Customs Duty

FCC approved BellSouth’s first Sec. 271 application, voting 4-0 to let company offer long distance service to customers in Ga. and La. In announcement late Wed., agency said BellSouth could start offering service May 24. “BellSouth is ready to be in the long distance business,” CEO Duane Ackerman said. “Our networks are ready, our employees are ready and our customers soon will realize why this is a watershed event.” BellSouth said 27% of its customers were located in Ga. and La. and long distance market there was worth $4 billion. Company said it would file another multistate application at FCC “within weeks.” It already has state approvals for Ky., Miss., S.C.

Gilat said recent class action lawsuits filed against company are “without merit” and it’s ready to “vigorously defend its position.” Satellite company hasn’t been served with any papers or seen an actual complaint, but it’s aware of 3 separate lawsuits that claim it withheld important information from investors on market difficulties, said spokesman.

Access control was major obstacle for many who were part of telecom restoration effort that followed terrorist acts of Sept. 11, said members of “Sept. 11: IT Lessons Learned” panel at AFCEA conference in Washington Wed. on Homeland Security. There were at least 4 changes to policy and procedures involved with gaining access to facilities in controlled areas in N.Y.C., said Brenton Greene, deputy mgr., National Communications System. Greene said N.Y. city police initially controlled access, until duty was turned over to N.Y. State police. After that, access control changed hands between National Guard and FEMA, making it difficult for some involved in restoration effort, he said: “There were significant changes in procedures… Access procedures need to be consistent.”

Qwest abandoned all plans to share sensitive local exchange customer information with affiliates until after FCC issued new national rules on privacy of customer proprietary network information (CPNI) later this year. Qwest CEO Joseph Nacchio said any future decisions on information sharing within its family of companies would depend on what FCC said. “When many of our customers tell us that they're concerned or don’t understand what we're doing, it’s time to stop the process and make a change,” he said. Nacchio said 5% of Qwest’s 12 million local customers called with questions and concerns about notices it had sent with Dec. phone bills explaining its information-sharing plans and giving instructions for blocking information sharing. He said Qwest had invested billions of dollars to improve service and customer perceptions about value of its services: “We will not allow misunderstandings to unravel all the good we've done or minimize our best service results in more than 7 years.” Nacchio also announced that David Heller, Qwest’s risk management vp, would be given additional duties as chief privacy officer, overseeing implementation, enforcement and review of company’s privacy policies.

SAN FRANCISCO -- Bankruptcy judge Fri. delayed approval of @Home Corp.’s $355 million cable deal and required company’s lawyers to provide analysis of potential legal claims it would foreclose against cable operators. Attorneys planned to work over weekend to provide analysis to balking bondholders’ attorneys in advance of Tues. hearing. Every day approval is delayed means delay in $2 million daily payments to @Home out of full payment cable companies have deposited to cover continued service through Feb.

Spacenet laid off up to 40% of its remaining personnel Tues., after similar cut in workforce less than 6 months ago, source close to company said: “We're pretty shorthanded, but we can adjust.” Spacenet provides narrowband and broadband VSAT service to many companies in U.S. including Rite Aid, Holiday Inn, and U.S. Postal Service. Company didn’t return calls Tues. Employees from at least 5 different departments were laid off including staff from Program Management, Information Technology, Network Operations Center (NOC) and even some director-level positions, according to source. Cuts have been made across board and not just at Spacenet, according to source within parent company Gilat. Spacenet consolidated its NOC employees with its Installation Group employees, and also trimmed Customer Care staff. NOC employees once responsible for maintenance problems only, are now tasked to handle network installation, customer care and hub services duties as well, source said.

FCC adopted new access charge regime for rural telephony Thurs. that departed from proposal offered by coalition of associations representing rural telcos. For one thing, new access rate system is mandatory while Multi-Assn. Group (MAG) had proposed making it optional for some carriers. Order adopted at agency’s agenda meeting also postponed action on incentive plan to encourage rural carriers to move from rate- of-return to price cap regulation. That component, also proposed by MAG, will be subject of further notice of proposed rulemaking, also adopted Thurs. Rural reform plan is attempt to convert implicit universal service subsidies, buried within access charges, to explicit funding, as required by Telecom Act. FCC said in news release it also sought to meet another goal in order: Aligning access rate structure more closely with how costs are incurred by “driving per-minute access charges toward lower, more cost- based levels.”

After weeks of uncertainty on leadership of Charter Communications, Chmn. Paul Allen announced former Liberty Media executive Carl Vogel become CEO, sitting on Charter board and exec. committee. Former CEO Jerry Kent resigned Sept. 24, citing irreconcilable differences with Allen, co- founder of Microsoft and founder of Vulcan Ventures, major investor in Charter. Following departure, Wall St. sent stock down more than 20%, its lowest point of year. Allen, who espouses “wired world” philosophy, made it clear Tues. that he and Vogel saw eye-to-eye on direction of St. Louis- based Charter. “Carl shares my vision that cable represents the premier medium for delivering an array of advanced broadband services to consumers,” Allen said. Vogel began his duties immediately.

Charter Communications said it would pay $81.1 million in cash to buy nearly all assets of High Speed Access Corp. (HSA), struggling Internet access provider. All 75,000 shares of HSA’s preferred stock held by Charter and its affiliate, Vulcan Ventures, will be canceled under agreement. Deal has been approved by boards of Charter and HSA, and is expected to close later this year subject to regulatory review and approval by HSA’s shareholders. Charter, Vulcan and HSA directors, who collectively hold a majority of voting power in HSA, have agreed to vote in favor of transaction. Some 85% of HSA subscribers are Charter customers, while HSA has been divesting itself of remaining 15% affiliated with other companies. Rest of HSA assets are overseas, primarily in Germany. About 2/3 of HSA work force will be acquired by Charter, and of remaining 1/3, 50 will remain with overseas unit and more than 100 will lose their jobs. Charter spokesman said customers should see no interruption in service. Financial condition of HSA was called into question when AOL-Time Warner (AOL-TW) said it had backed out of deal to provide Internet service over its cable lines (CD Sept 6 p4). Meanwhile, Charter Chmn. Paul Allen reaffirmed his commitment to senior managers, signing long-term employment contracts with CFO Kent Kalkwarf and COO David Barford. They are expected to assume many of duties of Jerry Kent, who recently stepped down as CEO.

Wireless location privacy bill by Sen. Edwards (D-N.C.) would require FCC to start and complete rulemaking proceeding to give consumers power over personal location information gleaned by wireless service providers. CTIA said it was supportive of provision in bill that would require consumer consent before service providers collected or disseminated such information. Spokesman said that if wireless phone users received calls that they didn’t want, they simply would turn off their phones: “It’s hard to make money if no one has their phones on.”