Nearly $4 billion in contracts for local telecom services awarded by General Services Administration (GSA) suffer from serious delays and high overhead rates that federal agencies don’t realize they are paying, Rep. Davis (R-Va.) charged Thurs. “Each city is its own soap opera -- all with a bad plot line,” Davis said of 37 Metropolitan Area Acquisition (MAA) contracts awarded by GSA in 20 cities. Davis, chmn. of House Govt. Reform Subcommittee on Technology & Procurement Policy, in interview outlined problems that still plague MAA program nearly 2 years after GSA began it. Delay and cost issues come as GSA is facing increased congressional scrutiny for continued delays on $1.5 billion FTS 2001 long distance contract. Davis’s panel will hold first hearing on MAA contracts Wed. and he has requested General Accounting Office (GAO) report that’s expected to paint bleak portrait of MAA implementation to date. At hearing, details are expected to be released on overhead rates and delays, including fact that only 9.45% of agency traffic in N.Y.C. has switched to local services contract awarded to AT&T 2 years ago, staffer said. “Different cities have different excuses,” Davis said. “Some have had a long time to implement it. Either it’s not a priority or they're not sure how to do it.”
Country of origin cases
Real Access Alliance urged U.S. Supreme Court to reject arguments that Sec. 224 of Telecom Act, which applies to pole attachments, also mandates access to private buildings by wireless carriers. In June 5 amicus brief in pole attachment case, Alliance said interpretation of Sec. 224, which was advanced in earlier brief by FCC and wireless carriers, “could adversely affect property owners by inadvertently endorsing a broader interpretation of Section 224 than Congress intended.” Case is FCC and NTCA v. Gulf Power Co. (00-832, 00-843) in which 11th U.S. Appeals Court, Atlanta, ruled that FCC lacked jurisdiction to regulate pole attachment fees paid by cable operators when providing Internet access (CD Jan 23 p3). Alliance, which represents real estate and property management companies, said 11th Circuit properly held that Sec. 224 “does not confer benefits on persons seeking to attach wireless facilities.” Supreme Court is hearing appeal of that decision. Alliance said adding wireless protection to Sec. 224 went well beyond original intent of Congress.
Iridium announced commercial availability of mobile satellite data services, including dial-up connectivity and direct Internet connections Wed. as “add on” company hoped would boost usage, CEO Gino Picasso told us. New data service is latest step in Iridium’s effort to reshape its profile and boost customer usage following return from bankruptcy under new management (CD May 3 p5). Company returned to global telephone market last March with niche marketing plans for maritime, aviation, oil and gas, mining, construction, forestry, govt. and military users in remote areas that lacked communication networks. Picasso said availability of data services “has been the missing link” for target customers: “The ability to send and receive e-mails, data files and conduct basic Web services will prove invaluable for users in the field.” He said users would be able to access network from anyplace in world.
Ellipso is “still in business” despite FCC decision that revoked its Ka-band satellite license for failing to meet construction milestones, Vp-International & Govt. Affairs Gerald Helman told us Tues. Ellipso subsidiary Mobile Communications was one of several companies Commission took action against in wide- ranging order expected to clear spectrum for 2nd round applicants and force companies to build systems without delay (CD May 29 p4). Ellipso had proposed utilizing 17 satellites in low-Earth orbit to provide competitive telephone service with Iridium and Globalstar, but tight financial markets caused by failure of similar projects hurt efforts to raise $1.5 billion to begin service, industry sources said. “Things just never quite came together, although they have great alternative with McCaw and New ICO,” source said.
Key DTV must-carry issue isn’t whether Congress would impose dual-carriage now, but whether “the plain language of the Cable Act requires” it, broadcasters said in latest FCC filing. NAB, MSTV and ALTV, in reply to cable group’s opposition to reconsideration of latest DTV must-carry decision, said “the basic rationale behind must-carry has not changed” because cable’s dominance of TV households has only increased since analog must- carry decision. They also said: (1) Congressional limit on percentage of cable channels devoted to must-carry seldom had been reached and “it would be hard to imagine it being reached with the temporary addition of digital must-carry.” (2) Clear reading of “primary video” requires cable to carry all broadcast multicast channels. (3) It would be impossible to monitor acceptable degradation of broadcast signals, so cable shouldn’t be allowed to “tamper” with bit stream. They also said there was no cost for cable to carry broadcast signal in original digital format, but converter was required to change to new format.
ISPs are divided on whether revised broadband bill moving through House will help or harm their industry, and division has become acrimonious. On one side is U.S. Internet Industry Assn. (USIIA), headed by former Democratic Rep. Dave McClure. USIIA last week sent advisory to its members urging them to write Congress in favor of HR-1542, broadband bill sponsored by House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.) on basis of amendments adopted during committee markup. That advisory has led other ISP associations, such as U.S. ISP Assn. (USISPA) and American ISP Assn. (AISPA), to insist that McClure doesn’t speak for all ISPs. “I've heard from a lot of ISPs who are really angry about the USIIA advisory,” AISPA Pres. Sue Ashdown said. Originally opposed to Tauzin-Dingell -- which would allow Bells to send data across interLATA boundaries and free them from interconnection obligations for new equipment - - USIIA had asked Commerce Committee to modify bill, and association said in advisory May 23 that those modifications had been made. “Based on the version of the bill that was approved in committee, USIIA endorses passage of the bill and strongly recommends that ISPs support it.” McClure said specifically that bill gained “substantial strengthening of the pro-ISP portions of the bill.” He urged ISPs to read amended bill, particularly clauses that declare that: (1) Bell DSL customer could have ISP of his or her choice. (2) Bells must permit colocation by any ISP that has equipment to do so. Maura Colleton, USISPA’s senior adviser, wrote next day that her 800 members -- mostly ISPs and state ISP associations -- “are extremely concerned with McClure’s representations of the opinions of our industry.” She said: “They do not believe that the so-called ’strong measures’ in support of ISPs’ are any more than unenforceable window-dressing designed to appease the very constituents this bill, if passed, would summarily eliminate -- independent ISPs.” McClure has found himself subject of angry postings on listservs. One of those flaming him was Chris Merrick, CEO of Colo.-based Peak to Peak Internet. In interview with our affiliated Warren’s Washington Internet Daily, Merrick said: “I am willing to publicly bloodlet against anyone that thinks ISPs and RBOCs can be friends… I'm not wrong; HR-1542 is evil.”
FCC released order on petitions for reconsideration or clarification of previous order that streamlined licensing procedures and restructured rules affecting multiple address systems (MAS) service. MAS is radiocommunications service in 900 MHz and licensed under Part 101 of FCC’s rules. Service covers 3.2 MHz of spectrum and typically has been used by power, petroleum and security industries for alarm and control systems and by paging industry to control multiple paging transmitters in same geographic area. Among petitioners was Critical Infrastructure Communications Coalition (CICC), which represents railroads, pipelines, utilities. Original order had designated 928/952/956 MHz and 20 of 40 channel pairs in 923/941 MHz for public safety/federal govt. and private internal services. CICC had objected to decision barring service that’s provided on nonprofit, cost-shared basis, instead arguing that FCC should continue to allow licensing of nonprofit cost-shared systems in private MAS bands by parties that otherwise would be eligible for individual licenses. Coalition contended that industries that wanted access to that spectrum for private systems could aid FCC in policing spectrum uses and protecting against “sham” private applications so for-profit systems didn’t use band. “Upon reviewing the record, we believe that reinstating the provision allowing nonprofit, cost-shared use is in the public interest,” order said. But FCC didn’t grant separate request to allow private carrier service on MAS bands designated for private internal use. Agency said future licensees in MAS bands designated for private internal use were barred from providing private carrier service. Commission said it would modify rules to stress that grandfathered operations couldn’t be altered in manner that wasn’t consistent with current rules. Order, adopted May 22 and released Mon., also clarified treatment of incumbents and added type of economic area composed of Gulf of Mexico for MAS service. U.S. and Mexico have bilateral agreement that covers 20 channels in 932/941 MHz, FCC said.
Liberty Media Corp. will get larger, and possibly majority, stake in UnitedGlobalCom in return for its $1.4 billion investment of cash and assets in United, companies announced Tues. Under revised deal, United will issue 60 million shares to Liberty, up from 54.1 million in original agreement announced in Feb. Liberty also may receive up to another 26.5 million shares in United, depending on stock prices or value of latter’s subsidiaries over next year. As result, companies said, Liberty will pick up at least 44% pro forma economic stake in United and possibly as much as 51%. They also said Liberty’s previously announced one billion Euro investment in United’s European unit, United Pan-Europe Communications (UPC), will take form of convertible loan that can be exchanged into ordinary stock shares. United also said UPC’s rights offering had been cancelled.
AT&T said 372.6 million shares of its common stock were exchanged Fri. for 438.2 million shares of AT&T Wireless Group tracking stock. Exchange ratio, as planned, was set at 1.176 shares of tracker for each share of AT&T common. Based on tracker’s closing price of $18.09 Fri., value of exchange was $7.9 billion. Number of shares of common swapped fell short of original 427.7 million AT&T said it was willing to make part of offer (CD April 19 p5). At that time, AT&T said ratio of 1.176 represented 7% premium, based on AT&T Wireless’s trading at $19.88 and common at $21.85 April 18. By time exchange was completed, premium had shrunk to closer to 1%. AT&T said final results of exchange would be announced June 4. It has said it would retain $3 billion of Wireless stock for later disposition, with parent’s remaining interest expected to be distributed as dividend to holders of AT&T common. AT&T plans to spin off AT&T Wireless as separate publicly held company by summer.
Companion Senate and House bills to provide $3 billion in loans to rural carriers could enhance existing federal broadband deployment initiatives, but NTIA’s “consultation” role in proposed Rural Utilities Service (RUS) program would add unnecessary layer of bureaucracy that could detract from program’s effectiveness, rural telecom industry source said. HR-2038, co-sponsored by Reps. Stupak (D-Mich.) and Pomeroy (D-N.D.), and S-966, co- sponsored by Sens. Dorgan (D-N.D.), Minority Leader Daschle (D- S.D.), Johnson (D-S.D.), Murray (D-Wash.) and Wellstone (D-Wis.), would make loans at 2% interest available until Sept. 30, 2006. Program would provide funds and “other extensions of credit” for network infrastructure projects in nonmetropolitan area communities with 20,000 or fewer residents.