Howard Buskirk

The Multi-band OFDM Alliance Special Interest Group (MBOA- SIG) told the FCC approval of its petition seeking a waiver from FCC radio frequency rules for its “frequency hopping” ultra- wideband technology is a matter of providing consumers with choice. The group, supported by Intel and Texas Instruments, among other high-tech players, is promoting one of the 2 leading UWB technologies. “MB-OFDM, more than any other UWB modulation scheme, has inherent spectral shaping capabilities to mitigate unforeseen interference situations,” the group said. Granting the waiver will “level the UWB playing field” and “permit consumers, rather than Commission rules” to decide winners and losers. The group took dead aim at its main competitor, Freescale, formerly a Motorola division. “Freescale’s objections are baseless,” the alliance said. “Although they purport to be grounded in Freescale’s own, lengthy technical study, they are wildly off the mark. Indeed, they appear to be designed solely to ‘muddy’ the technical record in this proceeding and delay Commission action.” The Alliance accused Freescale of trying to ensure a “first to market advantage.” Robert Aiello, CEO of Staccato Communications, another member of the group, told us Fri. he hoped the FCC would move the issue “to the marketplace where it belongs, not the regulatory arena… We recognize this is a new wave form that wasn’t anticipated by the rules. We have proven conclusively that this wave form doesn’t interfere more than other waveforms approved under the rules.” Freescale had its own spin, arguing MBOA’s rationale for the waiver and its noninterference claims “fail under close examination.” Freescale said what MBOA has requested isn’t a matter of providing a level playing field. “Far from giving MB-OFDM parity with other forms of UWB, the waiver would instead bestow on MB-OFDM a unique regulatory benefit,” Freescale said.

The Justice Dept. released remedy merger guidelines late Thurs. holding explicitly that structural remedies, including the sale of assets, are preferable to “conduct” remedies. Several attorneys with antitrust and telecom expertise were reviewing the guidelines Fri. The release comes as the Dept. nears the release of its order on the Cingular-AT&T Wireless merger, which may be just days away. Among the principles DoJ endorses is that the remedy should promote “competition, not competitors” and that all remedies must be enforceable: “A defendant will scrupulously obey a decree only when the decree’s meaning is clear, and when the defendant and its agents know they face the prospect of fines or imprisonment if they disregard the decree.” The guidelines are consistent with a stance taken by FCC Chmn. Powell that in general structural remedies, such as asset sales, are preferable to behavioral remedies. The guidelines state that “conduct” remedies are appropriate in limited cases, such as when a “full- stop prohibition” of the merger would “sacrifice significant efficiencies and a structural remedy would also sacrifice such inefficiencies or is infeasible.” Hewitt Pate, asst. attorney gen.-Antitrust Div., said the guidelines provide more clarity for all involved in mergers. “Effective antitrust enforcement requires remedies based on sound legal and economic principles and closely related to the identified competitive harm,” Pate said. “Once we have determined that a merger may substantially lessen competition, the division will insist upon relief that fully restores competition to the market… The Remedies Guide provides the tools needed to more quickly identify critical legal and economic issues regarding merger remedies and devise a remedy specifically tailored to the competitive harm.”

Bill Owens, the former U.S. admiral brought in to lead Nortel only last year, will leave the firm, to be replaced by former Motorola executive Mike Zafirovski. Analysts voiced surprise at the turn. Owens hands off to Zafirovski Nov. 15. Zafirovski, 51, quit as Motorola pres. in Jan. after being passed over as CEO. Under him, Motorola’s once-struggling mobile division developed its popular Razr phone. He joined Motorola in June 2000 after leaving GE, where he ran the lighting division. Owens, 65, was CEO 19 months and by most accounts enjoyed the job. Seaboard analyst Brian Sharwood told us Owens’ departure seemed linked to the surprise exit of Gary Daichendt, a former Cisco executive who was pres. and COO fora few months. But Sharwood, a specialist in the Canadian telecom sector, said that just as Daichendt’s resignation is a mystery, the full story on Owens’ exit may remain a riddle. “Like with all Nortel things, we all scratch our heads and wonder what the hell happened,” Sharwood said.

Senate Finance Committee Chmn. Grassley (R-Ia.) is open to requests by Senate Finance Committee members that BellSouth and other telecom firms get a multi-year tax break to help defray costs of rebuilding after Hurricane Katrina, he told us Thurs. Senators disagreed on the likelihood telecom carriers will get tax relief.

FCC Chmn. Martin has yet to circulate an AT&T-SBC merger order, despite speculation that a vote could occur as early as the Oct. 12 meeting. Sources said Thurs. completing the order has been slowed by Commission work in response to Hurricane Katrina and later Rita. The FCC is considering pushing back the Oct. 12 meeting by a week or even 2, a Commission source confirmed. “We had heard and order might circulate last week, but as of this morning we're hearing that members of the Commission still haven’t seen paper,” said a source from a company with reservations about the merger.

Alltel announced an asset sale and trade with U.S. Cellular to help it satisfy a major part of merger conditions imposed last summer by federal regulators in approving the firm’s merger with Western Wireless. Alltel gives U.S. Cellular 6 markets in Kan. and 9 markets in Neb. In return, Alltel gets 2 markets in Idaho and $50 million in cash. The deal helps Alltel meet the most significant condition imposed on the merger sale within 120 days of the Aug. 1 closing of Western Wireless’s Kan. and Neb. assets overlapping Alltel assets, an Alltel spokesman said Tues. Alltel still must sell off markets covering 4 counties in Ark., and the Cellular One brand. These assets are being run by a trustee pending a sale. U.S. Cellular said the Neb. and Kan. markets help the carrier strengthen its Midwest focus. The carrier gets some 125,000 retail customers, 193 cell sites, 15 company-owned retail locations and 89 authorized agents - in an area with about 1.4 million people. The markets Alltel gains in Idaho will make that carrier a bigger player in the state. Alltel previously picked up parts of northwestern Ida. from Western Wireless. It adds markets along U.S. 84 and U.S. 15 through heart of the state, taking in Twin Falls, Pocatello and Idaho Falls. The markets touch but aren’t really contiguous to markets Alltel already owns. The carrier adds 91,000 customers, 84 cell sites, 6 company-owned retail locations and 32 authorized agents in an area of some 500,000 potential customers.

ATIS said it completed local service migration guidelines for wireline-wireless number porting. This month, an ATIS working group will start looking at another tricky matter: Porting numbers to and from VoIP phones. The ATIS number porting guidelines followed almost a year of weekly meetings: “It has been a tremendous problem. There weren’t any rules,” said Joe Scolaro, an ATIS mgr. who chaired the working group: “We tried to simplify the entire process, put it in an easy to understand document… It allows companies to have one process that they follow, and they all understand the other person’s process. Everybody agreed that if we follow this process we'll have the smooth transition of customers from the losing company to the winning company.” Scolaro said ATIS started examining porting issues when CLECs complained about problems porting numbers back and forth with ILECs. The guidelines were developed by a group representing ILECs, CLECs, wireless carriers and vendors, ATIS said: “The resulting guidelines provide clear step-by-step direction for various local service migration scenarios, including directory listings, local number portability, emergency services such as 911… basic data services and a variety of bundled and unbundled service arrangements.”

SBC significantly outspent cable TV interests in Tex. on its way to winning passage of controversial legislation that would allow SBC, Verizon and other competitors obtain a state-wide franchise as they seek to offer video in the state, according to a study. The legislation was still hung up in the office of Gov. Rick Perry (R) Fri. Texans for Public Justice, a watchdog group based in Austin, said lobbying records for the state show SBC to be “Austin’s leading lobby force by far” outspending cable operators who oppose the bill. “Its army of 123 lobbyists -- who reported up to $6.8 million in SBC fees -- gave this giant well over twice the lobby clout of runner-up TXU,” the group said in a report: “Verizon, the next-largest beneficiary of the new telecommunications bill, paid 38 lobbyists another $1.8 million. As such, SBC and Verizon lobbyists outnumbered the 150-member Texas House.” The report continued: “This phalanx left the leading force opposing this handout in the dust. The Texas Cable and Telecommunications Assn. paid 11 lobbyists up to $685,000. Time Warner Cable paid 14 lobbyists $505,000.” Other significant cable spenders included Cox, which spent as much as $275,000 on 6 contracts with lobbyists. Comcast tossed in $50,000 on lobbying in the state. An SBC spokesman said: “We are happy to represent the best interests of the citizens of Tex. anxious for choice in video providers.”

Auction 60 of lower 700 MHz spectrum, which starts today (Wed.), hasn’t drawn significant telecom industry interest. The 5 licenses offered, which went unsold in earlier 700 MHz auctions, cover smallish CMA areas in Puerto Rico. The lower 700 MHz spectrum, still encumbered by broadcasters, will have to be cleared through the DTV transition. But companies led by Aloha Partners, which has paid some $100 million for 700 MHz licenses, believe they can use it for robust wireless data networks. An industry source called the licenses on sale the “dregs from auction 49m” which elicited scant interest during that sale and which the FCC is trying to sell again. Aloha and 4 other carriers have qualified to bid.

A N.Y. Public Service Commission staff report said the $8.44 billion Verizon-MCI merger would lead to a significant increase in market power in the state. N.Y. presents the pending merger a key clearance hurdle. The PSC didn’t find similar concerns with the SBC-AT&T merger, at least in N.Y. Wall Street is watching N.Y. and other key states as big tests for the merger.