Cal. PUC audit of SBC/Pacific Bell alleges telco failed to report $1.9 billion in operating profits for years 1997 and 1998. That would mean Pac Bell owed customers $350 million refund under terms of its alternative regulation program for those years. Pac Bell denied underreporting profits and disputed audit findings. Audit’s conclusion, if ultimately upheld, would mean average $35 owed per customer, although actual amount to each would depend on amount of billings.
Country of origin cases
Mich. Senate passed 3 broadband-related bills critical to high-speed Internet access development plan of Gov. John Engler (R). Meanwhile, group that conducted recent dial-up modem speed tests in Mich. (CD Feb 15 p12), which found actual throughput to be about half of what 56 kbps modems are capable of, said Mich. wasn’t only state where actual dial-up speeds fell well below modems’ top designed speed.
Astrium is seeking $133 million damages from TRW and 2 other companies in U.S. Dist. Court, L.A., for problems associated with solar panel contracts on 9 satellites constructed for company. Following weeks of negotiations, companies haven’t been able to agree, and case apparently will go to court, industry source said. Astrium has revised its original complaint and now is accusing TRW of fraud in its handling of contract. Optical Filter Corp. (OFC) of Natick, Mass., div. of Corning Netoptix, and Pilkington Optronics of Tustin, Cal., were also named in suit, accused of negligence.
In latest skirmish over regulatory reform in rural areas, rural LECs (RLECs) urged FCC to give them flexible rules to better serve their costly areas, while competitors said agency should stick to its guns in eliminating protections for RLECs. Their comments, filed Feb. 14, were in response to 2nd part of agency’s reform effort. FCC last year acted on access and universal service portions of Multi- Association Group (MAG) plan proposed by RLECs (CD Oct 12 p1). Agency now is looking at several portions that were deferred, such as incentive regulation to encourage rural carriers to move from rate-of-return to price cap regulation.
FCC’s tentative conclusion that DSL and other phone- based Internet services should be reclassified as information services (CD Feb 15 p1) is likely to have broad impact on cable industry, which is nation’s leading provider of high- speed Internet access. With parallel proceedings examining classification of cable modem service pending, Commission appears to be extending its vision of broadband across platforms, observers say, and that could add regulatory burdens to cable modem service that aren’t there today. For example, in FCC’s notice of proposed rulemaking (NPRM) are questions about universal service requirements and whether companies other than traditional wireline telephone service providers should be only ones contributing to it.
CCC Globalcom launched long distance switching platform in L.A. Houston-based CLEC said southern Cal. was “key market” due to large number of newly acquired customers in region and large immigrant population it would target for international voice services. L.A. switch provides gateway to Pacific rim and Latin America for call termination and origination and will reduce costs 20%-30%, it said.
Wireline local number portability has been “costly experiment that has failed to foster competition,” CTIA CEO Tom Wheeler told FCC Chmn. Powell Wed. He reiterated concerns of large wireless carriers that Commission not move forward on rules that would implement wireless local number portability (LNP) by planned date of Nov. 24. Verizon Wireless has asked agency to forebear on that requirement, move opposed by state regulators. “There is scant evidence that wireline consumers have received benefits to justify the $3 billion they were forced to spend for local exchange carrier number portability,” Wheeler wrote. Wireline LNP hasn’t produced benefits originally envisioned by Commission and Congress, he said. Wheeler cited “collapse of competitive local exchange carriers” over last 4 years, period in which he said 225 carriers had entered bankruptcy or merger agreements. Trend “has made it clear that number portability -- by itself -- is not sufficient to ensure a competitive market,” he said. Wheeler said there already was significant competition in wireless market without LNP. He said carriers would spend $1 billion in first year to implement wireless LNP and $500 million in each year after that. CTIA also asked FCC to make decision on wireless LNP forbearance request “as rapidly as possible.” Without “clear direction” from Commission, carriers are having difficulty figuring out how to allocate resources, he said.
Following complaints from consumer groups, Comcast changed its policy of collecting information about its customers’ Internet surfing habits without notifying them. Comcast launched its own Internet network 6 weeks ago after Excite@Home was declared bankrupt. At that point, Comcast began storing IP and URL information. Comcast Pres. Stephen Burke said Wed. that storage was just temporary. “Beginning immediately, we will stop storing this individual customer information in order to completely reassure our customers that the privacy of their information is secure,” he said. Turnaround occurred after Comcast spokesman acknowledged company already was storing Web browsing information about subscribers in Detroit, parts of Del., and Va. and planned to do so nationwide by week’s end, affecting all 950,000 Comcast Internet subscribers.
U.S. Trade Representative Robert Zoellick said Wed. he was asking World Trade Organization (WTO) for dispute settlement panel on complaint that Mexico hadn’t opened its cross-border telecom market to competitors. Bush Administration has said in last year that Mexico has made some progress in areas such as ensuring that competitors obtain local interconnection from incumbent Telmex. But serious concerns on international interconnection issues have remained unresolved. Request marks first time USTR under Zoellick has made such request to WTO. In Nov. 2000, U.S. asked WTO to convene dispute settlement panel on complaints about Mexico, process that wasn’t pursued when some progress was made. But USTR said its latest WTO request was focused on unresolved issue of U.S. carriers’ paying inflated charges because “Mexico has still not begun to dismantle its anticompetitive cross-border telecommunications regime.” Panel request is expected to be brought up at March 8 meeting of WTO’s dispute settlement body.
FCC Chmn. Powell endorsed report by Computer Science & Telecom Board and said many of its recommendations were serving “as the backbone of the Commission’s broadband policy.” Report, Broadband: Bringing Home the Bits, said any broadband regulatory regime should defer new or existing regulations in early stages, promote facilities-based competition, encourage new entrants. “Consistent with your recommendations, the Commission will redouble its efforts to monitor the deployment of, and investment in, broadband- capable infrastructure,” Powell wrote in letter dated Mon. Report, which followed 2-year study, encourages govt. to monitor market developments rather than pursue policies that might inhibit the market. Report, originally released in Nov., was product of the Committee on Broadband Last Mile Technology and its staff.