Customs Duty

Congress eventually will have to “weigh in” on universal service, NTCA CEO Michael Bunner said Wed. in letter to incoming Senate Commerce Committee Chmn. John McCain (R- Ariz.) that urged continuing universal service fund (USF) support. “We continue to advocate these concepts before the Federal Communications Commission in a plethora of open proceedings,” letter said. “Yet, it is our belief that it will be crucial for Congress to weigh in on these matters as well, to ensure congressional intent is being met in terms of ensuring the future of this indispensable national policy.” Bunner said “string of adverse regulatory and judicial decisions” in name of “competitive neutrality” have eroded congressional mandate on universal service. “The Senate has long played a leading role in advocating and monitoring the many aspects of this critical national policy,” he said. NTCA outlined its leading USF principles: (1) Universal service support must be sufficient and sustainable and all providers of telecom should contribute as public interest mandates. (2) Eligible telecom carriers (ETCs) receiving universal service support should receive such support based on their own costs rather than on costs of incumbent. (3) Competing ETCs should receive support only when they actually had captured customer lines, begun service to new lines or modified their rates or services. (4) States must take their public interest duties more seriously when authorizing additional ETC’s in given market.

FRANKFURT, Germany -- Consumers will pay price for rising requirements for legal data interception in European countries, several experts said Fri. at conference here of Electronic Commerce Forum (ECO), association of German Internet industry. “Legal interception is not part of our core business and, as a matter of fact, does not generate any revenue. It will be customers who have to pay for it in the final run,” ECO Pres. Michael Rotert said.

U.S. Appeals Court, D.C., Fri. denied CompTel challenge to FCC’s decision to place usage restrictions on enhanced extended links (EELs), saying it was “unpersuaded” by CompTel’s claims. EEL is combination of unbundled network elements (UNEs), composed of local loop and dedicated transport element, that competitive LECs want to use to provide local service more efficiently. Bell companies have opposed making EELs available to competitors because combination also could be used to provide long distance service to customers in lieu of higher priced special access service. CompTel had argued that Telecom Act didn’t allow FCC to impose use restrictions on UNEs.

FCC approved order that within 5 years will lift requirement that cellular carriers continue to provide analog service, as long as hearing aid devices are compatible with digital networks by then. FCC Comr. Copps dissented in part, citing concerns over issues such as current lack of hearing assistance technology that worked with digital networks. “The majority finds that the analog standard is no longer ‘necessary’ even though compatible services are not yet available,” he said of item, which was part of Commission biennial review proceeding. Comr. Martin voted for order, but voiced concern that it didn’t discuss meaning of term “necessary” as covered under FCC’s biennial review obligations. FCC said point of its order was to eliminate certain requirements for cellular carriers that no longer were necessary because they dated back to duopoly era of cellphone service when it started in 1980s. Other changes in order involve elimination of cellular channelization provisions, removal of manufacturing requirements on electronic serial numbers and rules on cellular antitrafficking.

PORTLAND, Ore. -- NARUC study committee on public rights-of-way (ROW), formed last winter, offered 178-page draft report outlining several possible methods for states to consider in addressing competing interests involved in their management for telecom use. But portion of report addressing ROW fees prompted clash Sun. between local exchange industry and local govt. representatives at NARUC’s summer meeting here, and some state delegations wanted it made clear that while report was interesting and valuable, it didn’t represent official NARUC policy position on ROW questions.

WorldCom made largest Chapter 11 filing in U.S. history late Sun., leading FCC Chmn. Powell to issue statement providing reassurances that his agency didn’t believe action would “lead to an immediate disruption of service to consumers or threaten the operation of WorldCom’s Internet backbone facilities.” FCC Deputy Gen. Counsel John Rogovin filed appearance Mon. at U.S. Bankruptcy Court, N.Y., action characterized by spokeswoman as assuring that Commission was official party in proceeding. She said Rogovin’s role would be to make judge aware, during bankruptcy proceeding, of importance of continued service to customers, including federal govt., and need to protect universal service funding, wireless licenses and Internet. Justice Dept. (DoJ) also took action, filing motion requesting independent examiner be appointed to investigate company’s financial affairs.

With Adelphia in Chapter 11 bankruptcy, cable analysts said Wed. they believed company, or at least good part of it, would be broken into pieces and sold off. But given tough economic climate, they wondered whether there would be many takers at fire sale. Some observers said Charter was most likely candidate since it had expressed interest before bankruptcy filing and had clusters near Adelphia systems, but experts also suggested that Cox or AOL Time Warner would benefit for same reason of geography. However, those same experts said all 3 had more than enough reasons to bow out of running, leaving possibility that Adelphia’s systems -- even some of its most prized ones -- could be sold for extremely low prices. One analyst suggested that dark horse, possibly financial group, might find cable business enticing, but declined to be more specific. For most part, analysts said they believed parts of Adelphia would be absorbed by current players, further consolidating industry. Adelphia, with more than 600 cable systems spread across more than 30 states, has highly valued systems in L.A. and Fla. and significant holdings in Ohio, Pa., Vt., Carolinas and elsewhere.

Three-judge panel of U.S. Appeals Court, D.C., handed ILECs pair of unanimous victories Fri., remanding FCC orders on line-sharing requirements and unbundled network elements (UNEs). On FCC’s UNE order, which responded to U.S. Supreme Court remand of agency’s rules, court said it mandated unbundling in every geographic market without regard “to the state of competitive impairment in any particular market.” Ruling concluded FCC “nowhere appears to have considered the advantage CLECs enjoy in being free of any duty to provide underpriced service to rural and/or residential customers and thus of any need to make up the difference elsewhere.” Line- sharing case focused on requirements that ILECs unbundle portion of copper loops so they could offer competitive DSL Internet access to CLECs. Court sided with ILEC arguments that FCC had failed to consider broadband competition in larger context of not just DSL choices, but alternatives provided by cable and satellite. Both CLECs and incumbents said ruling was likely to help shape upcoming FCC decisions, including Commission’s UNE review.

Ground-penetrating radar (GPR) companies urged FCC to provide interim relief on parts of ultra-wideband (UWB) rules that they have said are more restrictive than necessary. In filing at FCC this week, GPR Industry Coalition said rules “effectively block many needed and safe GPR applications.” It said that under policy approved by Commission in March, “much of the GPR industry, composed of small businesses, would be unable to survive through another rulemaking cycle.” Group of GPR manufacturers already has said it plans to challenge UWB order (CD April 24 p7), raising concerns that power limits in order could eliminate many GPR uses. FCC order said GPR must operate below 960 MHz or in band of 3.1- 10.6 MHz. At issue in latest GPR filing is short-term relief. FCC has said it plans to assess UWB restrictions in 6-12 month review period and issue further notice if testing indicates some parts of rule should be revisited. GPR Industry Coalition said in May 21 ex parte filing that under that schedule, revising rules could take at least 1-2 years, which could stretch to 3 years if rules were challenged. Group said short-term relief was needed because: (1) Regulatory uncertainties were “already impairing product sales and end users’ contracts with service customers.” (2) GPR manufacturers and customers typically were small businesses “that cannot survive even a short rulemaking cycle.” GPR Industry Coalition said their devices had “never caused reported interference” and interference with GPS systems wasn’t issue because many units had embedded GPS receivers that didn’t experience UWB interference. “Deployment density and duty cycle of GPRs are low,” filing said. “Most GPRs operate in unpopulated or lightly populated areas.” Among changes requested are: (1) Additional user categories for GPR devices. Order now limits use to law enforcement, fire and emergency rescue workers, scientific researchers, commercial mining companies, construction firms. Group wants additional categories “to capture needed users” and, longer term, elimination of marketing restrictions. (2) Identification of sensitive areas such as airports and precoordination everywhere else for unlimited use. Longer term, group seeks elimination of coordination requirements as unnecessary. (3) Approval of emissions under current mask requirements. Rules now disqualify shallow emissions profile even it’s “tens” of dB below emissions mask that’s designed to prevent interference to other spectrum users, GPR said. Long term, group wants FCC to relax emissions mask. GPR group said there wasn’t evidence in record at FCC to justify GPR emissions limits below Class B levels for Part 15.

Tel-Aviv-based Gilat said terrorist activity in Israel hadn’t made major impact on satellite company’s day-to-day activities, but it had left staff slightly shorthanded because many of its employees have been called up as miliary reservists. Reserve duty is “way of life,” in Israel, spokesman said. More employees have been called away because of current situation, but companies haven’t seen “large- scale” call-ups yet, he said: “It hasn’t made a material impact… It is not a situation where [Gilat] can’t cover its bases.” Company said it hadn’t beefed up security at its hq because it was in security-minded country and always had taken measures to reduce potential threats. Some international customers have expressed concern with Gilat over doing business with company so close to war zone, but most understood and were unaffected by situation, spokesman said: “Doing business with Israel is nothing new… [Gilat’s] business hasn’t been affected in any way.” Company has facilities in many parts of world, including major manufacturer in Spain. Spokesman said some businesses had cancelled agreements with Israeli companies because they didn’t agree with certain politics, but said that hadn’t been problem for Gilat. Company doesn’t do business in Israel because its markets are all outside country, spokesman said, and Gilat’s technology hasn’t been used in any military effort, but it could be, and company would “be open” to idea, although it never has been its focus.