FCC issued Notice of Proposed Rulemaking (NPRM) Fri. that examines potential spectrum that could be tapped for 3rd- generation wireless and other advanced services. Agency seeks comments on providing mobile and fixed services in 1755-1850 MHz band now used by military, various approaches for 2500-2690 MHz now occupied by Multichannel Multipoint Distribution Service (MMDS) and Instructional TV Fixed Service (ITFS) licensees, proposed allocation of 1710-1755 MHz for fixed and mobile services, and other options (CD Jan 5 p1). Interim report on 3G spectrum issued by FCC last fall said segmenting MMDS and ITFS bands to allow operation of advanced mobile services would pose technical challenges. NPRM seeks comments on scenarios that would allow operation of advanced wireless services in that frequency. One possibility, FCC said, is allocating spectrum for fixed and mobile services on co-primary basis, which would allow spectrum to be used for advanced offerings such as 3G. Comment is invited on “public interest costs and benefits” of adding mobile allocation to bands without mandatory relocation. NPRM asks whether there are steps that could bolster secondary market in those bands so they could “evolve to their highest value use,” whether fixed or mobile. “Could current ITFS/MDS licensees reorganize their systems to continue providing current services and also offer new mobile services on a competitive basis with other wireless system providers, such as cellular or PCS,” FCC asked. It wondered whether part of spectrum could be made available for new entities. It asked ITFS licensees whether adding mobile service allocation to 2500-2690 MHz would help educators and, “if so, how such operations could be utilized in an educational context.” MMDS licensees are asked whether adding mobile service would benefit their band plans. If part of band were cleared for advanced wireless services and incumbents had to be moved, notice asks how licensees could be accommodated elsewhere. In that area, agency is looking for cost estimates for relocation and whether equipment would need to be retuned or facilities would have to be replaced altogether. Second phase of FCC’s 3G spectrum report, due in March, is to cover potential relocation options and related costs. NPRM also seeks comment on several band pairing schemes and pairing options. In general terms, FCC solicits feedback on range of advanced wireless services that could be introduced in future and their cost impact on manufacturers, system operators, consumers. Comment is sought on how much additional capacity is needed for advanced services, including high-speed data and multimedia applications such as full-motion video. Specifically, NPRM asks what size of spectrum blocks would be appropriate and when extra spectrum will be needed.

While CLEC industry is far from strong overall, upbeat news from McLeod and XO Communications shows CLECs with good management and business plans are persevering, analysts said Fri. McLeod announced bond offering and better-than-expected financial expectations Thurs. while XO announced Fri. it is selling $450 million of 5.75% convertible subordinated notes in private placement. Lehman Bros. analyst Daniel Zito said successful market transactions “should alleviate some pressure on the better names which have been cast away with everything else in the sector downdraft.” It shows “funding is still available at reasonable terms for the better management teams,” he said.

Largest AT&T affiliate TeleCorp PCS said it added 145,231 customers in quarter ended Dec. 31. TeleCorp PCS was created last year after merger of TeleCorp Wireless, which added 95,656 subscribers in 4th quarter, and Tritel, which added 49,575. Combined entity had year-end subscriber base of 666,425. Tritel said it expected to take premerger one-time charge related to reductions in roaming revenue. TeleCorp PCS said that was likely to mean $4 million reduction in roaming revenue guidance for quarter for Tritel.

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.

Bidding in FCC’s C- and F-block auction slowed Fri., but reached $13.07 billion, with Verizon Wireless maintaining wide lead of $5.52 billion in net high bids. Other top bidders include AT&T Wireless-backed Alaska Native Wireless with $2.75 billion and Cingular Wireless-backed Salmon PCS with $1.94 billion. AT&T Wireless doesn’t appear in list of top 15 bidders, and Cingular isn’t competing as standalone entity. In all, top 15 bidders now include 13 designated entities, most of which have links to larger carriers. While Verizon is by far highest bidder, $2.26 billion of its total is in bids for 2 N.Y.C. licenses at $1.17 billion and $1.1 billion. Alaska Native Wireless bid $758 million for 3rd license in that market. After 31 rounds, Verizon had highest bids on licenses in Washington, Boston, L.A., Chicago, San Francisco, Philadelphia. Alaska Native Wireless had high bids for spectrum in L.A. and Atlanta and Salmon PCS in Dallas license. Dobson Communications DCC PCS edged into upper echelon of bidders, placing 4th with $957.68 million, followed by VoiceStream with $540.12 million, affiliated Cook Inlet with $348.69 million, Leap Wireless with $293.47 million. Last week marked exit of several large carriers, including Sprint PCS and Alltel. Of 87 bidders who qualified at Dec. 12 start of auction, 49 remained as of late Fri. SVC BidCo, designated entity in which Sprint has 60% noncontrolling investment, still was in auction. Other bidders who have left auction include Nextel, Sprint affiliate Alamosa PCS, Nextel-affiliated designated entity Connectbid, Cincinnati Bell Wireless.

TechNet formally announced appointment of former Rep. Rick White (R-Wash.) as its new CEO. White founded Congressional Internet Caucus and was involved in numerous Internet-related laws, including Internet Tax Freedom Act. He has been partner in Perkins, Coie since losing reelection bid in 1998. “I'm really excited about it,” White told us in interview. He said TechNet would set its agenda for year in executive committee meeting Jan. 11, but he expected hot issues to be trade and education. “I don’t see a whole lot of threats from the government,” White said. “Both parties still want to do business with us. We still have a window of opportunity” for key issues, and “frankly I can’t think of a lot of people opposed to technology.” He said that during his time in Congress, “there was an aversion in the technology community to spend time with government, and government quite frankly didn’t get it… There’s been a gradual evolution in the right direction.”

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.”

Ind. Utility Regulatory Commission (IURC) adopted first comprehensive update of service quality rules in 30 years. New rules are intended to take effect in May, pending legal review by state attorney gen. Among other changes, new rules covering incumbents and CLECs alike would require faster carrier responses to customer service complaints, toughen standards for outage restorations, require performance to be monitored at wire center level rather than by statewide averages. IURC said it began work on quality rule rewrite in late 1999, before last summer’s flood of service complaints against Ameritech.

Boeing Space Systems (BSS) received $160 million contract potentially worth $1.3 billion to develop high-capacity communication system for U.S. Air Force and Army by 2005, company said Thurs. Harris Corp., Logicon and ITT Industries are working with Boeing on project. Fixed-price agreement calls for first satellite to be launched in 2004 at cost of $160.3 million. If Pentagon exercises its options for 5 more satellites, business could be worth $1.3 billion. Boeing is using its new 702 model satellite bus and associated spacecraft and payload equipment. Team of technicians is expected to provide associated control equipment for both payload and spacecraft.

NCTA submitted 2nd brief to U.S. Supreme Court, seeking to convince high court to review appellate court ruling that struck down FCC’s authority over pole attachment rates for cable lines carrying Internet service. In 10-page reply brief filed Jan. 2 in Gulf Power case, NCTA argued that decision by 11th U.S. Appeals Court, Atlanta, “improperly rejected the FCC’s reasonable construction of Section 224” of Telecom Act and wrongfully concluded that “Congress intended to repeal the regulatory authority that the FCC admittedly possessed over pole attachments regardless of the type of service provided over the equipment attached to the poles.” NCTA also contended that “this case squarely presents an issue of national importance that was improperly decided” by lower court. It said utilities’ claims that “they are constitutionally entitled to recover so-called monopoly ‘market rates’ for providing access to essential bottleneck facilities is contrary to settled law and, if accepted, would render all rate regulation of monopoly enterprises unconstitutional.” Cable operators charged that utilities had been increasing pole attachment rates substantially since 11th Circuit ruling last spring. But utilities contended that they were entitled to get what market would bear.