BOCA RATON, Fla. -- Proposal to use “bill-&-keep” system for intercarrier compensation could cause significant problems for rural carriers unless universal service was increased to cover shortfall in revenue, panelists said Wed., last day of USTA’s annual convention here. Idea of moving to bill & keep to replace access charges and other carrier compensation systems has been under study at FCC for at least 2 years. Commission has been looking at having one compensation system replace myriad of carrier-to-carrier payment plans, including access charges and reciprocal compensation. Carriers, especially Bells, support moving to bill & keep as that one payment system. As originally proposed in White Paper by FCC staffers, bill & keep would divide network into 2 parts, with caller’s phone company billing from caller to central point and call recipient’s network charging for completion of call. System is considered simpler than those used now.
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FCC officials were up in arms Thurs. over remarks by Center for Digital Democracy (CDD) Exec. Dir. Jeffrey Chester who said that media ownership studies released earlier in week were designed to “please the chairman” (CD Oct 2 p1). Chester later also suggested that 2 outside researchers, Prof. David Pritchard of U. of Wis.-Milwaukee and Asst. Prof. Mara Einstein of Queens College, City U. of N.Y., were influenced by large media companies with interests in deregulation. FCC Media Bureau Chief Kenneth Ferree said he was particularly upset at notion that members of FCC staff did their research with eye toward pleasing Chmn. Powell. “I flat out take umbrage at these personal attacks,” Ferree told us. “We didn’t cook this thing up.” He said he was open to criticisms of studies on their merits and in fact was hoping for that, “but to go after these professionals, these are honorable people, is just really a low blow.” Separately, Chester questioned integrity of study on viewpoint diversity in cross-owned newspapers and TV stations done by Pritchard. Pritchard acknowledged that his original research on subject was paid for by Quebecor Media of Canada but said FCC contacted him after he had article published in Communications Law Journal, and he FCC paid him to conduct expanded research project. Pritchard explained in phone interview that when he originally was approached by Quebecor, he told company officials that he did “objective social science” and would retain right to publish his findings, whether or not they supported Quebecor. Pritchard, chmn. of Dept. of Journalism & Mass Communication, said he had conducted similar research that was sharply critical of media consolidation for Center for the Study of Media at Laval U. in Canada. FCC never tried to influence his findings, he said: “I got no pressure whatsoever from anybody at the Commission that the results should go one way or the other. And I think the study, I think it’s not black and white.” He said his work was “rigorously objective” and he would “never cater to the whims of a funder.” Pritchard studied 10 commonly owned newspaper-TV combinations and their coverage of 2000 Presidential campaign. He said he found 5 combinations exhibited similar slant, 5 exhibited divergent slants. Chester had pointed to Einstein’s job from 1994 to early 1999 as dir.-mktg., NBC TV, as evidence that she brought bias to her work. Einstein, of Dept. of Media Studies, denied that, saying core of study originally was doctoral dissertation and had nothing to do with her old job. Her study found that financial interest and syndication rules didn’t improve program diversity and that TV networks were significantly influenced by financial incentives associated with programming ownership. “This was done as completely independent research,” she said. Ferree said researchers were chosen by FCC’s Media Ownership Working Group because of their expertise, not ideology, and Powell and his office weren’t involved in choosing them. “None of them were picked to get some particular result,” Ferree said. What’s more, he said, FCC still is reviewing studies and they could be interpreted any number of ways, even as evidence that current media ownership rules were working. “We're a long way from trying to figure out what these all mean,” he said. Chester, for his part, stood by earlier comments, telling us he believed “the FCC process is a corruptive process.” CDD will raise what it charges are inconsistencies in regulatory treatment of cable companies, specifically lack of open access requirements, when it files comments on recent FCC media ownership reports. Chester told New America Foundation Wed. that media ownership issues related to open-access requirements for cable. American Civil Liberties Union (ACLU) has joined CDD in push to require cable companies to open networks to competitive ISPs. ACLU and CDD said there were fears that cable companies could restrict access to Web sites, particularly those affiliated with cable companies’ competitors. Chester said FCC was using Internet as rationale for loosening media ownership rules under premise it provided outlet for different viewpoints. But without open access rules on cable or media ownership restrictions, cable is likely to dominate Internet content and access in future, he said. “This gives [cable companies] what they want in a pretty package,” Chester said. “The Internet as we know it is an endangered species. This is a clear attempt by a handful of companies to extend their control from TV viewership to broadband.”
BOCA RATON, Fla. -- FCC Comr. Martin told USTA members Tues. he wasn’t sure about suitability of “connection-based” proposal for collecting universal service contributions from carriers, comment that was duly noted by participants on universal service panel later in day. Speaking at USTA’s annual convention here, Martin said proposal by SBC and BellSouth could have “deterring effect on advanced services.”
Senate Commerce Committee hearing on broadband Tues. stressed importance of wireless technology as 3rd pathway for broadband deployment, with telecom experts painting grim picture of “depression” that had beset sector. While he and others acknowledged that time was running out to take action on broadband legislation this year, Chmn. Hollings (D-S.C.) stressed importance of moving away from “finger-pointing” in Congress. “We need to move beyond the intramurals up here over Tauzin-Dingell and parity,” Hollings said. “If the market demonstrates anything, it is that competition, not deregulation, drives the Bells to invest in their networks and comply with Section 271 to open their markets,” Hollings said. While panelists, which didn’t include telecom company officials, emphasized need to “jump-start” funding for sector, another common theme was how to structure unlicensed wireless rules and spectrum to allow Wi-Fi and other technologies to compete with DSL and cable.
Candidates for unexpired term of the late Laska Schoenfelder on S.D. PUC differ on whether state agency has sufficient power to ensure consumers get fair prices and high-quality service from telecom and energy companies. Incumbent Robert Sahr (R), appointed in Dec. 2001 to replace Shoenfelder, is seeking election to 4-year unexpired portion of her term against Democrat Curt Johnson, currently S.D. public and school lands commissioner. Also on ballot will be incumbent Democrat Pam Nelson, seeking her 2nd 6-year term on PUC against GOP challenger Gary Hanson, former mayor of Sioux Falls. In published interviews in S.D. media, Johnson said PUC needed more enforcement tools so it could impose large fines and other sanctions on violators of its rules and regulations, and power to force utilities to disclose outside business interests that could affect their financial health. Sahr said PUC had authority needed for prodding utilities to address service problems. He said PUC could use reporting requirements to create record that it could use to deal with recalcitrant utilities. He said PUC’s first priority should be to solve immediate problem, then address rate or service changes. Candidates split on whether state antispam law passed in Feb. would curb problem of deceptive and unwanted e-mail advertising. Johnson said law wouldn’t do much because most spam originated from servers outside U.S., beyond reach of U.S. courts. But Sahr said law’s main strength was that it allowed ISPs to act against spam without fear of lawsuits. Both candidates agreed that PUC had important role to play as impartial information source for consumers of telecom and energy services, and in ensuring that companies provided customers with full disclosure. Both also agreed that PUC should remain elected body because it made public policy.
EchoStar joined suit accusing News Corp. pay-TV unit NDS of facilitating piracy of DBS service, seeking unspecified damages. EchoStar and NagraStar both filed Fri. in U.S. Dist. Court, San Francisco, as intervenors in suit originally filed by Vivendi Universal’s Canal Plus Technologies (CPT). Companies alleged NDS employees hacked into access cards made by NagraStar, which is joint venture of EchoStar and Swiss digital broadcast technology company Kudelski. EchoStar and NagraStar told court they had interest in protecting smart card encryption technology. CPT filed suit earlier this year, alleging NDS had intercepted codes embedded in cards that allowed DBS companies to control users’ access to programming. CPT lawsuit was placed on hold while Vivendi attempted to complete deal to sell its Italian pay-TV service Telepiu to News Corp. Trial is scheduled for Jan. 9 before Judge Vaughn Walker.
FCC is seeking comment on 2 petitions on how intercarrier compensation should apply to certain kinds of wireless traffic. Comments are due Oct. 18, replies Nov. 1. T-Mobile USA, Western Wireless and Nextel asked Commission last month to “reaffirm” that wireless termination tariffs weren’t proper mechanism for creating reciprocal compensation arrangements for transport and termination of traffic. Carriers sought declaratory ruling, telling FCC that commercial mobile radio service (CMRS) carrier usually interconnected indirectly with rural ILEC by exchanging traffic through intermediate carrier. Those indirectly interconnecting carriers typically exchanged traffic under bill-and-keep arrangements, not interconnection pacts, for mobile-to-land traffic, carriers said. Those arrangements were called into question recently when some rural LECs filed state tariffs to collect reciprocal compensation for termination of certain traffic originated by CMRS operators. Wireless carriers argued that compensation for traffic only should be paid when LEC and CMRS carrier had reached interconnection agreement under Sec. 251 of Communications Act. Otherwise, they said, such traffic should fall under bill-and-keep arrangements. Wireless carriers want FCC either to direct ILECs to withdrawn existing wireless termination tariffs or to declare them unlawful and void. Second petition on which FCC sought comment was filed by US LEC in Sept. seeking declaratory ruling for FCC to reaffirm LECs were entitled to recover access charges from IXCs for provision of access service on interexchange calls originating from or terminating on wireless networks. US LEC told FCC that industry practice was for IXCs to pay access charges to LECs for such traffic but that recently one IXC (not named in filing) had declined to pay charges.
Bush Administration should encourage deployment of secure Wi-Fi networks “rather than discouraging the use of wireless technology as the industry continues to evolve,” White House advisory panel recommended Mon. Report provided stark contrast to White House Cybersecurity Czar Richard Clarke, who in speeches and his draft report National Strategy to Secure Cyberspace has argued that consumers and federal agencies should be wary about adopting Wi-Fi technology. President’s Council on Science & Technology (PCAST) Mon. unanimously approved its own report to President Bush titled Building Out Broadband at meeting at State Dept. on one-year anniversary of Bush’s signing of Executive Order creating PCAST.
In Sept. 26 letter to FCC Chmn. Powell, Qwest joined Verizon and SBC in calling for changes in TELRIC pricing formula to make it conform with its original purpose. Written by Qwest Senior Vp Steven Davis, letter said TELRIC’s purpose was “creation of economically appropriate price signals for CLECs as they choose between leasing facilities from ILECs and procuring their own.” Davis said “Congress did not intend to create a regime in which all carriers use exactly the same network and compete about nothing but marketing and salesmanship.” FCC should “correct the misapplications of TELRIC that systematically thwart the incentives of ILECs and CLECs alike to make the facilities investments needed for genuine, long-term competition,” letter said. Davis said “a wide gulf separates TELRIC as it was originally conceived from TELRIC as it is now being applied in many states” and urged FCC “to step in to narrow that gulf.” TELRIC is used to determine if prices Bells charge for leasing unbundled network elements (UNEs) to competitors are cost-based. “In recent years, non- facilities-based CLECs and many states have treated TELRIC not as the economically objective replacement-cost methodology the Commission intended but as a mandate to reduce rates in order to produce ’the widest unbundling possible,'” letter said.
FCC urged U.S. Supreme Court to reject last-minute filing by NextWave as untimely and without merit. Commission’s filing marks latest round in 11th-hour filings in case, with court to hear oral argument Oct. 8. FCC stressed that NextWave’s arguments came outside of official filing window in case, for which final brief was due from Commission last month. NextWave, in filing at Supreme Court Sept. 20, accused agency of reversing course on some of original arguments it made when wireless licenses cancelled automatically (CD Sept 26 p3). Bankrupt C-block bidder also contended recent public notice, on options for allowing NextWave re-auction winners to bow out of nearly $16 billion in outstanding bid obligations, undercut “auction integrity” principles that Commission had advocated in case.