AFL-CIO criticized AT&T Thurs. for trying “to deprive shareholders of meaningful oversight of AT&T management’s controversial breakup plan.” Union disapproved of company’s filing preliminary proxy statement with SEC Wed. in which it proposed to amend its charter to reduce approval threshold for mergers and asset disposition to simple majority from current 2/3 majority of outstanding shares. “AT&T is essentially asking shareholders to relinquish an important right before they have enough information to decide if they want to exercise that right,” said Richard Trumka, AFL-CIO secy.-treas. Union’s concern is effect charter change would have on AT&T’s plan to break up into 3 separate companies and 4 publicly listed securities. AFL-CIO has expressed concern about breakup.
CWA called for full FCC audit of AT&T Broadband’s cable franchises for alleged violations of agency’s public disclosure rules. Union said it found in preliminary survey of dozen AT&T franchise locations that company management had refused public access to records; didn’t make files available to public; maintained incomplete and outdated information. CWA told FCC that “especially troubling is the failure of AT&T franchises to maintain complete signal leakage logs and proof-of-performance records” that would demonstrate compliance with Commission’s technical standards for cable operators. Audit is needed to ensure compliance with those rules and technical standards, it said. Union said Commission also should levy financial penalty “commensurate with the record of violation of these rules.”
FTC entered final settlement with bankruptcy trustee for International Telemedia Assoc. (ITA) that resolved cramming suit against ITA. Settlement gives FTC allowed claim of $3.5 million in ITA’s bankruptcy case. Commission said it already had received $700,000 from ITA’s bankruptcy estate and expected further distribution. FTC filed suit against ITA and Online Consulting Group in July 1998 alleging they were engaged in cramming charges for audiotext services -- telephone-based entertainment programs - - onto consumers’ phone bills. In Sept. 1998 preliminary injunction was issued but both companies already had ceased operations. Settlement resolves outstanding claim for monetary relief against ITA, agency said.
Canadian Radio-TV & Telecom Commission (CRTC) said existing telemarketing rules now would apply to all telecom service providers uniformly across country and called for public input on whether rules should be toughened. CRTC said move addressed “patchwork application of rules across Canada” that differed from region to region and by type of service provider.
Dept. of Defense (DoD) and wireless industry remain apart on some technical issues regarding how bands occupied by military users could be altered for 3rd-generation uses. Govt. and industry officials, at meeting hosted by NTIA Thurs., emphasized that analyses of bands that could be used for additional 3G spectrum were continuing, with final FCC and NTIA reports due late next month. “We still have a lot of work to do,” Motorola’s Steve Sharkey said. “We have at least an idea of where the paths to move forward are.” Meanwhile, Congressional Budget Office (CBO) raised budget projections for proceeds from FCC spectrum auctions through 2007, with rosier outlook attributed to interest in 3G.
GM is denying industry reports that its board gave preliminary approval to bid by News Corp. Chmn. Rupert Murdoch to take control of DirecTV (CD Feb 8 p9). GM spokeswoman said “there’s nothing new to report.” She said board last week held regularly scheduled meeting and was updated on talks with “parties interested” in buying DirecTV, but took no action.
Dominion Video Satellite received temporary restraining order and preliminary injunction from U.S. Dist. Court, Denver, that requires EchoStar to work with Christian DBS provider on contract dispute. Dominion’s Sky Angel network uses EchoStar satellite service at 61.5 degrees W, where it shares spectrum. Dominion said its customers started complaining in Feb. that EchoStar wasn’t activating new customers or reactivating older receivers. Complaints began about time EchoStar sent letter asking Dominion to buy additional programming, pay higher price for receivers than EchoStar charges its customers, pay additional fees for services, Dominion said. EchoStar asked Dominion for $7 million to offset costs. Both sides have agreed on arbitration to work out differences. Until then, they must abide by old contract, court said. Dominion has 100,000 subscribers that receive 35 channels of religious and educational programming. Separately, EchoStar said patent infringement lawsuit involving identification functionality in satellite TV receivers had been filed against it by Peter James and Saskatchewan govt. EchoStar offers caller ID functions for selected DISH network satellite receivers.
Copyright holders claimed win Mon. when a federal appeals court refused to overturn lower court order barring Napster from facilitating transfer of copyrighted songs on Internet. “The District Court correctly recognized that a preliminary injunction against Napster’s participation in copyright infringement is not only warranted but required,” 9th U.S. Appeals Court, San Francisco, said in Feb. 12 opinion. However, 3-judge panel sent case back to U.S. Dist. Judge Marilyn Patel, San Francisco, to craft narrower injunction that would: (1) Require Napster to remove infringing material only after record labels notified it of copyrighted works available on Napster system. (2) Force Napster to actively police its service to keep out pirated music. Unanimous, 50-page decision went down line in favor of music labels and against Napster, said lawyer Russell Frackman. Decision “pretty much writes Napster’s epitaph,” said lawyer Chuck Cooper.
GM and News Corp. are refusing to comment on reports that Rupert Murdoch is close to finalizing $70 billion deal to buy DirecTV. New company would become largest DBS company in world. News Corp. satellite unit Sky Global reportedly is valued at $35- $45 billion. With industry speculation rampant, GM spokesman cautioned that “no agreements had been reached” and company “remained in talks with more than one interested party” for sale of Hughes Electronics and DirecTV. If deal were to be made, boards of each company would have to approve along with regulatory agencies. Sale could run into antitrust problems and other snags, industry sources said, “but the 2 sides appear to be real close.” However, at our deadline, no deal had been announced and source said no announcement of deal “could be expected” for at least 2 weeks.
Boeing said it would provide details of its proposal to revamp U.S. air traffic control system by May, but industry officials said key issue remained $10-$15 billion cost of effort. Details of plan remained sketchy, but Boeing had said its plan could allow 50% increase in number of airline flights by using new technology, such as Global Positioning Systems (GPS). FAA spokeswoman called Boeing plan “intriguing” and said agency would be monitoring situation closely.