Federal Communications Commission (FCC)

In ruling that could mark end of protracted NextWave litigation, U.S. Supreme Court Mon. upheld lower court decision that reversed FCC on cancellation of carrier’s licenses. Court ruled 8-1, with dissent by Justice Stephen Breyer, that Bankruptcy Code barred FCC from revoking licenses held by bankrupt debtor for failing to make timely payment. Writing for majority, Justice Antonin Scalia said that reading of bankruptcy law didn’t conflict with Communications Act, which he said didn’t require FCC to cancel licenses as penalty for missed payment. “What the petitioners describe as a conflict boils down to nothing more than a policy preference on the FCC’s part,” he wrote.

Bipartisan group of 20 House members asked FCC to delay final decisions on Unbundled Network Element (UNE) Triennial Review and wireline broadband proceedings “until Congress has a sufficient opportunity to consider the impact of the pending proposals on consumers and competition,” they said in letter Jan. 24. Signers included House Govt. Reform Chmn. Davis (R-Va.) and Judiciary Committee ranking Democrat Conyers (Mich.).

Federal Election Commission should defer to FCC in how latter crafts its electioneering communications database and determines audience reach for over-air broadcasts, cable systems and satellite systems, NAB said in comments to FEC. Filing was in response to FEC’s Interim Final Rules with Requests for Comments. FEC is considering part of Bipartisan Campaign Reform Act (BCRA) involving political announcements in media. Act itself already is being challenged in court. Section of Act defines certain electioneering communications as those that can be received by 50,000 or more people. NAB said FCC was agency empowered with statutory authority to regulate broadcast, cable and satellite. What’s more, FEC’s interim conclusion that Grade B contour standard should be used to exclusion of other audience- predicting models “was not based on agency expertise or regulatory experience,” NAB said. It also said FEC had no engineering staff to evaluate comments and suggestions on calculating audience reach. FEC is “ill-equipped” to address issues raised by digital transition, including audience reach, NAB said.

More bills have emerged in state legislatures that would affect jurisdiction and operation of state utility commissions, including proposed legislation in N.M. to restructure and limit jurisdiction of state commission and Kan. bill to deregulate broadband. Other state bills would expand scope of no-call lists beyond landline residential numbers, as well as telecom tax measures.

ITU Study Group is to meet for first time today (Tues.) in Geneva to hash out ultra-wideband (UWB) policy issues, including definitions and operational and technical characteristics. In flurry of last-min. contributions last week, Canada and several European countries submitted proposals, some of which used emissions limits in FCC’s Feb. 14 UWB order as starting point. In other cases, companies such as Ericsson, Nortel and Qualcomm submitted similar data on interference concerns as they had been teed up at Commission.

Verizon Wireless, Salmon PCS, Alaska Native Wireless (ANW) and VoiceStream PCS BTA I filed joint opposition this week at FCC to auction relief challenge filed by Eldorado Communications. Eldorado asked FCC Wireless Bureau to reverse decision to grant NextWave re-auction winners relief on their bid obligations. Eldorado also has filed challenge at U.S. Appeals Court, D.C., arguing that bureau decision should be overturned because it conflicted with federal statutes, FCC regulation and Commission case precedent. Verizon, Salmon PCS, which has financial backing from Cingular, ANW, which has financing from AT&T Wireless, and T- Mobile unit VoiceStream PCS all participated in Jan. 2001 re- auction and availed themselves of FCC order allowing them to dismiss pending license applications. They charged that Eldorado’s challenge at FCC was “a transparent attempt to hold Auction No. 35 participants hostage while Eldorado pursues its grossly untimed request for additional relief” for participants in original C-block auctions. Eldorado competed with NextWave in original C-block auction, later filing for Chapter 11 bankruptcy and returning spectrum to govt. Carriers argued that Eldorado lacked standing and its application for review should be dismissed. DCC PCS filed similar objection last week (CD Jan 15 p3). Carriers said: “The application in effect seeks a stay of the orders by which the FCC granted the requested dismissals of Auction 35 applications and made related refunds without Eldorado even attempting to satisfy the heavy burden it must bear to warrant such extraordinary relief in the context of its own defaults” in original C-block auction. Eldorado isn’t injured by relief granted to re-auction winners, filing said. Instead, it was put at disadvantage by earlier FCC decisions granting relief to initial round of C-block winners when they ran into financial problems. “But those earlier decisions are well beyond review, and any challenges at this time would be grossly untimely,” filing said. “Eldorado cannot be allowed to use decisions unique to Auction 35 as a means to rejuvenate long-expired appeal time frames applicable to those prior auction actions.”

FCC Chmn. Powell told Senate Commerce Committee in hearing Tues. that complete preemption of states wasn’t issue in Triennial UNE Review or other upcoming proceedings. He said there would be a role for both federal and state regulators, saying “the word preemption is being thrown around lightly.”

Progress & Freedom Foundation (PFF) scholar Randolph May produced “scorecard” for evaluating FCC’s action on upcoming UNE Triennial Review, cable high-speed access and wireline broadband. PFF benchmarks for scoring Commission’s actions are: (1) Unbundling and sharing should not be required for newly installed fiber or other noncopper facilities. (2) Broadband services, regardless of technology platform, should not be subject to unbundling and sharing requirements or Computer 2-type proceedings. (3) Local switching should be removed promptly from unbundling and sharing regime. (4) Interoffice transport and high-capacity loops should be removed promptly from unbundling and sharing regime and “special access” should not be reregulated. (5) Presumptive sunset regime with competitive triggers should be established for removal of copper local loops from unbundling and sharing requirements. (6) Commission should preempt states from mandating unbundling and sharing requirements that exceed scope of federal obligations. (7) Elements that have been removed from unbundling and sharing regime should not be considered on “competitive checklist” for evaluating Sec. 271 applications. May’s paper said FCC would be forced to choose between 2 competing visions of telecom regulation: (1) Static regulated competition, where communications services were provided essentially in natural monopoly environment, which is likely to be case indefinitely. Question for regulators would be how to shape regulation to guarantee competitor access to incumbent facilities. (2) Dynamic deregulation, where communication services were provided in what rapidly was becoming naturally competitive environment that encouraged more competition and innovation. Regulators would have to figure out how to transition to framework with less regulation, leaving regulation in place only where necessary for remaining “pockets of monopoly.” May said if Commission chose first vision, investment in advanced telecom facilities and equipment would be impaired. Other vision would lead to long-term sustainable competition, he said.

FTC urged House Commerce Committee Wed. to give it power to levy fees on telemarketers to fund proposed do-not-call registry. Commerce Committee spokesman Ken Johnson said House could take action to implement funding mechanism as early as today (Thurs.) through continuing resolution. During “briefing” today on Capitol Hill, FTC Chmn. Timothy Muris told committee it would take about $16 million to fund list and if Congress didn’t act soon to give FTC funding authorization, Commission wouldn’t be able to implement list this year. Committee Chmn. Tauzin (R-La.) said he was concerned about potential jurisdictional issues that could hamper FTC’s implementation of list, but Johnson said Tauzin agreed to limit authorization to 1-2 years. During briefing, Tauzin asked Muris about reauthorizing system after period of time, to which Muris replied: “It would be reasonable to assess the system after it’s up and running.” Tauzin told Muris: “You understand there are some concerns about authorizing fees for a system that’s not yet set up.”

CTIA plans to petition FCC next week to seek another delay in implementing wireless local number portability (LNP), Pres. Tom Wheeler said Wed. In July, Commission gave wireless carriers 3rd extension, to Nov. 24, 2003, to provide LNP in 100 largest Metropolitan Statistical Areas. Wheeler cited new CTIA data on wireline rate centers that 90% of time when consumers wanted to keep phone number when switching from wireline to wireless, “they're told to go pound sand.” Point of new challenge to LNP rules, he said, is that they shouldn’t be implemented until “the competition that they claimed they were doing in the first place is made possible by their rules.”