Telecom reform package proposed to Minn. legislature by Gov. Jesse Ventura (I) appears dead for this year. Today (March 30) is procedural “pass or die” deadline for bills to clear committees in chamber of origin, but Ventura’s package (HF-510/SF-554) isn’t on schedule for House or Senate committee action. Ventura’s bills have seen only lukewarm legislative and public support and strong lobbying against proposals by local exchange industry. His legislative package featured tax, rate and regulatory incentives intended to ensure future universal service, bring down access charges, reduce long distance rates, bring about more competition, promote deployment of high-speed data services to rural areas of state. Proponents such as state Sen. Steve Kelley (D-Hopkins) said Ventura Administration did poor job of selling reform plan’s benefits while incumbent telcos played on fears of higher local phone rates. Kelley also faulted administration for attempting to impose more regulation when fewer rules were what was needed to stimulate telecom investment. However, failure of legislative package doesn’t mean issue is dead. Ventura’s Deputy Commerce Comr. Tony Mendoza said administration would consult with PUC to see whether some portions of Ventura’s plan could be implemented via PUC regulations.
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World Access has retained UBS Warburg to “explore alternatives” to restructure its debt and identify new sources of capital. Company said if effort isn’t successful it “may find it necessary to seek protection under Chapter 11” of Bankruptcy Code. World Access provides bundled voice, data and Internet services to small and medium-sized business customers in Europe. Company said preliminary 4th-quarter results showed revenue was about 15% below original guidance and losses were “significant.”
Ariz. Corp. Commission granted Qwest $23.3 million net revenue increase, to come entirely from its competitive services. Decision closing 1999 rate case gave Qwest just 11.5% of $201 million increase carrier had sought originally and 50% of amount company said it was willing to settle for. Order freezes basic local residential and business rates at current levels through 2003 except for $14.4 million in mandated cuts, mostly from $11.50 reduction in residential installation charges. Qwest also must reduce intrastate carrier access charges by $5 million. Commission said Qwest could recover up to $42.7 million in additional revenues from competitive services. Rates for those services can be priced to market, except for cap on directory assistance of $1.15 per call with first call free each month. Order also imposes strict service quality requirements on Qwest. In any month where it fails 2 or more service quality categories, company must give all customers automatic $2 credit per line. Carrier also must spend $5 million on training programs for Ariz. employees on new technologies and service improvements. Program will be administered by 7-member board consisting of 3 Qwest representatives, 3 CWA union members and one neutral member picked by other 6.
NTIA expressed concerns last week to FCC that without appropriate safeguards in proposal for use of software defined radio (SDR), “this flexibility may lead to unauthorized spectrum usage.” NTIA submitted comments on notice of proposed rulemaking (NPRM) adopted by FCC (CD Dec 8 p1) that would streamline equipment approval processes. SDR technology allows wireless phones to receive intelligence from software rather than hardware, meaning radios can be changed quickly to transmit on different frequencies and in different formats. NPRM proposes SDR definition as transmitter for which operating parameters, including frequency range and modulation type, could be altered in software without making hardware changes. Proposal would streamline equipment certification procedures so that new operating parameters could be set via software without relabeling equipment already in field. NTIA said FCC had proposed that changes in frequency, power and modulation type of SDR could be authorized as new class of permissive change, called Class 3. FCC proposed that Class 3 permissive changes be made only to equipment in which no hardware changes have been made in original device. “NTIA does believe that, in order to verify that after the modifications authorized under a Class III permissive change, the SDR still remains compliant with the Commission’s operating and service rules… the combination of the hardware and the software modification must be reauthorized.” NTIA said proposal wasn’t clear on whether all possible combinations of installed software must be tested or whether it was sufficient to test each waveform separately. NTIA recommended that, in coordination with SDR industry, FCC examine security features that could be used to prevent unauthorized modifications that could change SDR compliance. SDR Forum said it backed NPRM and sought quick adoption of rules. As for tentative conclusion that radio software and hardware should be approved in combination, forum said that as technology advances, it might make sense to test them separately, Forum said. “Testing numerous versions of software with many versions of the underlying radio equipment could become burdensome,” Forum said, and combined testing would make sense until manufacturers and FCC had acquired more experience with technology. Among recommendations in its comments are that FCC: (1) Revise SDR definition to recognize software changes that affect both desired and undesired emissions and to permit hardware changes that don’t affect emissions of either type. (2) Not require declaration that radio is SDR at time of original equipment authorization. (3) State clearly that Class II permissive change is required only when undesired emission are degraded.
Qwest turned to General Accounting Office (GAO) for relief last week after losing agency-level protest at General Services Administration (GSA) over bridge contract for FTS 2001 program. Qwest filed protest with procurement law control group of GAO over most recent extension contracts awarded to AT&T and Sprint, incumbent bidders for original FTS 2000. Qwest had filed challenge at GSA in Dec. (CD Dec 18 p2), contending sole-source interim contracts carried rates that on average were 25% higher than those for original FTS 2000 contract and that GSA should have bid work competitively. Interim contracts were awarded in Dec. after GSA missed target for shifting federal agency telecom traffic to FTS 2001 awarded to Sprint and WorldCom from old FTS 2000. Qwest raised same concerns with GAO last week as it did in GSA agency protest. Agency protest official Donald Suda said GSA decision not to seek competitive bids for interim contract was business judgment, upholding GSA decision. Qwest told GAO its protest was based on contentions that: (1) GSA violated procedural mandates of Competition in Contract Act (CICA) and Federal Acquisition Regulation. Qwest argued GSA didn’t prepare justification document for deciding not to seek competitive bids until after contracts were awarded. (2) Agency couldn’t justify sole-source awards on basis of “unusual and compelling urgency” because it knew for at least 4 months beforehand that more service coverage under FTS 2000 would need to be awarded. “Yet it failed to conduct any planning for such a procurement,” Qwest said. (3) GSA failed to demonstrate prices in bridge contract extensions were fair and reasonable. Because CICA requires this demonstration, GSA’s action “renders the bridge contracts voidable.” In particular, Qwest took aim at GSA arguments that company couldn’t provide national long distance service under federal telecom contract because it didn’t yet have FCC approval to provide interLATA services in former U S West region. “GSA’s position misses the central point: Qwest is permitted to team with a long distance provider capable of providing service in Qwest’s ‘in-region’ territory and thus submit a proposal fully responsive to GSA’s requirements,” Qwest told GAO. Qwest Govt. Systems Div. Senior Vp James Payne said Fri. company disputed GSA’s characterization of company’s compliance with Sec. 271. Teaming arrangement could have been made with contract partner for states in which long distance approval hadn’t been received yet, he said. “To say that ‘you are not allowed to provide services in all 50 states,’ that is going way beyond the rules of the FCC,” Payne said. “It’s bad policy.” GSA wasn’t available for comment.
Attorneys for FCC and Coalition for Noncommercial Media (CNM) squared off in U.S. Appeals Court, D.C., Thurs. over Western N.Y. Public Bcstg. Assn. (WNYPBA) plan to sell its 2nd noncommercial station to commercial broadcaster LIN TV for $26.2 million (CD Nov 9 p5). Washington-based CNM, which opposes conversion of PTV station to commercial broadcaster, is seeking to overturn Mass Media Bureau’s approval of that switch because move would leave Buffalo area without one of its 2 public stations. But FCC stoutly defended its approval as justified after dismissing 2 CNM counterproposals to preserve both stations as noncommercial entities. WNYPBA, which originally planned to sell station to Sinclair Bcst. Group, is pursuing sale to finance DTV conversion of its remaining station.
AT&T late last week offered proposal to FCC aimed at reducing CLEC access charges to level charged by incumbent LECs within year’s time. Plan is 2nd one proposed to agency, which is expected to act in 2-3 months to rein in CLEC prices that can be 14 times what ILECs charge long distance companies. AT&T has proposed that FCC immediately reduce originating and terminating access charges to 1.2 cents, which carrier said still would be twice what incumbent LECs charge, and then drop rates further over year. ALTS 2 months ago proposed another plan to reduce rates to 2.5 cents per min. on either end, which Assn. said would be 60% reduction from 4.27 cents CLECs now charge on average.
Skybridge, DirecTV and EchoStar joined Satellite Bcstg. & Communications Assn. in filing petitions Tues. asking FCC to reconsider decision to allow terrestrial Multichannel Video Distribution & Data Services (MVDDS), including startup Northpoint, to share spectrum with satellite operators in 12.2- 12.7 GHz band (CD March 14 p3). PanAmSat and Skybridge also filed motions for reconsideration in effort to amend rulemaking and order (R&O) that would permit nongeostationary satellite orbit (NGSO) fixed-satellite service (FSS) providers to share frequencies in Ku-band with geostationary orbit FSS systems. Each of petitions filed involved critical spectrum-sharing issues that Commission made in crucial R&Os in Jan. (CD Jan 31 p3).
FCC let AT&T off hook on MediaOne deal compliance conditions Fri. evening, suspending 2 pending deadlines for company to dispose of some key cable assets. In 3-1 vote, Commission said it was lifting deadlines to give itself “an opportunity to determine the relationship, if any,” between obligations that agency imposed on AT&T-MediaOne acquisition and recent U.S. Appeals Court, D.C., ruling that held cable ownership limits to be unconstitutional. Brief order covers both May 19 deadline for AT&T to sell its 25.5% stake in Time Warner Entertainment (TWE), spin off Liberty Media or shed cable systems with 9.7 million subscribers and today’s deadline for AT&T to state whether it would be able to comply by May 19. Agency officials offered no guidance on when they would decide whether to seek rehearing by appellate court, appeal to U.S. Supreme Court or change congressionally required limits.
Differing filings with SEC and FCC on same proposed service by WildBlue (WB) Communications are being challenged by rival Pegasus. In FCC filing, Pegasus accused company of “willful misrepresentation” to gain “milestone deferrals” and valuable Ka- band spectrum allocation. WB said in 2000 SEC filing that it wouldn’t build satellite equipped with intersatellite links (ISLs), but in later FCC filing received milestone waivers for ISLs based on premise that satellites would have them.