PASADENA -- Jamie Kellner, new chmn.-CEO of Turner Bcstg., made it clear in presentation to TV critics here Thurs. that CNN wasn’t looking for new partners. “There’s not going to be a merger of news operations,” he said, responding to speculation both CBS and ABC were interested in merging with CNN: “We are not going to, in any way, merge CNN into any kind of a different structure. It will always be owned by AOL Time Warner and be operated independently.”
Country of origin cases
FCC revised its colocation rules Thurs. in effort it said was designed to better balance needs of incumbents and competitors and provide “regulatory certainty.” Most of changes were in response to remand last year by U.S. Appeals Court, D.C., which questioned whether FCC adequately justified statutory basis for some of rules guiding colocation of competitive equipment in incumbent central offices. New rules:
NOAA soon will re-issue notice on federal land valuation policies for fiber and other utility projects that cross national marine sanctuaries, industry source said. Notice is expected to include revised timetable for comment and implementation period, but otherwise will be nearly identical to one that NOAA published in Jan. Earlier notice included review of govt.’s land valuation practices and recommended that govt. significantly increase rates charged to utilities that deployed telecom and energy infrastructure across marine sanctuaries, source said: “It pretended to be an analysis, but it was only a report.” Source decried methodology of original notice, which omitted input of utility and real estate industry appraisal valuation professionals. Revised notice could appear in Federal Register as earlier as next week, he said.
For 5th time, FCC Wireless Bureau postponed Sept. 12 auction of Ch. 60-69 spectrum in 700 MHz band Wed., but it said wouldn’t set new date until Commission acted on pending petitions for reconsideration. Auction delay covers 747-762 MHz and 777-792 MHz bands now occupied by analog broadcasters that don’t have to vacate band until 2006 or DTV penetration rate reaches 85%. Indefinite postponement marks first such delay under tenure of FCC Chmn. Powell. Way for delay was cleared in congressional budget resolution this year that addressed Bush Administration proposals for auction delays. Action came as industry and FCC officials increasingly acknowledged difficulty of clearing broadcasters from band by 2006.
EchoStar will acquire majority of Gilat subsidiary Starband in deal that adds to EchoStar Internet service offerings while giving Starband cash and support it needs, companies said Wed. Plans call for EchoStar first to increase its stake in Starband 13% to 32%, ballooning to 60% once it begins construction of next generation satellite for Starband next year. Satellite analyst estimated deal to be worth $300 million: “Obviously this takes a big load off Gilat’s back.” Starband’s financial struggles have been widely documented since it opened 2-way Internet service in early, and EchoStar has been looking for ways to increase holdings and bundle Internet and DBS services. It wouldn’t comment on how Starband deal might affect talks for DBS rival DirecTV, which reportedly was close to finalizing agreement with News Corp.
IBeam Bcstg. said it closed on $40 million in new financing from 4 investors, including $30 million in cash and services from Williams Communications (CD June 26 p8). Other investors are Allen & Co., Lunn iBeam, TouchAmerica. In new arrangement, iBeam issued 2.4 million shares of convertible preferred stock, with Williams now holding 49% of iBeam voting stock. IBeam increased its board to 9 members from 7, adding Howard Janzen of Williams, John Bumgarner of Williams subsidiary Strategic Investments, Laura Kenny of Williams’ Vyvx, Paul Gould of Allen & Co. Rich Shapero of Crosspoint Ventures Partners and Peter Wagner of Accel Partners, both companies original iBeam investors, resign from board. Reflecting its “increased focus… on enterprise and entertainment” markets, iBeam, based in Sunnyvale, Cal., announced following promotions: Robert Davis to pres., Entertainment Services; Nicholas Balletta to pres., Enterprise Services. IBeam Pres. Peter Desnoes said it provided more than 100 million audio and video streaming services per month -- including interactive Webcasting, ad insertions, syndicated and pay-per view programming -- to more than 210 communications networks worldwide.
Ameritech and Verizon told Mich. PSC they planned to complete implementation by end of Oct. of local calling expansion required by 2000 state law and May PSC order. Both companies are required to expand current calling areas to include adjacent exchanges that now are toll calls. For most local customers, change will add 2 or 3 additional communities to current local calling areas. Ameritech said it set expansion of local areas to coincide with previously scheduled Oct. updating of billing and network routing software, moving action up by 2 months from original Dec. 31 target date. Ameritech said it would start project in Grand Rapids 616 area code. It will notify customers of change via 2 bill inserts in Aug. and Sept. Verizon will start its process Sept. 10, with customers notified of change by direct mail in Aug. For both companies, once change is complete, calls that now are carried and billed by customer’s presubscribed interexchange carrier as toll traffic will be carried and billed by telcos as local traffic. During Aug. and Sept., both telcos told PSC, they will be advising individual CLECs of how calling-area expansion will affect them, and will work with CLECs to resolve any resulting technical or billing concerns.
NextWave CEO Allen Salmasi reiterated Fri. company’s plan to build out 3rd generation wireless network that would be carrier’s carrier, catering to mobile virtual network operators (MVNOs). While MVNOs have had success in Europe, with companies such as Virgin Mobile leasing network capacity to sell wireless products under their own brand, they haven’t taken off in U.S. yet. Salmasi said pent-up demand by companies interested in starting virtual wireless networks that hadn’t been able to cut deals with incumbents had generated “huge” interest in NextWave’s network buildout, which he said was expected to complete first phase within ambitious timeline of one year. “I can’t tell you how huge it is,” Salmasi said of interest expressed to NextWave so far from potential MVNO partners. Referring to European MVNOs, “you can assume that we are talking to every one of those brands,” Salmasi told us in interview Fri. These companies are “really trying to find a way to get into the U.S. and are willing to go out of the way to make equity investments,” he said.
In decisive victory for satellite TV industry, U.S. Appeals Court, D.C., Fri. ruled in favor of FCC regulations that allow renters to install DBS dishes and other types of TV antennas despite property owner opposition. Panel of 3 judges roundly rejected petitions by building owners, building managers, homeowner groups and real estate trade associations that challenged federal rules as unconstitutional and exceeding Commission’s authority. Judges also rejected petitioners’ claims that agency “acted capriciously and arbitrarily” in extending its original rules on over-the-air reception devices (OTARD) to renters in 1998 action. Although FCC’s statutory authority is, “of course, subject to limitations,” court ruled, “an OTARD rule that safeguards all viewers’ access to these services clearly falls within this limitation” in light of “Congress’s explicit (and exclusive) grant of jurisdiction to the Commission over direct-to-home satellite services and its broad responsibility to make communications services available to all individuals.”
Broad cross-section of wireless carriers and consumer groups urged FCC to implement transition period before eliminating requirements that cellular operators provide analog service. Recommendations came in comments to Commission this week on notice of proposed rulemaking (NPRM) in which agency asked whether it should do away with or modify requirements for cellular carriers that dated back to 1981, including whether AMPS-type (Advanced Mobile Phone Systems) service requirement should be kept in place. Sprint PCS, Qwest and Verizon Wireless were among carriers advocating 5-year transition period before AMPS requirement was shelved. Factors cited by carriers advocating phase-out period include: (1) Large number of subscribers still using analog service. (2) Dominance of AMPS technology for roaming. (3) Importance of AMPS for linking customers to 911 services. (4) Reliance of new telematics systems such as General Motors OnStar system on analog networks. (5) Extent to which current digital technologies weren’t compatible with text-telephone systems (TTY) for subscribers with hearing disabilities.