Senate Judiciary Committee said it had reached “agreement in principle” with White House on wiretap-related legislation, but acknowledged that negotiations on bill’s language were continuing. Committee expected to release final draft version of Dept. of Justice (DoJ) counterterrorism proposal Thurs., Chmn. Leahy (D- Vt.) and ranking Republican Hatch (Utah) said in joint statement: “These have been complex and difficult negotiations, but after much hard effort we have completed work on this bipartisan agreement.” They said they “hope to transmit the bill to Majority Leader Daschle [D-S.D.] and Republican Leader Lott [Tenn.] on Thursday.”
Country of origin cases
State Dept. and industry sources denied rumors Thurs. that State had banned all U.S. missions at International Launch Service (ILS) facility at Kazakstan because of its proximity to Afghanistan and possible U.S. military actions in region. Office of Defense Trade Controls, which licenses all munitions list items, is “not aware of anything along those lines,” State Dept. spokesman said. Reports that sources said appeared in Moscow newspaper Vedemosti were merely speculation, ILS spokeswoman said: “A lot of people are calling and asking if they can launch… There is no ban. It’s a very secure, well-guarded facility, just like the launch facilities in the U.S.” Spokeswoman said State told ILS there was no ban on launches in Kazakstan. DirecTV spokesman did see Russian report, but said delay of DirecTV 5 satellite, originally scheduled to fly at end of Oct. from ILS facility, could be attributed solely to satellite manufacturer Loral’s investigation of solar anomaly causing power degradation on one of its FS 1300 satellites (CD Oct 3 p8). Loral spokeswoman said: “DTV-5 is being held up only because of the ongoing investigation into PAS-7,” owned by PanAmSat. DirecTV spokesman did say Oct. 2 that delays were due in part to reports that State had halted shipment of satellite to Kazakstan, statement that company later clarified. “Until we hear something official from the State Department, we consider it to be a rumor,” spokesman said. Intelsat, which is scheduled to launch Intelsat 903 satellite aboard Proton launch vehicle from Kazakstan next month, said it hadn’t been told of any changes in policy by State. Spokesman said company was monitoring events in entire region very carefully: “We don’t want to put any of our employees in a situation that could be hazardous to them… We are working with the launch service vehicle provider in the region and our own government and we're making plans accordingly. If that means delays or rescheduling [launch], then that’s what we'll do.” Company said it hadn’t considered cancelling launch, but said it would be prepared for any contingencies.
Cable descramblers don’t facilitate interception of “communications by radio,” so statutory damages available under Sec. 605 of Telecom Act don’t apply to their unauthorized manufacture or sale, 3rd U.S. Appeals Court, Philadelphia, ruled. Court vacated penalties imposed under Sec. 605 by U.S. Dist. Court, Newark, N.J., on Cable City Corp., seller of unauthorized cable descramblers, and remanded case for further proceedings. Dist. Court had awarded TCR Cable Co., which brought suit, damages of $160,000 and attorney fees, under Sec. 605. Appeals Court said Sec. 605 barred only unauthorized interception of any radio communication and provided penalties for unauthorized manufacture and sale of any device that helped in decryption of satellite cable programming or direct-to-home satellite services. It agreed with defendant that Sec. 553 was sole statutory remedy for cable piracy of signals sent over terrestrial cable lines. Although Sec. 605 originally addressed wireline communications, such as those with which Cable City interfered, Congress subsequently revised section, confining its scope nearly exclusively to radio transmissions, court said. It concluded that Sec. 605 encompassed interception of satellite transmissions “to the extent reception or interception occurs prior to or not in connection with, distribution of the service over a cable system.” Once satellite transmission reaches cable system’s wire distribution phase, court said, it’s subject to Sec. 553 and no longer is within purview of Sec. 605. Cable City is subject to lesser statutory damages under Sec. 553, it said. Court observed, however, that despite cable’s precautions, cable theft business persisted: “Cable pirates have permeated the marketplace with unauthorized decoders that render viewable previously scrambled transmissions.” NCTA declined comment on decision, spokesman saying it was studying its implications.
Shaw Communications said it would offer free previews of PrideVision TV after Canadian Radio-TV & Telecom Commission (CRTC) ruled in its favor. Shaw originally offered PrideVision -- gay, lesbian and transgender cable channel -- only on pay-per-view basis. PrideVision filed complaint with CRTC, which held Shaw shouldn’t treat it any differently than other cable networks offered free preview periods. Michael D'Avella, senior vp- planning for Shaw, acknowledged that original decision was based on Shaw executives’ view of “the nature of the content.” He said Tues. that Shaw would comply with CRTC decision.
Senate Majority Leader Daschle (D-S.D.) was joined by National Telephone Co-op Assn. and 8 senators in urging FCC against making “premature” decision on access charge reform. Commission shouldn’t rush into issuing final rule on Multi-Assn. Group (MAG) proposal to remove “implicit” support in current access charges, they said in Sept. 28 letter to FCC Chmn. Powell. They said plan “provided options allowing high-cost companies to continue to recover access costs that do not constitute implicit support via access charges.” They urged Powell to allow further comment on any changes in original plan, which they said “now appears” will be recommended by FCC staff for agency’s Oct. 11 meeting. Several court decisions since May, which they didn’t identify, “are open to numerous interpretations with differing impacts on the interrelated issues in this proceeding.” In addition, they said that since “slowing economy has contributed to uncertainty” in telecom market, carriers in rural areas could be affected if MAG plan were changed with additional public input. Sens. Johnson (D-S.D.), Dorgan (D-N.D.), Conrad (D-N.D.), Baucus (D-Mont.), Harkin (D-Iowa), Grassley (R-Iowa), Thomas (R-Wyo.), and Lincoln (D-Ark.) signed letter.
EchoStar and Starband closed deal that increased former’s cash investment to $50 million, companies said, as expected (CD July 12 p3). EchoStar stake now is 32%, which will increase to 60% after construction begins on next-generation satellite for Starband service. EchoStar originally invested $50 million in Starband in April 2000 and currently serves as one of largest distribution channels for satellite Internet service.
Correction: Howard Stern radio program originates on Viacom- Infinity owned WKTU(FM) N.Y., not Inner City Bcstg.’s WBLS(FM) N.Y., as reported (CD Sept 28 p4). Inner City Vp-Corporate Counsel Lois Wright told us: “We have no association with Stern’s show and do not permit such harsh and degrading language to women and minorities to be used on any of our stations.”
In midst of settlement negotiations over NextWave’s PCS licenses, hearing set for today (Mon.) in U.S. Bankruptcy Court, White Plains, N.Y., has been delayed until Oct. 22. Court filings didn’t provide reason for delay, originally set for Sept. 12 and postponed until Oct. 1 after Sept. 11 terrorist attacks. Talks continued last week on NextWave licenses that carriers such as Alaska Native Wireless, Verizon Wireless and VoiceStream won at re-auction in Jan. U.S. Appeals Court, D.C., threw auction results into disarray this summer when it overturned FCC decision to cancel NextWave licenses for nonpayment. Commission has planned to appeal that decision to U.S. Supreme Court and recently was granted extension to Oct. 19 to file writ of certiorari. NextWave filings last week in bankruptcy court said hearing on its proposed reorganization plan, originally set for Oct. 30, also had been delayed without new date. Meanwhile, Verizon Wireless CEO Dennis Strigl outlined last week for FCC Chmn. Powell concepts that would form basis for carrier’s participation in settlement. “Our chief concern is a need for flexibility in the schedule for making the payments contemplated by the settlement,” Strigl wrote. Capital markets have shifted dramatically since FCC’s re-auction of NextWave’s licenses in Jan., Strigl said. (Auction drew $15.4 billion in bids on bankrupt carrier’s licenses and nearly $17 billion overall.) Two key components Verizon is seeking as part of settlement are staged payments so it has enough time to raise capital, and finality of agreement, which would be attained through “immediate legislation.” Strigl told Powell: “The staged payments would have the effect of recognizing that the extended delay in this process has cost us substantial amounts of money, including interest costs and the cost of foregone opportunities, as well as capital expended in order to serve our customers during the delay.” Settlement conditions Verizon outlined include: (1) FCC’s return of $1.5 billion of $1.7 billion Verizon paid as deposit for licenses it won in re-auction that since have been returned to NextWave. That would occur by Oct. 15. (2) Payment of $3.1 billion to NextWave when it surrendered licenses and there was complete finality, meaning no 3rd party actions were pending, including challenges to designated entity status of any bidders. (3) Verizon Wireless payment to govt. of $5.4 billion by Dec. 31, 2002, or one year after “complete finality” is reached on court, regulatory and bankruptcy actions, whichever comes last. Settlement proposed by Verizon Wireless also would include “exit rights.” If certain conditions weren’t met under those exit rights, FCC would cancel results of Jan. re-auction and put licenses up for new bids. Conditions leading to such scenario, under Verizon’s proposed conditions, would include: (1) If settlement doesn’t close “for any reason.” (2) If bankruptcy proceedings don’t close by end of this year. (3) If FCC and bankruptcy approvals aren’t finalized by Dec. 1. All top 10 re- auction winners must agree to settlement for it to take effect.
FCC Comr. Martin dissented from otherwise routine Commission order Thurs. because of what one aide called frustration at agency’s lack of action on related issue of whether interexchange carriers (IXCs) could refuse to pay CLEC access charges they considered too high. Martin dissented on vote to dismiss request by 5 CLECs for reconsideration of agency’s May 30 order partly granting formal complaints filed by AT&T and Sprint against Business Telecom Inc. (BTI) for excessively high access charges. FCC denied request for reconsideration because 5 CLECs weren’t party to original dispute and didn’t meet requirements for nonparties to seek reconsideration. Martin said in separate statement he dissented because of his concerns about original order’s approach to lawfulness of CLEC access charges and “the lack of guidance the Commission has provided on related issues, such as whether and under what circumstances IXCs could refuse access service.” Martin said that “to be fair, this item was not my preferred forum for addressing these issues” but it was only vehicle available because FCC hadn’t responded to questions posed by U.S. Dist. Judge Thomas Ellis, Alexandria, Va., in Jan. “That court months ago asked us to weigh in on these issues by July and we have yet to offer any response,” Martin said. “And at this point, it is unclear whether we will do so at all.” Group of 20 CLECs asked FCC in letter sent Wed. to act soon on Judge Ellis’s request for clarification of whether long distance companies could refuse to pay CLEC access charges.
There’s good chance FCC will take up ILEC accounting reform at Oct. 11 agenda meeting, various sources said. USTA and Bells have been pushing for account streamlining as part of biennial review process, arguing that current reporting system is unnecessarily burdensome (CD Aug 29 p4). Item, which originally had been scheduled for Sept. 13 agenda meeting, would cut back on number of accounts Bells have to keep and might go further and streamline related accounting rules such as affiliate transaction reporting. Bells have argued that it’s costly and time consuming to submit accounting reports based on several hundred categories of operation, some of them not pertinent to way they run their businesses. However, CLECs and some state regulators have expressed concern about reducing data reported by ILECs, saying detailed information was needed for regulatory oversight. For example, such information is used to determine rates for unbundled network elements (UNEs), depreciation and pole attachment rates, ALTS Gen. Counsel Jonathan Askin said. ALTS and CompTel have been telling FCC officials in ex parte meetings that it’s premature to go as far as Bells want, meaning to eliminate more detailed Class A accounting rules. Detailed reporting is necessary as safeguard while local competition develops, they argued. “USTA’s proposal would gut the FCC’s nonstructural accounting safeguards and strip federal and state regulators of critical data necessary to protect against potential ILEC anticompetitive and discriminatory behavior,” according to Sept. 6 ex parte presentation by ALTS, CompTel and XO Communications. They also argued that elimination of Class A reporting would give ILECs unfair advantage in UNE ratemaking “because they would be the only parties with access to disaggregated cost data.” Also rumored as possible candidate for Oct. 11 agenda meeting: MAG plan for rural access charge reform. Named for group of rural telco associations that proposed it -- Multi-Assn. Group -- plan would be companion to last year’s CALLS plan for reforming access charge regime for Bells and other large companies. Members of MAG group told Common Carrier Bureau staff at Sept. 12 ex parte meeting that, while they thought MAG plan should be adopted as filed, they would accept “reasonable alternative.”