Tex. PUC urged state legislature to set statewide goal of providing affordable advanced services to all Texans by date certain, refrain from overregulation of advanced digital data services, create climate that promotes advanced service development. PUC, in annual report to legislature on broadband development in Tex., said while rural areas’ broadband interest was high, they were less likely to have services available. Agency said Internet use among older, poorer and minority populations was less than in overall population. To spur broadband development, PUC suggested legislature consider tax incentives, giving rural governments authority to provide broadband services if private efforts failed, using control over state rights-of-way to encourage development, using economic development funding for advanced services. Agency also suggested private initiatives including demand pooling, community networks and finding “anchor tenants” that would guarantee usage to attract investment.

As it continues to weigh imposing additional regulatory conditions on AOL’s pending purchase of Time Warner (TW), FCC is seeking help from group of small and midsized ISPs. Commission has asked coalition of smaller ISPs and state associations to draft definitions of local and regional ISPs that agency might use in setting tougher open access requirement on AOL-TW combination. Proposed requirement reportedly would force AOL-TW to carry at least one local and one regional ISP on every TW cable system, in addition to national EarthLink service that MSO already has committed to carry. That would go beyond open access provision stipulated by FTC, which would require AOL-TW to open its high- speed cable lines to at least 3 unaffiliated ISPS, including EarthLink, when it added AOL as offering. Speaking for ISP coalition, NorthNet Mktg. Dir. Stephen Heins said group also was pressing FCC to set open access mandates for business users in smaller and rural areas. He said group planned to submit its proposal to Commission by today (Jan. 8) at latest.

Satellite digital radio rivals used Las Vegas Consumer Electronics Show (CES) to flex their promotional muscle in advance of commercial debuts later this year. Sirius Satellite Radio told news conference it had signed “multifaceted” marketing and programming partnership with House of Blues that “will introduce service to millions of music fans” attending House of Blues events throughout U.S. Sirius also announced programming carriage agreements with A&E TV Networks, Discovery Channel, Weather Channel. Mktg. Vp Doug Wilsterman said first Sirius receivers should arrive for sale by midyear at $300-$400. Sirius also plans to market FM modulator for adapting existing car audio equipment for use with Sirius satellite receiver. It demonstrated what Wilsterman called “absolutely true” satellite reception in Las Vegas Convention Center. He said that for demonstration purposes, Sirius had turned off its Las Vegas terrestrial repeater. Responding to questioner, Wilsterman said Sirius and rival XM Satellite Radio were committed to “honoring” FCC mandate that receivers marketed by both services be made interoperable. He said Sirius and XM were working very hard to achieve interoperability under “unified standard” agreement they signed last year. But he estimated that first interoperable receivers wouldn’t be available in marketplace for 4 years. Meanwhile, at Fri. Las Vegas news conference set for past our deadline, XM planned to demonstrate first-time live broadcasts to Convention Center from company’s Washington studio. On eve of CES, XM said it scored big promotional coup, announcing it had signed 2,200- store Sears to promote XM radio products and services at retail nationally.

American Tower said Fri. its operating income before depreciation and amortization plus interest would fall below expectations for 4th quarter. Company said lower than anticipated levels were due mainly to one-time $7 million reserve for bad debt on component sales to Anicom. Operating income before depreciation and amortization is now expected to be $56-$60 million in quarter. Company also said it expected revenue for quarter to be $226-$233 million, resulting from stronger than forecast sales in services and Internet, voice, data and video segments. American Tower estimated that towers newly constructed in quarter would top 500, also beating forecasts and raising year- end total to more than 1,650. Company’s shares fell 8.37% Fri. to $36.25 at close.

Hungarian Telephone & Cable finalized purchases of shares of its Hungarian subsidiaries from minority stockholders, terms not disclosed. Company said transactions were all-cash except for purchase of International Finance Corp.’s (IFC) 20% stake in Papatel. For Papatel transaction, Hungarian Telephone issued 72,000 shares of common stock to IFC, which is part of World Bank Group. Hungarian Telephone Pres. Ole Bertram said it planned to consolidate its 4 subsidiaries into single company.

European Commission (EC) updated its Internet telephony policy with few changes, concluding this technology “in general continues to fall outside the definition of voice telephony.” EC supplement to 1998 communication cited cases in which Internet telephony could be treated as voice telephony. Conditions that must be met include cases when service is offered commercially, provided to public, provided to and from public switched network termination points and involved direct speech transport and switching in real time and at same level of reliability and quality as public switched telecom network. Unless those caveats are met, EC said European Union members “should normally continue to allow Internet access/service providers to offer voice on Internet under data transmission general authorizations, and no mandatory requirement for an individual license is justified.” But if Internet telephony offerings meet 4 conditions, they should be regulated as substitutes for voice telephony under principle of technology neutrality, EC said. It sought comment last summer on status of voice communications on Internet. Several carriers urged Commission to make distinction between voice over Internet, which can be provided over public Internet facilities, and voice over IP, which is offered over dedicated IP networks and can guarantee quality of service (CD Sept 19 p1). EC policy update stipulated that voice over Internet covered “all kinds of conveyance of voice” using IP for routing and transmission. But voice over Internet is subset of voice over IP and “covers only such voice services that are provided over the public Internet, defined as a network of networks,” document said. While technology has improved since EC’s 1998 voice over IP directive, policy update makes clear that “public Internet” still is vulnerable to congestion that could affect voice signal quality. When service operators market bundled data and voice offering, EC would view this combination “as comprising 2 commercial offers,” policy said. In cases such as video telephony, when voice element can’t be separated from other components, “provision of voice services cannot be considered as the subject of a commercial offer,” EC said. It said supplement provided “general guidelines” and didn’t bar national authorities from making “specific assessments when justified by specific circumstances.”

BEI Technologies said it had acquired digital quartz inertial measurement and miniature integrated GPS/INS tactical systems (MIGITS) units from Boeing Co., terms not disclosed. BEI said acquisition of subsystems lines would give it access to developed Microelectromechanical Systems and Global Positioning Systems for aerospace, defense and commercial applications.

Sweden’s Telia plans to ask that country’s court system to suspend decision by National Post and Telecommunications (PTS) Agency to award 3G licenses. PTS last month awarded 4 Universal Mobile Telecommunications Service licenses, in process in which Telia failed to win 3G spectrum. Telia, which is country’s largest carrier, said it is asking county administrative court system in Sweden to freeze PTS decision until it has processed company’s appeal. Telia appeal contends that PTS: (1) Made incorrect technical applications in license award process. (2) Failed to comply with its regulations, including not evaluating “commercial viability” of applications. (3) Ignored Swedish law which requires that license allocations be made at lowest possible cost to national economy. Telia charged that PTS awarded licenses in process that reflected public procurement proceeding and not license allocation procedure. Other issues raised in Telia appeal include concerns about role of external consultant hired by Swedish govt. to help process applications. Telia contends that consultants added “important information” to examination of applications which PTS, in alleged violation of administrative law, didn’t inform Telia about. Telia also said it wasn’t informed about questions on its application that consultants asked and that PTS didn’t refer to company for consideration. “The law states that private individuals are to have access to efficient telecommunications at the lowest possible cost,” said Telia Pres.- CEO Marianne Nivert. “But the PTS has certainly taken no law into consideration.”

Qualcomm reached CDMA modem card license agreement with Korea’s Qualified Mobile Telecommunications (QMtel), terms not disclosed. Royalty-bearing deal allows QMtel to develop and manufacture CDMA and cdma2000 1xEV modem card products for use in wireless data devices, including personal digital assistants. QMtel said it also was developing CDMA products such as e-books.

Minn. Gov. Jesse Ventura (Ind.) outlined his telecom reform agenda for 2nd half of his term. In State of State address Jan. 4, he called for: (1) Abolishing outdated telecom regulations that he said stood in way of developing telecom competition. (2) Bringing advanced digital telecom services to every household and business in state by promoting competition and investment in high- tech telecom. (3) Eliminating implicit subsidies in telecom service rates. Ventura didn’t go into details on how he would accomplish his goals, but said overhaul of state’s telecom laws was needed to ensure Minn. cities would have access to modern high-speed telecom infrastructure that’s prerequisite for attracting new business investment.