Federal Communications Commission (FCC)

Progress & Freedom Foundation (PFF) scholar Randolph May produced “scorecard” for evaluating FCC’s action on upcoming UNE Triennial Review, cable high-speed access and wireline broadband. PFF benchmarks for scoring Commission’s actions are: (1) Unbundling and sharing should not be required for newly installed fiber or other noncopper facilities. (2) Broadband services, regardless of technology platform, should not be subject to unbundling and sharing requirements or Computer 2-type proceedings. (3) Local switching should be removed promptly from unbundling and sharing regime. (4) Interoffice transport and high-capacity loops should be removed promptly from unbundling and sharing regime and “special access” should not be reregulated. (5) Presumptive sunset regime with competitive triggers should be established for removal of copper local loops from unbundling and sharing requirements. (6) Commission should preempt states from mandating unbundling and sharing requirements that exceed scope of federal obligations. (7) Elements that have been removed from unbundling and sharing regime should not be considered on “competitive checklist” for evaluating Sec. 271 applications. May’s paper said FCC would be forced to choose between 2 competing visions of telecom regulation: (1) Static regulated competition, where communications services were provided essentially in natural monopoly environment, which is likely to be case indefinitely. Question for regulators would be how to shape regulation to guarantee competitor access to incumbent facilities. (2) Dynamic deregulation, where communication services were provided in what rapidly was becoming naturally competitive environment that encouraged more competition and innovation. Regulators would have to figure out how to transition to framework with less regulation, leaving regulation in place only where necessary for remaining “pockets of monopoly.” May said if Commission chose first vision, investment in advanced telecom facilities and equipment would be impaired. Other vision would lead to long-term sustainable competition, he said.

CTIA plans to petition FCC next week to seek another delay in implementing wireless local number portability (LNP), Pres. Tom Wheeler said Wed. In July, Commission gave wireless carriers 3rd extension, to Nov. 24, 2003, to provide LNP in 100 largest Metropolitan Statistical Areas. Wheeler cited new CTIA data on wireline rate centers that 90% of time when consumers wanted to keep phone number when switching from wireline to wireless, “they're told to go pound sand.” Point of new challenge to LNP rules, he said, is that they shouldn’t be implemented until “the competition that they claimed they were doing in the first place is made possible by their rules.”

FTC urged House Commerce Committee Wed. to give it power to levy fees on telemarketers to fund proposed do-not-call registry. Commerce Committee spokesman Ken Johnson said House could take action to implement funding mechanism as early as today (Thurs.) through continuing resolution. During “briefing” today on Capitol Hill, FTC Chmn. Timothy Muris told committee it would take about $16 million to fund list and if Congress didn’t act soon to give FTC funding authorization, Commission wouldn’t be able to implement list this year. Committee Chmn. Tauzin (R-La.) said he was concerned about potential jurisdictional issues that could hamper FTC’s implementation of list, but Johnson said Tauzin agreed to limit authorization to 1-2 years. During briefing, Tauzin asked Muris about reauthorizing system after period of time, to which Muris replied: “It would be reasonable to assess the system after it’s up and running.” Tauzin told Muris: “You understand there are some concerns about authorizing fees for a system that’s not yet set up.”

IDT Winstar and Verizon told FCC they had settled dispute over former’s acquisition of assets of fixed wireless provider that filed for Chapter 11 protection in 2001. But Verizon said in Jan. 2 filing that its counter-petition for declaratory ruling would remain alive because issues could recur under similar scenarios. IDT Winstar and Bell companies had disagreed in last year over terms of interconnection agreements to which RBOCs must be held for fixed wireless provider that has emerged from Chapter 11. In April, IDT Winstar filed emergency petition for declaratory ruling, raising concerns about “immediate threats” by Verizon and Qwest to deny or delay providing facilities. Winstar contended Communications Act and agency rules mandated that those facilities and services be provided to company. But Bell companies contended federal bankruptcy law required IDT Winstar to assume and cure past debt on contracts assumed by pre-Chapter 11 Winstar. Verizon told Commission its process shouldn’t be used to allow carriers in bankruptcy to avoid requirements of bankruptcy court and that Winstar had period to assume or reject existing services or facilities and to make “appropriate cure” for services assumed from pre-Chapter 11 company. IDT Winstar and Verizon said their notice informing FCC of settlement didn’t affect relief that Winstar sought against other LECs in its original petition.

Facing May deadline for digital conversion, public broadcasters have largely come up empty in their digital carriage negotiations with cable operators in more than 3 years of talks following the successful carriage deal with Time Warner in Sept. 1999. Only other MSO to sign voluntary carriage agreement with PTV stations was Insight Communications in April last year.

Wireless technology developers urged FCC to move forward with allocation plan for 71-76 GHz, 81-86 GHz and 92-95 GHz that would allow commercial users and govt. and scientific operations to co-exist. Allocation and licensing proposals for W-band frequencies were part of comments due this week in rulemaking that would pave way for commercial operations in those bands for first time. Developers have eyed that millimeter wave spectrum for rollout of gigabit-per-sec. broadband capacity, particularly in areas where fiber couldn’t reach easily.

FCC is likely to loosen some unbundled network elements (UNE), said AT&T Gen. Counsel James Cicconi during debate on broadband at Federal Communications Bar Assn. conference Fri. Cicconi said noteworthy part of ruling will be “how the Commission views the important problems of switches,” he said, adding Bell companies have been unwilling or unable to facilitate the “hot cut” process.

ALTS filed letters with FCC from 4 small facilities- based CLEC members that emphasized importance of their getting access to unbundled loops and transport to serve their small business customers. Letters -- from Cbeyond, DSL.net, Eschelon and Network Telephone -- urged Commission not to eliminate access to TELRIC-priced loops and transport when it acted on Triennial UNE [unbundled network element] Review. CLECs told agency they could offer small businesses large price, customer service and technological benefits because of their ability to purchase unbundled loops and transport from ILECs. “Without an ability to buy loops, transport, tandem switching and interconnection trucking at TELRIC rates, Eschelon would be forced out of business,” Eschelon said in letter. DSL.net said it was founded in 1998 to meet data communications needs of “underserved small and medium-sized business market” and depended on several types of UNEs to do it -- 2-wire copper loops, interoffice transport and high-capacity copper loops such as DS1. Network Telephone said it served small communities such as Hattiesburg and Vicksburg, Miss., and its success relied on continued availability of UNEs such as last-mile digital loops and interoffice transport. Federal policy requires FCC to keep needs of small business in mind when it takes action, ALTS Gen. Counsel Jonathan Askin said.

FCC told 9th U.S. Appeals Court, San Francisco, that it had “reasonably” concluded that cable modem service was interstate information service. “The Commission’s reading of the statute makes good sense,” agency wrote court last week. Court is reviewing FCC’s classification of cable modem service, which is being challenged by Earthlink, Verizon, WorldCom, consumer groups and several others. In March, FCC said that cable modem service was interstate information service and that Internet delivered over cable wasn’t subject to common carrier regulations (CD March 15 p1). Ruling went to heart of questions about rights of local franchising authorities, their ability to levy taxes on such services, whether cable modem ever would be subject to universal service requirements and whether cable operators would have to offer “open access” to Internet service providers (ISPs). In its filing, FCC said court’s ruling 2 years ago in AT&T v. Portland, Ore., didn’t require agency to classify cable modem as telecom service, just that law classified telecom component of cable modem service as such. Because Telecom Act doesn’t define clearly how it should be classified, “this court must defer to the FCC’s reasonable interpretation of ambiguous statutory terms,” Commission said. Agency said it believed cable operators were using telecom to provide end users with information service. Therefore, it said, it concluded that cable operators’ offering of telecom to ISPs constituted private carrier service, not common carrier telecom service. FCC said it asserted federal jurisdiction properly because Internet communications frequently crossed state and national boundaries. Court should reject any suggestion that agency’s order “somehow impairs the ability of local governments to manage their rights of way,” agency said: “The Commission has not yet decided how (if at all) its classification of cable modem service will affect local regulation of rights-of-way.” That question is subject of separate proceeding. FCC in March opened rulemaking to examine which govt. agencies, if any, had power to regulate cable modem service and invited comment on whether, “in light of marketplace developments, it is necessary or appropriate at this time” to require multiple ISP access. FCC asked court to dismiss challenge by Verizon, which said Commission should adopt same classification for wireline broadband services. Again, FCC said that question was part of separate proceeding and shouldn’t be considered by court.

Advanced Communications said opposition by FCC Enforcement Bureau, EchoStar, GM and Hughes to Advanced’s petition to intervene in DBS case was based incorrectly on legal proceeding that didn’t address its concerns. Advanced said its petition to intervene and seek continuance of 1995 order, which denied Advanced application for extension to construct, launch and operate DBS system, involved new evidence that Commission had based previous decision on “expectation of future auction revenues” and whether consideration of such expectations violated Communications Act. Opponents said decision U.S. Appeals Court, D.C., in 1996 dealt with issue, but Advanced quoted unpublished decision that said “we express no opinions as to whether the Commission was in fact barred from taking into account the expected impact on federal revenues.” Advanced also said new evidence on Commission decision was “tainted,” making 1995 order and court decisions “not controlling.”