Nokia expanded terms of existing CDMA terminal cross- licensing agreement with Qualcomm, terms not disclosed. Nokia said it has received royalty-bearing license under Qualcomm patents to make and sell infrastructure equipment for all CDMA wireless systems. Under pact, Qualcomm receives rights under Nokia’s CDMA-related patents to make and market CDMA components. Companies said Nokia will keep paying royalties to Qualcomm for subscriber equipment at rates established under original cross- licensing agreement in 1992.
Country of origin cases
Charter Communications, Comcast and Mediacom Communications closed their previously announced deals to buy or swap cable systems with AT&T Broadband. In biggest of 3 transactions, Charter and AT&T consummated $1.77 billion agreement in which charter gained systems serving total of 563,000 subscribers in return for cash and small Sebastian, Fla. system. Charter also retained its hold on its Miami Beach systems, which were part of original deal. In 2nd transaction, Comcast closed its purchase of AT&T’s Baltimore cable system in exchange for $518 million in cash. Finally, Mediacom picked up AT&T’s Mo. systems serving total of 94,000 subscribers for $309 million in cash.
FCC finalized regulatory fee schedule for 2001 in order issued Mon. and acted on requests for changes, including WorldCom’s objection to increased fees for Multipoint Distribution Service (MDS), which FCC turned down. WorldCom complained that 64% increase in MDS fees doesn’t reflect increase in regulatory costs but rather reflects drop in number of MDS licenses. Company said agency’s practice of spreading increases proportionately across communications services resulted in discriminatory treatment of MDS providers. On another issue, agency said complaint by CTIA and Verizon Wireless about commercial wireless fees was “misplaced.” CTIA said per-subscriber fees should have declined far more than they have because there are more subscribers now. CTIA and Verizon said number of subscribers has increased 62% since 1999 fiscal year but 2001 fee is only 3% less than FY 2000 and 6% less than 1999. However, FCC said its current approach is aimed at eliminating concerns expressed by CTIA. Agency did agree to revise its estimate of wireless subscribers based on new FCC data but said it wasn’t willing to accept CTIA’s claim that FCC had to use industry’s data “to avoid overpayment by CMRS [commercial mobile radio service] operators.” FCC also turned down request for revision by Paxson Communications although agency said company raised “significant questions.” Paxson said fee for UHF construction permits has increased 43% over FY 2000 and now is $1,000 higher than one for VHF, even though Congress originally set lower fees for UHF. Paxson had argued that increase in UHF fees is inconsistent with lower fees paid by some faster-growing services that presumably impose more regulatory cost. FCC said it will re-examine UHF TV fees next year when new cost accounting system has been developed. FCC also turned down Comsat’s request that regulatory fees not be placed on satellites owned by Intelsat.
NextWave late Mon. unveiled selection of CDMA as technology choice for its planned wireless network, and Lucent as its vendor for phased construction of “3G digital wireless network.” Technology and vendor decision comes little more than one week after U.S. Court of Appeals, D.C., ruled in favor of original C- block bidder, concluding that FCC contravened bankruptcy law when cancelling carrier’s licenses for missed payment (CD June 25 p1). Build-out of full-scale voice and data capabilities will be launched in Detroit and Madison, Wis., which are among NextWave’s 95 PCS markets. Lucent also will implement “initial phase of a data only network in NextWave’s remaining 93 markets,” company said in press release. NextWave said it expects work to be completed in next 10 months. Companies didn’t disclose financial terms of contract. “NextWave’s vision and mission is to fundamentally alter how people use wireless,” said NextWave Chmn.- CEO Allen Salmasi. He described extending range of desktop Internet experience to wireless devices, dubbing this trend “mobile DSL.” “Third generation CDMA 20000 3G 1X technology has the highest spectral efficiency in the industry, effectively doubling the voice capacity of existing CDMA digital wireless networks,” Salmasi said. He also described NextWave as “carrier’s carrier” that will provide network capacity to other wireless operators and potential virtual network operators. Lucent will provide network facilities and professional services in all of NextWave’s markets. NextWave said it’s buying equipment and services in “an all cash deal.” “The spectrum is being cleared; the design work is completed; the tower sites are identified and easily accessible,” said Chief Operations Officer David Needham. NextWave said that on June 13, U.S. Bankruptcy Court, White Plains, N.Y., authorized additional debtor in possession financing, which will fund agreement with Lucent. NextWave said it plans to file plan of reorganization “shortly.” “We anticipate emerging from bankruptcy soon,” said Gen. Counsel Frank Cassou. Company will outline details of financing for its full scale network buildout in that reorganization plan, he said.
U.S. Supreme Court Fri. turned down FCC request to review 5th U.S. Appeals Court, New Orleans, decision that sided with C-block bidder General Wireless Inc. (GWI) on $166 million valuation of its licenses, just fraction of its original auction bid. After D.C. Circuit decision overturning $17 billion PCS auction results in NextWave case (CD June 25 p1), industry has been closely watching whether high court would agree to review GWI case because some -- but not all -- of same issues were at stake involving valuation of original C-block licenses by bidder that later entered bankruptcy. Supreme Court’s decision lets stand 5th Circuit ruling that sided with bankruptcy court valuation of GWI’s licenses at $166 million, versus $1.06 billion that carrier had bid in 1996. Unlike NextWave case, GWI’s 14 PCS licenses weren’t part of FCC re-auction late last year of C- and F-block licenses reclaimed from bankrupt bidders. Fifth Circuit ruling in Oct. didn’t come to all of same conclusions as 2nd Circuit in NextWave case. Specifically, 5th Circuit differed from 2nd Circuit conclusion that courts should defer to FCC’s interpretation of its regulations when payment obligations of winning bidders arose. FCC had said that obligation came up on date that auction closed. GWI contended bankruptcy court was correct in fixing later date of Jan. 27, 1997, as point when those obligations kicked in because that was when Commission actually transferred licenses. At point when licenses were transferred, bankruptcy court ruled they had dropped in value to $166 million, versus original bid by Dallas- based GWI, which now does business as Metro PCS. In GWI case, bankruptcy court prevented Commission from cancelling licenses. Brief filed with Supreme Court by U.S. Solicitor Gen. contended 5th Circuit’s ruling, which allowed bankruptcy courts to offer relief that FCC had chosen not to do as regulator, would create incentives that Commission had tried to avoid. Solicitor Gen. argued that reducing payments could foster speculative bidding in future auctions because bidders could hang on to spectrum even if financing didn’t work out. Not surprisingly, Metro PCS contended that FCC was responsible for company’s tough financial straits in first place by delaying issuing licenses. U.S. Supreme Court’s decision to not grant certiorari in GWI case came as FCC was debating options in NextWave case, in which D.C. Circuit said Commission had violated bankruptcy law when cancelling NextWave’s licenses for missed payment -- ruling that reversed agency and returned licenses to NextWave. FCC must decide whether to seek review before full D.C. Circuit or by Supreme Court. “If the High Court had taken the GWI case, that would have increased the FCC’s prospects for gaining a hearing of the D.C. Circuit decision on NextWave,” said research note issued Fri. by Legg Mason. “One of the questions about the NextWave case is whether the Supreme Court would consider the spectrum-bankruptcy issues serious enough to warrant review. The denial hints at, but does not provide, an answer to that question.”
XM’s 2nd satellite, Roll, started broadcasting Thurs. afternoon after completing in-orbit tests and reaching final orbit position at 85 degrees W. First satellite has been at its final position at 115 degrees W since last month. XM plans to launch commercial service later this summer. XM Vp-Space Segment Derek de Bastos said: “We have ground stations uplinking our original content, fully operational tracking stations and 2 satellites operating perfectly.”
House Commerce Committee Chmn. Tauzin (R-La.) and other key members are urging House Administration Committee leaders not to move campaign finance reform measure that would require TV stations and other media to give preferential treatment to federal political candidates when selling ad space. Tauzin, ranking Democrat Dingell (Mich.), Rep. Green (D-Tex.) and House Telecom Subcommittee Chmn. Upton (R-Mich.) sent letter late Wed. to Chmn. Ney (R-O.) and ranking Democrat Hoyer (Md.) to shoot down attempts to adopt amendment by Sen. Torricelli (D-N.J.) that was attached to bill (S-27) that Senate approved earlier this year. House Administration Committee is holding hearing today (Thurs.) on campaign finance bill by Sens. McCain (R-Ariz.) and Feingold (D- Wis.). Although it’s expected to be committee that will move bill to Senate floor (CD June 22 p2), Ney, Hoyer and other members in recent weeks have raised questions on constitutionality of Torricelli amendment. House Commerce members also sent letter to Reps. Hays (R-Conn.) and Meehan (D-Mass.), who are likely to reintroduce similar campaign finance measure in near future. Letter said: “[B]y requiring television broadcast, cable and satellite companies to provide candidates with rates equivalent to the least expensive spot in the same time period over the past year and making those spots nonpreemptible, the Torricelli amendment goes well beyond merely clarifying existing law and fulfilling its original intent…[W]e find troubling the notion that federal government officials, through this amendment, would be awarding themselves far superior treatment than even the most favored advertisers during the preelection period.” Broadcasters applauded effort to remove Torricelli amendment, with NAB Pres. Edward Fritts saying: “Far from being ‘reform,’ the Torricelli amendment would result in perpetual political campaigns and more negative attack ads.”
NBC TV bowed to pressure from its west coast affiliates and will permit them to delay live coverage of Winter Olympics next year from Salt Lake City. Network originally planned to carry games live, beginning at 5 p.m. in western states. Affiliates, including NBC-owned KNBC L.A., had lobbied hard for change over protests of NBC Sports Chmn. Dick Ebersol. In statement after network acted, he said “a domestic Olympics cries out to be telecast live across the entire country.” Affiliates wanted delayed feed primarily to prevent live coverage from preempting early news, and NBC made change after surveying potential west coast viewers.
BOSTON -- Implications of sagging financial markets raised at Wireless Communications Assn. convention here this week ranged from difficulty in renewing ITFS leasing agreements to FCC delay in setting auction date for 24 GHz market. Winstar Chmn.-CEO William Rouhana, in first comments before industry group since company’s Chapter 11 filing in April, assailed “schizophrenia” that has beset telecom sector, pitting perception of “overvalued” assets of broadband providers against growing consumer demand for services. “There is this incredible schizophrenia that has taken hold,” he said Tues.
N.Y. Assembly is scheduled to vote today (June 25) on final passage of bill that would make N.Y. first state to ban use of handheld mobile phones while driving, except to place emergency calls. Bill (SB-5400A) passed Senate Thurs. night just hours after being introduced. Because measure is product of agreement between Gov. George Pataki and leadership of both legislative chambers, Assembly passage and enactment are both expected. Any Assembly amendments would slow final action, however, because Senate has recessed for 4 weeks while Assembly considers state budget bill. Once approved, statewide handheld car phone ban would take effect Dec. 1 and preempt all local car phone ordinances. Offenses would be primary traffic infraction, meaning drivers could be stopped and ticketed for handheld cellphone use even if they had committed no other traffic violation. Penalty would be $100 fine but no violations points. Starting Nov. 1, police could issue verbal warnings to motorists using handheld phones. From Dec. 1 to March 1, fine would be waived on first offense if driver submitted proof of purchasing hands-free mobile phone device. Several N.Y. localities, most recently Nassau County, adopted ordinances to ban use of handheld mobile phones while driving. Some 34 other states considered car phone use restriction bills this year but Conn. was only one in which measure passed chamber of origin; it was defeated in opposite chamber’s committees.