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Telecommunications Reports - January 29, 2001 FCC Expands ILEC Line-Sharing Mandates To Fiber Loops, Confirms=20 Line-Splitting Duty Critics Worry White House =0F`E-rate=0F' Proposal May Reduce Funding, Disco= urage=20 Participation FCC Gears Up To Enforce E-rate =0F'Net-Filter Mandate Large Carriers Want 700 MHz Auction Postponed, But Small Providers,=20 Broadcasters Oppose Delay FCC Takes Additional Steps To Help Clear 700 MHz Band The FCC=0F's Enforcement Bureau is a proposing a monetary forfeiture... Easing Spectrum Crunch Tops CTIA=0F's 2001 Lobbying Agenda Nextel Communications, Inc., has agreed to purchase specialized mobile=20 radio... Commission Examines Merits Of Lifting CMRS Spectrum Cap Bookham Technology plc, an Oxfordshire, England=0F-based... Appellate Court Upholds Nextel Tower Permit Finance Panel Senators Back Broadband Service Tax Credits Verizon Wants Law Changing Approach to Broadband Regs Utah Bill Would Halt Plan To Merge Consumer Agencies Reps. Cannon, Eshoo Unveil Internet Privacy Measure Appeals Court Says FCC Erred in Rejecting U S WEST Bid for =0F`Nondominant= =0F'=20 Regulation The FCC=0F's Enforcement Bureau has issued a monetary forfeiture... FCC Gives Bells =0F`Blueprint=0F' In OK of SWBT=0F's InterLATA Bid FCC Rethinks Limitations On Carriers=0F' Use of EELs Pole Attachment, TELRIC Rates To Be Challenged in High Court Supreme Court Again Refuses To Hear State Immunity Cases =0F'Net-Based Directory Publishers Can Access LEC Data, FCC Says Analysts See Lucent Plan Leading To Profitability, But Not Growth Court Says WorldCom Tariff Trumps Service Pact with ICOM Long Distance Revenues Head North, FCC Reports Telefonica, Portugal Telecom Foresee Brazilian Consolidation Losses in Handset Operations Spur Ericsson To Exit Business CRTC Nixes Vancouver Bid For Fiber-Deployment Fees Brazil, France Face Setback In Awarding Wireless Licenses Wireless Industry Seeks Changes In Antenna-Collocation Agreement The Telecommunications Industry Association has published... Carriers, Others See Problems In FCC=0F's ID-Number Proposal=20 Building Owners, Carriers Spar over FCC Proposal To Block Service, Extend B= an=20 on Exclusive Pacts Missouri Lawmakers Seek To Oust Three PSC Members FCC Says ATU Must Refund $2.7M For Misallocating Costs =0F`C,=0F' =0F`F,=0F' Block Reauction Nets Record $16.8B; Large Carrier Par= ticipation May=20 Be Contested Pa. ALJ Slams Verizon Plan To Avoid Full Structural Split Carriers Back Simplified Transfers Of International Authorizations Personnel Regulatory & Government Affairs Industry News Verizon=0F-Vodafone Assets DT Acquisitions What=0F's Ahead. . . Falling Credit Ratings Create Costly Obstacle for Carriers Telecom Sector=0F's Dubious Debts Create Drag on Financial Markets Conn. Draft Decision Would Let SNET Drop Cable TV Business Executive Briefings FCC Expands ILEC Line-Sharing Mandates To Fiber Loops, Confirms=20 Line-Splitting Duty The FCC has given data CLECs (competitive local exchange carriers) a major= =20 win by expanding incum-bent local exchange carriers=0F' =0F"line-sharing=0F= " and =0F" line-splitting=0F" duties. The FCC tinkered with its rules governing those= =20 duties in an order and further notice of proposed rulemaking released in=20 Common Carrier dockets 96-98 and 98-147. The order addressed petitions for= =20 reconsideration and clarification of a previous order on line sharing (TR,= =20 Nov. 22, 1999). Line sharing is the requirement that incumbent local exchange carriers=20 (ILECs) allow competitors to offer high-speed service over the high-frequen= cy=20 portion of a loop, while the ILEC continues to offer voice service over the= =20 low-frequency portion. In the order adopted Jan. 19, the FCC said ILECs must provide line sharing= =20 over the entire loop even if they=0F've deployed fiber in the loop to suppl= ement=20 or replace the original copper line. The order was one of many actions tha= t=20 the FCC took on the last day of Chairman William E. Kennard=0F's tenure but= that=20 were not immediately available, eventually trickling out of the Commission= =20 last week. Rhythms NetConnections, Inc., had filed a petition for clarification with t= he=20 FCC, complaining that some ILECs were contending they didn=0F't have to unb= undle=20 fiber portions of the loop when those portions were used to provide xDSL=20 (digital subscriber line) services. =0F"In the absence of this clarification, a competitive LEC might undertake= to=20 collocate a DSLAM [digital subscriber line access multiplexer] in an=20 incumbent=0F's central office to provide line-shared xDSL services to custo= mers,=20 only to be told by the incumbent that it was migrating those customers to= =20 fiber-fed facilities,=0F" the FCC said. In that case, the CLEC would have = to=20 collocate another DSLAM in a remote terminal to continue offering line-shar= ed=20 services to the same customers. =0F"All indications are that fiber deployment by incumbent LECs is increasi= ng=20 and that collocation by competitive LECs at remote terminals is likely to b= e=20 costly, time-consuming, and often unavailable,=0F" the FCC said. The FCC says ILECs must allow for =0F"line splitting,=0F" so competitors th= at offer=20 voice service using the unbundled network element platform can provide=0F-o= r=20 partner with another data CLEC to provide=0F-DSL service on those same line= s. =0F"Incumbent LECs are required to make all necessary network modifications= to=20 facilitate line splitting, including providing nondiscriminatory access to= =20 [operation support systems] necessary for preordering, ordering,=20 provisioning, maintenance and repair, and billing for loops used in=20 line-splitting arrangements,=0F" the FCC said. The FCC =0F"strongly urged=0F" ILECs and CLECs to =0F"work together to deve= lop=20 processes and systems to support competing carriers=0F' ordering and=20 provisioning of unbundled loops and switching necessary for line splitting.= =0F" The FCC, however, denied a related petition for clarification filed by AT&T= =20 Corp. It had asked the FCC to require ILECs to make their xDSL services=20 available to customers even if they obtain voice service from competing=20 carriers using the ILECs=0F' lines. AT&T was worried that customers wouldn= =0F't=20 switch their voice service to a competitor if that change would eliminate= =20 their ability to get DSL services. =0F"Although the line-sharing order obligates incumbent LECs to make the=20 high-frequency portion of the loop separately available to competing carrie= rs=20 on loops where incumbent LECs provide voice service, it does not require th= at=20 they provide xDSL service when they are no longer the voice provider,=0F" t= he=20 FCC said. =0F"To the extent that AT&T believes that specific incumbent behavior const= rains=20 competition in a manner inconsistent with the Commission=0F's line-sharing = rules=20 and/or the [Communications Act of 1934, as amended] itself, we encourage AT= &T=20 to pursue enforcement action,=0F" it said. The FCC also denied requests from Bell Atlantic Corp. (now Verizon=20 Communications, Inc.). It had asked the FCC to (1) reconsider the=20 requirement that ILECs refusing to condition a loop for the provision of DS= L=20 service demonstrate to the relevant state commission that conditioning that= =20 loop would degrade voice services and(2) permit a line-sharing deployment= =20 schedule other than the one it adopted. Rhythms applauded the FCC=0F's decision. =0F"By expanding the definition o= f line=20 sharing to include fiber loops and ensuring our ability to use consumers=0F= '=20 existing voice lines for data services, we can bring the benefits of the mo= st=20 robust broadband service offerings to consumers,=0F" said Jeffrey Blumenfel= d,=20 chief legal officer and general counsel for Rhythms. During a press briefing last week (see separate story), Thomas J. Tauke,=20 senior vice president-public policy and external affairs at Verizon=20 Communications, Inc., criticized the FCC=0F's decision, specifically the=20 provisions requiring line splitting. The FCC =0F"didn=0F't address how thi= s is to=20 be done,=0F" he said. Jonathan Lee, vice president-regulatory affairs at the Competitive=20 Telecommunications Association, said the order was an =0F"unmitigated win= =0F" for=20 data CLECs. But he said the FCC=0F's decision not to grant AT&T=0F's petit= ion for=20 clarification was =0F"regrettable.=0F" Residential consumers who have DSL available only from the ILEC won=0F't be= able=20 to switch their voice service without losing their DSL service, he said. M= r.=20 Lee compared the ILECs=0F' =0F"tying=0F" of voice and DSL service to Micros= oft Corp.=0F's=20 practice of linking its Internet Explorer Web browser with its Windows=20 operating system. The ILEC practice =0F"could run afoul of antitrust laws,= =0F" he=20 said. Critics Worry White House =0F`E-rate=0F' Proposal May Reduce Funding, Disco= urage=20 Participation The education reform package that President Bush sent to Congress last week= =20 is drawing criticism from policy-makers who helped draft and implement the = =0F" E-rate=0F" telecom discount program. It=0F's also sparking concern among s= chools=20 and libraries that have participated in the program and benefited from it. They=0F're worried that the president=0F's E-rate proposal, if adopted in i= ts=20 current =0F"blueprint=0F" form, would discourage certain schools from apply= ing for=20 discounts on telecom and Internet services and internal connections. In th= e=20 long run, they fear that the president=0F's proposal would lead to decrease= d=20 funding for the program, which currently stands at $2.25 billion a year. The main problem, these critics say, is that shifting administration of the= =20 program to the Department of Education, as President Bush has said he inten= ds=20 to do, would render E-rate funding dependent on congressional=20 appropriations. In its current form under the FCC=0F's oversight, the prog= ram=20 is funded by universal service contributions assessed from telecom carriers= . The technology part of the president=0F's education reform initiative unvei= led=20 last week calls for combining the E-rate with several Department of Educati= on=20 programs to form one =0F"performance-based technology grant program.=0F" T= hen, it=20 says, funding for that program would be disbursed =0F"by formula=0F" to sta= tes=20 through block grants. The aim is to streamline the many =0F"duplicative technology programs=0F" i= nto one=20 education grant plan, the Bush administration says. Such streamlining woul= d=20 go a long way toward reducing the E-rate program=0F's =0F"burdensome paperw= ork=0F"=20 requirements and adding more flexibility to those program, the proposal say= s. =0F"Flexibility will be increased by allowing funds to be used for purposes= that=20 include software purchases and development, wiring and technology=20 infrastructure, and teacher training in the use of technology,=0F" it state= s. =20 It also would permit E-rate recipients to use federal funds to pay for=20 Internet filtering software, which is being mandated for the first time thi= s=20 year by the Children=0F's Internet Protection Support Act of 2000 (TR, Jan.= 22). But key U.S. lawmakers and education officials aren=0F't prepared to embrac= e the=20 plan yet. They say more details are needed from the Bush administration on= =20 several issues, including how the E-rate program would be funded and what= =20 formula would be used to distribute money among the states. Jeff Burnett, director-government relations at the National Association of= =20 Independent Schools, says the language of the proposal is cloudy when it=20 comes to whether the program would be supported by the Universal Service=20 Fund, as it is now, or by general tax revenues. =0F"That=0F's a huge quest= ion=20 mark, and we are highly nervous about it because it does appear that it wou= ld=20 become part of the Department of Education=0F's budget,=0F" he says. Mr. Burnett says making the E-rate dependent on general tax revenues could = =0F" destabilize=0F" its funding and discourage some private and parochial schoo= ls=20 from applying for telecom discounts. =0F"It would go from where it is now,= a=20 pretty stable $2.25 billion per year, to where you would have arguments eve= ry=20 year in Congress over how much money it would get.=0F" Plus, he says, E-rate funds =0F"no longer would be string-free=0F" if they = were to=20 be allocated by the federal government. Moving the program to the Departme= nt=20 of Education could discourage religious schools from participating because = of=20 potential =0F"church-state problems,=0F" he says, referring to the First Am= endment=20 to the U.S. Constitution, which prohibits congressional establishment of an= =20 official religion. And some states may be restricted by their state=20 constitutions from providing federally funded educational services to priva= te=20 and religious schools, he adds. Former FCC Chairman Reed E. Hundt, who oversaw the implementation of the=20 E-rate program back in 1996, fears that the end result could be the =0F"kil= ling=20 of the program altogether=0F" or a =0F"chopping of it down from a significa= nt=20 program to an insignificant one.=0F" =20 Having the Education Department oversee the E-rate program would remove=20 stability from the program, Mr. Hundt stressed. =0F"Where are they going t= o=20 find 2, 3, or 4 billion dollars in the general [tax revenues] to pay for it= ?=0F"=20 he asked. =0F"The bigger [telecom service] providers probably would be hap= py,=20 but the [support] would be reduced,=0F" Mr. Hundt told TR last week. He also rejected the administration=0F's claims that consolidating the educ= ation=20 technology programs would reduce applicants=0F' paperwork and filing=20 requirements. =0F"Moving it to the Department of Education is not a way to= =20 simplify paperwork,=0F" Mr. Hundt said. =0F"Nothing is simpler than the wa= y it=0F's=20 done now. These forms don=0F't even go to the government; they go to a=20 privately run trust fund,=0F" he added. A source who works with schools on fine-tuning their E-rate applications=20 foresees a =0F"food fight at the state level=0F" if the Bush administration= =20 institutes a block-grant program. =0F"There won=0F't be the same spirit of= =20 cooperation among the schools and libraries that there is today,=0F" the so= urce=20 says. =0F"Instead, they=0F'll see each other as competition.=0F" A library official said that even if the E-rate program remained part of th= e=20 USF, expanding its scope to include software purchases and teacher training= =20 could give telecom carriers grounds for a legal challenge of the assessment= s=20 made on their revenues. =0F"If the money is to come from the service provi= der,=20 then the program must directly relate back to the services that they=20 provide. I could see someone challenging the software and teacher-training= =20 aspects,=0F" the source says. Snowe, Rockefeller Are Skeptical The program has received an icy response from two U.S. senators who were=20 among the original sponsors of the legislation that added the E-rate=20 provisions to the Telecommunications Act of 1996: Republican Olympia J.=20 Snowe (Maine) and Democrat John D. Rockefeller IV (W.Va.). In a statement issued soon after the Bush education proposal was released= =20 Jan. 23, Sen. Rockefeller vowed to =0F"aggressively fight=0F" the E-rate as= pects of=20 the proposal. It would be a =0F"grave mistake=0F" to fold the E-rate into = a block=20 grant program with the Education Department technology programs, Sen.=20 Rockefeller said. =0F"Under the Bush block-grant approach, local schools would have less=20 flexibility, not more,=0F" Sen. Rockefeller said. =0F"Private and parochia= l=20 schools would have to negotiate with state education agencies and worry abo= ut=20 entanglements of federal regulations. Most importantly, the secure funding= =20 for the E-rate and investments in technology would be jeopardized,=0F" he s= aid. Sen. Snowe also worries about turning the E-rate into a block-grant program= . =20 Among other things, she says, such a proposal could deter private and=20 parochial schools from participating in the program. =20 =0F"We plan to work with President Bush and our colleagues in the Congress = to=20 ensure that the current program is protected, as we don=0F't support any ef= forts=20 that would undermine its goals,=0F" a Snowe aide told TR. =20 New House telecommunications subcommittee Chairman Fred Upton (R., Mich.) h= as=20 told President Bush in a letter that he plans to hold several hearings this= =20 year on =0F"aspects of your proposal that fall under the subcommittee=0F's= =20 jurisdiction,=0F" including the E-rate plan. Rep. Upton has asked the Bush administration to focus on broadband service= =20 deployment, =0F"particularly as it relates to how increased access to high-= speed=20 data services in our homes and schools could vastly improve educational=20 opportunities.=0F" Numerous calls to the White House seeking comment weren= =0F't=20 returned before TR=0F's Friday afternoon news deadline. FCC Gears Up To Enforce E-rate =0F'Net-Filter Mandate The FCC wants advice on how to implement the Children=0F's Internet Protect= ion=20 Act of 2000 (CIPA), which requires schools and libraries that receive =0F" E-rate=0F" discounts for Internet services and internal connections to use = =0F" filtering=0F" technology that prevents minors from accessing =0F"harmful=0F= " material=20 over the =0F'Net. The FCC has suggested that recipients certify compliance with the CIPA on= =20 forms they must file when applying for E-rate discounts on telecom services= ,=20 Internet services, and internal connections. Under the CIPA, the =0F"Internet safety technology=0F" must filter out =0F"= visual=20 depictions=0F" of =0F"obscene=0F" material or =0F"child pornography,=0F" ev= en when adults=20 are using the computers. Schools and libraries are required to bar access = to=20 visual depictions that are =0F"harmful to minors=0F" only when minors are u= sing the=20 computers. The law requires E-rate recipients to certify each program year that they a= re=20 complying with the filtering mandate and that they monitor the operation of= =20 the filtering technology while the computers are in use. The law allows an= =20 administrator to disable the filtering technology while the computer is bei= ng=20 used by an adult =0F"for bona fide research or other lawful purpose.=0F" Schools and libraries have one year to adopt an Internet safety policy; in= =20 the first year after the effective date of the law, they either must certif= y=20 that they have such a policy or that they are developing one. The law also allows schools and libraries to seek a waiver from the FCC=20 during the law=0F's second year, if state or local procurement rules or=20 competitive bidding requirements have prevented them from implementing an= =20 Internet safety policy. The FCC=0F's further notice of proposed rulemaking released last week in Co= mmon=20 Carrier docket 96-45 proposes that E-rate recipients this year certify eith= er=20 that they have complied with all relevant provisions of the CIPA or that th= e=20 CIPA requirements don=0F't apply. The certifications would appear on their= =0F" receipt of confirmation=0F" forms (FCC Form 486). The CIPA doesn=0F't require schools and libraries that use E-rate funds onl= y for=20 telecom services=0F-and not for Internet access or internal connections=0F-= to=20 install the filtering technology. The FCC proposes that in future years recipients include their compliance= =20 certifications on FCC Form 471, which is used to describe the services to b= e=20 funded. It asks how to implement the =0F"remedial=0F" provisions of the CI= PA,=20 which detail ways an applicant can correct its noncompliance or=20 noncertification. Comments are due 15 days after publication of the=20 rulemaking notice in the Federal Register; replies are due 30 days later. The American Library Association has announced plans to challenge the=20 constitutionality of the CIPA (TR, Jan. 22), whose Internet-filtering=20 requirements extend to other federal programs that subsidize schools=0F' an= d=20 libraries=0F' purchases of computers and Internet access. The ALA, which notes that the CIPA takes effect April 20, has launched a We= b=20 site where it will post information about its activities regarding the CIPA= =20 (http://www.ala.org/cipa). Meanwhile, President Bush last week announced a proposal for modifying the= =20 E-rate program, including reducing the paperwork demands on applicants (see= =20 separate story). Large Carriers Want 700 MHz Auction Postponed, But Small Providers,=20 Broadcasters Oppose Delay Large wireless carriers are once again asking the FCC to postpone the=20 scheduled auction of licenses for the 700 megahertz band, citing a host of= =20 familiar concerns that they say could dampen enthusiasm for bidding on the= =20 frequencies. But rural carriers and TV broadcasters are urging the Commission to begin t= he=20 auction March 6, as scheduled, noting that the sale already has been=20 postponed three times. They say that large carriers have had plenty of tim= e=20 to prepare for the auction and that further delays would be unfair to them. They offered their views in comments filed with the FCC last week in respon= se=20 to a request by Verizon Wireless to delay the sale until September (TR, Jan= .=20 22). Several large carriers that supported the request asked for an even= =20 longer postponement. Supporters of postponement cited the presence of broadcasters in the spectr= um=20 and the need to negotiate band-clearing agreements as evidence to support= =20 their cause (see separate story). Most of their arguments echoed those of= =20 Verizon Wireless. TV broadcasters don=0F't have to evacuate the spectrum (channels 60=0F-69) = as part=20 of the transition to digital TV until 2006 at the earliest. But wireless= =20 carriers, citing the uncertainty about when the frequencies slated to be=20 auctioned will be available for use, have asked the FCC and Congress to for= ce=20 the broadcasters out early. In addition to the presence of the broadcasters, other reasons the large=20 carriers said the auction should be delayed included concerns that (1)a=20 reauction of =0F"C=0F" and =0F"F=0F" block PCS (personal communications ser= vice) licenses=20 hadn=0F't finished in time for carriers to assess their spectrum needs in t= he=20 700 MHz auction (see separate story), (2)companies need more time to prepar= e=20 for package bidding rules that will be used for the first time in the aucti= on=20 (TR, July 10, 2000), and (3)a high-level effort to identify and allocate=20 frequencies for third-generation (3G) services will affect carriers=0F' int= erest=20 in the 700 MHz band (see separate story). The Cellular Telecommunications & Internet Associationsaid carriers=20 interested in participating in the 700 MHz band auction wouldn=0F't have ti= me to=20 assess their bidding strategies and spectrum needs and form alliances becau= se=20 the C and F block reauction concluded last week, after the comments were=20 filed. In addition, the Commission=0F's anticollusion rules limit contact= =20 between bidders, CTIA noted. CTIA added that prospective 700 MHz band bidders wouldn=0F't have time to= =20 negotiate the band-clearing agreements the FCC is encouraging. And it cite= d=20 carriers=0F' need to prepare for package-bidding rules. In the end, the sa= me=20 factors that led the FCC to delay the auction last year still exist, CTIA= =20 said. AT&T Wireless Services, Inc.,asked the FCC to delay the auction until March= =20 2002. Such a move =0F"will give incumbents, prospective bidders, and the= =20 Commission an opportunity to resolve much of the uncertainty associated wit= h=20 this band,=0F" the carrier said. AT&T Wireless also said more time was nee= ded=20 to assess whether recent FCC actions designed to speed broadcasters=0F'=20 transition to digital TV would accomplish their goals. It suggested that the FCC schedule the auction of channels 60=0F-69 in=20 conjunction with a sale of channels 52=0F-59, which the FCC is statutorily= =20 required to license by September 2002. Cingular Wireless LLCasked the FCC to delay the auction until at least 60 t= o=20 90 days after it acts on all =0F"long form=0F" applications filed by winnin= g=20 bidders in the C and F block reauction. It also suggested that FCC=20 coordinate the timing of licensing channels 60=0F-69 and channels 52=0F-59. Nextel Communications, Inc.,wants the auction delayed until November. That= =20 move would give carriers time to assess the spectrum-allocation decisions= =20 made under the 3G initiative, Nextel said. Although the 30 MHz of commerci= al=20 spectrum in the 700 MHz band is not under consideration as part of that=20 effort, the frequencies are considered ideally suited for such advanced=20 services. Telephone and Data Systems, Inc.,filing on behalf of itself and its United= =20 States Cellular Corp.subsidiary, supported a delay until September or later= =20 if several other related proceedings aren=0F't completed. A postponement is =0F"essential=0F" for smaller and midsize companies that = need=20 time to assess 700 MHz market valuations, to locate funding sources, and to= =20 prepare for the package-bidding methodology, TDS said. =0F"In July of 2000, the Commission postponed this very auction for precise= ly=20 these same reasons, a decision strongly supported by the wireless industry,= =0F"=20 said Motorola, Inc.=0F"The logic of that postponement should apply with equ= al=20 force to the present request by Verizon.=0F" It added =0F"that forcing carriers to engage in competitive bidding for spe= ctrum=20 without adequate preparation will itself create a market distortion both in= =20 the actual process and in the rapidly evolving mobile marketplace.=0F" The Association of Public-Safety Communications Officials-Internationalsaid= =20 it backed a postponement =0F"to the extent that such a delay may facilitate= the=20 ultimate clearing of television broadcasters from the 700 MHz band. . .Any= =20 effort that facilitates band-clearing on channels 60=0F-69 is likely to ben= efit=20 public safety agencies waiting to use the 700 MHz band.=0F" Spectrum Exchange Group LLCsought a delay of two to six months, saying such= =20 an action would strike =0F"the appropriate balance between the needs of the= =20 bidders and incumbent broadcasters to establish a band-clearing agreement,= =20 and the urgency of putting this valuable spectrum to its best use.=0F" Ronald M. Harstad and Michael H. Rothkopfof Rutgers University and Aleksand= ar=20 Pekecof Duke University also argued for a delay, citing the 3G initiative,= =20 the need to negotiate band-clearing agreements, and the introduction of=20 package bidding. Rural Carriers, Broadcasters Object But a group representing rural carriers urged the FCC to hold the auction a= s=20 scheduled. =0F"The Commission should not establish auction deadlines that= =20 comport with the business plans of any private company,=0F" the Rural=20 Telecommunications Groupsaid. =0F"And, stripped to its essence, Verizon ur= ges=20 the Commission to delay the 700 MHz [band] auction merely for Verizon=0F's= =20 business convenience.=0F" Delaying the sale would benefit Verizon Wireless at the expense of=20 competitors that skipped the C and F block reauction with the expectation o= f=20 bidding in the 700 MHz band sale, the group said. It added that it opposed= =20 any linkage between the 700 MHz band auction and the initiative to allocate= =20 3G spectrum. =0F"This informal daisy chain between auctions=0F-and between auctions and = other=20 allocation proceedings=0F-can only serve to advantage the largest carriers = who=20 seek to participate seriatim in each and every auction,=0F" it said. Paxson Communications Corp.,the largest incumbent broadcaster in channels 6= 0=0F- 69, also asked the FCC to reject the postponement request. Further delay = =0F"is=20 unfair to incumbent broadcasters who are seeking to get past the auction an= d=20 determine the future availability of this spectrum for both their digital a= nd=20 analog operations,=0F" it said. The broadcaster added that wireless carriers had plenty of time to prepare= =20 for the sale. And it noted that the FCC already had missed a September 200= 0=20 statutory deadline for depositing proceeds from the sale into the U.S.=20 Treasury. Equity Broadcasting Corp.said it supported Paxson=0F's comments. =0F"Further delay will slow the digital transition, violate congressional= =20 directive, and will not benefit potential bidders for the spectrum,=0F" agr= eed=20 Shop At Home Network.=0F"Moreover, Verizon=0F's arguments that a further de= lay will=20 benefit it and other potential auction participants are specious at best.= =0F" FCC Takes Additional Steps To Help Clear 700 MHz Band The FCC has taken additional steps to help spur the relocation of incumbent= =20 TV broadcasters from the 700 megahertz band in order to make way for wirele= ss=20 carriers. But it said it wouldn=0F't force the incumbents to clear the=20 frequencies=0F-at least not yet. In a third report and order released last week, the Commission said it had= =20 decided to allow the private sector to determine what band-clearing=20 mechanisms best suited the needs of broadcasters and wireless carriers. Specifically, the FCC has decided not to impose cost-sharing rules, cost=20 caps, or cost-recovery guidelines at this time on the relocation of incumbe= nt=20 broadcasters. Last year the agency asked whether it should impose such rul= es=20 (TR, June 26 and July 10, 2000). =0F`Secondary Auctions=0F' Touted The FCC also will leave it up to industry to decide if =0F"secondary auctio= ns=0F"=20 should be organized to facilitate band-clearing agreements before the=20 auction, which is scheduled to begin March 6. The FCC earlier asked for=20 comments on whether it had the authority to conduct such auctions. In the order released last week, the FCC reiterated its view of the benefit= s=20 of such auctions, saying they =0F"have potential to offer both broadcasters= and=20 new entrants additional opportunities to reduce the potential transaction= =20 costs of negotiating with each other directly after the auction.=0F" As part of their transition to digital TV (DTV), broadcasters don=0F't have= to=20 leave the 700 MHz band (channels 60=0F-69) until 2006 at the earliest. The= y may=20 stay longer if less than 85% of households in their markets have access to= =20 DTV signals. That timetable has created uncertainty among wireless carrier= s=20 about how much to bid=0F-or whether to bid at all=0F-on the spectrum when i= t is=20 auctioned. Wireless carriers have asked the FCC to force TV broadcasters out of the=20 spectrum before they are required to leave (TR, Aug. 21, 2000). For their= =20 part, broadcasters have fought such band-clearing mandates and instead have= =20 urged the FCC to address larger issues related to the DTV transition,=20 especially digital =0F"must-carry=0F" cable TV rights. The FCC recently took several actions that it said would facilitate=20 broadcasters=0F' transition to DTV, including those dealing with must-carry= =20 rights. In its 700 MHz band order, the FCC said it wanted to give voluntary=20 mechanisms a chance in clearing the frequencies for wireless services. =0F= "We=20 believe that voluntary agreements between broadcasters and licensees should= =20 result in the effective clearing of the 700 MHz band,=0F" it said. =0F"How= ever, we=20 will revisit this issue in the future if we find it necessary.=0F" The FCC=0F's latest action builds upon the policies it adopted last year to= =20 provide guidance to broadcasters and carriers regarding the regulatory=20 treatment of private band-clearing agreements. For example, the agency extended to three-way agreements a general =0F" rebuttable presumption=0F" adopted last year for bilateral pacts. The=20 presumption is that such agreements are in the public interest. The FCC also provided guidance on interference issues arising from relocati= on=20 agreements that involve moving a broadcaster to a channel below channel 59.= =20 And it has streamlined the review of band-clearing agreements and affirmed= =20 that it expeditiously will process band-clearing agreements. It also=20 clarified that voluntary agreements to temporarily relocate licensees into= =20 channels 52=0F-58 would be permitted. Commissioner Gloria Tristani dissented in part from the report and order. = In=20 a statement, she said she opposed the decision to extend the rebuttable=20 presumption to three-way agreements. She expressed concern that such=20 agreements would result in a loss of TV service for viewers and said she=20 wanted to consider band-clearing agreements case by case. =0F"As I have stated previously, my ultimate concern is that the presumptio= n in=20 favor of band clearing reflects a diminishing regard for the public value o= f=20 free, over-the-air television services,=0F" Commissioner Tristani said. She also took exception with the FCC=0F's statement that it might revisit i= ssues=20 surrounding the mandatory relocation of broadcasters. =0F"I remain convinc= ed=20 that such action would contravene the statute=0F" establishing broadcasters= =0F' DTV=20 transition, she said. The FCC=0F's order was adopted Jan. 18 in Wireless Telecommunications docke= t=20 99-168, Cable Services docket 98-120, and Mass Media docket 00-39. A news= =20 release on the action and the text of the document were released Jan. 23. Kennard Requests Hard Stand In a related development, former FCC Chairman William E. Kennard has asked= =20 Congress to take a hard stand against broadcasters in their transition to= =20 DTV. Writing Jan. 19 to Sen. Ernest F. Hollings (D., S.C.), Mr. Kennard=20 suggested that Congress set a firm deadline of Dec. 31, 2006, for TV=20 broadcasters in channels 52=0F-69 to relocate. =20 He also proposed that broadcasters using channels 2=0F-51 after that date b= e=20 charged an escalating fee to encourage them to clear the spectrum. Writing Jan. 26 to Senate Commerce, Science, and Transportation Committee= =20 Chairman John McCain (R., Ariz.), Lyle Gallagher, president of the=20 Association of Public-Safety Communications Officials-International,=20 expressed support for Mr. Kennard=0F's proposals to help clear the 700 MHz = band. At the very least, steps should be taken to clear channels 60=0F-69, Mr.=20 Gallagher said. Public safety agencies urgently need access to 24 MHz of= =20 spectrum in the 700 MHz band that the FCC has reallocated for their use, he= =20 said, but much of it is occupied by broadcasters. =0F"By making the Dec. 31, 2006, date firm for channels 60=0F-69, state and= local=20 governments throughout the nation could plan on spectrum being available no= =20 later than Jan. 1, 2007, and could proceed with necessary funding, frequenc= y=20 planning, design, and construction for new radio systems,=0F" he added. = =0F"APCO=20 also supports adoption of legislative and regulatory provisions that may=20 allow for clearing of channels 60=0F-69 even prior to 2006.=0F" The FCC=0F's Enforcement Bureau is a proposing a monetary forfeiture... The FCC=0F's Enforcement Bureau is a proposing a monetary forfeitureof $5,0= 00=20 against Verizon Southwest, Inc., for operating a paging station in Juno,=20 Texas, without Commission authorization. Verizon told the agency that it= =20 operated the station without authorization between Nov. 1, 1998, and Feb. 7= ,=20 2000. The bureau released a notice of apparent liability for forfeiture=20 against Verizon Jan. 25 in file no. EB-00-TS-212. Easing Spectrum Crunch Tops CTIA=0F's 2001 Lobbying Agenda Spectrum issues will top the wireless industry=0F's Washington agenda for t= his=20 year, according to Cellular Telecommunications & Internet Association=20 President and Chief Executive Officer Thomas E. Wheeler. A scarcity in=20 frequencies is hurting U.S. carriers=0F' competitiveness with their foreign= =20 counterparts and thwarting development of the wireless Internet, he said. Mr. Wheeler urged the FCC to lift the cap on how much spectrum a carrier ma= y=20 hold in any one market while a high-level effort to identify and allocate= =20 frequencies for third-generation (3G) services proceeded. Such a move woul= d=20 ease the spectrum crunch, he reasoned. At a briefing for reporters last week, he said the Bush administration had= =20 its work cut out for it in collaborating with the FCC to find suitable band= s=20 for 3G use. U.S. Seen Falling Behind =0F"God bless the Clinton administration for starting the spectrum policy r= eview=20 process, but [it] couldn=0F't bring it to fruition, and it now falls to the= Bush=20 administration to deal with the really hard parts and to make decisions,=0F= " Mr.=20 Wheeler said. =0F"Those decisions will probably take time. We can=0F't afford time. It= =0F's what=20 we don=0F't have. Japan and Europe are already building the [networks whil= e] we=0F' re still trying to figure out where we should get it,=0F" he added. Then-President Clinton launched the 3G initiative by executive memorandum i= n=20 October 2000 (TR, Oct. 16, Nov. 6, and Nov. 20, 2000; and Jan. 8 and 22). = =20 The memorandum calls for the FCC to license the spectrum by Sept. 30, 2002,= =20 after a collaborative effort led by the FCC and the Commerce Department=0F'= s=20 National Telecommunications & Information Administration. But a key obstacle is that the bands being examined most closely for 3G=20 applications already are occupied by military, commercial, and educational= =20 users. Mr. Wheeler said that the time it would take to allocate 3G spectrum made i= t=20 even more important for the FCC to lift the spectrum cap immediately. The= =20 FCC asked for comments on the issue last week (see separate story). He said he had =0F"some very profitable discussions=0F" with Bush transitio= n team=20 officials on spectrum issues, although he wouldn=0F't elaborate. He also s= aid=20 he was pleased that Donald L. Evans stressed the importance of allocating 3= G=20 spectrum in his Senate confirmation hearing for secretary of commerce earli= er=20 this month (TR, Jan. 8). Mr. Wheeler said another key issue for the coming year was finding ways to= =20 use wireless technologies to bridge the =0F"digital divide.=0F" He stresse= d that=20 the gap wouldn=0F't =0F"be bridged by just pumping more money into existing= subsidy=20 programs,=0F" although he said changes in the universal service program wer= e=20 needed. On other issues, Mr. Wheeler said CTIA also hoped there would be=20 congressional or FCC action on Internet privacy, =0F"calling-party-pays=0F"= billing=20 arrangements, and reciprocal compensation. Regarding privacy, he said the= =20 trade group had gotten a positive response from members of Congress and=20 regulators to its proposed principles for location-information services (TR= ,=20 Oct. 30 and Nov. 27, 2000). Mr. Wheeler defended the industry=0F's claims regarding the safety of mobil= e=20 phones. A new book by George L. Carlo, a scientist who led a seven-year, $= 27=20 million industry-funded initiative to study the issue, says the wireless=20 industry has downplayed evidence that the phones can cause illness (TR, Dec= .=20 25, 2000). The book is particularly critical of Mr. Wheeler. The industry= =20 also has suffered recent setbacks in pending court cases that claim mobile= =20 phones are dangerous to humans (TR, Jan. 22). =0F"I don=0F't think that the issue is George Carlo or Tom Wheeler or CTIA,= =0F" Mr.=20 Wheeler said. =0F"The whole issue is, What=0F's the science? . . .We=0F've= supported=20 independent science and will continue to support independent science.=0F" As for litigation, he said that lawsuits alleging a link between exposure t= o=20 radio frequency emissions and health effects such as cancer had been=20 dismissed in the past. Nextel Communications, Inc., has agreed to purchase specialized mobile=20 radio... Nextel Communications, Inc., has agreed to purchase specialized mobile=20 radio(SMR) licenses from Arch Wireless, Inc., for $175 million and invest $= 75=20 million in the paging carrier. In exchange, Nextel will receive a new seri= es=20 of Arch preferred stock. The two companies also will explore ways to=20 collaborate on marketing. Arch said it didn=0F't expect to need the SMR=20 spectrum because of upgrades to its two-way messaging network. Nextel said= =20 the transition would give it about 20 megahertz of SMR spectrum in the 800= =20 and 900 MHz bands in 52 of the top 100 U.S. markets. Commission Examines Merits Of Lifting CMRS Spectrum Cap The FCC is reexamining whether to lift its cap on the amount of spectrum=20 wireless carriers may hold in any one market. The Commission also is=20 considering whether it should eliminate its cellular cross-interest rule. In a notice of proposed rulemaking released last week, the FCC asked for=20 comments on whether the spectrum cap should be retained, modified, or=20 eliminated to comply with the public-interest standard set forth in section= =20 11 of the Communications Act, as amended. Specifically, the agency is soliciting views on whether =0F"meaningful econ= omic=20 competition=0F" in the commercial mobile radio service (CMRS) market has=20 rendered spectrum aggregation limits, including the cellular cross-interest= =20 rule, unnecessary. Under the agency=0F's rules, carriers aren=0F't allowed to hold more than 4= 5=20 megahertz of spectrum in urban markets and 55 MHz in rural markets. The=20 cellular cross-interest rule restricts an entity=0F's ownership interest in= =20 cellular carriers operating in the same market. The FCC wants to know=20 whether those limits are still needed to prevent harmful concentration of= =20 spectrum holdings or ensure opportunities for new players to enter the mark= et. The Commission is asking for comments on what constitutes =0F"meaningful=20 economic competition=0F" under section 11 and how competitive conditions ha= ve=20 changed since it last reviewed the restrictions in 1999. In the largest metropolitan areas, where seven in 10 Americans live, at lea= st=20 five mobile telephone carriers are offering service, the agency noted last= =20 week. As a result, it said, prices are declining, coverage areas are=20 expanding, and new service packages are being offered. It wants to know if= =20 there are public-interest reasons for maintaining the cap regardless of suc= h=20 competitive developments. Large wireless carriers have lobbied the FCC to lift the cap, saying it has= =20 thwarted the U.S. wireless industry=0F's deployment of third-generation (3G= )=20 services, placing it at a disadvantage with foreign competitors. Some=20 smaller carriers, however, have asked the FCC to retain the cap, saying it= =0F's=20 needed to ensure that they remain competitive against their larger=20 counterparts. In a broad review of the cap conducted in 1999, the FCC decided to retain t= he=20 restriction, although it eased the limit in rural markets (TR, Sept. 20,=20 1999). At the time, it concluded that the cap was a safeguard against=20 excessive concentration in the CMRS market, preserving competition and the= =20 consumer benefits it had produced. It also determined in 1999 that the=20 cellular cross-interest restriction was necessary to protect competition. = =20 The agency eased the rules somewhat, however, permitting some degree of=20 cross-interest. In November 2000, the FCC denied two petitions for reconsideration of its= =20 1999 decision but said it would reexamine the cap as part of its 2000=20 biennial review (TR, Nov. 13, 2000). The notice of proposed rulemaking,=20 adopted Jan. 19 and released Jan. 23 in Wireless Telecommunications docket= =20 01-14, stems from that review. Comments are due 60 days after the notice= =0F's=20 publication in the Federal Register, and replies are due 30 days after that= . In a separate statement, Commissioner Harold W. Furchtgott-Roth said that h= e=20 supported the rulemaking notice but that he tentatively would have conclude= d=20 that the cap should be lifted. =0F"The use of a spectrum cap is a drastic regulatory remedy that continues= to=20 search for a corresponding competitive ill,=0F" he said. =0F"I have grown= =20 impatient with the Commission=0F's repeated reexaminations of these issues= =20 without substantial alterations in our policy approach.=0F" Industry Praises Review Thomas E. Wheeler, president and chief executive officer of the Cellular=20 Telecommunications & Internet Association, said that lifting the cap was=20 crucial while a high-level effort to identify and allocate 3G bands winds= =20 through the regulatory process (see separate story). Mr. Wheeler told reporters at a luncheon last week that such access to=20 additional spectrum was necessary for the U.S. to maintain its leadership i= n=20 the development of the Internet as it moves to wireless devices. Japan and European countries have moved more quickly to allocate frequencie= s=20 for 3G services, setting aside twice as much spectrum as the U.S. has, he= =20 said. The Personal Communications Industry Association, however, has said the cap= =20 is necessary to give smaller carriers a chance to enter the CMRS market. Mr. Wheeler noted that newly named FCC Chairman Michael K. Powell had said = he=20 would favor lifting the spectrum cap. =0F"Clearly in some of the opinions = that=20 he=0F's written in the spectrum proceeding, he=0F's asked the question, Why= should=20 this continue?=0F" Mr. Wheeler said. =0F"We=0F're hopeful.=0F" Then-Commissioner Powell voted to retain the cap in November 2000 but said = he=20 tended to agree with Commissioner Furchtgott-Roth=0F's conclusion that the = cap =0F" has outlived its usefulness.=0F" Notice Explores Alternatives In its rulemaking notice, the FCC seeks comments on alternatives to lifting= =20 the spectrum cap entirely or leaving it untouched. For example, it asks=20 whether it should apply the cap only to spectrum used for voice services. = It=20 also asks whether it should retain the cap in markets where there is less= =20 competition and eliminate it in other markets where more carriers are=20 offering service. The FCC also solicits opinions on whether to treat already-licensed spectru= m=20 differently from frequencies licensed in the future. =0F"As a general matt= er,=20 we believe that newly available CMRS-suitable spectrum either should be=20 excluded from the spectrum cap, or, if it is included, that the cap should = be=20 adjusted accordingly,=0F" the Commission said. The FCC also wants opinions on how eliminating or relaxing the cap would=20 affect its authority to review license-transfer requests under section 310(= d)=20 of the Act. If it makes such changes to the cap, it wants to know whether = it=20 could or should =0F"incorporate other methods=0F" into its license-transfer= review=20 to prevent consolidations =0F"that would eliminate the benefits brought by= =20 competition.=0F" It also seeks comments on whether removing the cap would place more of a=20 burden on the FCC and industry in the review of license transfers. If the Commission decides to keep the spectrum cap for now, it wants to kno= w=20 what further market developments could make the cap unnecessary and whether= =20 it should set a =0F"sunset=0F" date for the restrictions. Regarding the cellular cross-interest rule, the FCC asked whether the=20 restriction was still necessary to prevent cellular carriers from merging i= n=20 markets where there is little or no other competition. Bookham Technology plc, an Oxfordshire, England=0F-based... Bookham Technology plc, an Oxfordshire, England=0F-basedoptical=20 network-components manufacturer, has signed a =0F"multimillion-dollar=0F" c= ontract=20 to provide wavelength division multiplexing equipment to Fujitsu=20 Telecommunications Europe Ltd. Bookham agreed to deliver up to 10,000=20 bidirectional transceiver modules per month to Fujitsu Telecom, a unit of= =20 Fujitsu Ltd. Japan. Fujitsu will use the components in SONET (synchronous= =20 optical network), fiber-to-the-curb, and other telecom network-access=20 equipment deployments. =20 Appellate Court Upholds Nextel Tower Permit A Pennsylvania state court has upheld a local zoning board=0F's decision to= let=20 Nextel Communications, Inc., build a communications tower under a special= =20 exemption provision for radio transmitters. Residents opposing the tower h= ad=20 argued that the entire 150-foot structure didn=0F't qualify as a transmitte= r. The opinion, written by Commonwealth Court President Judge Joseph T. Doyle,= =20 affirmed a trial court decision that upheld the action of the Newlin Townsh= ip=20 Zoning Board. The township=0F's zoning ordinance limits the types of buildings that can b= e=20 constructed but allows the board to grant a special exemption to authorize= =20 the construction of a =0F"radio or television transmitter.=0F" But the ord= inance=20 doesn=0F't define radio transmitter. The residents asserted that the =0F"radio transmitter component of the faci= lity=20 is but a minor element=0F" and said the tower =0F"falls far outside any com= monly=20 understood definition of radio transmitter.=0F" They argued that because t= he=20 tower didn=0F't fit into that or any other category, the zoning ordinance d= idn=0F't=20 permit it to be constructed within the township. Judge Doyle ruled that the record supported the board=0F's decision. The ju= dge=20 noted that testimony by a Nextel engineer demonstrated that the tower was a= n=20 integral part of the facility. He concluded that the =0F"entire system ope= rates=20 together in order to transmit the necessary information for the cellular=20 network to function.=0F" Senior Judge William J. Lederer and Judge Bonnie B. Leadbetter joined Judge= =20 Doyle=0F's opinion in Robert and Loren Pearson v. Zoning Hearing Board of N= ewlin=20 Township and Nextel Communications of the Mid Atlantic, Inc. (case no. 3182= ). Finance Panel Senators Back Broadband Service Tax Credits Former New York Sen. Daniel Patrick Moynihan (D.) may have retired, but his= =20 push to extend tax credits to carriers that deploy high-speed Internet=20 facilities is being revived by key Democrats and Republicans who control th= e=20 congressional purse strings. Its proponents also have asked President Bush= =20 to include the measure in his initial budget submission to Congress. On Jan. 23, Sen. John D. Rockefeller IV (D., W.Va.) led a bipartisan group = of=20 more than 30 U.S. senators=0F-including freshman Hillary Rodham Clinton (D.= ,=20 N.Y.), who won the seat left vacant by Sen. Moynihan=0F-to introduce the=20 Broadband Internet Access Act (S 88). A companion bill is expected to be= =20 introduced in the House Ways and Means Committee this week by committee=20 members Philip English (R., Pa.) and Robert T. Matsui (D., Calif.) The Senate bill is a slightly altered version of Sen. Moynihan=0F's legisla= tion=20 of the same name, which almost cleared the Senate last fall as part of the = =0F" New Markets=0F" tax-break package (TR, June 12 and Oct. 2, 2000). =20 =0F"This bill represents my commitment to making sure that no community is = left=20 behind in the technology revolution,=0F" Sen. Rockefeller said in a stateme= nt. =20 The bill =0F"will ensure that communities everywhere, whether rural or urba= n,=20 will have the tools necessary to compete in the global economy,=0F" he=20 continued. Added Sen. John F. Kerry (D., Mass.), a co-sponsor: =0F"Too man= y=20 businesses are shying away from areas where broadband access is either too= =20 expensive or unavailable, and underserved areas are put at a tremendous=20 disadvantage.=0F" Like the Moynihan plan, the new bill would provide a tax credit equal to 10= %=20 of a carrier=0F's investment in equipment used to provide =0F"current-gener= ation=20 broadband=0F" services to business or residential customers in rural and=20 low-income areas. It defines current-generation broadband services as=20 services that can transmit at least 1.5 megabits per second downstream (to= =20 the subscriber) and at least 200 kilobits per second upstream (from the=20 subscriber). Carriers also could claim a tax credit equal to 20% of a carrier=0F's inves= tment=20 in equipment used to deploy =0F"next-generation=0F" broadband services to = =0F"all=20 residential customers,=0F" according to Sen. Rockefeller. His bill defines= =20 next-generation services as those able to transmit at least 22 Mbps=20 downstream and at least 5 Mbps upstream. A Rockefeller aide said the=20 upstream transmission requirements were lower than those in last year=0F's = bill=20 because lawmakers =0F"didn=0F't want to cut out any potentially good broadb= and=20 suppliers, like wireless and satellite providers.=0F" Because the measure would amend the Internal Revenue Code of 1986, it has= =20 been referred to the Senate Finance Committee, where several of its members= =20 are co-sponsors, including Sens. Rockefeller and Kerry, Minority Leader=20 Thomas A. Daschle (D., S.D.), Finance Committee ranking Democrat Max Baucus= =20 (Mont.), Orrin G. Hatch (R., Utah), Olympia J. Snowe (R., Maine), Blanche L= .=20 Lincoln (D., Ark.), and Kent Conrad (D., N.D.). =0F"It is crucial that we act quickly,=0F" the lawmakers said in a Jan. 22 = letter=20 to President Bush. =0F"A number of other nations, including China, Japan,= =20 Sweden, and Singapore, are moving aggressively to surpass the U.S. in=20 broadband infrastructure over the next five years.=0F" The proposed Broadband Internet Access Act =0F"is a truly bipartisan measur= e,=0F"=20 they told the president. =0F"Clearly, such support indicates a general=20 recognition of the need to extend a high-speed information system to all=20 Americans. This legislation provides the vehicle for delivering such a=20 system, and we hope you will support it in your upcoming budget proposal,= =0F"=20 they said. The support of Republicans Hatch and Snowe is important because they give t= he=20 bill much-needed bipartisan support on the Finance Committee, something it= =20 didn=0F't have last session, the Rockefeller aide said. =0F"We=0F're hopef= ul=0F" that=20 new Finance Committee Chairman Charles E. Grassley (R., Iowa) will allow th= e=20 measure to come up for a committee vote. Calls to Sen. Grassley=0F's offic= e=20 were not returned by TR=0F's deadline. Meanwhile, one day later, Sen. Kerry introduced a portion of the broadband= =20 tax-credit bill as a separate, stand-alone measure. His bill, S 150, would= =20 authorize a tax credit equal to 10% of a carrier=0F's investment in equipme= nt=20 used to provide current-generation broadband services to underserved areas.= =20 But it wouldn=0F't provide tax credits for investments to deliver those ser= vices=20 to rural areas, nor would it provide added tax credits for delivering=20 next-generation services. A Kerry aide said the senator crafted the separate bill to attract more=20 attention to the lack of high-speed deployment to low-income communities. = =0F" That=0F's the area he=0F's most concerned with,=0F" the aide told TR.=20 Verizon Wants Law Changing Approach to Broadband Regs The =0F"time is ripe=0F" for legislation creating a new regulatory regime f= or=20 broadband services and networks, similar to the regime that governs the=20 wireless industry, according to Verizon Communications, Inc. Such an=20 approach would entail =0F"no economic regulation and minimal rules,=0F" and= states=20 would be preempted from regulating broadband services. Meeting with reporters in Washington Jan. 25, Verizon executives said recen= t=20 court decisions had made it more important for Congress to develop a new=20 regime for such services. Thomas J. Tauke, Verizon senior vice president-federal government relations= ,=20 said representatives of incumbent telephone companies, cable TV providers,= =20 and telecom equipment providers had discussed with each other the need for= =20 new broadband legislation. =0F"There has been no organized effort=0F" by the industry segments to coor= dinate=20 lobbying efforts, Mr. Tauke said. =0F"But it=0F's fair to say there=0F's b= een a lot=20 of discussion among the players.=0F" Recent court decisions on the appropriate regulatory regime for cable modem= =20 services (TR, April 17, May 22, and June 26, 2000) have troubled the cable = TV=20 industry by suggesting that they could be considered telecom services, Mr.= =20 Tauke said. He also cited the recent federal appeals court decision overturning the FCC= =0F's=20 regime for advanced services affiliates (TR, Jan. 15). The court rejected= =20 the FCC=0F's finding that incumbent local exchange carriers could avoid=20 unbundling and resale mandates for their digital subscriber line offerings = if=20 they provided those services through a separate affiliate. =0F"This court case really highlighted the point that the FCC doesn=0F't ha= ve the=20 ability to come up with, on its own, a new regulatory structure covering=20 broadband services,=0F" Mr. Tauke said. Mr. Tauke said the Freedom and Broadband Deployment Act drafted last year b= y=20 Reps. W.J. (Billy) Tauzin (R., La.) and John Dingell (D., Mich.) would have= =20 provided a =0F"little bit=0F" of the regulatory reform sought by Verizon. = But Mr.=20 Tauke said he hoped lawmakers would =0F"look at it in somewhat broader term= s=0F"=20 this time around. Mr. Tauke suggested that this type of broadband legislation had become=20 Verizon=0F's top priority and that its push for legislation to allow Bells = to=20 offer interLATA (local access and transport area) data services was becomin= g=20 less so. Asked if interLATA data relief was still the most important legislative iss= ue=20 to Verizon, Mr. Tauke said, =0F"It certainly would have been two years ago.= Is=20 that the most important thing now? It=0F's certainly important. . .But of = equal=20 importance, if not more importance, is getting some clarity on the broadban= d=20 world.=0F" Verizon still is pushing for legislation to change the existing reciprocal= =20 compensation regime. Edward D. Young III, SVP-federal government relations= ,=20 said payments to compensate competitive local exchange carriers for=20 terminating calls to Internet service providers ran Verizon about $1 billio= n=20 a year. Although the FCC has been promising to act on the reciprocal compensation= =20 issue, Congress may need to step in, Mr. Young said. =0F"The FCC is still= =20 trying to work through the issue, but obviously it=0F's a different dynamic= =0F"=20 given the change in chairmen from William E. Kennard to Michael K. Powell, = he=20 added. Mr. Tauke said it was =0F"shameful=0F" that the FCC hadn=0F't resolved the = issue. =0F" Two years ago they knew there was a problem, but they didn=0F't have the co= urage=20 to preempt the states,=0F" he said. =0F"They could see the problems coming= , but=20 they thought it would work itself out.=0F" Joan H. Smith, chairwoman of the National Association of Regulatory Utility= =20 Commissioners=0F' telecommunications committee and a member of the Oregon P= ublic=20 Utility Commission, said she was =0F"puzzled=0F" by the bid to preempt stat= e=20 regulators in a new broadband regulatory regime. =0F"We don=0F't regulate= =20 broadband=0F" services, she told TR. =0F"Our biggest issue at the state le= vel is=20 promoting broadband [deployment], not regulating it.=0F" Utah Bill Would Halt Plan To Merge Consumer Agencies Legislators in Utah have passed a measure to repeal a year-old law that wou= ld=20 have folded together two state agencies that represent utility customer=20 interests before the Public Service Commission. Absent the repeal measure,= =20 the legislation passed in 2000 would have combined the Committee of Consume= r=20 Services and the Division of Public Utilities, effective July 1. The new= =20 entity would have been called the Office of Public Advocate. House Majority Whip David Ure (R.), who sponsored last year=0F's restructur= ing=20 legislation, also was behind the bill to repeal it. The legislative staff= =20 said he=0F'd decided that the time wasn=0F't right to overhaul the state=0F= 's utility=20 regulatory system. The repeal measure sped through the Utah Legislature la= st=20 week, progressing from its first House reading through passage by both hous= es=20 in just two days. Rep. Ure rejected alternative proposals for re-structuring the state=0F's= =20 regulatory agencies, settling for a straight repeal of last year=0F's=20 legislation. One proposal would have expanded the PSC=0F's membership, the= =20 legislative staff told TR. Another version that circulated between the end of last year=0F's legislati= ve=20 session and the beginning of this year=0F's would have merged the PSC and t= he=20 Division of Public Utilities. =20 The staff said Rep. Ure pulled those drafts after deciding that the state= =0F's=20 regulatory structure shouldn=0F't be altered in the midst of the current en= ergy=20 crisis. The Division of Public Utilities is charged with representing the public=20 interest before the PSC and ensuring that all utility customers have access= =20 to safe, reliable service at reasonable prices. The Committee of Consumer= =20 Services represents residential, small- business, and agricultural consumer= s=20 before the PSC. Some parties had expressed concern that merging the two=20 entities would decrease the amount of information available for PSC decisio= n=20 making. Consumer group opposition last year persuaded Gov. Michael O. Leavitt (R.) = to=20 call for a review of the law after the legislative session ended in March. = =20 He allowed the bill to become law last year without signing it. Reps. Cannon, Eshoo Unveil Internet Privacy Measure Reps. Chris Cannon (R., Utah) and Anna G. Eshoo (D., Calif.) have introduce= d=20 a bill to require operators of commercial Web sites that collect personally= =20 identifiable information to explain to site visitors what information is=20 collected, how it will be used, and who is collecting it. The proposed=20 Consumer Internet Privacy Act (HR 237) would authorize the Federal Trade=20 Commission to assess civil penalties of up to $22,000 per violation, or a= =20 total of $500,000 against a particular violator. Rep. Cannon said the bill was a good starting point for addressing Internet= =20 privacy, a topic that many observers see as the top Internet-related issue = in=20 the 107th Congress. =0F"We are going to rely heavily on the marketplace to help define how to= =20 implement the guidelines established in this bill=0F's language, just as th= e=20 market has commendably worked with government officials to develop other=20 standards and seals for privacy,=0F" Rep. Cannon said. Rep. Eshoo, who said consumers shouldn=0F't have to =0F"reveal their life s= tory=20 every time they surf the Web,=0F" said their privacy must be protected with= out=20 impeding the free flow of information on the Internet. =0F"This legislatio= n=20 achieves that goal=0F-the bill doesn=0F't regulate th
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