Leaders of the consumer electronics (CE), broadcast, cable and movie industries agreed Mon. that more consumers were embracing HDTV than ever before, but they agreed on little else, often engaging in polite and at times humorous finger-pointing over who was holding up the DTV transition. They participated in a series of panels at an HDTV Summit sponsored by the CEA in Washington. NCTA Pres. Robert Sachs chided broadcasters for trying to “extract additional compensation” for cable carriage, while NAB Pres. Eddie Fritts accused cable of refusing to pass through broadcasters’ digital signals.
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The previously announced DirecTV senior secured credit facilities and senior notes offering have been completed, parent Hughes Electronics said. Credit facilities totaled $1.675 billion, up $125 million from the original value. The senior notes are valued at $1.4 billion and will accrue nearly 8.4% interest per year, Hughes said. The notes will mature March 15, 2013.
The FCC is pushing back an auction filing window for applications for new FM translator stations and major modifications to FM translator facilities in the nonreserved FM band. The original window for Form 175 was 9 a.m. March 10-6 p.m. March 14 and the Form 349 window was 12:01 a.m. March 8-6 p.m. March 14. The Commission said it was finishing technical upgrades to its computer systems on March 8 and 9, making the Consolidated Database System unusable those days. The Form 175 window will be 9 a.m. March 10-6 p.m. March 17 and the Form 329 window 12:01 a.m. March 10-6 p.m. March 17.
The FCC Wireless Bureau granted a Qwest Wireless waiver request and extended its deadline to meet the build-out requirements for a 10 MHz E-block PCS license in Albuquerque. The bureau granted Qwest an additional 9 months, to March 31, from an original construction deadline of June 26. The spectrum at issue had been partitioned from Qwest to Tularosa Basin Telephone Co., which said it would meet the 5-year construction benchmark, leaving Qwest to meet the build-out requirements for the rest of the licensed area. The Wireless Bureau’s order noted that Tularosa hadn’t constructed any PCS facilities, instead giving the license for that partitioned block back to Qwest. Qwest told the FCC that since it reacquired that part of the spectrum it had worked on a market development plan and believed it could obtain the necessary building permits within the extended construction period. The order said the circumstances of Qwest’s request were unique because the spectrum was part of a partitioned area originally held by Qwest and later re-acquired. The population of that area represents 4% of the total of the Albuquerque basic trading area (BTA), the order said. The bureau also said Qwest already had completed “a substantial amount” of construction in the Albuquerque BTA. “Qwest was able to provide coverage to more than triple the requisite percentage of its licensed population as of its 5-year build- out deadline,” the FCC said. Qwest’s recent re-acquisition of the partitioned spectrum area and the level of construction in the general market mean it warrants “greater flexibility with regard to building out the Albuquerque partition,” the Commission said.
In the nation’s 101st TV market today there is one less TV station serving the roughly 13,000 people who live in 9 rural Neb. counties. That’s because ABC affiliate KLKE-TV (Ch. 24) Albion quietly shut off its transmitter in the wee hours of Mon. morning. Normally, such a development would be of little consequence, except for the affected viewers in Neb., but this appears to be the first station to go dark, contending it was because of costs associated with the transition to DTV.
The debate over digital content protection is continuing the long-brewing jurisdictional feud between the Commerce and Judiciary committees in both the House and the Senate. In the 107th Congress the most dramatic example was then-Senate Commerce Committee Chmn. Hollings (D-S.C.) seeking to rewrite copyright law with a digital rights management bill, a bill then-Senate Judiciary Committee Chmn. Leahy (D-Vt.) and then- ranking Republican Hatch (Utah) vowed never would pass Congress, insisting such legislation had to originate in their committee.
Following the U.S. Supreme Court’s NextWave ruling, the 10th U.S. Appeals Court, Denver, reversed a lower court decision that concluded the FCC’s license cancellation of a bankrupt PCS bidder was automatic and not covered by the Bankruptcy Code. The Supreme Court earlier this year upheld a U.S. Appeals Court, D.C., decision that had overturned an FCC decision to cancel NextWave’s licenses for a missed payment. In an order released late Tues., a 3-judge panel of the 10th Circuit said the same question was at issue in both cases: Whether an FCC license-holder who sought relief under Ch. 11 of the U.S. Bankruptcy Code was protected by parts of the Communications Act from cancellation of the license for nonpayment of license fees. “NextWave makes clear the district court’s decision in this matter was erroneous,” the 10th Circuit said. The ruling on Kansas Personal Communications Services (PCS) spectrum was made by Circuit Judge Stephanie Seymour, Circuit Judge John Porfilio, and U.S. Dist. Court Judge Tom Stagg, who was sitting on the Circuit by designation. A final ruling from the 10th Circuit in the case had been delayed until the Supreme Court issued its NextWave decision earlier this year. “The Chapter 11 filing barred the FCC from taking any action against the license of Kansas Personal Communications Services without first obtaining authority to do so from the bankruptcy court,” the court said. The 10th Circuit sent the case back to bankruptcy court. Kansas PCS had been a high bidder in the original PCS auction for 3 C-block licenses and, like NextWave, had failed to make an installment payment on the licenses. The licenses then cancelled automatically under Commission rules. The U.S. Bankruptcy Court in Kansas City had ruled that the Bankruptcy Code precluded the FCC’s automatic cancellation regulation from taking effect. The U.S. Dist. Court disagreed, taking the side of the FCC in ruling that the license cancellation was automatic and not covered by Sec. 362 of the Bankruptcy Code. That lower court concluded that even if the Bankruptcy Code did apply here, the FCC’s automatic cancellation regulation would fall within an exception for police and regulatory power. Sec. 362 of the Bankruptcy Code provides a regulatory exception to its automatic stay provisions.
FCC Wireless Bureau decision Mon. on NextWave’s PCS build-out deadlines “resolves any uncertainty regarding the timeliness of our compliance filings,” NextWave Senior Vp- Deputy Gen. Counsel Michael Wack said: “We look forward to working with the Commission as it completes its review of our build-out demonstrations.” Order stipulated that NextWave should receive 703 days beyond original 5-year construction deadlines for certain licenses. Decision reflected period during which FCC had cancelled NextWave’s licenses for missed payment, ruling later overturned by U.S. Appeals Court, D.C., and leading to return of spectrum to NextWave. Lower court decision was upheld by U.S. Supreme Court earlier this year. Part of time also involves period of negotiated settlement agreement for licenses, which Congress ultimately failed to approve. For 63 C-block licenses with original 5-year construction deadline of Jan. 3, 2002, new date is Dec. 7, 2003. For 22 F-block licenses with 5-year deadline of April 28, 2002, new date is March 31, 2004. Designated entity period for licenses is extended for same amounts of time. That means NextWave would face restrictions in selling that spectrum to carriers that weren’t also designated entity licensees until build-out was complete unless it made showing to FCC that it had met construction deadlines. “Essentially, they made a decision to reset the clock -- that’s kind of bone fairness,” Precursor Group analyst Rudy Baca said. “It’s really difficult to say that you failed to meet your build-out requirements. It would be imprudent to build out something you weren’t sure you had.” But keeping designated entity restrictions in place will limit NextWave’s ability “to do anything other than build” for now, Baca said. He said proceedings such as foreign ownership of NextWave still were open at FCC. “It was a good, sensible order that allowed NextWave to try and turn itself into a wireless company,” he said. But by keeping designated entity status in place, FCC “tipped its hands and said we will enforce the original rules,” he said. Order said agency would rule separately on request by NextWave for clarification that it had satisfied construction requirements. Agency said it would address separately request by NextWave for clarification that it already had satisfied construction requirements. FCC turned away challenge by N.Y. Telecom that charged NextWave hadn’t met original build-out deadlines and licenses should be revoked. “It seems to give them a little more time to meet their build-out requirements. If they have already met them, they can polish up a few areas where they may have a few weak spots,” Legg Mason analyst David Kaut said. That could strengthen NextWave’s hand in potential negotiations with other carriers for some of these licenses, he said, because with N.Y. Telecom challenge out of way, “they aren’t under pressure to have their licenses revoked.” Meanwhile, N.Y. Telecom plans to continue to press case at FCC, attorney Henry Goldberg saying: “We plan to file an application for review.”
FCC Wireless Bureau upheld NextWave’s interpretation of its construction build-out deadlines for its embattled PCS licenses, dismissing challenge filed by N.Y. Telecom. In order adopted Mon., Bureau granted NextWave request that set license construction deadlines for 90 C- and F-block licenses as 703 days after original 5-year construction deadlines, subject to certain conditions. “We intend to give NextWave a fair opportunity to satisfy the letter and spirit of our construction rules without a cloud over, or uncertainty about, the status of the licenses,” order said.
Alcatel Space expects 2003 “to be more active in terms of institutional and commercial orders,” CEO Pascale Sourisse said in news briefing Fri. Economic environment for year won’t be great for funding, she said, but company expects to receive 12-15 satellite orders this year. It expects sales of about 1.3 billion euros, with 50% from commercial telecom and including increase in military figures. Sourisse said company was going through request for proposal (RFP) process with several companies for minimum of 4 satellites and continued “consultations with Eutelsat, SES [Global] and Japan.” Alcatel also plans to provide satellite payloads this year, Sourisse said. Contract for payloads on Russian satellites AM2 and AM3 were announced in Jan., and company plans to compete for others, she said, including Chinese satellite and XM 4. She discussed several current projects, including Indian satellite for Agrani Satellite Services Ltd. (ASSL). That bird originally was Thaicom 3 contracted for Thailand, which subsequently cancelled agreement. Contract with ASSL was announced in March 2002 in addition to necessary changes in antennas and frequency bands to meet ASSL specifications. Sourisse said launch of ASSL satellite was targeted for early to mid 2004. When asked whether another project, KoreaSat 5, was being delayed, she said she wouldn’t use “delay” to characterize progress: “KoreaSat 5 has 2 customers, Korea Telecom and ADD [Korean Agency for Defense Developments]. Two customers make things a little complex. Things are progressing well and we expect the contract to be signed shortly.” Sourisse said domain of broadband initiatives still was active: “We have no substantial initiative, but we expect many more contracts this year.”