January 16, 2001 by Sasha Samberg-Champion|Miscellaneous
FCC seemed to please no one with its compromise instant messaging (IM) conditions on its approval of AOL takeover of Time Warner (TW) last week (see separate story). Despite pleas of Democratic Comr. Tristani, agency chose not to require AOL-TW to provide immediate interoperability for competing IM providers, even when IM services were provided over TW’s cable platform. Instead, it mandated interoperability on hypothetical future IM services such as streaming video, which it labeled “advanced, IM- based high-speed services (AIHS).” AOL-TW also must file progress report with FCC every 180 days on steps it has taken toward IM interoperability. Competing IM providers immediately criticized conditions as ineffective, while many said FCC should have imposed no conditions at all.
January 16, 2001 by Alan Breznick and Dinesh Kumar|Miscellaneous
Now that FCC finally has approved AOL’s takeover of Time Warner (TW) with additional regulatory conditions, cable operators, consumer groups, phone companies, state and local regulators, ISPs, broadcasters, DBS providers, cable overbuilders and others already are girding for next big fights over extending those regulations to rest of cable industry. Likely new battle fronts include 2 separate FCC proceedings on cable open access issue and interactive TV (ITV) rules, each of which covers part of leading conditions imposed on AOL-TW by FTC and FCC. Another new battle front could be expected bill in new Congress that would create comprehensive regulatory scheme for all broadband services, whether delivered by cable, telephone, satellite or wireless technologies. “It’s going to be more diffuse,” said Precursor Group CEO Scott Cleland. “The progress will still be made but it will be more difficult to track.”
EchoStar said it would raise rates for 2 of its top packages. Monthly fee for America’s Top 50 increased 10% to $21.99 and America’s Top 100 package $1 to $30.99. Rate for premium America’s Top 150 package will be unchanged. Company said it had to raise rates because some channels had increased prices up to 40%. New rates become effective Feb. 1.
U.S. Copyright Office started 6-month negotiation period for adjustment of royalty rates and terms for performance of copyrighted sound recordings by preexisting subscription services and satellite digital audio services. Negotiation period began Jan. 9 and those who want to participate must notify Copyright Office by Jan. 31.
If competition is subsidized it can become artificial, said White Paper released Thurs. by National Telecom Coop Assn. (NTCA). “The Cost of Competition” argues that competition doesn’t necessarily work in rural areas and it shouldn’t be forced. Bottom line is “permit competition to develop in rural areas but don’t subsidize it,” NTCA said in news release. Authored by economist Dale Lehman, White Paper questioned wisdom of making universal service funds available to competitive entrants, saying that might undermine viability of broadband deployment by incumbent rural LEC. There isn’t real strong business case for broadband deployment in rural areas in first place, report said. Solution might be to increase universal service fund so more money would be available to all carriers, Lehman concluded -- www.ntca.org.
FCC denied Small Business in Telecom (SBT) petitions to deny applications of Radiofone Nationwide and Harbor Wireless, winners of 700 MHz guard band auctions. Action Thurs. also held that SBT had no standing as petitioner and that petitions, which asserted that applicants should have disclosed personal income of controlling interest holders for purposes of determining qualification for bidding credit as very small business, lacked merit.
Convergence of technologies is spurring “surprisingly” strong push by govt. agencies into telecom market, but phenomenon won’t help achieve desired goal of lower costs and more rapid deployment of services, Progress & Freedom Foundation said in study released Jan. 10. More than 200 state and local govts. are providing telecom services, with 100 offering cable service and others everything from Internet to local telephony, said study titled Does Government Belong in the Telecom Business? Argument that govt. involvement can provide benchmark of real costs of providing service, thereby helping regulators set prices at appropriate levels, is myth, study said, because municipal utilities, like other govt. entities, benefit from “plethora of tax and regulatory advantages not available to the private sector": (1) Municipalities are able to issue tax-free debt. (2) They have access to public rights-of-way on terms not available to private companies. (3) They “avoid” franchise fees and other “taxes” that private companies must pay. (4) They aren’t subject to generally accepted accounting practices. (5) They often receive interest- free loans or outright public subsidies. As result of subsidies and advantages, public utilities never provide accurate gauge of true costs of providing service but distort marketplace, study said. Because subsidies allow public utilities to “undercut” prices charged by private companies, they deter entry by real competitors and thus prevent marketplace from setting cost-based prices, it said. Study said govt. agencies that had entered telecom business had been saddled with financial losses and obsolete, legacy technologies. It said such entry distorted marketplace incentives and slowed development of private sector competition. Study said govt. role in telecom marketplace must be confined to removal of regulatory barriers to private deployment of services and reduction of telecom taxes that “account for over 18% of the typical telephone bill.” Recent study by foundation found that high telecom taxes cause one million fewer households to have 2nd telephone line.
Electronic Privacy Information Center (EPIC) counsel David Sobel said location technology for wireless phones has “issues that need to be addressed soon.” Sobel said there “is very spotty legislation” in this area. Most important is question of legal standards required for law enforcement to gain access to location information, he said.
Mich. Gov. John Engler appointed Laura Chapelle as new PSC chmn., succeeding John Strand, who recently resigned to head Mich. Legislative Advisory Council. Chapelle, who was Engler’s deputy legal counsel, will serve out 6 months remaining in Strand’s term. Her background is in energy regulation and legislation. Nomination is subject to Senate confirmation.
ALTS submitted proposal to FCC to curb high CLEC access charges without more drastic measure of mandatory detariffing. ALTS plan proposed Thurs. would: (1) Set ceiling of 2.5 cents per min. for CLECs serving large markets. Different formula would be used for rural CLECs. (2) Make CLECs subject to mandatory detariffing if they exceeded ceiling. (3) Protect CLECs from “harassing” tactics by large interexchange carriers (IXCs). For example, FCC would “affirm” that IXCs couldn’t refuse to pay filed tariff rates. Agency also would define terms under which IXCs could refuse to terminate service to end users served by CLECs that charged higher-than-permissible access rates. Proposal, called Guaranteed Reduced Exchange Access Tariffs (GREAT), was presented in comments to FCC on whether mandatory detariffing should be used to discourage excessive rates (CC Doc. 97-146). Agency had expressed concern that under “filed rate doctrine” of tariff law, CLECs could set unreasonably high rates and enforce payment through federal tariffs. ALTS said plan would “ensure reasonable CLEC access charge levels while at the same time promoting regulatory certainty.”