Tex. PUC Comr. Judy Walsh resigns to take position with President-elect Bush’s energy policy development team; she will stay on until Tex. Gov. Rick Perry (R) appoints replacement to fill remaining 3 years of her term. Walsh was first appointed to PUC in 1995 by then Gov. Bush… WorldCom names Donna Sorgi, northern region public policy vp, to head its Washington-based federal regulatory group… Rosemary Kimball moves from FCC Office of Media Relations to press liaison at agency’s Consumer Information Bureau… Douglas Hanson, CEO, Internet Commerce & Communications, named CompTel chmn., replacing Global Crossing’s Anthony Cassara, who stepped down… Named partners in Wiley, Rein & Fielding law firm: Mary Borja, John Burgett, Tanja Hens, Scott McCaleb and Suzanne Yelen; named of counsel to firm are Christopher Kelly, ex-U.S. Patent & Trademark Office, and David Southall, ex-Information Management Consultants.

Cal. Gov. Gray Davis (D) declined to name immediate replacement for PUC Comr. Josiah Neeper, who left agency Jan.1 when his term expired. Political observers in Cal. said Davis might have delayed appointment to ensure bipartisan vote this week on controversial proposal for major emergency increase in retail electric rates. State’s 2 largest electric utilities say boost is necessary to stave off imminent bankruptcy due to soaring wholesale electric prices. Utilities say they need 30% boost, with PUC reportedly prepared to grant up to 20% in vote this week. Departure of Neeper leaves PUC with 2-2 partisan split. Observers said that if Davis had filled Neeper’s seat, his appointees would form PUC majority and his administration would bear all political heat for rate boost.

In defiant response to AT&T Broadband’s request for waiver of franchise fees on cable modem service (CD Jan 3 p3), Lakewood City, Cal., warned company that withholding payment of franchise fee “will jeopardize your franchise or subject you to penalties.” Accusing AT&T of misstating federal policy in its letter requesting waiver, Asst. City Mgr. Michael Stover said city should neither agree to waive franchise fees nor indemnify AT&T against various potential costs. “We expect AT&T Broadband to continue to pay all required franchise fees, including those based on cable modem service revenue,” city said. Referring to AT&T’s contention that it passed through franchise fee on cable-delivered Internet service to subscribers under federal law, he said Telecom Act “only permits cable operators to pass through increases in franchise fees on regulated cable service rates. Federal law does not authorize or otherwise address the ability of cable operators to pass through franchise fees on cable modem and other services.” Although federal law allows cable operators to include line item on subscriber bills indicating amount assessed as franchise fee, Stover said including line item was “entirely different concept” than passing through those costs to subscribers. In City of Dallas v. FCC, 5th U.S. Appeals Court, New Orleans, “made it clear that, even when such a line item is included on subscriber bills, franchise fee are imposed upon cable operators, not on subscribers,” he said. As for concerns raised by AT&T over potential class action lawsuits, he said that since franchise fees were paid by AT&T and not subscribers, there were no fees collected from subscribers that could be refunded. “This imaginary exposure to litigation is not a legitimate basis for not paying the required franchise fees.” However, Stover proposed 2 options to allay AT&T concerns about potential litigation: (1) Refrain from itemizing franchise fees on cable modem service because federal law doesn’t require such action. Doing so won’t reduce amount company can collect from subscribers “because you can essentially set your rates at any level you choose.” (2) Agree, as alternative, to pay 5% telecom franchise fee on cable modem service. That appears to be consistent with 9th U.S. Appeals Court, San Francisco, ruling classifying cable modem service as telecom service, he said.

Citing lack of funding and fall-off in membership, founder Dorothy Swanson announced Viewers for Quality TV would shut down early this year. Founded in 1984, Va.-based group led efforts to keep on air many low-rated TV network programs that members considered high-quality.

McLeod USA announced plans to offer $450 million of its senior notes due 2009 and said it expected to meet or exceed market expectations for 4th quarter and year-end. Company will host conference call today (Jan. 4) to discuss offering and expectations.

Ida. Dept. of Consumer Affairs began accepting names for its no-call list under 2000 state law that will take effect May 2. Ida. charges $10 registration fee for first 3 years on list, plus $5 renewal fee to keep name on list another 3 years. Ida. Attorney Gen. Albert Lance and Gov. Dirk Kempthorne were among first to sign onto list Tues., along with legislative leaders. Those who register by March 31 will be on first list published in April. Those who miss deadline will be on first quarterly update in July. Violators face penalties of $500 per call on first offense and up to $5,000 per call for subsequent offenses. Ida.’s no-call law exempts calls from tax-exempt nonprofit organizations and from businesses calling their established customers.

Four major MSOs swapped or purchased cable systems from one another as new year began, furthering trend toward industry consolidation that has snowballed in last 3 years. Adelphia, AT&T Broadband, Comcast and Mediacom all announced system exchanges or acquisitions that would result in 2.4 million subscribers, or more than 3% of all U.S. cable customers, changing corporate hands overnight. Transactions will create even bigger cable clusters in such large markets as N.Y.C., L.A., Washington, Chicago, Detroit, Philadelphia, Atlanta, southeastern Fla. But some industry observers said deals, concluded as FCC continued to weigh final govt. approval of AOL’s pending purchase of Time Warner (TW), would lead to even more as scale became ever more important. “Cable consolidation is not over,” ABN AMRO analyst John Martin said.

MPAA filed several major objections to CableLabs’ full final draft of its anticopying technology license for advanced digital cable set-top boxes, signaling that fight over controversial encryption technology wasn’t over (CD Dec 29 p1). In comments submitted to FCC late last month, MPAA said it was “concerned with a number” of provisions in POD Host Interface License Agreement (PHILA) and was “uncertain as to how some of these and other provisions will work in practice.” Group said its concerns included technology’s: (1) “Apparent ineffective protection against unauthorized Internet retransmission of all content, including broadcast.” (2) “Unprotected high-resolution output of most categories of content from those devices.” (3) “Copying and permanent storage in those devices of all content, including high- value content, which individual copyright owners and cable operators may have voluntarily negotiated to treat as ‘copy never.'” To ease such concerns, MPAA said “the only alternative” for cable operators would be to “turn off the OpenCable box” and prevent DTV programming from reaching consumers. It said such result “would have a negative effect on consumer expectations, particularly if they were not given adequate notice from equipment manufacturers.” MPAA said it would continue to work through those and other issues with CableLabs and 5C companies “in a prompt, good-faith and constructive manner.”

Portugal Telecom’s mobile business arm signed letter of intent Wed. to select Alcatel to provide multimedia technology. Alcatel will install infrastructure for 1,000-site UMTS/3G network. Company guaranteed high-speed, high-quality mobile UMTS service would start Dec. 1, 2001.

Arianespace announced twice-delayed launch of Turksat 2A/Eurasiasat 1 on Flight 137 was rescheduled for Jan. 8 in 5:18 p.m.-7:26 p.m. ET window, after authorizing resumption of launch preparations Wed. Arianespace delayed 2nd launch when Alcatel Space, primary contractor for satellite payload, requested verifications Dec. 11 after Arianespace ran its own set for Dec. 11 rescheduling.