Pa. PUC gave Verizon “passing grade” after reviewing final report from KPMG Consulting on tests of carrier’s operation support systems (OSS), even though “some deficiencies” remain to be corrected. But PUC also made clear that its ultimate decision on whether to endorse any Verizon Sec. 271 interLATA long distance application to FCC would depend in large measure on how well company did in addressing OSS deficiencies and filling commercial CLEC service orders in next 3 months. KPMG told PUC Verizon had “passed sufficient operational aspects” to conclude test program. PUC’s Fri. action set stage for 100-day period during which agency will monitor Verizon’s commercial OSS performance and review its compliance with non-OSS-related market-opening requirements of Telecom Act’s 14-point checklist. Verizon said it was “pleased the PUC deemed the final KPMG report as a passing grade… We're confident that when all the evidence is examined, the PUC will support our long distance application to the FCC.” However, local rival AT&T said that unless PUC addressed gaps and “questionable metrics” in KPMG test results, Pa. could be vulnerable to same OSS glitches as hit Verizon in N.Y. after its long distance entry there. AT&T said Verizon was rushing to meet self-imposed “artificial deadline” for long distance entry and “hasn’t done all its homework when it comes to system readiness” for large volumes of CLEC service orders.

Twice-delayed Arianespace Flight 137 was set finally to get Eurasiasat 1 off ground after our deadline Mon. Flight cleared launch readiness review Jan. 6 and launch was expected in window of 5:08-7:51 p.m. ET. Flight had been planned for Dec. 8 but was rescheduled for Dec. 11 for checks on Ariane 4 launcher. Eurasiasat 1 contractor Alcatel Space requested 2nd round of verification on satellite that caused further delay to Jan. 8 (CD Dec 12 p8).

AT&T named Oscar Munoz, ex-Qwest senior vp, as vp-CFO of its new consumer unit…. Va. Corp. Commission named Steven Bradley, ex-Verizon sales exec., as dir. of Communications Div., replacing retiring Alan Wickham… Janet Cooper, ex-Qwest Communications, named CFO-senior vp-finance & administration, McData… Dipesh Shah, ex-Lucent Labs, appointed vp-engineering, U.S. Wireless… Robert Perry, ex-Webhire, named senior research analyst-Internet Computing Strategies Planning Service, Yankee Group… David Marvento, legislative dir. for Rep. Tauzin (R-La.), will follow him to House Commerce Committee as staff dir… Paul McGuire resigns as UPN senior vp-communications to become Disney media consultant… Patrick Scannell, ex-Silknet, appointed CFO, PhotonEx… Promotions at USA Affiliate Distribution: Douglas Holloway to pres.-network distribution & affiliate relations, Peter Ruben to exec. vp-affiliate relations,Tom Smith to senior vp-eastern division, Mark Bienstock to senior vp-business affairs & gen. counsel… Andrew Fisher promoted to pres., Cox TV… Traver Gruen-Kennedy, chief strategist at Citrix Systems and chmn., ASP Industry Consortium, appointed pres., Tech. Forum of S. Florida… Alain Briancon, ex-Motorola, named exec. vp-chief technology officer, InterDigital… Oscar Munoz, ex-Qwest, appointed vp-CFO, AT&T Consumer… Appointments to PrivacyRight Board of Advisers: Ray Everett-Church, founder of PrivacyClue LLC; Michelle Kraus, founder of MagicMaker… Paul Yazge, ex- Zaffire, named vp-sales & mktg., Codeon… Jonathan Chauvin-Blitt, ex-Allied Global, appointed pres., Americas, ITT Industries, Network Systems & Services… Robert Allen promoted to vp- accounting & financial reporting, Regent Communications… David Brown, chmn. of U.K. subsidiary Motorola Ltd., awarded knighthood… Don Cameron, former exec. dir., National Education Assn. and founding partner of CEO Forum on Education & Technology, awarded Presidential Citizen’s Medal… Scott Dinsdale, ex- FirstLook, appointed exec. vp-Digital Strategy, MPAA.

Verizon met or exceeded “key operating targets” for 4th quarter and full-year 2000, CEO Ivan Seidenberg said Mon. at Salomon Smith Barney conference in Scottsdale, Ariz. Among them: (1) Company ended year with about 540,000 DSL subscribers, exceeding 500,000 target. (2) It had 1.4 million long distance customers in N.Y. at year’s end, gaining 20% share of state’s residential long distance market. (3) Verizon Wireless had net gain of about 1.2 million new customers in quarter and ended year with about 27.5 million. He also announced that Verizon had $535 million in merger-related expense savings in 2000 following formation of Verizon Wireless and Bell Atlantic-GTE merger.

Gemstar International Group took fresh shot at Time Warner (TW as FCC continued to ponder AOL’s pending acquisition of TW. In 2-page letter to FCC Thurs., Gemstar, which has been sparring with TW over MSO’s temporary blocking of Gemstar’s electronic program guide on TW cable systems last year, warned Commission that cable operator easily could do same thing again because it had shown no remorse. Despite TW’s June “decision to desist from stripping,” Gemstar said, TW “neither acknowledges that stripping is a violation of the FCC’s rules and policies, nor undertakes that it will not resume stripping without awaiting definitive FCC action.” Gemstar urged Commission to “deal with the issues” raised “regarding the anticompetitive nature of Time Warner’s behavior” before approving AOL-TW deal. Specifically, Gemstar wants agency to impose conditions on AOL-TW prohibiting it from discriminating against rival interactive TV content providers.

White House formally renominated FCC Comr. Ness again for new term, throwing her bid to stay on Commission back to Senate Commerce Committee for consideration. Ness was renominated last year, but Committee Chmn. McCain (R-Ariz.) never scheduled confirmation vote, and she currently functions under recess appointment that expires as soon as another commissioner is appointed. If cleared by Committee, Ness’s 5-year term would start from July 1, 1999, expiration of her last one. However, Commerce Committee spokeswoman said panel would concentrate on confirming Bush cabinet members before considering Ness’s situation.

FCC Chmn. Kennard will announce his resignation as soon as Commission votes on AOL takeover of Time Warner, which is expected this week, Commission source told us. Kennard’s term expires in June but he was expected to leave once George Bush was sworn in as President Jan. 20. It will be up to Administration to decide whom to name as interim FCC chairman until permanent replacement for Kennard is appointed. FCC Comr. Powell is expected to be tapped but he hasn’t confirmed that. Source didn’t say when Kennard actually was leaving or reveal where he planned to work once he left. He moved to Commission from Verner, Liipfert, Bernhard, McPherson & Hand, where he was partner.

PASADENA -- Threatened strike against TV networks this spring by Writers Guild of America (WGA) and other unions (see separate item, this issue) was a major topic of conversation here as Pax TV, UPN and WB kicked off semiannual round of questions and answers with TV critics. “Everyone that’s involved on both sides says there’s going to be a strike,” WB CEO Jamie Kellner said. “I have no involvement whatsoever, so I say there’s not going to be a strike. I think there’s going to be a lot of reasons to avoid a strike.” He and UPN executives said they had contingency plans in place in case there was strike, including at least 4 “reality” programs under development by WB, plus advantage of being able to add movie night by using affiliate Turner Bcstg.’s huge library of films.

Despite earlier public statements of support, Globalstar wants General Accounting Office (GAO) to overturn deal that awarded rival Iridium $72 million contract last month for satellite telephone service without open bidding (CD Dec 13 p7). Globalstar charged lack of open competition and bidding process violated Dept. of Defense (DoD) bidding procedures, which should invalidate deal. Globalstar filed complaint with GAO Dec. 15. U.S. Defense Information Systems Agency (DISA), which oversaw contract, disagreed with Globalstar and predicted deal would pass legal muster with federal auditors. Military officials have suggested all along that Iridium contract was signed in “best interests” of providing global communications to military and govt. Govt. also played significant part in convincing Motorola “it was in the best interests of national security” to keep Iridium satellites in orbit when company went bankrupt, official said. DISA, which responded to complaint by saying Globalstar lacked capacity to service contract, said it planned to respond to complaint by Jan. 16 deadline. Iridium spokesman said company had no comment. GAO scheduled hearing for March 26.

NCube Corp. filed patent infringement suit against SeaChange International Mon., charging that latter’s video-on-demand (VoD) products violated one of nCube’s interactive TV patents. NCube said it was seeking permanent injunction against SeaChange’s shipping its allegedly infringing products. In earlier court battle on other patents, Del. jury ruled in SeaChange’s favor in Sept., but nCube is challenging that decision.