Federal appeals court ruled in favor of Qwest Tues. by deciding that Telecom Act and Wash. state law preempted franchise fees levied by several cities in Wash. However, Ninth U.S. Appeals Court, San Francisco, agreed with cities on another issue -- saying they weren’t required to shoulder costs associated with relocating telco and utility poles and conduit when right-of-way improvements are made. Case involved 2 distinct issues: (1) Relocation was topic of original suit filed in 1998 by 18 cities against Qwest for not paying relocation costs. Qwest had refused to pay for relocating its facilities for street repairs or other needs, arguing that tariff adopted by Wash. Utilities & Transportation Commission shifted payment burden to cities. In decision written by Judge Margaret McKeown, court said in one instance Qwest refused to move telephone pole, leaving it standing in middle of newly widened road. Court said tariff language relied upon by Qwest was “ambiguous” and didn’t “alter the long- established and unbroken rule… that the utility company must pay for relocation costs.” (2) Preemption issue arose from counterclaim by Qwest saying Telecom Act preempted municipal ordinances in 5 of those cities that required companies to obtain franchise to use public rights-of-way. Court determined, among other things, that “the ordinances… include several features that have the effect of prohibiting the provision of telecommunications services” in violation of Telecom Act. Court also held that ordinances violated state law that exempted from franchise requirements any telephone company with “existing statewide grant” of operating authority, such as Qwest’s U S West unit. Appeals Court action affirmed U.S. Dist. Court, Seattle, on relocation order but reversed lower court on preemption issue. Washington attorney William Malone, who frequently represents cities in such cases, said decision contradicted earlier ruling by 6th U.S. Appeals Court, Cincinnati, in case involving AT&T and city of Dearborn, Mich.
Country of origin cases
Bill to deregulate Bell company provision of data services (HR-1542) seemed primed to move at this morning’s House Telecom Subcommittee, both sides of issue agreed following contentious, all-day Commerce Committee hearing that didn’t end until 5 p.m. Several changes were in works at our deadline, apparently pacifying some wavering members but not of sufficient magnitude to bring on hard-core opponents or dissuade bill’s backers.
General Accounting Office (GAO) has directed Social Security Administration (SSA) to open for new bids telecom contract that had been awarded to WorldCom and was challenged by losing rival. In decision made in Dec. and disclosed this month, GAO upheld protest by Rockwell Electronic Commerce, which argued that evaluation of WorldCom proposal didn’t fully account for all of FTS 2001 costs included in bid. In latest decision, which is set to be released publicly in next several weeks, GAO takes earlier conclusions step further by requiring SSA to seek new bids. In letter to SSA last week (CD April 23 p3), Rep. Davis (R-Va.), chmn. of Govt. Reform Committee’s Subcommittee on Technology & Procurement Policy, had called contract one of first “significant” competitive bids since FTS 2001 was awarded to Sprint and WorldCom. GAO’s latest decision comes as Davis is set to hold major FTS oversight hearing Thurs.
Multichannel Video Distribution & Data Services (MVDDS) could cause “significant interference threat” to DBS services unless “wide variety of mitigation techniques” are used, according to independent Mitre report released by FCC late Mon. Report said mitigation techniques, if applied properly under appropriate circumstances, could greatly reduce potential MVDDS interference impact upon DBS. Report stopped short of endorsing Northpoint or supporting DBS claims (CD April 9 p6). Instead it left final decision up to FCC, but did provide technical assessment of issues surrounding interference. “MVDDS/DBS bandsharing appears feasible if and only if suitable mitigation measures are applied,” report said: “Different combinations of measures are likely to prove best for different locales and situations.” Supporters of DBS and Northpoint claimed victory following release of report.
Combatants in broadband wars were prepping for busy week Mon. as House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.) neared reintroduction of bill (HR-2420 last session) to free Bell companies from many regulations when deploying DSL and Internet backbones. With 3 rapid-fire events crammed into 3 days -- introduction scheduled for today (Tues.), hearing Wed. and Telecom Subcommittee markup Thurs. -- opponents said they still were formulating strategy. Both sides agreed many amendments were expected Thurs. from lawmakers sympathetic to CLECs and from those seeking to attach their own agendas to what’s likely to be first major telecom item to pass House this year. “Thursday’s a long way away,” said one opponent on Hill who was resigned to hard week of work, including long Wed. night after the hearing. “A chaotic markup is probably not conducive to ultimately successful legislation, but that’s the path they've chosen.”
Small Business Administration’s (SBA) Office of Advocacy told FCC in letter last week that Nov. order on Enhanced 911 didn’t comply with Regulatory Flexibility Act (RFA) because it didn’t adequately address impact on small business. It said conclusions weren’t based on issues raised in initial regulatory flexibility analysis (IRFA) and didn’t give small businesses chance to comment on new IRFA, SBA said. SBA told FCC Chmn. Powell that his agency should draft supplemental document to seek comment on impact on small businesses of decision to remove cost-recovery mechanism. Order itself was response to petitions for reconsideration of decision to remove precondition of cost recovery from states to accelerate introduction of E911 services. Originally, carriers were allowed to defer providing 911 operators with ability to automatically locate position of wireless callers. Before cost recovery had been removed as precondition, deferral was predicated on timing of state mechanism to reimburse carriers for costs. Order under scrutiny by SBA upheld FCC decision to require carriers to install automatic locator systems regardless of whether they were reimbursed by state govts. SBA told Powell that because small businesses didn’t have chance to comment on decision to do away with cost-recovery requirement, “the Commission’s rulemaking is grievously in violation of the RFA.” Technical regulatory concerns raised by SBA center on fact that FCC relied on regulatory analysis drafted in earlier order rather than creating separate one for comment on cost-recovery requirement change. Updated analysis should be disseminated “immediately to cure this deficiency,” SBA wrote.
FCC Common Carrier Bureau granted extension for filing comments and replies on joint petition filed April 5 by BellSouth, SBC and Verizon asking Commission to find that high-capacity loops and dedicated transport weren’t subject to mandatory unbundling. Extension is result of joint motion filed by 21 carriers and industry associations seeking 30 days more to respond to report “Competition for Special Access Service, High-Capacity Loops and Interoffice Transport” attached to original April 5 petition. New deadline for comments is June 11, replies June 25.
Focal Communications signed interconnection agreements with Verizon that called for reciprocal compensation levels similar to what FCC required in latest order (CD April 20 p1) -- 0.15 cents per min. for traffic below 10-1 ratio of originating to terminating traffic, 0.12 cents per min. for traffic that exceeds ratio. Agreements, announced by Focal Wed., cover states where 7 Focal markets are located -- Baltimore, Boston, N.J., N.Y., northern Va., Philadelphia, Washington.
FCC Wireless Bureau Chief Thomas Sugrue outlined several prospects for potentially freeing additional private wireless spectrum Fri., including possibility of user fees, audit of spectrum uses, current secondary spectrum proceeding. Point of user fees for private land mobile radio licenses, idea that has been floated in past and would require change by Congress, wouldn’t be to generate revenue but to increase efficiency of spectrum use, Sugrue said in lunch speech to Land Mobile Communications Council (LMCC) annual meeting in Washington. “The theory is unless there’s a cost placed on bandwidth and coverage, licensees wouldn’t improve their efficiency of both,” he said, noting that FCC couldn’t make change on its own.
FCC voted 3-1 late Wed. to adopt long-awaited order reducing carrier-to-carrier payments for Internet-bound dial-up calls. Comr. Furchtgott-Roth dissented. Order ends long debate about high level of reciprocal compensation payments that flow from ILECs to CLECs. Reciprocal compensation is intended to pay one local carrier for terminating call from customer of another local carrier. Because many CLECs signed up ISPs as customers, traffic generally has flowed to CLECs from ILEC. Order caps payments for ISP-bound calls at level that generally is lower than what carriers pay for voice traffic under state-supervised reciprocal compensation agreements.