Work on U.S. draft proposal for World Radio Conference (WRC) 2003 that would create international identification of public safety spectrum has been slowed by continued opposition of U.S. military over one band, sources said. Sustained DoD opposition to use of 380-400 MHz, historically used by NATO for global operations, contributed to Motorola’s recent withdrawal from one of lead roles in drafting U.S. proposal in that area. Still under consideration are 700 MHz and 4.9 GHz, both allocated in U.S. for public safety, but NATO band already designated in Europe for public safety interoperability appears to be off table in U.S., several sources said. Steve Sharkey, dir.-spectrum & standard strategies for Motorola, said 700 MHz and 4.9 GHz are “great bands” for U.S. to back for international harmonization for public safety. But as to key objective in crafting U.S. position on spectrum harmonization in this area, he said: “We have been frustrated in not being able to achieve that and that is one of the reasons that we have decided to use our resources elsewhere.”

Qwest got good news from Ariz. but bad news from Ida. in its efforts to win interLATA long distance approval. In Ariz., operation support system (OSS) tester Cap Gemini Ernst & Young reported Qwest successfully completed retesting of critical OSS functions that were found wanting in Dec. preliminary report and now had passed. Qwest said final favorable OSS report on Ariz. meant it should be able to seek FCC long distance approval for Ariz. in late May. Ariz. test was separate from 13-state regional OSS test conducted by KPMG Consulting. On that regional test, whose preliminary results were released April 19, CLEC AT&T said Qwest’s claims that test results showed it passed with flying colors might be overstated. AT&T said KPMG identified several issues where “the scores Qwest kept for itself are suspect.” AT&T said that raised question whether Qwest actually was doing what it was saying it did. AT&T said data integrity and other questionable areas in KPMG draft report would be reviewed over coming weeks and final report could contain “significant alterations” from draft findings: “Anyone who claims or suggests that the draft report is the end of the process is engaging in significant and irresponsible exaggeration.” Qwest’s bad news came in Ida., where PUC concluded its long distance entry wasn’t in public interest because its unbundled network element (UNE) rates weren’t cost-based. PUC said current UNE rates in state were set in arbitrated 1999 interconnection agreement between AT&T and Qwest, but there was no evidence showing those prices satisfied FCC requirement that UNE rates be based on total element long run incremental cost (TELRIC) or that UNEs in contract conform to list of UNEs that must be offered to CLECs. PUC said there was pending docket to review Qwest UNE rates and terms in Idaho but proceeding was nowhere near completion.

Source familiar with proposed merger of AT&T Broadband and Comcast said companies were “in discussions” about possibility of speeding up elections for members of what would be board of merged AT&T Comcast. Discussions were disclosed as Senate Judiciary subcommittee prepared to hold hearing Tues. (today) on proposed merger. In recent weeks, Council for Institutional Investors and N.Y.C. Comptroller William Thompson complained to SEC about merged company’s corporate governance provisions as they were described in preliminary proxy statements sent to investors. Among provisions that raised objections was plan not to hold elections until 2005. Source said companies now were considering pushing elections up to 2004. AT&T CEO Michael Armstrong and Comcast Pres. Brian Roberts are among those scheduled to testify at hearing of Subcommittee on Antitrust, Competition and Business & Consumer Rights. Meanwhile, Consumer Federation of America and Computer & Communications Industry Assn. were planning to try to steal some thunder from corporate executives touting merger. CFA and CCIA, which weren’t invited to subcommittee hearing, planned to hold press briefing beforehand to release their study exposing what they called “myth of cross-technology competition” and FCC’s hopes that intermodal competition would influence cable’s market power. “The proposed Comcast merger would create the nation’s largest cable company, threatening competition and further weakening consumers’ choice,” groups said in written statement. One competitor, BellSouth, also got out front, saying in statement that regulatory disparity between cable and phone companies didn’t serve public interest. In meantime, BellSouth Vp-Govt. Affairs Herschel Abbott said, consumers wouldn’t be served by “creating a behemoth” that would dominate market for high- speed Internet service. AT&T spokesman responded to BellSouth’s criticism by saying combined AT&T Broadband- Comcast would further challenge BellSouth’s dominance of local telephone service “and weaken the monopoly they hold so dear.”

NTIA is raising interference concerns over some parts of notice of proposed rulemaking (NPRM) issued by FCC in Oct. that would update sections of its Parts 2, 15 and 18 rules, including provisions that would modify emissions to limits on certain Part 15 devices above 2 GHz. In letter to Office of Engineering & Technology Chief Edmond Thomas, NTIA cited part of proposal that would increase allowable field strengths for radio frequency identification (RFID) rules. On RFID systems, proposal would harmonize U.S. rules with standards for such devices in Europe and Australia. NPRM sought comment on changes in power levels for RFID tags operating at 425-435 MHz, which NTIA said was within 420-450 MHz allocated on primary basis to federal govt. Military systems operating in that spectrum include radiolocation operations for aircraft and missile surveillance, early warning and fire control, said letter from Fredrick Wentland, acting associate administrator of NTIA’s Office of Spectrum Management. “The radiolocation radars in this band include ground, shipborne and airborne radars that are essential to the nation’s homeland defense,” Wentland wrote. NASA also uses band for telemetry and telecommand, he said. Citing preliminary NTIA analysis, he said power level changes in parameters for RFID tags “could result in interference to federal systems” and NTIA and federal agencies “cannot support the proposed rule changes.” In next 90 days, NTIA and agencies will complete studies and provide them to Commission. In NPRM, FCC said it agreed with Savi Technologies that proposed Part 15 changes would allow more advanced systems to operate at 433 MHz. In other areas: (1) NTIA objected to 11 dB increase in field strength limits for RFID tags in 13.11-13.41 MHz. It said 13.26-13.36 MHz was allocated to aeronautical mobile services, which are designated for safety-of-life communications. FAA uses that spectrum for communications in oceanic and remote areas. “The increase in field strength by 11 dB could severely reduce the distance that an aircraft can successfully communicate with a ground flight tracking system,” NTIA said. NTIA recommended use of another part of high frequency band that wouldn’t require increase in Part 15 emission limits in frequency band allocated for Aeronautical Mobile Services. NTIA said it needed 90 more days to complete studies in that area. (2) NTIA said it and other federal agencies also needed another 90 days to complete studies on protection of sensitive services and to identify continuing R&D projects above 38.6 GHz. FCC sought comment on need for changes in restricted bands above 38.6 GHz and whether there were Part 15 rules designed to protect sensitive service such as govt. operations that should be modified. Among govt. services operating in that spectrum are 13 bands used by NASA for space research and Earth exploration satellite service sensors for missions such as weather forecasting and global warming measurements, NTIA said.

When commercial users need more wireless spectrum, “the federal government cannot continue to be the spectrum grocery store,” Badri Younes, Defense Dept. dir. of spectrum management, said Thurs. “This is not right,” he told Washington conference of World Computer & Internet Law Congress, sponsored by FCBA and Computer Law Assn. While he said federal govt. users such as DoD were interested in coming up with solutions on where additional spectrum for 3G would come from, he raised series of questions that he said must be answered first. FCC and NTIA last fall undertook scaled-back assessment of bands available for 3G, including 1710-1770 MHz now occupied by federal govt. users, mostly military. Younes said questions included whether spectrum could be reallocated from existing users without endangering national security and whether FCC had done all it could to ensure that industry had incentives to use spectrum efficiently. Younes also questioned 200 MHz of spectrum that CTIA has cited as needed for provision of advanced wireless services, based on past ITU estimates. Many assumptions on which ITU based estimate “have not been looked at very carefully,” Younes said. In particular, he said that 3G services haven’t developed as quickly as originally thought, with Merrill Lynch estimating that many systems aren’t expected to begin operating until 2005, Younes said. He called for more “realistic” assessment of 3G prospects, compared to optimistic estimates created in late 1990s when financial markets were brighter. “The need is not real,” he said. “We need more time to make public policy decisions on advanced spectrum services.” He reiterated view of several DoD officials at recent public policy forums that there is imbalance in how policy decisions are made when officials weigh national security and public safety needs of federal users versus need to accommodate growth of commercial services. “The current public policy debate shows the imbalance in how spectrum is evaluated and allocated,” Younes said. “Dropped calls should not take precedence over misdropped bombs,” he said. Stressing need for interagency coordination, he raised possibility of “White House-level oversight committee” in which diverse entities could be brought together to decide such issues. Noting difficulties in preliminary assessment of whether parts of 1710-1770 MHz band could be freed for 3G, he said “nobody should assume that band is going to be made available” although DoD, NTIA and FCC are continuing to work together. In keynote, NTIA Dir. Nancy Victory said spectrum search for new technologies or expanded uses of existing ones “often seems to pit the innovators against the incumbents. The debates get cast an either/or proposition. That needs to change.” Outlining themes from recent NTIA Spectrum Summit, Victory noted policymakers “need to remove the clouds over spectrum availability and provide certainty for the deployment of new services.” Among areas of intense debate over additional wireless spectrum is 800 MHz band and spectrum under evaluation for 3G, she said. Victory called recent FCC proposal to examine alternatives for mitigating interference to public safety users at 800 MHz “a good starting point and a catalyst for rethinking how things should be done in the future.” She said federal, state and local public safety systems “need a plan for an effective and orderly transition to a fully interoperable web of systems.”

After setback in federal court, video and record retailers are pressing Congress to tinker with U.S. copyright law to clarify that online stores can use unauthorized or “home brew” trailers to promote sale and rental of copyrighted movies. In letters dated April 8, VSDA and NARM asked members of House Judiciary Committee to enlarge section of proposed Music Online Competition Act (MOCA) to cover in-store and online display of movie clips compiled by sources other than content owners. MOCA in present form would permit stores and online retailers to play music previews only.

Pegasus is seeking shareholder approval for reverse 1- for-10 stock split of Class A and Class B common stock, it said in preliminary proxy filed Tues. with SEC. Board said current low price of Class A shares could have negative effect on outstanding shares and on transaction costs paid by stockholders as well as potential to raise capital by issuing more Class A stock in future.

SEC opened formal investigation against Adelphia, company said Wed. in brief statement. Until now, inquiry by SEC staff had been informal. Formal decision by SEC to move into new phase of investigation gives agency power to subpoena company documents and compel executives, including members of founding Rigas family, to testify during depositions. Adelphia twice has missed deadline to file its annual 10-K report to SEC (CD April 17 p2), saying it was working on its own review with auditors Deloitte & Touche. Questions center on Adelphia’s handling of $2.3 billion in off-balance sheet loans to entities controlled by Rigas family. Adelphia executives have called them “co-borrowing” agreements and said at least some of money was used by Rigases to buy company stock. However, company itself still would be responsible for loans should family default. Analysts have openly criticized family members, accusing them of concealing loans for personal gain. Stock has lost more than half its value since March 27, when loans became public. Adelphia and Rigases, meanwhile, have said little publicly, and stockholders filed class-action lawsuits.

Private wireless operators asked FCC Chmn. Powell Tues. to delay June 19 start of 700 MHz auction, citing proceeding at Commission to eliminate interference at 800 MHz. FCC Wireless Bureau turned down CTIA request last week to delay auction for upper and lower bands at 700 MHz (CD April 11 p1). Letter by 8 representatives of private land mobile radio services (PLMRS) cited comment period that Commission had opened for notice of proposed rulemaking that addressed interference experienced by public safety operators at 800 MHz. Private wireless community said several proposals “under preliminary discussion” involved retuning some incumbents 800 MHz licensees to 700 MHz band, including licenses covered by Ch. 60-69 auction. “While it is premature to assume that one of these proposals is the best course of action available, or the course of action the Commission ultimately will follow, it is equally premature to eliminate such proposals from consideration by going forward with the auctions on the scheduled date,” letter said. Groups said comment period for NPRM ends May 6, 2 days before short forms from auction participants are due at Commission. “It would be a disservice to thousands of 800 MHz incumbent licensees, and to the nation’s public safety needs, to allow the 700 MHz auction to proceed after interested PLMRS parties have expended extensive time and resources to devise a workable solution dependent on the availability of that spectrum,” letter said. Filing was signed by Aeronautical Radio Inc., American Assn. of Railroads, Forest Industries Telecommunications, Industrial Telecommunications Assn., frequency coordinator MRFAC, National Assn. of Mfrs., Small Business in Telecommunications, United Telecom Council. Groups said FCC appeared “eager to consider any and all reasonable solutions to 800 MHz public safety interference.” Saying that that was among themes raised at recent NTIA Spectrum Summit, letter said holding auction on current timeline could compromise “the Commission’s ability to meet that imperative.”

Comptroller of N.Y.C. is latest to urge SEC Chmn. Harvey Pitt to stop AT&T and Comcast from creating new corporate governance for their proposed merger of AT&T Broadband unit and Comcast. Comptroller William Thompson, trustee of 4 and investment adviser to 5 N.Y.C. pension funds, told Pitt he objects to preliminary proxy statements to shareholders that show companies want to keep new board of directors in place for 3 years and disallow any challenges by shareholders and new company wouldn’t hold annual shareholders meeting until 2005. “The proposed broadband spinoff/merger transaction is bundled with a number of new, significant corporate governance changes, which, in their totality, would deal a crippling blow to shareholder rights, while insulating [the] AT&T Comcast board of directors from accountability to the shareholders,” Thompson wrote in April 10 letter. He argued that bundling merger deal with corporate governance changes would violate Securities Exchange Act of 1934, which limited companies’ ability to group related matters into single proposal.