Decision by Lockheed Martin (LM) to sell Comsat International (CI) to World Data Consortium (WDC) marks latest step by company “to divest noncore businesses in a prudent but timely manner,” Chmn. Vance Coffman said. LM announced late Thurs. it would sell 81% of Comsat International for undisclosed amount as part of effort to leave satellite telecom market because of overcapacity (CD May 17 p7). On May 21, company announced sale of its stake in Astrolink to Liberty Satellite. CI agreement needs regulatory approval, but is expected to close in 4-6 months, LM said. LM will retain 19% of WDC, which reported revenue of $80 million in 2001. WDC is one of lowest-producing units in LM portfolio. LM announced last Dec. it was going to eliminate satellite unit just one year after acquiring former Intelsat signatory. LM bought Comsat in 2000 with hope of offering satellite and Internet communication services, but unit never turned profit, industry source said. Earlier, Lockheed sold mobile telecom unit and World Systems satellite business.
Country of origin cases
At suggestion of FCC, wireless communications service (WCS) licensees and satellite digital audio radio service (DARS) operators have been talking to each other about possible solutions to difficult terrestrial repeater issue, officials said. Several important issues remain unresolved, although sources said fact that both sides had been talking frequently in recent weeks represented movement. Talks reportedly have only dealt with technical issues, not broadcasters’ concerns about local origination of programming, we're told.
FCC Comr. Abernathy said at Thurs. press breakfast that she expected Commission to act before one-year anniversary of Verizon Wireless petition for forbearance on wireless local number portability (LNP) requirements. Verizon last July asked forbearance on requirement that carriers began providing wireless LNP capabilities by Nov. 24 of this year. If FCC doesn’t act on such forbearance petitions within one year of original filing, they're automatically granted unless agency grants temporary extension. Abernathy told reporters that range of dates under discussion to give wireless carriers more time appeared to be between 6 months advocated by public safety groups in recent filings and year or more, which she advocated. Asked whether last week’s U.S. Appeals Court, D.C., ruling that vacated certain line-sharing and unbundled network element (UNE) requirements would make it harder to impose Internet access requirements on MSOs or other service providers, she said: “I don’t think it has done that… We are trying to figure out exactly what the standard is that the court articulated in that decision.” D.C. Circuit had remanded FCC orders on line-sharing requirements and UNEs, handing ILECs victories in both cases (CD May 28 p1). Commission still is examining what “reasonable” interpretation of that decision would be. “We are still working through that, it’s very complex,” Abernathy said. In some regards, FCC is “fortunate” because notice of proposed rulemaking already is examining issues that court had highlighted as needing more justification by Commission. Example, she said, is that FCC is seeking comment on issues such as national list of UNEs. “We have already asked if additional granularity is required in this area,” she said. “It certainly gives us some more information about the court’s thinking when it comes to under what circumstances do you force line-sharing, under what circumstances do you impose unbundling requirements,” Abernathy said. Asked whether Commission still had maneuvering room to require cable operators to carry unaffiliated ISPs, she said, “I think that’s still an option.” She said she hadn’t spoken directly to Gen. Counsel’s office on issue, but it still appeared to be option, although Commission would need to justify such step. “You can’t just do it because you think it’s nice.” Asked about recent series of cases in which Supreme Court has gone different way than circuit courts on issues such as TELRIC and pole attachments, Abernathy acknowledged, “it is frustrating.” But she said Commission was obligated to abide by Circuit Court rulings in such cases unless Supreme Court held otherwise. On recent legal challenge to FCC’s classification of cable modem service as information, Abernathy said agency’s order was “very well written. I feel very strongly that we should be able to win that.” Local govt. groups recently announced they were asking U.S. Appeals Court, D.C., to review that decision.
S.C. Senate passed bill for massive restructuring of PSC that also would include near-total ban on ex parte communications and ban on certain legislators’ relatives seeking PSC posts. Senate accomplished that by amending measure passed by House (HB-5108) that originally addressed energy utility reporting requirements. Amended measure was returned to House for concurrence. Bill was inspired by legislature’s concerns about PSC members’ being too close to companies they regulated and members’ showing inadequate understanding of matters before them. Bill would restructure PSC by splitting off public advocacy functions into independent Office of Public Staff, which also would take over utility consumer advocacy functions of S.C. Dept. of Consumer Affairs. Change would occur by July 2003. Purpose, said supporters, is to avoid having agency staffers serve simultaneously as advocates before, and advisers to, PSC on pending cases. Head of new Public Staff would be appointed by governor. Neighboring N.C. has had similar organizational structure for utility regulation for many years. Legislation also would impose tougher qualifications for PSC commissioners. Under measure, candidates for PSC would have to be college graduates with expertise in telecom, energy, consumer issues, finance, economics, engineering or law. Currently, there are no educational or experience criteria for PSC membership. Measure would allow legislature this year to select PSC members under old qualification standards, but 3 of terms would end in 2004 and 4 in 2006. Currently, all members are elected at same time to identical terms. After this year, all PSC candidates would have to meet new qualifications. Another change would bar spouses and dependent children of legislators from election to PSC. Senate rejected stronger amendment to bar all close relatives of lawmakers. Bill would prohibit just about every conceivable form of ex parte contact between PSC members and regulated utilities on pending cases. Inadvertent ex parte contacts would have to be made public within 10 days. Ex parte violations could be prosecuted as misdemeanors punishable by $250 fine and up to 6 months in jail. Session is due to adjourn June 6, leaving little time for passage of this bill and election of 7 PSC members from field of 28 candidates.
House Telecom Subcommittee Chmn. Upton (R-Mich.) postponed ultrawideband spectrum management hearing to June 5, 10 a.m. in Rayburn Bldg., Rm. 2123. Hearing was originally scheduled for June 4. Witness list hasn’t been released.
Less than week before controversial European Parliament (EP) vote on revisions in 1997 European Union (EU) telecom data protection directive, 2 large party blocs, Socialist and Conservative, have switched sides and will back data retention for law enforcement purposes, we're told. If EP adopts their position -- set out in amendment introduced May 23 by Ana Palacio, member of conservative EPP group and head of EP’s Committee on Citizens’ Freedoms & Rights -- it essentially would accord with “common position” adopted in Jan. by Council of Ministers, which civil libertarians say would require companies in member countries to retain data and make it available to law enforcement agencies. It also would reverse her committee’s original position, adopted last month, that personal data should be kept only for limited periods and purposes, such as billing.
Three-judge panel of U.S. Appeals Court, D.C., handed ILECs pair of unanimous victories Fri., remanding FCC orders on line-sharing requirements and unbundled network elements (UNEs). On FCC’s UNE order, which responded to U.S. Supreme Court remand of agency’s rules, court said it mandated unbundling in every geographic market without regard “to the state of competitive impairment in any particular market.” Ruling concluded FCC “nowhere appears to have considered the advantage CLECs enjoy in being free of any duty to provide underpriced service to rural and/or residential customers and thus of any need to make up the difference elsewhere.” Line- sharing case focused on requirements that ILECs unbundle portion of copper loops so they could offer competitive DSL Internet access to CLECs. Court sided with ILEC arguments that FCC had failed to consider broadband competition in larger context of not just DSL choices, but alternatives provided by cable and satellite. Both CLECs and incumbents said ruling was likely to help shape upcoming FCC decisions, including Commission’s UNE review.
Mich. man and his attorneys filed class action lawsuit against Comcast, alleging that cable company violated privacy of its 1 million Internet subscribers. Suit, filed May 17 in U.S. Dist. Court, Detroit, charged that Comcast from Dec. 2001 through mid-Feb. 2002 collected information about Web sites visited by its subscribers and tracked their Internet surfing activities. Suit asks for $100 per day for each violation per subscriber, along with punitive damages and attorney fees, amount that could total millions. “The Congress in its wisdom has banned collecting personally identifiable information,” said attorney Steven Goren, who represents Jeffrey Klimas of Royal Oak, Mich. “Why were they doing it? I'm not sure the answer is so innocent. We have some inside information that gives us reason to believe it might not be innocent.” Following complaints from consumer groups, Comcast in Feb. changed its policy of collecting information about its customers’ Internet surfing habits (CD Feb 14 p7). “Comcast respects the privacy of our high-speed Internet subscribers and has not in any way compromised their privacy or linked Internet usage data to personally identifying information about any specific subscriber,” Comcast representative said Fri. Representative said Comcast hadn’t shared, and wouldn’t share, personal information about where subscribers went on Internet, except as required by law or as authorized by subscribers. “We believe the lawsuit is without merit and Comcast intends to defend itself vigorously,” representative said. At time issue first came up, Comcast said it had collected information for only about 6 weeks, during transition from network run by now-bankrupt Excite@Home to its own, new high- speed network. Change occurred after Comcast spokesman acknowledged company was storing Web browsing information about subscribers in Detroit, parts of Del., and Va., and planned to do so nationwide. Comcast originally had defended storage and said information was used only in aggregate in order to make its service faster and more efficient. But Comcast Pres. Stephen Burke subsequently said information never had been connected to individual subscribers. Goren said fact that it hadn’t connected the customer database with the one collecting information about Internet surfing “doesn’t get them off the hook.”
Next phase of regulatory battle over NextWave PCS license case at FCC involves construction requirements faced by bankrupt C-block bidder, according to recent filings at Commission. NextWave made initial construction filings for most of its C-block licenses in Jan. after Commission returned its previously cancelled PCS licenses last year. U.S. Appeals Court, D.C., last year reversed FCC ruling that had cancelled NextWave licenses for missed payment, resulting in overturning of $16-billion re-auction of NextWave licenses won by carriers such as Verizon Wireless. One issue at center of pending FCC petitions is whether settlement agreement reached by Commission, NextWave and re-auction winners last year had given NextWave additional time to meet certain construction requirements. But that interpretation of settlement agreement, which had been approved by Justice Dept. but ultimately not ratified by Congress, is being challenged now at FCC Wireless Bureau by N.Y. Telecom. Company, which didn’t fully disclose its ownership interests in its FCC filing, said it was interested in bidding on some NextWave licenses if they ultimately were revoked and subjected to re-auction. N.Y. Telecom contended NextWave had missed its construction deadlines.
Federal regulators “appear to have at their core the single-minded but mistaken notion that open, nondiscriminatory telecommunications platforms no longer serve the public interest when they are used to provide so- called ‘broadband’ services,” Vint Cerf WROTE Mon. to key Washington officials, adding “the FCC appears determined to deny CLECs and ISPs the very capabilities they need to survive.” Cerf, co-creator of Internet Protocol (IP) standard used for Internet and now senior vp-Internet Architecture & Technology for WorldCom, wrote FCC Chmn. Powell and Commerce Dept. Secy. Donald Evans urging open broadband markets to promote competition. “If you want competition there is one absolute way to guarantee it,” Cerf told our affiliated Washington Internet Daily -- namely, that federal regulators should ensure that “we compete within each medium.”