Network Access Solutions (NAS) said SBC converted NAS preferred stock into common and agreed to resell NAS’s broadband services in Verizon territory. Preferred shares, which were issued as part of $75 million SBC investment in NAS in March, were converted into 2.6 million common shares at $31 per share. “This will help SBC flesh out our DSL network” in northeast U.S., SBC executive said. NAS also will assign to SBC the central office sites in BellSouth and Qwest territories that were built under agreement between 2 companies and Telefonos de Mexico. NAS will take $24 million reduction in “paid-in capital” in 4th quarter to reflect transaction.

Qwest Communications signed 3-year, $32 million contract to provide mysmart.com with Web hosting and development, dedicated Internet access, dial port connectivity, onsite project management, future DSL connectivity. Deal enables mysmart.com to offer nationwide Internet service at $9.95 per month. Agreement also allows mysmart.com customers to buy Qwest long distance service directly from mysmart.com. Qwest made equity investment of $5 million as part of long-term strategic alliance with mysmart.com.

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.

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.

Verizon urged N.Y. state lawmakers to consider legislation this year to require that drivers use hands-free mobile phones. Carrier said if mobile phone usage restrictions were needed, they should be imposed statewide rather than through patchwork of local ordinances. N.Y.C. and at least 6 other local govts. are considering handheld mobile phone bans, in addition to the 2 N.Y. counties that adopted restrictions last year. Verizon said statewide uniformity was critical and municipal or county laws would only confuse drivers. It also said statewide law would ensure uniformity in defining offenses and in penalties. N.Y. legislature opened its 2001 session Wed.

Sprint PCS became latest carrier to drop out of FCC’s C- and F-block auction, which resumed Thurs. and reached $12.01 billion in net high bids. Sprint’s bidding eligibility was reduced to zero after 27 rounds Thurs., FCC said. Lehman Bros. research note issued before auction resumed after holiday hiatus said Sprint was among carriers likely to abandon bidding, path already taken by Nextel and several other carriers since auction started Dec. 12. (Bidding was suspended between Dec. 22 and Thurs. for holidays). Lehman said Sprint PCS didn’t place bids Dec. 21, using waivers instead. “It seems as if Sprint PCS feels the prices are too high and is going to exit the auction shortly after bidding resumes,” Lehman said. Following CDMA agreement with Palm, Sprint shares soared 15.41% Thurs. to close at $23.88. (Pact covers Sprint’s provision of first CDMA solutions for Palm’s handheld devices). Meanwhile, Verizon maintained strong lead with $4.06 billion in net high bids, followed by AT&T-backed designated entity Alaska Native Wireless with $2.67 billion and Cingular Wireless-backed Salmon PCS with $2.19 billion. Verizon Wireless had been high bidder for 2 N.Y. licenses for last several rounds, but ended Thurs. with high bid for only one license at $968.6 million. Alaska Native Wireless bid $716.57 million for another N.Y. license, with Salmon PCS vying for 3rd with $714.45 million. Lehman Bros. indicated auction could wrap up in several weeks. DCC PCS placed high bid of $519.7 million for L.A. license. Verizon also placed high bids for licenses in L.A., Chicago, San Francisco, Philadelphia, Boston, Seattle. Alaska Native Wireless placed high bid for L.A. and Salmon for Atlanta. In top 15 markets, VoiceStream had high bid for Washington license.

As FCC continued to wrestle with imposing additional regulatory conditions on AOL’s pending purchase of Time Warner (TW), Microsoft and other online rivals of AOL pressed their furious campaign for instant messaging (IM) requirements. In latest letter to FCC Chmn. Kennard Thurs., Microsoft called again for “imposition of a meaningful and enforceable condition that facilitates IM interoperability by enabling consumers to communicate with each other regardless of the IM system they use.” Along with brief letter, Microsoft and its allies sent 2-page fact sheet listing 8 consumer groups, 53 companies and associations, 10 senators, 12 House members and 7 publications that are calling for IM interoperability. At minimum, Microsoft argued in separate filing with FCC Tues., “the Commission should obligate AOL to enter into multiple contracts with leading IM providers to allow for interoperability prior to offering any advanced services over the broadband infrastructure of Time Warner’s cable systems.” In earlier filing with Commission, nationwide group of ISPs that had brought class action lawsuit over AOL’s 5.0 and 6.0 software urged agency to force company to modify its offending software feature. They argued that regulatory condition changing that feature, which directs modem calls away from user’s desired ISP to AOL access number, “would do more to introduce competition in Internet access than the instant messaging condition that has been the subject of recent press reports.” Meanwhile, new op-ed piece published by Cato Institute said FTC’s open access conditions on AOL-TW merger would hurt consumers and hamper competition and innovation by dampening incentives for rivals to build competing high-speed data systems. “The entire forced access campaign is an unfortunate example of unelected regulators overstepping their bounds,” wrote Clyde Crews, Cato technology studies dir. “They are exploiting their power over industries to make regulatory ‘law’ that should require an act of Congress. Forced access represents a regrettable new incarnation of industrial policy.”

WSNet said it signed strategic agreement with Ashe County Cable TV of Fleetwood, N.C., to offer its subscribers privately branded direct-to-home (DTH) digital satellite TV service using WSNet’s satellite programming technology. Agreement marks official entry of WSNet into small and rural franchise cable market. Other terms of deal weren’t announced.

“Nothing would be gained by further delaying a decision” on core DTV must-carry issues, NAB Pres. Edward Fritts said in letter Thurs. to FCC in which he said Commission could defer decision on must-carry itself while adopting some “rules of the road” for carriage of DTV stations. He said there would be no benefit in delay, “certainly nothing that would be worth the harm to the progress of the transition.” NAB also pressed FCC for requirement that all new TV sets have tuner capable of receiving DTV.

Integra Telecom said it secured $41 million in equity financing from shareholders including Bank of America Capital Investors, Boston Ventures, Navis Partners, Shaw Venture Partners. Investment will be used to expand Integra’s customer base in its regional markets and pushes its total financing in 2000 to $252 million. Integra CEO Dudley Slater said he was “gratified” by market response since CLECs have been struggling for financing. Integra provides telecom services to small and midsized businesses.