Cable industry analysts said they doubt reported AOL-Time Warner (AOL-TW) bid for AT&T Broadband could pass regulatory muster, but one observer said govt. disarray over ownership caps could provide “a window of opportunity” for megadeal. Prospect of such corporate marriage was raised by Liberty Media Chmn. John Malone in discussions with analysts, many of whom said any alliance between AT&T Broadband, largest cable operator in nation with 15.3 million subscribers, and TW Cable, second largest cable operator with 12.8 million, would raise serious regulatory questions, even with courts openly criticizing FCC’s cable cross- ownership cap and new FCC Chmn Powell’s stated reluctance to impose such limits. AOL declined comment. AT&T officials said they were exploring their restructuring options and were in talks with “more than one company” but declined to identify any.
Country of origin cases
NEW ORLEANS - Although they didn’t call for FCC mandates, 2 of 4 remaining agency commissioners said Fri. that broadcasters should voluntarily keep tapes or transcripts of programs that might be subject of Commission indecency enforcement actions. Comr. Copps, who first raised issue immediately after taking office, said voluntary industry action might be “the best way to avoid a draconian solution.” He suggested broadcasters keep tapes or transcripts of all programming, but Comr. Abernathy said that might be limited to programming that broadcasters believed might generate complaints.
FCC Wireless Bureau seeks comment on revised wireless E911 Phase 2 waiver request filed by Cingular Wireless. In its original request July 6, carrier asked for limited waiver of Phase 2 rules to permit it to deploy hybrid network and handset E911 system. Cingular had said it would deploy Enhanced Observed Time Difference of Arrival technology in GSM networks and switch-based location technology for Time Division Multiple Access (TMDA) networks. Bureau started pleading cycle July 11. Before comments became due, Cingular on July 24 withdrew request for waiver for TDMA networks. It said it was concluding tests to validate switch-based technology it planned to deploy on TMDA networks. Cingular resubmitted waiver request for TDMA networks Aug. 30. It now seeks to deploy TruePosition network-based location technology on TDMA/Advanced Mobile Phone Service (AMPS) networks. TruePosition guaranteed to Cingular that technology would meet Commission’s accuracy requirements for handsets and had committed to deploying technology on 2,000 TDMA/AMPS cell sites in 2002, which should satisfy all outstanding Public Safety Answering Point (PSAP) requests for Phase 2 information, carrier said. From 2003 forward, Cingular said it would be able to deploy Phase 2 within 6 months of PSAP request and TruePosition technology would give it capacity to be fully deployed on TDMA/AMPS networks by late 4th quarter 2004 or early 2005, depending on PSAP requests. Cingular said it hadn’t tested current version of TruePosition technology, and would be unable to do so in short term, and sought “contingent enforcement relief” in event accuracy and deployments commitments weren’t met. Comments are due Sept. 19, replies Sept. 26.
Liberty Media signed final agreement gaining major foothold in Europe with acquisition of 6 regional cable TV companies from Germany’s Deutsche Telekom (DT). Deal, worth about $4.8 billion, would make Liberty one of world’s largest operators of broadband cable networks. Agreement engineered by Liberty Chmn. John Malone still requires regulatory approval by Germany’s cartel authority. German cable operations pass 15 million homes and have 10 million customers. Liberty also gains: (1) 100% ownership of DT’s DeTeKS, “last mile” distribution network that will provide Liberty with direct access to 33% of customer base. (2) 100% of Media Services GmbH, information technology service provider of digital distribution platform in Germany.
Some 5.6 million telephone subscribers in 13 states have made clear their wish not to receive calls from telemarketers by placing their home phone numbers on state “no-call” telemarketing lists. Wis. last week became 14th state to enact statewide no- call list law, while similar bills in Cal. and Mich. have advanced out of their chamber of origin and are pending in opposite chamber’s committees.
Excite@Home didn’t meet Fri. deadline for $50 million payment to its creditors and Comcast and Cox both bailed out of service agreements with beleaguered company. Meanwhile, Excite, nation’s largest broadband services provider, retained new financial advisers to explore its restructuring options. Fri. was deadline for Excite to make $50 million payment on notes called in by investors affiliated with Promethean Asset Management. When it called in notes, Promethean charged that Excite had misrepresented its financial condition, which Excite denies. Promethean source said late Fri. that although discussions continued, Excite@Home “has taken concrete steps that may form the foundation for a potentially constructive solution.” As result, source said, Promethean didn’t take immediate steps to remedy breach. Excite spokeswoman said lawyers were “on the case” in trying to fight off creditors.
FCC asked U.S. Bankruptcy Court, White Plains, N.Y., Fri. to reject NextWave’s “speculative and skeletal disclosure statement” that is part of its pending plan of reorganization. Wide-ranging objection by Commission assailed lack of information about NextWave’s financing, business plan, expected cash flow, use of funds, market analysis and liquidation plan. “It is impossible for this court or any creditor to make an informed judgment about the proposed current plan,” FCC said, contending it was “unconfirmable on its face.” Objection underscored that NextWave’s compliance with eligibility requirements for regaining its PCS licenses still had to be decided in pending regulatory proceedings. “It is both premature and misleading for NextWave to affirmatively represent to creditors that it believes itself to be in compliance with the various eligibility requirements for the licenses,” FCC said: “Any such representation must be tempered by language apprising creditors that the threshold question of its eligibility to hold the licenses is a matter to be decided by the FCC alone, and that this court lacks jurisdiction to issue any orders with respect to the question of NextWave’s compliance.” Meanwhile, group of investors that included CIBC, Liberty, Pacific Capital Group and TPG Partners also filed objection to disclosure statement Fri.
FCC granted Fla. PSC request for another area code to relieve 561 code in Boca Raton, Vero Beach, W. Palm Beach vicinity. In Aug. 28 letter to PSC, FCC Common Carrier Bureau Chief Dorothy Attwood accepted state’s plan to geographically divide original 561 area code into 2, using new code to create 2nd region. N. American Numbering Plan Administrator (NANPA) denied Fla. plan in Nov. because it didn’t provide relief for long enough time. Plan extended number availability in one of those regions for only 3 years, while estimating that numbers would last 24 years in other region, which is more sparsely populated. Industry standards call for at least 5 years for geographic splits and discourages disparities between 2 regions of more than 15 years. State came back with new plan that takes into consideration results of new number pooling activity to push exhaust date to 5 years. PSC also contended that less populated region was growing and 24-year exhaust estimate could be shortened in future. Attwood said bureau granted Fla. petition because its relief plan was “based on extensive input from industry, local governments and from consumers affected by the decisions, which balanced a number of public interest goals.” FCC recommended that NANPA assign new number.
Alaska Native Wireless (ANW) and VoiceStream filed petition at FCC late Thurs. asking agency to deny reinstatement of NextWave’s PCS licenses and contending recent $2.5 billion investment agreement by UBS Warburg gave banker “de facto control.” Petition also challenged proposed $300 million investment by Qualcomm, saying stake would call into question NextWave’s independence and adherence to FCC licensing requirements. Qualcomm investment “could substantially impair NextWave’s ability to implement its own business and policy decisions regarding build-out, deployment and spectrum usage, particularly if NextWave is unwilling to lose Qualcomm as a source of needed mobile virtual network operators customer contracts,” petition said. Petition was filed on same day that U.S. Appeals Court, D.C., was scheduled to hand down remand mandate of decision that overturned FCC decision to cancel NextWave licenses for nonpayment. FCC wasn’t planning to appeal to U.S. Supreme Court decision by D.C. Circuit Aug. 23 that rejected Commission’s request for stay of mandate, source said (CD Aug 27 p2).
White House is sticking to revised budget projections, despite Congressional Budget Office (CBO) warning that estimates of FCC spectrum auction proceeds “continue to be volatile.” CBO this week made $6 billion auction-related reduction in previous FY 2002 govt. revenue estimates, part of agency’s overall estimate “that this year’s surplus will be $153 billion -- $122 billion less than it projected just a few months ago.” However, Office of Management & Budget (OMB) spokeswoman reiterated that Bush Administration wouldn’t change budget in midyear based on chance that Supreme Court would overturn U.S. Appeals Court, D.C., remand of FCC’s cancellation of NextWave licenses for missed payment (CD Aug 24 p2).