SBC begins long distance service in Cal. Tues., following approval Mon. by Cal. PUC of intrastate long distance authority, subject to certain post-entry competition safeguards. State action follows FCC’s Dec. 19 Sec. 271 interLATA service approval for SBC. Meanwhile, BellSouth became first Bell since 1983 to offer long distance to all its customers systemwide as it started long distance in Fla. and Tenn.
Country of origin cases
Eldorado Communications challenged FCC Wireless Bureau decision that granted NextWave re-auction winners relief on what had been their pending bid payment obligations. In Nov., FCC agreed to let re-auction winners opt out of their Jan. 2001 bid obligations, despite continued litigation over NextWave licenses. Commission recently followed up by approving decisions of auction winners to exit bid commitments. In application for review filed Dec. 24 at FCC, Eldorado said bureau decision should be overturned because it conflicted with statutes, regulation, case precedent, FCC policy. Earlier this month, Eldorado also asked U.S. Appeals Court, D.C., to review FCC order. Eldorado had competed with NextWave in original C-block auction, filing for bankruptcy protection after auction and returning C-block licenses it won in 1996 bidding. It said it had standing to file for review at FCC “because it is a similarly situated license applicant who was not offered the relief provided” by bureau’s decision. Eldorado argued it wasn’t given chance to dismiss its applications in that earlier auction “with a release of all associated payment obligations.” It told FCC it wouldn’t object to decision on its application being deferred until U.S. Appeals Court, D.C., issues ruling.
NAB board meetings next month in La Quinta, Cal., will see formal presentation by MSTV seeking start-up funding for digital broadcast lab -- idea that has been in works for more than 2 years. Originally planned for TV only, lab concept has been expanded to include digital radio, we're told. At Jan. 12 meeting of NAB joint board, MSTV Pres. David Donovan and Senior Vp-Engineering Victor Tawil will present proposal, requesting start-up money of $2 million annually from NAB for 3 years.
FCC asked for comments by Jan. 9 on Focal Communications plan to discontinue DSL services in Cal., Del., N.J., N.Y. and Pa. Jan. 31. FCC authorizes service discontinuations unless customers would be unable to get substitute service. Focal filed application with FCC Dec. 24, shortly after announcing Dec. 19 it had filed prenegotiated Chapter 11 bankruptcy petition. In related action, FCC granted Cable & Wireless request to discontinue interstate voice services to dedicated access customers in 41 states and D.C. Jan. 18. Commission said it had received 13 e-mails from business and govt. customers expressing concern that they couldn’t transition to new service by original Dec. 27 date. FCC staff members said they determined after discussions with Cable & Wireless that Jan. 18 gave adequate notice and company had given assurances that steps could be taken to assure customers didn’t lose service.
FCC announced Mon. it had approved Qwest’s petition to provide interLATA long distance service in Colo., Ia., Ida., Mont., N.D., Neb., Utah, Wash., Wyo. Unanimous approval of company’s Sec. 271 application marked victory for Qwest, which withdrew earlier filings covering those 9 states after questions arose about its accounting practices. But FCC stressed company must continue to meet 14-point checklist of Sec. 271 or Commission would turn to its enforcement tools to compel compliance, including penalties or suspension of approval.
Failure of Ariane 5 “10-ton” launcher Dec. 11 will affect Arianespace only indirectly and industry as a whole little, industry sources said. “It’s never good to have a failure, but that’s part of the business and everyone knows that. It’s what makes the business risky,” one satellite owner said. Ariane 5 was destroyed when anomalies occurred (CD Dec 13 p8).
Cal. PUC comr. and agency judge ordered SBC Communications and Cal. ISP Assn. (CISPA) back to bargaining table over DSL marketing disputes. Proposed settlement of Assn.’s unfair-practices complaint apparently went overboard in limiting CISPA’s ability to challenge SBC in other proceedings, Comr. Loretta Lynch and Administrative Law Judge Dorothy Duda said in decision disclosed late Wed.
Sony will consolidate 2 subsidiaries to develop outlet for Internet distribution of content originally created for broadcast, Nikkei reported Thurs., citing Sony sources. Company will combine its AII and Sony Network Contents Corp. subsidiaries on March 1, with new company capitalized at $28.8 million -- 63% held by Sony Corp. AII distributes more than 30,000 titles to Internet access providers, including movies and animations, for viewing by about 1.4 million households. Sony Network Contents produces content for broadcasters. Sony sources cited in report claimed new company’s distribution system will eliminate barrier between broadcasting and communications industries by delivering over interactive Internet material originally developed for broadcast. Viewers would be able to buy products shown on TV screen online, or answer onscreen questionnaires.
FCC at our deadline Thurs. approved 2 key Bell applications for Sec. 271 authority to enter long distance business: (1) It voted 4-0 to approve BellSouth’s application for Fla. and Tenn., last remaining states in its territory without Sec. 271 authority. (2) It voted 3-1 to approve SBC’s application for Cal., biggest market in country. Comr. Martin dissented on SBC vote. Comr. Adelstein didn’t vote.
Two wireless carriers petitioned FCC for treatment similar to that received by NextWave re-auction winners when Commission allowed those operators to opt out of their bids. FCC this month granted requests by NextWave re-auction winners for dismissal of their license applications and release from payment obligations. Summit Wireless acquired 13 of licenses in Auction No. 35, but that spectrum didn’t involve licenses tied up by NextWave litigation. However, Summit argued that it should have same opportunity for relief as that provided to winners of spectrum that since had been handed back to NextWave. “This would assure that all auction winners are treated similarly and have the opportunity to void their Auction No. 35 obligations,” company said. Summit had contended that since Jan. 2001 NextWave re-auction, value of licenses it won in that bidding also had dropped significantly. “That dramatic change in wireless valuation is the most significant change that has occurred since the start of the auction and is the most unforeseeable event,” Summit said. “The fact that long-pending litigation has permitted only some of the licenses ‘won’ in the auction to have been granted, while others have remained pending, pales in comparison.” In case of licensees who acquired licenses tied up in NextWave litigation, uncertainty involved contingent liabilities of those licenses, Summit said. Those whose licenses were granted because they weren’t part of NextWave spectrum still faced financial obligations involving “existing debt or eroded equity,” Summit said. “For all winners, the value now is far less than that at the conclusion of the auction and the licenses are far ‘under water’ vis-a-vis the obligations that remain in effect regarding them.” Summit argued FCC had failed to address issues it raised in proceeding when it granted relief to NextWave re-auction winners. Mountain Solutions, high bidder for 2 licenses in 1996 re-auction of C-block licenses, filed separate petition for reconsideration. It told FCC its applications for 2 C-block licenses had been pending before Commission for more than 6 years but NextWave relief order covered only Auction No. 35 winners. Mountain Solutions said that order unfairly “pigeonholes” it with earlier auction winners who received PCS licenses and then used dismissal options laid out by C-block restructuring order, designed to address dire financial conditions of some original C-block bidders who couldn’t make payments. Instead, Mountain Solutions compared itself to NextWave re-auction winners and said FCC had retained its down payment on licenses for more than 3 times as long. Mountain Solutions said it neither defaulted on its payment obligations nor received licenses.