CTIA Pres. Thomas Wheeler said Tues. that wireless carriers were eyeing 1.7 GHz spectrum occupied by military users as “first choice” for obtaining more spectrum for 3rd-generation services. He and former FCC Chmn. Reed Hundt, now senior adviser with McKinsey & Co., spoke at New America Foundation lunch on wireless spectrum shortage. Turning to 1755-1850 MHz band would add to “global harmonization” of wireless bands used beyond U.S., Wheeler said, and 2500-2690 MHz band occupied by Multichannel Multipoint Distribution Service operators would be “2nd choice.” FCC and NTIA are looking at both bands as potential source of additional spectrum for next-generation services such as 3G.
Country of origin cases
Michael Howard, ex-Imation, named pres.-gen. mgr., N. American telecom headquarters, Coherent Networks International… Juan Villalonga, ex-Telefonica, elected to Univision Communications board… Dominique Telson promoted to vp-original programming, Showtime Networks… John Palmer advanced to gen. mgr., Group W Network Services Minneapolis, succeeding Mark Durenberger, retiring… Elected to infoUSA board: Former Sen. Bob Kerrey (D-Neb.) and Rob Chandra, Trust Co. of the West; replacing Sen. Ben Nelson (D-Neb.) and Charles Fote, First Data Resources, resigned.
Several wireless carriers told FCC that any steps to pave way toward development of secondary wireless market should rely on simple leasing rules, not existing limits such as spectrum cap restrictions. They strongly urged agency not to apply spectrum cap or unjust enrichment rules to lease deals. One theme among smaller carriers is that leasing arrangements can give them entree to truly compete in auctions because they could use proceeds from transactions to build out markets while retaining license ownership. Commenters on notice of proposed rulemaking (NPRM) on secondary wireless markets differed on details, including how regulatory requirements of original licensee should apply to lessees.
Group of Tenn. counties filed state court suit challenging property tax break state law gives to cellular companies. They hope suit filed Thurs. in Tenn. Chancery Court, Williamson County, will counter pending bill in state Senate that would give similar break to BellSouth and other landline phone providers. Under 1989 tax law, property of cellular companies is taxed at lower rate applied to commercial/industrial property rather than rate applied to property of telecom and energy utilities. Result is that cellular companies pay 20% lower property taxes than BellSouth on equivalent property value. Pending bill (SB-1484) would give BellSouth and other utilities credit on state business franchise taxes equal to difference between commercial and utility property tax rates. To cover resulting revenue shortfall, bill would raise sales tax on business long distance to 6% from 3.5%. It also would require that any net tax saving from changes be applied to reduce access charges. Counties’ suit said special tax treatment for wireless companies, originally granted to help development of affordable, widespread wireless service, was unlawful because it treated essentially similar companies unequally for tax purposes, and pending bill would extend unlawful discrimination to more companies. Bill sponsor, State Sen. Bob Rochelle (D-Lebanon), said localities should support lower taxes for wireline companies rather than higher taxes for cellular companies. He said portion of business phone sales tax increase would be paid to counties to offset property tax losses, while balance of sales tax rise would offset treasury losses from franchise tax credit.
Ind. House Commerce Committee passed 2 bills that would give Ind. Utility Regulatory Commission (IURC): (1) New power to discipline telephone companies and other utilities that violated its rules. (2) Jurisdiction over utility mergers and acquisitions. Both bills passed on 8-5 party-line votes Thurs., with Democrats in favor and Republicans opposed. HB-1181 would give IURC power to fine utilities up to 3% of annual Ind. revenues for violating service quality rules and other regulations. Originally, bill called for 15% fine but Democrats agreed that was too harsh. HB-1924 would give IURC oversight over all utility mergers and acquisitions. Both bills were legislature’s response to Ameritech-SBC merger of 1999 and Ameritech’s severe service quality problems last year. Merger bill addresses Ind. Supreme Court ruling on Ameritech-SBC merger that agency had no legal authority over utility mergers. Fining bill was written because of IURC’s lack of legal power to fine Ameritech directly for its massive service problems, officials said. IURC Chmn. William McCarty said he supported bill as passed by committee. “We're not interested in a ‘death penalty’ fine,” he said. “Three percent would still have a meaningful impact on a large utility but it wouldn’t put them out of business.” He said fining authority would give IURC enforcement powers similar to those of utility commissions in neighboring states. Currently, IURC must get a county prosecutor to sue offending utility in state courts to collect fines, and law limits fines to $1,000 per day per violation. Had Ameritech been subject to 15% penalty last year, it could have been fined $210 million, about 75% of its Indiana profits, while a 3% fine would total $42 million. Utility groups said they were opposed to any fine based on percentage of revenue and protested that other utilities were being punished for Ameritech’s transgressions.
Changes in office of Rep. Goodlatte (R-Va.): Chief of Staff David Lehman leaves to join Hall, Green, Rupli, where he will work on technology and telecom issues; Legislative Dir. Ben Cline promoted to replace him, Shelley Hanger advanced to legislative dir… Heidi Blumenthal, ex-office of Rep. Dunn (R-Wash.) joins Americans for Tax Reform to lead telecom lobbying… ABC TV Stations Pres. Walter Liss resigned, no replacement named… Trevor Walton, ex-independent producer, appointed senior vp- original movies, Lifetime… Jeffrey Benrey promoted to vp-mktg., iVast… William Doherty, Online Policy Group, named online activist, Electronic Frontier Foundation… Esther Dyson, EDventure Holdings, elected to Real User board.
FCC Enforcement Bureau is proposing to fine WCOM(FM) Bayamon, P.R., $21,000 for broadcasting indecent material Original complaint was accompanied by tape of broadcast, and station admitted carrying material. Bureau said broadcast contained “graphic, patently offensive discussions of sexual activities or organs.”
Several telecom bills made cut at Va. legislature’s “move or die” deadline for bills to pass chamber of origin, but car phone restrictions were among those defeated for this year. House bills crossing over to Senate Wed. included HB-1902 to eliminate mandatory hearings on local exchange certification applications, HB-1767 to require that new telecom and energy facilities be installed within existing utility rights-of-way whenever feasible, HB-1914 to limit grounds on which utility pole owners could refuse to allow telecom or cable facility attachments, HB-2640 exempting telephone cooperatives from filing local exchange tariffs and allowing them to take ownership interest in other telecom companies, and HB-2427 restricting telemarketing hours and requiring telemarketers to identify themselves in person and via caller ID. Senate bills passing on to House included SB-1349 exempting wireless customers from local E911 taxes and changing assessment basis for state’s 75-cent monthly wireless E911 surcharge to per-customer basis from per-number, and Senate resolution (SJR-336) forming legislative subcommittee to study highway safety threat posed by car phone use and to recommend legislation for next year. Among telecom bill casualties were 4 in House (HB-1629, 1884, 2381 and 2809) to restrict or ban use of car phones while driving. Other defeated bills included SB-1323 to give local governments explicit zoning authority over wireless telecom towers, HB-1490 capping local 911 taxes, SB-1425/HB-1971 to require landlords be compensated when competitive telecom providers access individual tenants, HB-2196 to require state Corrections Dept. to apply all provider rebates from inmate payphone services to reducing phone charges to inmates, and SB- 1328 to make electronic eavesdropping automatic felony.
New FCC Chmn. Powell laid out broad agenda Tues., stressing need for competition, deregulation and regulatory restraint. Agency should take “judicious” rather than “quasi-legislative” role, he said in his first news conference, citing examples in which FCC’s job primarily was to implement policy. While declining to discuss specifics of priorities such as streamlining FCC procedures, he repeatedly sounded theme of allowing competitive forces in market to take hold. “I do not believe that deregulation is like the dessert that you serve after people have fed on their vegetables as a reward for the creation of competition,” he said. Deregulation is critical to facilitate competition, “not something to be handed out after there’s a substantial number of players in the market,” he said.
Telecom companies may find stake in Internet tax debate, which will be renewed this week when 2 lawmakers known for supporting tax-free Internet will introduce new bill that promises comprehensive but controversial approach to many divisive questions. Sen. Wyden (D-Ore.) and Rep. Cox (R-Cal.), who last year pushed original Internet Tax Freedom Act (ITFA), are preparing bill that would extend moratorium on discriminatory Internet taxes for 5 years past current Oct. 31 deadline. It would create fast-track process for states to gain authority from Congress to tax online sales, but attach strict conditions on how states must simplify their taxing systems to do so.