Global Radio signed letter of intent with Delphi to design and develop first satellite-direct digital radio service for Europe. Under agreement, Delphi will design and develop radios for original equipment manufacturers in European market.
Country of origin cases
Controversial cost-sharing proposal on international Internet connections is expected to again emerge as issue at Asia Pacific Economic Cooperation (APEC) telecom ministerial meeting in Shanghai next week. Over U.S. objections, World Telecom Standardization Assembly (WTSA) approved recommendation 2 years ago that administrations involved in international Internet connections negotiate bilateral commercial arrangements for cost-sharing. While Australia had been among countries taking lead on International Charging Arrangements for Internet Services (ICAIS) issue, several industry observers said APEC meeting in Shanghai is of particular significance because China has since taken lead role in backing this policy. ICAIS is expected to be topic both at U.S.-China bilateral meeting that is set for Shanghai prior to start of APEC meeting, and at APEC’s ministerial gathering, sources said. China has teed up proposal for ministerial meeting that would address how to charge for Internet interconnections when 2 countries have disproportionate traffic flows. “It’s become sort of a religious issue -- either you believe it or you don’t,” one industry source said: “Yet this is a real problem that we have to follow.”
U.S. Supreme Court Mon. denied EchoStar appeal to protect what EchoStar called First Amendment right of consumers to choose programming. Company was seeking to overturn Sept. 2001 ruling by U.S. Appeals Court, Atlanta, that upheld constitutionality of ban on EchoStar broadcasting local news and information outside of local market (CD April 3 p3). Challenge arose out of 1998 lawsuit that TV networks, including ABC, CBS, Fox and NBC, filed in U.S. Dist. Court, Miami, to stop EchoStar from providing programming to consumers unless it originated from network affiliates closest to viewers’ homes.
HERSHEY, PA. -- Roy Stewart, chief of FCC Office of Bcst. License Policy, didn’t once mention EEO during his presentation here Mon. at Pa. Assn. of Bcstrs. (PAB) -- but that was subject of every question but one he received in spirited session. In its 3rd attempt to adopt employment rules for TV and cable that will withstand court scrutiny (2 early rules were ruled unconstitutional), he said Commission was trying to “strike a balance” to assure that all prospective employees would hear about industry job openings.
Comcast and AT&T Broadband defended their merger to FCC, saying combination of nation’s first- and 3rd-largest cable companies would be in public interest, wouldn’t violate Communications Act and would “have no anticompetitive effects in any relevant market.” In turnabout, American Cable Assn. (ACA) jumped on board in favor of merger, telling FCC that deal wouldn’t threaten livelihood of country’s more than 900 small and rural cable operators. Comcast and AT&T Broadband, in 328 pages of reply comments, said dozens of people and entities who filed opposing comments last month (CD April 30 p1) based their assertions on “unfounded fears, rank speculation and thinly disguised pursuit of private agendas.” Opponents, who included coalition of 38 national and state groups such as Consumer Federation of America, said proposed $72 billion merger would create corporate behemoth that would raise prices, offer fewer choices in programming, preclude competition on Internet and among Internet service providers (ISPs), dictate technology standards, put customer service needs last. But companies rejected those arguments and said they already had proved otherwise.
Cal. PUC adopted PUC Pres. Loretta Lynch’s proposal for interim reductions in SBC/Pacific Bell unbundled network element (UNE) rates. Adopted plan reduced Pac Bell’s unbundled loop rate by 15.1%, to $9.93, with 69% cut in unbundled end-office switching rate and 79% cut in tandem rate. Lynch’s plan, based on SBC’s UNE rates in Ill., had support of several Pac Bell competitors, who had indicated they might drop their opposition to Pac Bell’s interLATA long distance entry bid if Lynch’s UNE cuts were approved. PUC chose Lynch’s plan over 2 alternative proposals that would have produced smaller reductions in switching rates. Ruling came in PUC’s examination of Pac Bell UNE rates (Cases 01-02- 024, 034, 035) opened after AT&T and WorldCom requested formal review. PUC agreed that interim rates were warranted due to evidence supporting reasonable presumption that carrier’s costs have declined since rates originally were set, and due to unanticipated delays in case caused by procedural problems and need to examine competing cost models. Pac Bell called reductions “unreasonable, unjustified and unsupported by the record.” Carrier said its loop rates already were among lowest in nation. It said new artificially lowered prices would steer competitors toward leasing Pac Bell facilities rather than building their own networks, while discouraging it from investing in its own network because there would be too little return. AT&T and Z-Tel praised PUC for taking its most significant step ever to level competitive playing field. WorldCom also lauded decision, saying it will drop its opposition to Pac Bell’s long distance entry and launch its “Neighborhood” combined local/long distance service statewide. New interim rates will remain in effect until PUC completes review and sets permanent UNE rates.
DBS services might see increased potential audience thanks to bill that cleared Senate Commerce Committee Fri. Currently it is against law for anyone to receive DBS signal while at sea (prohibition begins moment ship leaves shore), but Sen. Breaux (D-La.) successfully added amendment to S- 2329, Ship, Seafarer and Container Security Act, to allow any ship to receive DBS signals at sea. Sen. Nelson (D-Fla.) wasn’t present for markup but asked that his objection to provision be noted; otherwise there was no objection and amendment was added, after which bill passed by voice vote. Also approved by voice vote Fri. was S-414 by Sen. Cleland (D-Ga.). Bill would create grant program at NTIA to give historically black colleges and universities, Hispanic- serving institutions, tribal colleges and Alaska Native and Native Hawaiian higher education institutions $250 million to buy computers, wire campuses and provide technology training. Original bill called for funding in FY 2003, but committee adopted Cleland’s amendment changing year to FY 2004.
FCC denied EchoStar extension of time to launch DBS service at 175 degrees W. orbit location. Permits for 175 W. were issued in 1989 and no progress has been made toward implementation of service, and authorizations to operate 22 channels were cancelled, Commission said, and spectrum will be reassigned. EchoStar had requested extension of operation milestones until Dec., but were required to start DBS operations by Aug. 15, 1999, and Nov. 30, 1998. In 1993, Commission determined EchoStar met first due diligence requirement and assigned company 22 channels 175 W. Original deadline to begin operations was Aug. 1995. EchoStar can appeal decision. It’s one of first times major DBS company has been denied “routine extension,” industry source said: “I don’t know what you could write into it, but it could portend bad things to come” for EchoStar. Industry lawyer said decision shows Commission “is tightening up” on milestones.
Investors said Adelphia either failed to make good on interest payments that came due this week, or made payments and then quickly pulled them back, official with Moody’s Investors Service told us Thurs. As result, credit rating firm lowered its ratings of Adelphia notes again on $19 billion in debt and preferred securities and was telling its clients company may have already run out of cash. Company could file for bankruptcy within couple of months, said Moody’s Senior Vp-Corp. Finance Russell Solomon. “We now believe that the prospect of a potential bankruptcy filing is more likely and may ultimately be unavoidable,” Moody’s said in written statement. That left potential bidders for cable system assets Adelphia put up for sale last week (CD May 10 p8) in position of having to decide whether they would get better deal now -- when company is in desperate need of cash -- or wait until assets are in hands of bankruptcy court judge who might auction them off at bargain price. Systems on sale include 1.2 million basic subscribers in southern Cal., 750,000 in Fla., and 225,000 in other parts of Southeast. Potential bidders could include Charter and Cox. Charter spokesman declined to comment. Cox spokeswoman didn’t immediately return phone message seeking comment.
Oftel ordered British Telecom to alter payment mechanisms by which operators purchase unmetered Internet access. U.K. regulator said change would reduce costs for those carriers. In future, BT must charge operators after fact for providing unmetered Internet access, compared with existing method under which operators must pay BT in advance, Oftel said. Regulator said changes would apply retroactively from start of Flat Rate Internet Access Call Origination (FRIACO) service. Oftel said that meant BT would have to refund operators “the additional costs they have incurred by having to make advance payments… The new charging arrangements are in line with BT’s arrangements for charging for metered Internet access, where operators pay in arrears for capacity.” Oftel Dir. Gen.-Telecommunications David Edmonds said: “Unmetered access is often a stepping stone to broadband. New broadband connections are running at around 20,000 per week, although consumers should continue to benefit from competition in the narrowband market.” Oftel said new system would create savings for operators on FRIACO payments, although it didn’t estimate extent of such savings. Oftel earlier ordered BT to provide wholesale unmetered Internet access service for operator and new payment decision took that measure further “to ensure that operators pay for it on terms that are equivalent to those for metered services,” Edmonds said.