Rumored sale of GE Americom to SES Astra of Luxembourg was announced Wed. at Grand Hyatt Hotel at Satellite 2001 (CD March 7 p5). Companies said newly formed SES Global acquired total control of GE Americom stock and other assets for $2.7 billion in cash and 15.4 million shares in SES Global. Analysts estimated total value of deal at $5 billion. GE will have 25.1% economic interest and 20.1% voting interest in SES Global. In return, SES Global will acquire SES Astra in 1-to-1 exchange involving cash and stock swap worth $1.4 billion. GE Americom had revenue of $510 million last year. Combined assets of companies will create world’s largest satellite services provider with pro forma revenue of $1.26 billion for 2000, analysts said. It’s 2nd sale in as many days of major U.S. satellite operator as consolidation of industry continues.
Broad group of wireless, GPS, satellite radio and air transport interests urged FCC not to take final action on operation of ultra wideband (UWB) equipment under Part 15 rules without issuing further notice of proposed rulemaking (NPRM). In letter sent late Tues. to Chmn. Powell, 26 companies and trade groups stressed it would be “premature and inappropriate for the Commission to adopt any final rules at this time.” Agency issued NPRM on UWB operations last May (CD May 11 p1), but it didn’t contain specific regulatory language, group said. Since then, FCC has received large volume of test results on potential interference of UWB operations in both GPS and non-GPS bands. “However, the interested parties cannot logically extrapolate from the various test submissions any comprehensive picture of the direction of the Commission’s final thinking with respect to a potential regulatory framework,” group said in letter obtained by Communications Daily. Companies signing letter include AT&T Wireless, Lockheed Martin, Nortel, Qualcomm, Satellite Industry Assn., U.S. GPS Industry Council, WorldCom.
World Access has retained UBS Warburg to “explore alternatives” to restructure its debt and identify new sources of capital. Company said if effort isn’t successful it “may find it necessary to seek protection under Chapter 11” of Bankruptcy Code. World Access provides bundled voice, data and Internet services to small and medium-sized business customers in Europe. Company said preliminary 4th-quarter results showed revenue was about 15% below original guidance and losses were “significant.”
Mass Dept. of Telecom & Energy (DTE) opened investigation into Verizon provision of special access for high-speed dedicated digital circuits because of CLEC complaints. DTE said its purpose was to determine whether Verizon special access services were being provided to other carriers in reasonable manner and whether company needed to take steps to improve service. Intervenor deadline is March 29. Preliminary hearing is April 4, followed by procedural conference to set rest of schedule. DTE said that in last several months it had been getting complaints from CLECs that Verizon quoted “extremely long” provisioning intervals, failed to meet those extended intervals, failed to keep carriers updated on order progress and had problems maintaining existing circuits. DTE said special access complaints surfaced during Verizon Sec. 271 review even though special access wasn’t 271 checklist item, and said informal efforts to resolve problems hadn’t worked.
Following recommendation by FBI’s Communications Assistance for Law Enforcement Act (CALEA) implementation section, FCC said Thurs. it was extending preliminary determination period for wireless carriers seeking extensions of deadline for complying with CALEA Sec. 103 to Sept. 30 from March 31. FCC said complexity of hardware and software that wireless carriers needed to comply with CALEA made it impossible for them to project accurately when they would be compliant. FCC said 7 wireless carriers that had filed extension petitions or supplements since June 30 had met requirements for preliminary determination that they warranted extension until Sept. 30. They are Americell, Concho Cellular, Glenn Ishihara, Guam Telephone, Nextel Partners, Pine Belt Cellular, Tex. RSA. Two others -- Copper Valley Telephone and Nev. Wireless -- didn’t satisfy requirements but can supplement their petitions, FCC said.
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.