complete IBOC standards work by early 2003. Ibiquity CEO Robert Struble said AM audio quality concerns amounted to “one very small piece of an overall system.” Struble said AM audio quality concerns were nothing new and were unrelated to the nighttime interference problems that persuaded the NRSC to recommend to the FCC that IBOC AM be approved for daytime use only, pending additional tests: “We're being challenged with the system’s low bit rates to deliver audio quality that the broadcasters find to be a significant upgrade over what they've got now.” Because the required improvements would entail only a software upgrade, Struble said, the NRSC action wouldn’t affect rollout of IBOC transmission equipment or receivers or endanger FCC approval. The serious concerns about AM audio quality were sparked by recent private demonstrations for NRSC DAB Subcommittee members at NPR studios in Washington, where it was found iBiquity’s 36-kbps PAC compression technology was not “suitable for broadcast,” according to a memo we obtained. The memo from NRSC subcommittee Chmn. Milford Smith of Greater Media informed members the NRSC was suspending IBOC standards-setting until AM audio problems can be resolved. The NRSC’s original evaluations and “subsequent positive recommendations” of AM and FM IBOC were based on an algorithm different than that now being used in iBiquity system, the memo said. iBiquity “has chosen to move forward” with a 36-kbps PAC codec that drew the ire of members at the NPR demonstrations, the memo said. Smith, speaking as chmn. of NRSC DAB subcommittee, said a majority is “of the opinion that before we can go forward and say we have an AM audio solution it does need to improve over where it is now.” But, speaking as a broadcaster, Smith said “we're all very enthusiastic about in-band on-channel. It is a wonderful system, there’s just a portion of it that has a problem. That problem needs to be rectified, and then I think we're going to have the solution we've been looking for all these years.”
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The N.Y. legislature overrode a line-item budget veto by Gov. George Pataki (R) that would have removed from the state budget $100 million for local government to get wireless and wireline enhanced 911 networks built and running. The funds would come from a state bond issue. The money in the budget was only 1/3 of what originally was proposed. Pataki had chopped the 911 item as part of an effort to cut $1.3 billion from the state budget. He said he vetoed the 911 item because borrowing wasn’t a wise way to pay for the program.
The broadband gold rush has begun. With more than 20 million residential high-speed data subscribers in the U.S. and Canada now, and the number growing by 20,000 per day, leading Internet service providers (ISPs), broadcast and cable networks, movie studios and others are rolling out premium programming packages crafted especially for broadband users. Using everything from TV news clips, sports video highlights and music jukeboxes to full-length movies, interactive games and other entertainment, the ISPs, TV programmers, studios and other broadband providers are racing to entice consumers to buy online content subscriptions.
ABC TV and its affiliates now have a much better understanding of the divisive issues between the network and the stations after 3 days of meetings in N.Y. last week, and returned home feeling “a hell of a lot better,” according to Philip Lombardo of Citadel Communications, a member of affiliates’ board. Network officials and a half dozen broadcasters expressed similar sentiments following the “frank and open discussions.” “By the end of the meetings, there was a marked decrease in the tension level between the network and the affiliates,” said Jerald Fritz of Allbritton Communications, but “we're going to hold their feet to the fire” to make sure the network follows through on its promises.
The Senate passed a measure late Thurs. to allow firms to expense new broadband construction. The measure, originally a bill (S-160) introduced by Senate Communications Subcommittee Chmn. Conrad Burns (R-Mont.), was passed as an amendment to the Jobs & Economic Growth Package (S-1054). The controversial $350 billion tax cut bill passed the Senate 51-49 after Vice President Dick Cheney’s vote was needed to pass the dividend tax cut portion of the bill. Burns and supporters said the amendment would spur broadband investment in rural communities. He made the proposal part of his “NexGenTen” technology agenda. The amendment would allow companies to expense 50% of “current generation” broadband buildouts, which is defined as technologies that deliver at least 1 Mbps downstream and 128 kilobits upstream. The amendment would also provide for 100% expensing of “next generation” broadband, defined as 22 Mbps downstream and 5 Mbps upstream. The amendment is technologically neutral. The broadband provision wasn’t included in an economic stimulus package passed recently by the House, leaving the provision to be examined in the House-Senate conference on the bills. Several groups praised the Senate for passing the economic package with the broadband amendment, including: TIA, EIA, USTA and the Information Technology Industry Council (ITI). “The result of this legislation will be a new broadband infrastructure that will serve this country for decades to come. It is yet another necessary piece of the puzzle that will help get the telecom sector out of its current recession,” said Matthew Flanigan, TIA pres.
Northrup Grumman said it had developed a command- generation capability that would support the existing Launch and Network Control Equipment (LANCE) system. LANCE, originally used for communication connectivity, now is a “full-service satellite command and control system,” Northrup said.
In a somewhat unusual case, the FCC tried to convince a U.S. Appeals Court, D.C., panel Mon. that it had properly interpreted a pair of interconnection contracts that dated back to 1996 while acting on behalf of the Va. State Corp. Commission (VSCC). The oral argument before Chief Judge Douglas Ginsburg and Judges Judith Rogers and David Tatel focused on the complex issue of how to determine whether calls were local, and thus subject to reciprocal compensation. The case stemmed from an appeal by Starpower Communications of an FCC decision that those contracts didn’t require Verizon to pay reciprocal compensation to Starpower for Internet-bound calls. The FCC had preempted an VSCC in ruling on the dispute because the state regulators chose not to act. To add to the complexity, Starpower wasn’t one of the original parties in negotiating the contracts. The company had opted into existing contracts between Verizon and 2 other companies, MCI and MFS, that required the FCC to try to interpret the intent of those parties when they negotiated the original contracts. Starpower opted into the MFS contract in 1998 and, when that contract was terminated, in late 1999 entered into an MCI contract. The basic question was whether the contract language, as well as Va. law and precedent, supported the FCC’s decision to bar the payment of reciprocal compensation for those calls. The FCC had ruled that Internet-bound calls were interstate in nature and the contracts called for reciprocal compensation payments only for local calls. FCC attorney Richard Welch argued that the contract language used Commission terms such as “end-to-end” in describing the test for whether a call was local or interstate, making it clear the contract deferred to the FCC’s view of the jurisdiction of an Internet call. The agency has used these terms for a long time and their meaning is clear to many in the industry, the agency contended. However, the judges asked whether the FCC action had been true to earlier rulings by the VSCC and other states, some of which were in favor of reciprocal compensation payments for local calls. One of the issues raised by parties was whether the FCC, because it was filling in for the state commission, had to follow state law, Ginsburg said.
The FCC Wireless Bureau announced an additional delay in the multichannel video distribution & data services (MVDDS) auction (Auction No. 53), with the new date not announced. The auction will follow resolution of 2 issues presented in the 2nd further notice of proposed rulemaking, a spokeswoman confirmed: (1) The duration of the build-out requirement for MVDDS. (2) Whether the use of designated market areas (DMAs) or component economic areas (CEAs) was better for defining the geographic service areas (GSAs). The auction, originally scheduled for Feb. 12, has been rescheduled twice -- for Aug. 6 and June 25. Northpoint Vp Toni Cook-Bush said the latest delay made sense because “you can’t have an auction until you know what the license areas are. We're a big supporter of using DMAs, so we're so happy to know the Commission will be making this decision.” Northpoint has lobbied Congress heavily on providing MVDDS exclusively and a bill was introduced recently proposing a licensing process for the spectrum instead of an auction. It was unclear how the auction delay would affect the legislation (S-564), introduced by Sen. Landrieu (D-La.). An industry official said the delay might give Northpoint additional lobbying time, but it might not gain enough momentum to overturn the FCC’s decision. Satellite Bcstg, & Communications Assn. (SBCA) Pres. Andrew Wright said the decision didn’t change the organization’s position, “which is that terrestrial sharing of the DBS band should not be permitted because of harmful interference.”
Competitor interests urged Ill. Gov. Rod Blagojevich (D) to veto a bill (SB-885) that would roughly double SBC’s UNE rates. The bill passed by the legislature Fri. would accomplish that by ordering the Ill. Commerce Commission (ICC) to make certain changes in the depreciation and network usage inputs that go into UNE costing calculations and by freezing CLEC cost estimates at current levels for 2 years. Blagojevich indicated he favored the bill because it would preserve incumbent telco jobs. The bill in its original form made innocuous technical corrections in the state Public Utilities Act but the House added the UNE provisions as an amendment and the Senate concurred less than 24 hours later, following a major SBC lobbying effort for the provision. MCI assailed the legislature for “overriding” the ICC while that agency was in the midst of a docket to reconsider SBC’s UNE rates. Z-Tel said the “unconscionable, unjustified and unwarranted” UNE rate increases required by the bill would violate the federal Telecom Act and said it was “exploring all our legal options” if the bill were to be signed. Frontiers of Freedom also called for a veto, saying maintaining fair wholesale rates was crucial for giving local competition the toe-hold it needed to serve, especially in rural markets. The group said the bill’s “arbitrary” increases in UNE rates would have a “terrible effect” on local competition and result in higher phone rates for all users. McLeod USA asked the ICC to suspend further action on SBC’s Sec. 271 interLATA long distance entry case until Blagojevich acted. If the bill is signed, McLeod urged the ICC to schedule additional hearings in the 271 case to determine the impact of the legislation on local competition. It said passage of the bill would represent a major change of circumstances in the state’s local marketplace and could have great impact on SBC’s compliance with Sec. 271. The legislature sent Blagojevich another telecom bill (HB-236) that would require telecom carriers to provide free local directory assistance service to customers who were blind.
Kaufman Bros. reiterated its “buy” rating for Covad, saying the company’s line-splitting plans with AT&T appeared to be on track for a summer start. Line splitting is a process in which a CLEC such as AT&T leases a line from a Bell company, then splits it with a data CLEC such as Covad. It differs from line sharing in which the originating Bell company leases directly to the data CLEC. Line splitting is seen as a way for Covad to remain competitive now that the FCC has eliminated line sharing as a UNE. Kaufman said in a report to investors Thurs.: “We continue to view the line- splitting commercial launch as a major catalyst for Covad as it saves the company’s wholesale consumer strategy, albeit in a different flavor from line sharing.” Kaufman said it also had been hearing that line sharing might be revisited by the FCC and perhaps deferred to the states, “which would imply a reversal… as the states are staunch supporters of line sharing.”