Federal magistrate in San Francisco rejected plea by Cal. consumer activists to bar AT&T from enforcing mandatory 3rd party arbitration policy that prohibits customers from filing class action lawsuits to settle disputes with carrier. But U.S. Magistrate Michael Zimmerman told AT&T to keep track of complaints from customers and set Nov. 1 trial date on charges that AT&T’s policy violates Cal. consumer protection laws. Plaintiffs allege policy’s confidentiality provisions, limitations on liability and automatic waiver of right to sue if customer uses AT&T’s phone service all but eliminate public’s ability to obtain compensation for wrongs. They also object to policy’s requirement that consumers pay arbitration costs if dispute involves more than $10,000, while AT&T absorbs arbitration costs beyond $20 on smaller amounts. While arbitration may work well for some consumers, plaintiffs say it too broadly restricts their rights to redress of grievances. Zimmerman said he denied injunction because plaintiffs had failed to prove irreparable harm if policy stood while lawsuit was pending. Attorneys for plaintiffs, Cal. Consumer Action and Berkeley, Cal., resident Darcy Ting, said they would ask magistrate to return case to Cal. Superior Court, Alameda County, where it originated. AT&T in July successfully had case moved to federal court. AT&T also said policy didn’t affect consumers’ rights to pursue individual complaints at Cal. PUC, FCC or Cal. Attorney Gen.
Country of origin cases
Rules are rules, except when FCC forgets to have them published in Federal Register, it turns out. Set of rules meant to streamline reporting requirements for cable companies went into effect Tues., almost 2 years after they were supposed to. That’s because someone -- no one at FCC will ‘fess up -- forgot to have them published, we're told. In May 2000, after blunder was discovered, Commission was forced to vacate rules, then give notice it wanted to reinstate them. Rules in question were minor in nature, cable industry sources said, merely changing way records were maintained by cable companies locally. Revision reduced recordkeeping requirements in accordance with Paperwork Reduction Act of 1995. Changes originally were part of FCC 1998 biennial regulatory review ordered by Congress. Daniel Brenner, NCTA senior vp-law and regulatory policy, said he didn’t think mistake cost cable companies much time or effort to come into compliance. Cable Telecommunications Assn. (CATA), which no longer exists, had most to say on issue, filing 192 pages in comments in September 1998, after rule changes were proposed. CATA since has merged with NCTA. Former CATA Pres. Steve Effros said “you have to have some sympathy” for FCC official who made mistake. “I was unaware -- obviously we've been closed for 2 years now -- that they screwed something up.” Mistake didn’t have any “practical effect,” he said, because cable companies followed what they thought rules were and FCC, in its discretion, chose not to correct that misperception. One FCC official acknowledged irony that mistake caused more paperwork and resulted in less streamlined process for having streamlining rules enacted. Unnamed employee who made mistake no longer works at FCC, but not because of error, spokeswoman said. Commission didn’t correct problem immediately, she said, because it wasn’t aware of mistake “for a while.”
New International Launch Service (ILS) “Schedule Assurance” backup plan will allow Space Systems Loral to launch DirecTV 5 satellite by mid-Oct., firm said. Satellite will be shipped to Baikonur Cosmodrome in Kazakhstan in mid-Sept. DirecTV 5 originally was scheduled for liftoff last spring aboard Atlas 2AS, but it was delayed by customer redesigns following change in ownership to DirecTV from Primestar, Loral official said. Name of new satellite also changed to DirecTV 5 from Tempo 1. For first time, ILS used mutual backup policy or Schedule Assurance to allow Loral to switch boosters. ILS has similar contracts for mutual backup option with Alcatel, EchoStar, GE Americom, Telesat. Customers designate primary launch vehicle and backup vehicle, spokeswoman said.
FCC asked U.S. Bankruptcy Court, White Plains, N.Y., not to approve Oct. 30 confirmation hearing proposed for NextWave’s reorganization plan until after U.S. Supreme Court rules on Commission’s request for certiorari. Commission plans to ask court Sept. 12 to review U.S. Appeals Court, D.C., ruling that returned PCS licenses to bankrupt C-block bidder. D.C. Circuit had remanded decision to cancel NextWave licenses for missed payment. U.S. Attorney N.Y. Mary Jo White told Bankruptcy Court Wed. that FCC wanted Supreme Court to have opportunity to weigh certiorari petition before proposed confirmation hearing was held for NextWave reorganization plan. Meanwhile, despite uncertainty created by litigation, Office of Management & Budget (OMB) said it wasn’t fretting over possibility it might not receive auction proceeds in NextWave case. In Jan. PCS re-auction, wireless carriers bid nearly $15.4 billion on licenses for which NextWave originally had bid $4.7 billion. D.C. Circuit turned down stay request, at our deadline.
As expected, Northpoint went on record at FCC with opposition to any auction in 12.2-12.7 GHz satellite band it seeks to use for satellite service. Since company introduced concept, others including Pegasus and MDS America have made applications mirroring Northpoint’s to use spectrum originally set aside for satellite operators. In meeting with FCC Wireless Bureau and legal adviser to Comr. Abernathy on pending license and auction, Northpoint said auction would delay service, penalize company and stymie future innovation. FCC auction would delay service rollout for “perhaps years and inevitably increase cost to consumers,” it said: “Moreover, auctions have never facilitated the deployment of service for rural areas.”
NeuStar’s Number Portability Administration Center (NPAC) in 7-state Northeast region went out of service early Tues. but at our deadline Thurs. company expected it to be operating before day’s end. NeuStar operates 8 regional NPACs, which are central points where end users can be moved from one local phone company to another without giving up their original phone numbers. During outage, local phone companies in Northeast couldn’t make transfers on behalf of their customers, although NeuStar said end users hadn’t been without service. Rather, they simply had remained with their original phone company rather than switching to new one as they wanted. NeuStar Vp Steve Cory said company had determined that problem was caused by software and it was working with vendors to fix it. Cory said this was first time problem had occurred in its 5 years of operating NPAC system. Northeast region covers Conn., Mass., Me., N.H., R.I., N.Y., Vt.
Cable companies shouldn’t be allowed to pass through to basic tier subscribers expenses for sales of ads, National Assn. of Telecom Officers & Advisers (NATOA) and Montgomery County, Md., said in ex parte presentation to FCC officials. Original petition filed by Pasadena, Cal., seeks FCC ruling that federal law and Commission rules don’t allow passthrough to subscribers of cable operators’ franchise fee on revenue from nonsubscriber sources. Permitting passthrough of expenses for competitive cable services would “unfairly disadvantage competitors” to cable operators, NATOA and county said. Charter Communications is Cal. MSO in question. Comcast and Coxcom support Charter’s claim that passthrough is acceptable. NATOA and county said it was unfair for subscribers to have their cable bills increase whenever cable operator “makes money from advertising sales.” Among FCC officials in meeting were Chmn. Powell’s cable adviser, Susan Eid, and representatives of Comrs. Tristani, Copp, Martin.
Airadigm urged FCC in ex parte filing to reinstate its PCS licenses, saying that wouldn’t compromise Commission’s “litigation position” in NextWave case. Original C-block bidder Airadigm has been awaiting answer from agency on reinstatement of its licenses, cancelled after it missed payment upon entering bankruptcy in July 1999. Unlike other bankrupt C-block bidders, Airadigm told FCC it already was offering service to customers. It said it provided service to more than 30,000 subscribers in Wis. and Iowa, including individual members and govt. agencies of Oneida Tribe in Wis. Carrier petitioned either for reinstatement of its licenses or, if they cancelled automatically, waiver of that provision. “The FCC plainly has the discretion to reinstate Airadigm’s licenses based on public interest considerations,” company said in Aug. 16 filing. Carrier said that for more than year it had been “viewed through the prism of the NextWave litigation.” U.S. Appeals Court, D.C., last month remanded FCC decision to cancel NextWave licenses, citing conflict between basis for that decision and bankruptcy law. FCC plans to appeal that ruling to U.S. Supreme Court next month and has asked for stay of remand mandate. Because ruling relied on Sec. 525 of Bankruptcy Code that govt. cannot revoke licenses solely because company hasn’t paid debt, Airadigm said court rendered NextWave arguments “superfluous.” It said: “Any argument that might have made something of the Commission’s treatment of Airadigm is thus no longer an issue.” Carrier said it wasn’t seeking “relief from an inflated bid,” particularly because it had filed for bankruptcy nearly 3 years after receiving licenses. “Airadigm went bankrupt not in an effort to game the auction process,” it said, “but because as an operating service provider it spent massive sums on its capital- intensive buildout and suffered heavy losses from operations.” It said it had monthly losses of $600,000. When filing for bankruptcy, Airadigm faced monthly operating losses of $1.5 million and stopped paying creditors, including FCC. “However, it has now received additional financing and has informed the FCC that it will repay its entire debt of obligation,” carrier said. Airadigm told FCC many of its customers are in rural or underserved areas, including areas where customers had purchased wireless phone to substitute for unsatisfactory landline service.
AT&T plans to submit proposal to General Services Administration (GSA) “very shortly” to modify Metropolitan Area Acquisition (MAA) contract so it can offer long distance services in competition with FTS 2001 vendors WorldCom and Sprint. Qwest had said it planned to file proposal with GSA this week to offer long distance services to federal agencies under new crossover program that GSA opened between MAA and FTS 2001 contract holders (CD Aug 21 p1). AT&T Govt. Markets Vp John Doherty said company met Thurs. with GSA Federal Technology Service Comr. Sandy Bates to discuss AT&T plans to submit proposal. Another meeting is planned with GSA next week, Doherty said. Proposals that GSA will review won’t be in form of new contract solicitations but will be modifications to qualified holders of existing MAA or FTS 2001 contracts. “We will be submitting to the GSA very shortly a proposal to amend our MAA contract,” Doherty said. AT&T was original holder of FTS 2000 contract, but lost FTS 2001 to WorldCom and Sprint in Dec. 1998 and Jan. 1999. In May 1999, AT&T had beat Bell company competition to win first set of MAA cities for which contracts were awarded, Chicago, N.Y., San Francisco. Since then, AT&T has won share of other MAA contracts in cities such as Boston, Buffalo, Cleveland, Dallas. GSA had structured contracts so that existing MAA or FTS 2001 vendor that received contract modification could provide local telecom services in another MAA city or market FTS 2001 long distance offerings after forbearance period had passed.
FCC got strong message from small telcos and some state PUCs Tues. in comments opposing agency’s idea of moving all intercarrier compensation to bill & keep regime. Although proposal is supported by large ILECs, rural and state interests expressed fear that it would harm universal service, threaten state independence, encourage more cream-skimming and raise consumer rates. FCC has been eying idea of making intercarrier charges more uniform for more than year and recently issued notice of proposed rulemaking (NPRM) asking for views. Plan would be to replace patchwork of compensation schemes -- such as reciprocal compensation and access charges -- with one form of payment, probably bill & keep. Bill & keep essentially means neither carrier pays other.