Federal Communications Commission (FCC)

FCC Chmn. Powell, in news conference after Tues. agenda meeting, described how Commission was adjusting to economic environment in which telecom bankruptcies were becoming more common. Commission has been examining procedures that allow it to pass information on to other federal agencies “should something come coincidentally into our possession that would raise questions about violations of securities and banking laws,” he said. To that end, FCC is examining proposing formal memoranda of understanding with SEC and potentially other agencies that would help to make routine process by which such information was made available. Powell said such MOU arrangements had been made in other policy areas, including EEOC-related issues. Addressing WorldCom’s scandal, Powell told reporters it didn’t appear that “the possibility of significant disruption of services is imminent. We don’t think the current financial troubles, even if they lead to a bankruptcy situation, present a catastrophic situation for consumers.”

Senate Commerce Committee appeared to support Jonathan Adelstein for open FCC Democratic seat after cordial hearing Tues. Committee hasn’t set date for vote, spokesman said. Adelstein, telecom aide to Senate Majority Leader Daschle (D- S.D.), emphasized rural issues during hearing, particularly deployment of broadband, maintenance of universal service fund and improved management of spectrum. “We can’t deploy broadband fast enough,” Adelstein said. Commerce Committee Ranking Republican McCain (Ariz.), whose possible hold had threatened to delay confirmation, called Adelstein “a fine young man.” McCain has threatened holds on all nominations until candidate for Federal Election Commission is approved.

SAN FRANCISCO -- Internet not only is undercutting rural telcos’ regulatory-based revenue sources, but also is shifting their policy focus away from states, industry conference heard here Mon. As e-mail, instant messaging and Web-based services, along with cell calls, increasingly supplant wireline voice and fax communications, local incumbents’ access revenues plunge correspondingly, compounding regulatory reductions in access rates, Chmn. Robert Riordan told convention of OPASTCO.

Public safety groups and Motorola urged FCC to adopt channelization plan that could accommodate 802.11 technologies in part of 4.9 GHz recently allocated to public safety operations. But several commenters on proposal that would clear way for high-speed digital technologies for emergency communications in band differed on who should be eligible to use that spectrum beyond “traditional” public safety entities. Representing critical infrastructure providers such as utilities, United Telecom Council (UTC) said FCC should adopt eligibility definition that would include entities such as pipelines and railroads that coordinate with public safety during emergencies. However, Assn. of Public-Safety Communications Officials (APCO) backed narrower definition that would prevent fire, police and emergency medical entities from having to compete with others for that spectrum. One point of agreement across broad range of comments was that 50 MHz allocation in further notice approved by FCC in Feb. was important for homeland security, but still fell far short of spectrum needed for public safety operations.

When granting additional flexibility for spectrum use, several wireless carriers and equipment makers urged FCC this week not to change rules in “midstream” for incumbent licensees that already had paid billions for licenses. Wireless and satellite companies, new technology developers, broadcasters and public interest groups filed close to 200 comments on questions from agency’s Spectrum Policy Task Force. Relatively high number of comments poured into Commission despite Office of Engineering & Technology’s refusal of several requests to provide extension of July 8 deadline. Public notice last month raised policy questions ranging from potential need to redefine harmful interference to whether rural spectrum should be covered under policy different from urban areas (CD June 7 p1). Some developers of emerging technologies stressed need for FCC to provide clarity in its Part 15 rules for unlicensed devices and to furnish more spectrum as demands increased. Several large carriers, including Sprint and Cingular, urged FCC to keep intact auctions of exclusive allocations and said market- based tools such as auctions worked only if license-holders had clearly defined rights.

Lt. Gen. Harry Raduege, Defense Information Systems Agency (DISA) dir., told Washington forum Mon. that military users were trying to move into higher spectrum where possible but were finding “more and more mobility that we are needing spectrum for” in much-coveted spectrum below 3 GHz. Raduege spoke at meeting of Center for Strategic & International Studies (CSIS) Commission on Spectrum Management, chaired by former Defense Secy. James Schlesinger and former Motorola Chmn. Robert Galvin. At time when NTIA is nearing completion of 3G viability assessment, which already has missed self- imposed deadline of June 30, defense speakers at meeting sent message of being willing to move when reimbursement and relocation were possible, but citing satellite spectrum as still particularly challenging for 3G.

In response to referral from U.S. Dist. Court, Kansas City, Mo., (CD June 13 p2), FCC ruled that Sprint PCS wasn’t prohibited from charging AT&T access fees for use of Sprint PCS network, but AT&T wasn’t required to pay them absent contractual obligation to do so. In order released Fri., FCC said that until court decided whether there was contract, it was premature to decide court’s 2nd question of reasonableness of rate charged. Agency said any changes to its rules would come up as it considered pending Intercarrier Compensation proceeding (CC Doc. 01-92). Issue arose in 1998 when Sprint PCS began sending invoices to AT&T asking that latter compensate it for costs of terminating long distance traffic bound for Sprint PCS’s wireless customers. Case is Sprint Spectrum v. AT&T. FCC said Sprint PCS charged AT&T 2.8 cents per min., rate included in NECA (National Exchange Carrier Assn.) tariff, and AT&T refused to pay. As of Sept. 1, amount in dispute exceeded $60 million. Sprint filed suit in state court in Mo. and AT&T requested that it be moved to federal Dist. Court. FCC ruled that: “Sprint PCS is correct that neither the Communications Act nor any Commission rule prohibits a CMRS carrier from attempting to collect access charges from an interexchange carrier… In a detariffed, deregulated environment such as this one, carriers are free to arrange whatever compensation arrangements they like for the exchange of traffic… That Sprint PCS may seek to collect access charges from AT&T does not, however, resolve the question whether Sprint PCS may unilaterally impose such charges on AT&T… We find that there is no Commission rule that enables Sprint PCS unilaterally to impose access charges on AT&T… We disagree with Sprint PCS that the forbearance policy adopted in the CMRS Second Report and Order enables Sprint PCS to impose unilaterally whatever rate it wishes, subject only to AT&T’s right to file a complaint.”

WorldCom’s financial scandal could have repercussions on entire communications industry and how it’s regulated, said Washington policymakers, analysts and others who follow sector. FCC Comr. Copps said scandal “should give us some pause at the Commission before we rely fully on [corporate] data” when reviewing applications for mergers and other financial changes. It might be better for FCC to do its own analysis, he said. One industry lobbyist warned that companies would have tougher time getting deregulatory action on Hill, for example broadband relief sought by Bell companies through measures such as Tauzin-Dingell, because Congress was expected to become much tougher on corporations in general. Randolph May, senior fellow at Progress & Freedom Foundation, said he had hoped WorldCom’s problems wouldn’t lead to backlash against deregulation because bankruptcy was “about accounting practices and human frailties, not regulatory policy.”

As Washington awoke Wed. to realization that major long distance provider, Internet backbone operator, Web hoster and wireless operator faced possibility of bankruptcy for questionable accounting practices (see separate story, this issue), it also was not lost on many that WorldCom was active player in Washington lobbying scene. WorldCom spent just under $4 million in lobbying alone in 2001, and was 5th- largest campaign donator of all telecom companies. Its political action committee as of May 31 had nearly $2 million on hand for more donations. But on smaller scale, WorldCom also is major backer of various grass-roots lobbying efforts fighting for competitive local exchange carriers (CLECs) and ISPs on Capitol Hill and at FCC, including Voices for Choices, U.S. ISP Assn. and group born only last week, BroadNet. Executives of all 3 of those groups expressed confidence they would be able to continue if WorldCom funding were to dry up.

FCC is expected to release within days notice of proposed rulemaking approved earlier this month that would open 71-76 GHz, 81-86 GHz and 92-95 GHz to commercial uses for first time, said Michael Marcus, assoc. dir. of FCC Office of Engineering & Technology. Potential uses for spectrum include high-speed wireless local area networks, broadband access systems for Internet and point-to-point and point-to-multipoint solutions. NPRM explores various options for allowing first nongovt. use of that spectrum: (1) Traditional Part 101 point-to-point licensing. (2) Area licenses with band manager, which would be subject to auction. (3) Unlicensed approach under Part 15. Item as adopted by Commission is neutral about which of those items was best and it was seeking comment from industry on preferred plans. Part 101 licensing probably would involve annual FCC fee and coordinator fee, Marcus said. In that scenario, coordinator would make decisions on whether proposed use would cause interference with other existing users, he said. “The coordinator in doing that would have to do that in the context of specific technical criteria that are in the FCC rules,” he said. FCC will seek comment on whether situation in which operators must rely on rule changes to keep pace with new technology would work in environment in which technology is changing so rapidly, Marcus said. Several developers made clear Wed. that they would prefer to see service rules that didn’t involve auctions. John Lovberg, chief technology officer of Loea Communications, which petitioned FCC for rule change, raised concern that auctions could “encourage artificial spectrum scarcity.” He said point-to-point licensing under Part 101 was solution that had appeared most amenable to NTIA and Interagency Radio Advisory Council. -- MG