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-------------------------------------------------- Telecommunications Reports presents.... TR DAILY Oct. 24, 2001 -------------------------------------------------- PLEASE NOTE: This electronic publication is copyrighted by Telecommunications Reports International. Redistribution or retransmission of any part of this electronic publication -- either internally or externally -- is strictly prohibited. Violation will be cause for immediate termination of your subscription and liability for damages. You may print out one hard copy for your personal use. If you are interested in having this publication sent to colleagues at your company, additional authorized recipients may be added to your subscription for a fee. Call Subscriber Services, at (800) 822-6338, or send an e-mail to customerservice@tr.com for more details. If you prefer not to receive TR Daily, please reply to customerservice@tr.com. -------------------------------------------------- Table Of Contents Click here for the full issue: http://www.tr.com/online/trd/2001/td102401/index.htm COMMERCE DEPARTMENT ASKS FCC TO LIFT SPECTRUM CAP http://www.tr.com/online/trd/2001/td102401/Td102401.htm POWELL DEFENDS COMMISSION's SUPPORT FOR 700 MHz BAND-CLEARING PACTS=20 http://www.tr.com/online/trd/2001/td102401/Td102401-01.htm AT&T MEETS THIRD QUARTER EXPECTATIONS, ANALYSTS SEE DISMAL 2002=20 http://www.tr.com/online/trd/2001/td102401/Td102401-02.htm NEXTEL UPBEAT ON FINANCIAL TARGETS; LEAP WIRELESS CAUTIONS ON FUNDING http://www.tr.com/online/trd/2001/td102401/Td102401-03.htm NextWave SETTLEMENT TALKS DRAW IRE OF SMALL BIDDERS http://www.tr.com/online/trd/2001/td102401/Td102401-04.htm CONTENT SHORTCOMINGS HINDER BROADBAND GROWTH,=20 NOT LACK OF CONNECTIONS, ITAA SAYS http://www.tr.com/online/trd/2001/td102401/Td102401-05.htm COURT PROBES ROLE OF PERU'S GOVERNMENT IN AWARDING CONTRACT FOR TELECOM NETWORK http://www.tr.com/online/trd/2001/td102401/Td102401-06.htm PRIVACY COUNCIL WANTS AUDIT OF MICROSOFT'S PASSPORT SERVICE http://www.tr.com/online/trd/2001/td102401/Td102401-07.htm NEWS IN BRIEF http://www.tr.com/online/trd/2001/td102401/Td102401-08.htm **************************************************************** COMMERCE DEPARTMENT ASKS FCC TO LIFT SPECTRUM CAP The Commerce Department today called on the FCC to lift the cap on the amount of spectrum carriers may hold in any one market, calling the restriction "arbitrary and outdated." The development is a boost to the efforts of major wireless carriers that have lobbied the FCC to repeal the cap. Nancy Victory, head of the Commerce Department's National Telecommunications & Information Administration, sent a letter to FCC Chairman Michael K. Powell calling for the repeal of the cap on commercial mobile radio service (CMRS) providers and the cellular cross-interest rule, which restricts an entity's ownership interest in cellular carriers operating in the same market. "In today's CMRS market, characterized by multiple national providers and numerous local carriers, rules such as these that draw arbitrary lines in the name of ensuring competition are simply not needed," Ms. Victory wrote. "Indeed, their retention will more likely result in consumer harm. The rules' arbitrary constraints on system capacity limit service availability as well as stifle the deployment of innovative new offerings on the CMRS networks." Repealing the restrictions "will not leave the CMRS market exposed and susceptible to anticompetitive behavior or harmful consolidation," she said. She noted that the FCC and the Justice Department had the authority to stop anticompetitive practices.=20 The agencies' existing authority is "more than sufficient to protect against future anticompetitive conduct or consolidation that threatens the public interest," she said. Retaining the cap would hurt consumers because carriers would be unable to keep up with growing demand or handle unusually large call volumes in certain instances, Ms. Victory said, citing emergencies such as the terrorist attacks on the U.S. "With re- spect to new services, the limits set by the rules discourage the offering of innovative new services over existing CMRS networks," she added. Commerce Secretary Donald L. Evans said the phrase "all circuits are busy" should be retired "alongside other relics of the industrial age and replaced by the opportunities and innovations that consumers have come to expect in the 21st century." But a conflict apparently exists within the Bush administration over the spectrum cap. The Small Business Administration has complained that the FCC has failed to describe how modifying the cap would affect small businesses or propose alternatives to minimize any negative effects (TR, April 23). Lifting the cap could ease pressure on the FCC and the Bush administration to find spectrum for third-generation (3G) wireless services. Industry representatives have said the cap's repeal is particularly important in light of the fact that 3G spectrum might be unavailable for some time. Thomas E. Wheeler, president and chief executive officer of the Cellular Telecommunications & Internet Association, praised the Commerce Department stance on the cap. The Department has taken "a bold policy position that will bring new and innovative services to consumers across America," he said. Currently, wireless carriers can only hold 45 megahertz of spectrum in urban markets and 55 MHz in rural markets. FCC Chairman Michael K. Powell has proposed raising the limit to 55 MHz in urban markets for 18 months, according to sources. Other Commissioners have indicated they would be willing to establish a higher limit, according to one source. Under proposals being discussed, after 18 months, the FCC would either "sunset" the restriction or forbear from enforcing it, a source said. The Commission plans to vote on the proposed changes at its Nov. 8 meeting, sources said. -- Paul Kirby, pkirby@tr.com **************************************************************** POWELL DEFENDS COMMISSION's SUPPORT FOR 700 MHz BAND-CLEARING PACTS=20 FCC Chairman Michael K. Powell has moved to justify the agency's backing of voluntary band-clearing agreements between TV broadcasters that operate in the 700 megahertz band and wireless carriers that want the spectrum. The pacts "may actually serve to both increase revenues to the U.S. Treasury through auction funds and facilitate the clearing of these frequencies for new commercial and public safety uses," he said. Responding to Sen. Ernest F. Hollings's (D., S.C.) recent letter on the issue (TR, Oct. 22), Mr. Powell said the FCC was endorsing the band-clearing option as a way to address a "looming quandary." The Telecommunications Act of 1996 permits broadcasters to keep their frequencies in the 700 MHz band until 2006, at the earliest, while the 1997 Balanced Budget Act mandates that the FCC auction the frequencies before then, he noted. "Relicensing this encumbered spectrum without clearly articulating the rights and obligations of new licensees vis-a-vis the incumbents before the end of the DTV transition would produce further uncertainty of when the current broadcasters would vacate," Mr. Powell said in a letter released today by the Commission. "The Commission's actions clarifying these rights thus facilitate the transition to the new uses that Congress has deemed important -- not the least of which is public safety," he wrote. Freeing up the 700 Mhz band "will double the amount of public safety spectrum available in the U.S. and provide for nationwide availability of interoperable communications channels, which now more than ever are in extremely high demand," he wrote. Mr. Powell added, "I have no idea how much it will cost the auction winners to clear the incumbents before the end of the transition, but I do believe that, by these efforts, the U.S. Treasury and American consumers will ultimately be compensated with greater auction returns and more valuable service offerings, respectively." -- Ryan Oremland, roremland@tr.com **************************************************************** AT&T MEETS THIRD QUARTER EXPECTATIONS, ANALYSTS SEE DISMAL 2002=20 AT&T Corp.'s third quarter results largely met Wall Street's reduced expectations, but some analysts anticipate the company's fortunes will dim even further in 2002. Merrill Lynch & Co. and Lehman Brothers today downgraded the company's shares because they foresee continued declines in AT&T's core businesses next year. Merrill Lynch analyst Adam Quinton lowered his intermediate-term opinion on AT&T shares from "accumulate" to "neutral." Blake Bath of Lehman Brothers lowered his rating from "strong buy" to "buy." "Previously we were looking for a 1% increase in business services revenue in 2002," Mr. Quinton said in a report. "Given the sluggish economy, declining market share, and continued pricing pressure, we are now looking for a year-over-year decline of 4%."=20 On the consumer services side, the analyst had expected a revenue decline of 15% in 2002; he now thinks that unit will post a 28% decrease. "Of course the pressure on AT&T's core telco operations are not company specific," he said. A Merrill Lynch survey of chief information officers at major U.S. companies suggests that information technology spending will fall 1% next year, he noted.=20 He predicted businesses would spend less on the kinds of telecom and consulting services offered by the three major interexchange carriers (IXCs) -- AT&T, Sprint Corp., and WorldCom, Inc. At the same time, the three big IXCs also will receive less wholesale revenue because many of their wholesale service customers -- emerging IXCs and Internet service providers -- have gone out of business, he said. He expects WorldCom to show similar symptoms when it unveils its quarterly results on Thursday. In anticipation of a poor showing by WorldCom on the consumer long distance side, Mr. Quinton reduced his near-term rating on WorldCom's MCI Group shares from "accumulate" to "reduce." He lowered his long-term rating from "neutral" to "reduce." MCI Group is a separately traded company that includes WorldCom's consumer and small-business services. In discussing its quarterly results yesterday, AT&T acknowledged that 2002 would be a tough year. Because it sells services to a wide range of businesses, AT&T's operations "mirror the American economy," said C. Michael Armstrong, chairman and chief executive officer. "At best," he said, the U.S. economy might begin its recovery in the second half of next year. For the third quarter ending Sept. 30, AT&T recorded revenues of $13.1 billion. On a pro forma basis, that's a 5.8% decrease over the year-ago figure. The company posted earnings per share (EPS) of $0.04 from continuing operations compared with $0.35 a year ago.=20 The company's financial report was complicated by the recent separation of AT&T Wireless and large one-time charges related to the breakup of its Concert global joint venture. AT&T Broadband added 76,000 cable telephony subscribers in the third quarter, versus 148,000 in the second quarter of this year.=20 As of Sept. 30, it had 924,000 cable telephony customers. It added 111,000 cable modem subscribers, down from the 131,000 added in the second quarter. Cable modem customers now total 1.4 million. AT&T executives said they still were pondering whether to sell AT&T Broadband or proceed with plans to make it a separate company.=20 AT&T has been in talks with Comcast Corp. and other potential buyers. AT&T's fourth quarter forecast calls for EPS from continuing operations of $0.03-$0.06 and a "slightly accelerated decline" in revenues compared with the second quarter. Capital expenditures will be $8.5 billion to $9 billion this year but will decline by 20% next year. AT&T executives said they would cope with slowing business conditions by continuing to cut costs. They declined to provide specifics, but the Communications Workers of America, which represents AT&T workers, said the company was planning to cut 2,400 positions. -- Tom Leithauser, tleithauser@tr.com **************************************************************** NEXTEL UPBEAT ON FINANCIAL TARGETS; LEAP WIRELESS CAUTIONS ON FUNDING Nextel Communications, Inc., turned in third quarter results at the higher end of expectations after reporting few bad effects from the Sept. 11 terrorist attacks. The company sounded an upbeat note on its ability to meet full-year financial targets and carry strong momentum into 2002. Meanwhile, fellow wireless provider Leap Wireless International, Inc., also reported strong subscriber growth for its Cricket service but sounded a note of caution on requirements to refinance its vendor debt in little more than a year from now. For the quarter ended Sept. 30, Nextel reported operating revenues of $1.99 billion, up from $1.52 billion in the year-ago quarter.=20 Nextel's domestic operations accounted for $1.81 billion, up 26% over the comparable quarter last year. EBITDA (earnings before interest, taxes, depreciation, and amortization), before a $147 million charge related to Nextel's Philippines operation, improved to $526 million, from $392 million for last year's third quarter.=20 Driving financial performance improvements were net customer additions of 481,200 for Nextel's domestic business and 650,000 customer additions on a proportionate global basis. At quarter's end, Nextel counted 9.6 million customers on a proportionate global basis. "During a quarter marked by a national tragedy, we turned in solid performance in line with our plans and full-year guidance," said Timothy Donahue, the company's president and chief executive officer. In a conference call, Nextel officials reaffirmed full- year financial guidance of revenues exceeding $7 billion, $1.9 billion of EBITDA from domestic operations, and net customer additions of up to 2.0 million. "I strongly believe we can build on this momentum for the fourth quarter of 2001 and build on it into 2002," Mr. Donahue said. Unlike many companies, Nextel was able to shrug off quickly the effect of the Sept. 11 attacks. "As terrible as these events were, they underscored the importance of wireless," said Jim Mooney, chief operating officer. "This event caused an unforeseen but very temporary interruption to our business," he explained. He added that Nextel's run-rate for customer additions was back to normal within a few days of Sept. 11. Net new domestic customer additions might have hit 500,000 for the quarter were it not for the attacks, he said. Going forward, Nextel will focus on continued expense control and renewed emphasis on sales to enterprise and government customers as key determinants of future results. In particular, Nextel will target the utilities, financial services, government, public safety, and transportation sectors. "These industries are becoming the early adopters of wireless technologies," said Mr. Mooney.=20 On the expense side, Nextel will continue reining in costs as it drives toward profitability. The firm spent $534 million on domestic capital expenditures in the third quarter, down from $616 million in the second quarter. "Over the next few years, we have the opportunity to drive $1 billion to $2 billion of operating costs out of our business," Mr. Mooney said. Nextel's business plan is fully funded, and the firm had $5.7 billion of available cash and credit as of Sept. 30, he added. While top-line trends at Leap Wireless mirror those at Nextel, the long-term funding outlook for the two firms is less similar. Leap today reported net new customer gains of 252,000 for its Cricket wireless service in the third quarter, nearly double the 132,000 net new additions in the second quarter and reflecting rollout of the service in additional markets. The service counted 724,000 customers at Sept. 30, and management increased guidance for total customer count to at least 1.1 million customers by year-end.=20 But accompanying strong quarterly revenues gains to $66.6 million were operating losses of $118 million. Leap Wireless said it had the resources to fund its business plan and purchase licenses won at auction, but it cautioned it would need to "refinance or reschedule" vendor debt prior to January 2003 or raise additional capital to pay a portion of that debt. "We expect to seek additional financial resources to support the further expansion of our business when terms and conditions appear favorable to the company and its stakeholders," Leap said. "We also intend to continue pursuing opportunities to maximize the value of our current spectrum portfolio." -- John Curran, jcurran@tr.com **************************************************************** NextWave SETTLEMENT TALKS DRAW IRE OF SMALL BIDDERS Small entities that bid on spectrum that has since been returned to NextWave Telecom, Inc., have been "frozen out" of settlement talks involving the carrier's "C" and "F" block PCS (personal communications service) licenses, two bidders complained today. In a letter to FCC Chairman Michael K. Powell, Vincent D. McBride and Scott D. Reiter of Santa Monica, Calif., noted that representatives of major carriers -- including some with significant foreign-ownership interests such as Verizon Wireless, AT&T Wireless Services, Inc., and VoiceStream Wireless Corp. -- were participating in the settlement negotiations. "As we recall, the C and F block PCS licenses were originally earmarked by the FCC for American-owned small businesses in order to satisfy the intent of Congress," they wrote. "The sad fact is that most of these C and F block licenses that were set aside for small businesses are now in the hands of a select few international behemoth telecoms." "It galls us to witness the FCC privately negotiating with these same select few behemoth telecoms for licenses once set aside for small businesses. Not only have true small businesses been treated as second-class citizens in this auction, we have been frozen out of all negotiations concerning these very same licenses," Messrs. McBride and Reiter added. "We should be treated fairly and equitably and given the same options and rights as any of the other winning bidders in auction No. 35." The bidders said they supported Verizon Wireless's request for additional time to pay off the balance of its debt to the government, but they want small businesses that participated in the auction should be given a say on the issue. "If Verizon can't readily raise the approximately $6 billion needed for their final payment, it is even harder for true small businesses to raise the capital," they said. They called on the FCC to return to bidders deposits paid on spectrum that has since been returned to NextWave. Mr. Reiter submitted net bids of $971,250 for four licenses at the auction, while Mr. McBride bid $1.5 million for one license. -- Paul Kirby, pkirby@tr.com **************************************************************** CONTENT SHORTCOMINGS HINDER BROADBAND GROWTH,=20 NOT LACK OF CONNECTIONS, ITAA SAYS A lack of compelling content, rather than any shortfalls in availability, is the chief culprit in slower-than-expected growth of broadband services, declared Harris N. Miller, president of the Information Technology Association of America=20 "It's the content, stupid," said Mr. Miller on Wednesday as the ITAA kicked off "Positively Broadband" campaign to spur the demand side of the broadband equation. "People won't buy [broadband service] to get their e-mail faster," he said. "They need compelling uses for it." According to Mr. Miller, bandwidth supply isn't the problem. He cited a recent Morgan Stanley Dean Witter study showing that 73% of households have access to cable modem service, 45% have access to DSL (digital subscriber line) services, and 86% of homes are covered by satellite broadband services. "But the take-up rate trails the supply that is out there, indicating a `demand gap,'" he said. The most promising areas for spurring the demand side are what Mr. Harris called e-work, e-government, e-health, e-education, and e- entertainment uses. Richer, next-generation broadband applications could help broadband adoption, he said. "But we need a broadband vision or roadmap to follow." In the debate over broadband deployment, Washington policy-makers have focused on mixing the cement for building the highway instead of on what will get people to drive on it, argued Mr. Miller.=20 Governments policies for spurring broadband acceptance should be policy neutral, he said. Moreover, the government should offer no sustained subsidies to spur broadband acceptance, but could use targeted nondiscriminatory incentives to address social policy holes such as the digital divide, Mr. Miller added. =20 -- Ed Rovetto, erovetto@tr.com **************************************************************** COURT PROBES ROLE OF PERU'S GOVERNMENT IN AWARDING CONTRACT FOR TELECOM NETWORK A Peruvian court has issued an injunction preventing government- owned carrier OSIPTEL and Gilat-To-Home Peru from continuing work on a very small aperture terminal (VSAT) network for telephone services in rural Peruvian communities. Irvine, Calif.-based STM Wireless, Inc., sought the injunction. Gilat-To-Home Peru is a subsidiary of Gilat Satellite Networks Ltd. of Israel. STM, in a joint venture with Peruvian CIFSA Telecom, won the competitive bidding for the project last year with a $27.8 million offer. Gilat submitted a bid that was $10 million higher than STM's. In papers filed with the court, STM contended that even though the contract was awarded to its consortium, the Peruvian government allowed Gilat to lower its bid to match STM's, then transferred the contract from STM to Gilat. The court said it found enough irregularities to question the legality of the government's handling of the contract. The court also found that OSIPTEL had violated Peruvian law regard- ing competitive bidding for government contracts when it allowed Gilat to lower its bid after the process had ended. The court ruling requires Gilat and OSIPTEL to cease work under the contract immediately. STM Chief Executive Officer Emil Youssefzadeh, speaking to what he views as an overly close relationship between Gilat and Peru's national telecom service provider said, "One way or the other, Gilat is now the VSAT supplier for all three rural telephone tenders that OSIPTEL has ever conducted. . .While we are pleased with the court's decision, the ruling shows that OSIPTEL has been clearly favoring Gilat in a highly questionable manner." STM also is suing Gilat Satellite Networks in California. STM alleges that Gilat had "improper, privileged access to government information. This information allowed Gilat to make a public announcement of government actions even though government records indicate that these actions had not yet occurred." "We have brought this matter to the attention of [Peruvian] Presi- dent Alejandro Toledo and U.S. government officials," Mr. Youssefzadeh said. "This incident could raise questions about Peru's willingness and ability to allow U.S. companies to compete fairly in the Peruvian marketplace." Peru is aggressively pursuing an expansion of trade between it and the U.S. under the Andean Trade Preference Act. Erin McConaha, who monitors Latin America for the office of the U.S. Trade Representative in Washington, said she was unaware of the STM case.=20 "I'm glad to hear about this and will look into it," she said.=20 "There is wildly differing opinion here about Peru." ?Michael Romanello, mromanello@tr.com **************************************************************** PRIVACY COUNCIL WANTS AUDIT OF MICROSOFT'S PASSPORT SERVICE The federal government must establish a system of checks and balances to ensure that personal information gathered by systems such as Microsoft Corp.'s Passport service are kept private, Privacy Council Chief Executive Officer Larry Ponemon said in a conference call today. He questioned where data-mining programs by public corporations could lead. The U.S. Federal Trade Commission (FTC) received a letter last week from several consumer and privacy groups complaining that Microsoft's failure to disclose risks associated with the collection and use of personal information in its Passport service was an unfair and deceptive trade practice. The service, which will coincide with the scheduled release of Microsoft XP tomorrow, will enable consumers to provide certain information to Microsoft that will authenticate them when they shop online with participating vendors. The privacy groups asked the FTC to order the software giant to revise its XP registration procedures so that Microsoft XP purchasers are informed clearly that they don't need to register for the Passport service to access the Internet. "As companies like Microsoft move from technology [vendors] to information intermediaries, who's to say Microsoft is not planning to do more sophisticated things with your data, including surveillance," Mr. Ponemon said. "Windows XP by itself is not creating a privacy issue, but it could be without the right checks and balances. If you're in an organization that is collecting data, you have an obligation to protect that information, and it is true that Microsoft has to be very sensitive to security features." Mr. Ponemon called for more government funding and technology tools to enforce privacy violators. "There is a tendency to create rules that are difficult to enforce, even if your best intentions are to crack down on bad players," he said. "The real concern is FTC will not have the resources to truly crack down. The ability to enforce [against] privacy abuse is very minuscule." -- Jerry Ashworth, jashworth@tr.com **************************************************************** NEWS IN BRIEF The Senate today confirmed Phillip Bond to be undersecretary for technology for the Department of Commerce and John H. Marburger III to be director of the Office of Science and Technology Policy.... AT&T Corp. has removed executives C. Michael Armstrong, Frank Ianna, Charles H. Noski, and Daniel E. Somers from the board of At Home Corp. AT&T execs Mufit Cinali and John C. Petrillo will remain on the board of the bankrupt Internet service provider. The move eliminates AT&T's control of the board, thereby removing a potential conflict of interest as At Home considers whether to accept AT&T's bid for some of its assets.... Robert Romano has been named senior vice president-strategic alliances for First Virtual Communications, Inc., a Santa Clara, Calif.-based provider of IP (Internet protocol) voice and video services. He was president of the U.S. subsidiary of Israeli videoconference company VCON.... CACI International, Inc., has appointed Roger W. Baker executive vice president and manager of its network and telecom business group. He was chief information officer at the U.S. Department of Commerce. CACI, based in Arlington, Va., provides information technology and telecom network systems.... Chris Royden has been named vice president-sales (Europe, Middle East, and Africa) for Corvis Corp. He was managing director of the same regions at SOTAS, Inc., a network management software maker.=20 Corvis is an optical networking systems provider based in Columbia, Md.... Kathleen Perone has been named to the board of Con Edison Communications, Inc. She is the founder and managing director of private telecom investment firm Accappella Ventures LLC. CEC is a wholly owned subsidiary of Consolidated Edison, Inc., and is a "carrier's carrier" serving the New York City area.... The House today voted 357-66 to approve legislation (HR 3162) to give law enforcement officials sweeping new wiretap and electronic surveillance authority. The Senate is expected to take up the same antiterrorism bill by the end of the week. The bill's wiretap provisions would expire at the end of 2005 under an agreement worked out late last week by House and Senate negotiators (TR, Oct. 22). President Bush has indicated he would sign the legislation.... The FCC's Common Carrier Bureau today conditionally granted delegated authority to the Florida and South Carolina public service commissions to implement thousands-block number pooling trials. Florida requested a trial in the `941' area code, and South Carolina in the `803' and `843' area codes. The trials must be initiated prior to March 2002, the start of national number pooling, the bureau said. South Carolina must maintain rationing procedures for six months following the implementation of area code relief, the bureau said. The bureau denied an Iowa Utilities Board petition for thousands-block pooling in the 319 area code, which rendered moot its request to require carriers not possessing local number portability to participate in number pooling.... The application window for schools and libraries to apply for "E- rate" discounts on telecom and Internet access services and internal connections for funding year five opens on Nov. 5 and runs through Jan. 17, 2002. Funding year five runs from July 1, 2002, until June 30, 2003. Applications filed during the window are considered simultaneously filed, which allows them to be reviewed based on need and poverty, as opposed to order of filing. The schools and libraries division (SLD) of the Universal Service Administration Co., which runs the program, has posted a new eligible services list, which changes or clarifies the eligibility of some products and services.... The Senate Commerce, Science, and Transportation Committee has canceled tomorrow's hearing on broadband technologies and the transition to digital TV, according to the Senate's Web site, www.senate.gov/legislative/legis_legis_committees.html.... The sale price of Teligent, Inc., has dropped from $115 million to $72.5 million. In a filing with the Securities and Exchange Commission, the bankrupt fixed-wireless service provider said it had a new agreement with a potential buyer, Teligent Acquisition Corp., which is led by former Teligent executives. The sale agreement will be reviewed by the U.S. Bankruptcy Court for the District of Delaware.... At the rates prevalent in urban areas, broadband Internet access is a losing proposition in much of rural America, according to a study the National Exchange Carrier Association, Inc., released today. Nor can service providers make up for losses by increasing business volume, according to figures in the "Middle Mile Cost Study."=20 Indeed, as penetration rates for high-speed Internet service increase from 0.5% to 15%, overall losses actually increase. NECA projects revenue shortfalls from $50 a month subscriber fees would fall short of combined DSL (digital subscriber line) charges and transport fees by $63.8 million, if broadband Internet access subscribership reached 15% across the 9 million access lines served by NECA member companies. For a summary of the study, visit 222.neca.org. ******************************************************** TR DAILY Copyright 2001 Telecommunications Reports International, Inc., (ISSN 1082-9350) is transmitted weekdays, except for holidays. Visit us on the World Wide Web at http://www.tr.com.=20 Published by the Business & Finance Group of CCH INCORPORATED. Editor: John Curran Associate Editor: Tom Leithauser Associate Editor: Ryan Oremland Associate Editor: Ed Rovetto Publisher: Stephen P. Munro 1333 H Street, NW, 1st Floor-East Tower, Washington, DC 20005 Editorial Information: Telephone: (202) 312-6060 Fax: (202) 312-6111 Email: jcurran@tr.com tleithauser@tr.com Customer Service: Telephone: (202) 312-6050 (877) 874-8737 Fax: (202) 312-6116 Email: customerservice@tr.com Federal copyright law prohibits duplication or reproduction in any form, including electronic, without permission of the publisher.=1A
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