Federal appeals court ruled that breach-of-tariff suits involving applicability of state-tariffed rates could be brought under federal “filed rate doctrine” even when rates themselves weren’t contested in litigation. Ninth U.S. Appeals Court, San Francisco, reversed dismissal by U.S. Dist. Court, Helena, of breach-of-tariff lawsuit filed by 9 Mont. independent incumbent telcos against Qwest because it refused to pay terminating access charges on interexchange traffic it transported but hadn’t originated. In case (CV- 99-00080-RFC) heard July 8, telcos said their Mont. tariffs required Qwest to pay terminating access on all interexchange traffic it transported, and filed rate doctrine compelled Qwest to obey tariffs. Doctrine holds that tariffs function in lieu of customer-specific contracts as “exclusive source for terms and conditions of service.” Lower court dismissed suit on grounds that federal law as interpreted by FCC didn’t obligate Qwest to pay terminating access on traffic it didn’t originate and that filed rate doctrine didn’t apply because rates weren’t in dispute. Appeals tribunal said lower court erred by not applying filed rate doctrine. Ninth Circuit said doctrine applied not only to rates in tariffs but also to circumstances under which given rate was to be applied. Court said applicability of access charges to differing types of interexchange traffic under Mont. tariffs was central issue in case and remanded it to Dist. Court for hearing. Ninth Circuit instructed lower court to “analyze and interpret” respective obligations placed on Qwest and independents under access tariffs: “Such tariff interpretation may require fuller development of the record on telecom industry practices and technology, particularly with respect to Montana.”
Country of origin cases
Cal. Gov. Gray Davis (D) signed 3 wireless service bills. SB-1311 will allow wireless carriers and public safety agencies to enter into contracts that give safety agency absolute priority over all other wireless users. Contracts will have to conform to applicable federal laws and regulations. Measure is intended to ensure that police, fire and rescue units can use cellphones for emergency communications whenever any capability remains operational. He also signed SB-1253 that repeals state ban on cellphone and pager use by students in public schools. Measure leaves it up to each local school board to set regulations for phone use by students. Ban originally was intended to deter drug dealing in schools, but now that cellphones and pagers are commonplace family communications tool, supporters said lifting ban would improve public security. Third wireless bill Davis signed (SB-1903) requires wireless carriers to develop system by end of next year allowing consumers to obtain accurate and current information about time remaining on usage allowances of their service plans. Measure also requires carriers to provide complete and accurate information about calling plans themselves. Carriers must tell customers how to obtain service information when customers sign up for service.
FCC is exploring proposal that would provide incentives to mobile satellite service (MSS) operators to return their spectrum so it could be auctioned to bidders that could include MSS licensees and mobile wireless operators, industry sources said last week. Mobile wireless carriers have opposed plan by New ICO to allow certain terrestrial services in MSS spectrum. Several industry observers said potential auction scenario, including possible bidding credits for MSS operators who returned spectrum, could be way to bridge impasse between interest of MSS operators in adding terrestrial component to that spectrum and concerns by wireless carriers that New ICO proposal amounted to “spectrum grab” and that underutilized spectrum in band should be auctioned.
Verizon planned to introduce reverse directory service Sept. 2 in R.I., Mass., Me., and N.H. Directory assistance operators will provide name and address to correspond with phone number anywhere in U.S. Verizon said service was faster than finding addresses online. Information won’t be provided on people with unlisted or unpublished numbers, company said. Verizon customers can receive service by dialing 411. Price is 95 cents per use for calls originating from 4 states, except for Mass., where out-of-state searches are $1.25.
FCC auction of C- and D-block licenses of lower 700 MHz spectrum produced $83.53 million in high bids when 12th round closed Fri. By large margin, high bidder remained Aloha Partners with $31.8 million, followed by Cavalier Group with $9.9 million and Paul Allen-backed Vulcan Spectrum with $5.7 million. License that brought in single highest bid was L.A.-Anaheim market, on which Aloha Partners bid $8.3 million. Second largest was N.Y.-Newark, N.J., license by Cavalier at $6.9 million. Of 125 authorized bidders at start of auction on Aug. 27, 113 remained at close of day Fri. FCC’s Web site didn’t list Omega Communications as among remaining eligible bidders. Authorized bidders for Omega had included Mario Gabelli, chmn. of Gabelli Asset Management, whose media holdings have included stake in Black Entertainment TV. Also no longer listed among eligible bidders is Council Tree Wireless, which had made upfront payment of $40 million to participate in original lower 700 MHz auction, before it was scaled back after congressional action this summer that postponed most of 700 MHz auctions except for remaining spectrum in Aug. bidding. Council Tree subsequently revised its upfront payment to $6.5 million.
Cable industry’s public service announcement (PSA) for Sept. 11 also will be available in Spanish, NCTA said. Spot is to serve as tribute and will include original photographs.
With partial dissent by Comr. Martin, FCC gave only narrow relief to radar detector industry Wed., providing 30 more days to market devices that meet Part 15 limits on emissions in 11.7-12.2 GHz band but denying request for more time to make and sell compliant devices. Commission also turned down request by RadioShack to allow radar detectors that didn’t meet new emissions limits to be marketed for 6 months beyond original Sept. 27 deadline. FCC adopted emission limits earlier this summer to protect VSAT satellite terminals that complained they were suffering interference from radar detectors. Latest order, which FCC adopted Tues. and released Wed., said radar detector industry had failed to show its request for stay of rules wouldn’t cause substantial harm to other parties in proceeding, including VSAT operators. If marketing cutoff date had been delayed to extent sought by industry and RadioShack, FCC said “conservatively” up to 300,000 noncompliant detectors would have been sold.
UBS Warburg said in research note Tues. that if Cingular and VoiceStream were to merge, other national operators such as Sprint PCS, Nextel and AT&T Wireless also would benefit. Wall St. Journal had reported last week that VoiceStream was in early talks with Cingular about possible merger. On regulatory front, brokerage said first merger application made after FCC’s wireless spectrum capped sunsets in Jan. was likely to pass antitrust review more easily than subsequent requests. “Moving from 6 carriers to 5 is simply not as big of a loss to the competitive landscape as a move from 5 to 4,” firm said. “At a certain point, consumer advocates will call into question the point of the original PCS auctions should industry consolidation get taken too far.” UBS Warburg said it expected FCC would adopt procedures and rules for evaluating wireless mergers that were similar to those in place at Justice Dept. It said it expected rules to be “issue-oriented and less formulaic in nature.” Point will be to focus on maintaining wireless competition in market, note said. Report said with one fewer competitor, customer turnover or “churn” rates would be expected to decrease industrywide. UBS Warburg said that with one fewer rivals, remaining carriers also would have to spend less on advertising to keep high profile in industry. It estimated national operators spend $50 to $75 per gross subscriber addition for ads and promotions. “However, we believe advertising spending on an absolute dollar basis could decrease as a result of consolidation, because less spending will be required to advertise one brand versus 2,” report said. Wireless consolidation could yield capital expenditure savings, UBS Warburg said, citing areas such as capacity additions, footprint expansions, network upgrades. In market such as Boston, VoiceStream and Cingular have networks, although Cingular “may be hitting capacity limits in the market” given its high penetration rate because it was incumbent operator. Cingular also will have to carve out more spectrum to overlay its TDMA network with GSM, note said. VoiceStream has excess capacity in that market because it is new operator with all-digital network, firm said. “A combination would save Cingular the trouble of upgrading its network to GSM since VoiceStream already deployed the technology.”
Three wireless carriers petitioned FCC for reconsideration of recent Enhanced 911 order, arguing Commission shouldn’t hold them to “strict liability” standard for Phase 2 deadlines that depend at least partly on factors such as vendors’ supplying compliant products. FCC last month delayed E911 Phase 2 interim handset and network upgrade deadlines for small and medium-sized carriers such as Alltel and Leap Wireless (CD July 29 p4). Dobson Cellular and American Cellular filed petition for reconsideration Mon., challenging what they called “strict liability” determination of order that stipulated small and medium-sized carriers would be deemed noncompliant for failure to meet interim performance benchmarks “without regard to a vendor, manufacturer or other entity’s inability to supply compliant products.” Alltel challenged order on similar grounds, contending that “both as a legal and as a practical matter,” carriers should have chance to show why noncompliance should be excused if deadlines were missed due to reasons beyond their control. Alltel said large carriers had raised similar “extraordinary” circumstances, such as role of LECs in Phase 2 deployment. Today (Wed.) marks FCC Wireless Bureau deadline for certain large LECs to provide information on interconnections needed for E911 deployment.
FCC set Sept. 5 deadline for comments on proposal to insulate AT&T’s interest in Time Warner Entertainment from what would be merged AT&T Comcast through use of trust. FCC extended due date from original deadline of Aug. 30 because of developments involving trust -- namely, Aug. 21 announcement that AT&T and AOL Time Warner, which was other major partner in trust, had come to agreement on how to dissolve their partnership in TWE.