Federal Communications Commission (FCC)

U.S. Appeals Court, D.C., questioned Tues. how costs of Enhanced 911 upgrades that rural and other wireless carriers pass on to customers are any different from public safety costs faced by other industries such as automakers and airlines. U.S. Cellular Corp., Corr Wireless Communications and Rural Cellular Assn. challenged 1999 FCC decision to eliminate cost-recovery mechanism for carriers as precondition to their obligation to furnish E911 caller location services. Commission lifted that requirement as it related to commercial carriers based on concerns that difficulties with putting state cost recovery legislation into effect were dramatically slowing E911 rollouts. Challenge by rural carriers centered on concerns that compared to larger carriers with urban customer bases, they must spread such costs over smaller subscriber base covering larger areas. But Judges David Tatel and Merrick Garland pressed U.S. Cellular attorney Thomas Van Wazer on how public safety costs and mandates at issue in this case were different from similar requirements imposed on other industries that also must pass on costs to customers. “Don’t auto makers pass that along?” Tatel asked. “Couldn’t Ford say we're not going to install any seatbelts because they are very expensive?”

Cable operators, manufacturers and their allies took off their gloves in battle over federal govt.’s interactive TV (ITV) policy, pounding away at Disney, Viacom, Gemstar-TV Guide and consumer electronics manufacturers for pursuing ITV regulation of cable industry. In reply comments on FCC’s ITV inquiry, AT&T, Comcast, Motorola, NCTA and Scientific-Atlanta accused regulatory proponents of hypocrisy and said they sought to replace fair marketplace competition with unfair govt. rules. In particular, they attacked Disney and Viacom, major independent programmers whose many cable networks are members of NCTA. Cable interests accused programmers and broadcasters of trying to use Commission’s proceeding to gain leverage in private, commercial negotiations.

FCC Comr. Ness will leave FCC at end of May proud of her work on E-rate and Telecom Act implementation, disappointed that agency didn’t move on redefining broadcast markets to ease radio concentration and ready to “weigh her options” for next job, she told news media after FCC agenda meeting Thurs. Ness reportedly has been thinking about going into academia, but she wouldn’t give any hints in impromptu news conference other than saying any future job probably would involve communications. “I am squelching the rumor that I'm opening a world-class restaurant in the Portals,” Ness said. FCC’s Portals building is in area not known for good restaurants.

Some wireless technology developers are recommending FCC set aside 5 GHz of spectrum or more when Commission finalizes proposal for service rules for spectrum at 92 GHz. Expectation is that as early as this fall FCC will launch rulemaking, although industry already has been bouncing ideas off Commission for what developers would like to see in that spectrum. On issue whether band should be made available on unlicensed basis or via licenses, panel organized by Wireless Communications Assn. (WCA) has floated idea of hybrid approach that would license some segments and allow others to be unlicensed at more restricted power levels, said Donny Burt, vp-advanced technology, e-xpedient/CAVU. Among “last mile” technologies that can be offered in that band, developers said, are gigabit ethernet-based systems that can connect buildings and extend metropolitan area networks.

FCC unanimously approved Deutsche Telekom’s (DT) merger with VoiceStream and Powertel, imposing no special conditions on $34 billion deal and provoking renewed commitment from Sen. Hollings (D-S.C.) to seek restrictions on foreign govt. ownership in U.S. telecom companies. FCC adopted order 4-0, with Comr. Furchtgott- Roth dissenting in part on separate deal on national security issues between federal agencies and companies. Order, approved Tues., is expected to be released as early as today (Thurs.) Commission said in news release it found DT would “have neither the incentive nor the ability to engage in unfair competition, specifically predatory pricing, in the U.S. domestic mobile telephony market.”

FCC Wireless Bureau Chief Thomas Sugrue outlined several prospects for potentially freeing additional private wireless spectrum Fri., including possibility of user fees, audit of spectrum uses, current secondary spectrum proceeding. Point of user fees for private land mobile radio licenses, idea that has been floated in past and would require change by Congress, wouldn’t be to generate revenue but to increase efficiency of spectrum use, Sugrue said in lunch speech to Land Mobile Communications Council (LMCC) annual meeting in Washington. “The theory is unless there’s a cost placed on bandwidth and coverage, licensees wouldn’t improve their efficiency of both,” he said, noting that FCC couldn’t make change on its own.

Back-and-forth is continuing at FCC over ultra-wideband (UWB) proceeding, with Sirius Satellite Radio telling Commission Tues. it should ignore advice of Fantasma Networks to split rulemaking between GPS and non-GPS bands. UWB developer Fantasma told agency last week it should bifurcate rulemaking between devices in those 2 bands. Fantasma was responding to letter to FCC from broad group of wireless, GPS, satellite radio and air transport interests that asked agency to not take final action on operation of UWB devices under Part 15 rules without further notice of proposed rulemaking. Fantasma recommended FCC authorize UWB technologies that operated in non-GPS spectrum, splitting off regulatory consideration of technology using GPS spectrum. Sirius argued in latest letter that “Fantasma misunderstands the data in the record concerning interference caused by non-GPS band UWB devices, continues to ignore its own burden of proof in this matter and reached the mistaken conclusion that immediate Commission action is warranted.” Sirius contended testing of impact of UWB devices on non-GPS systems was “hardly complete” and tests to date showed interference with incumbents. Sirius told FCC that NTIA testing found deployment of UWB devices below 3.1 GHz would present interference problems for govt. and commercial systems. It said premature agency action could cause disruption to services such as Enhanced 911 and GPS. Among issues NTIA tests didn’t cover is impact of UWB on commercial receivers such as those of Sirius, said Robert Briskman, co-founder of Sirius. NTIA tests in non-GPS bands focused only on federal receivers, not some of more sensitive systems, he said. One of Sirius’s concerns is that UWB devices “that would be the most bothersome to us are ones that are not yet apparently well-defined,” Briskman said. “Specifically, I am talking about the communications devices and the devices in cars that would sense the distance to other cars,” he told us. Meanwhile, backers of UWB also were lining up at Commission. Intel in ex parte filing last week said further notice sought by group of companies wasn’t needed because: (1) Current proceeding had given commenters ample opportunity to address issues. (2) Ultra-wideband had the potential to become “a very useful technology. Adding administrative process in this case will add needless delay and cost to UWB to the detriment of consumers.” Intel said that “expeditious consideration” by FCC would advance goals of Chmn. Powell “of reforming FCC’s processes to foster innovation and investment.”

Bush Administration’s fiscal year 2002 budget proposal would increase funds for FCC, but White House’s long term strategy is to level off agency’s spending over the next 4 years. According to govt. budget details released Mon., Bush would increase FCC’s FY 2002 budget to $248.5 million from current $230 million. Total proposed outlays, or “amount the [FCC] actually spends in a given fiscal year,” would increase to $320 million from $301 million. Spending in FY 2003 and 2004 would drop to $302 million, then increase by $1 million in FY 2005 and FY 2006, respectively, under plan.

White House announced Fri. it intended to nominate 3 Washington insiders as FCC Commissioners: (1) Kevin Martin, FCC transition leader for President Bush and former aide to FCC Comr. Furchtgott-Roth. (2) Kathleen Abernathy, vp of startup network provider Broadband Office Communications, who is former U S West regulatory vp and one-time adviser to ex-FCC Comr. James Quello. (3) Mike Copps, who worked for Sen. Hollings (D-S.C.) for 15 years before leaving Hill in 1980s to work in private industry and finally Commerce Dept. in international trade area. Formal nomination won’t happen for several weeks while paperwork is prepared and security clearances completed. After that comes Senate confirmation process.

Creation of “a multibillion-dollar” Digital Opportunity Investment Trust -- with much of proceeds earmarked for public broadcasting -- is recommended in 2-year study to be released today (Thurs.). Fund would be financed by proceeds from future spectrum auctions, which Congressional Budget Office estimated would produce $18 billion over next several years. Authors of report are Newton Minow, FCC chmn. in Kennedy Administration, and Lawrence Grossman, former pres. of PBS and NBC News. Recommendations in report would require approval by Congress for use of federal money before fund could be established.