Va. Corp. Commission approved price cap regulation plan for Verizon South (formerly GTE) that replaces indexed rate-of-return system in place since 1995. Under new cap system, approved Thurs. with effective date Mon., carrier’s basic exchange rates are frozen through 2003. Rates for other noncompetitive services are under caps indexed to 50% of gross domestic product price index, with annual adjustments. Competitive services are flexibly priced. Carrier won’t be allowed any rate increases if it fails to meet state service quality standards. Earnings aren’t regulated. Plan for state’s 2nd largest incumbent telco is similar to plans for other large Va. incumbents. Commission in mid-Dec. paved way for adoption of price caps by approving settlement providing for $200 million refund to customers of overearnings under previous earnings-based plan.
N.J. Board of Public Utilities extended Verizon’s price regulation plan for additional year, to Dec. 31, 2001, after allowing carrier to withdraw controversial proposed replacement plan that drew strident opposition from customer and competitor interests. Board directed Verizon to file new proposal by Feb. 15 for regulation after 2001, which must adhere to set of requirements board said are intended to address deficiencies that sparked much of opposition to this year’s Verizon proposal. New plan, board said, must include basic service option without additional features. Discredited Verizon plan had proposed doubling basic rate by bundling group of calling features with dial tone. Other requirements Verizon must address in new regulation plan include state universal service support, expanded Lifeline eligibility, service discounts for schools and libraries, service quality standards for wholesale and retail services, cost support for any proposed rate changes, analysis of company’s financial condition, and quantification of merger-related savings.
Covad Communications will trim additional 400 from its workforce, restructuring its Covad Business Solutions div. as part of previously-announced initiative to reduce this year’s operating costs by 20-30%. Costs of restructuring are included in estimated $20 million 4th quarter restructuring charge. Company “needed to consolidate and streamline operations to meet our drive to profitability goals,” said Covad Chmn. Chuck McMinn. Covad will also close about 200 central offices, affecting 1.5% of subscriber base. Staff reduction comes after Nov. 27 reduction of 400, another 14% of company’s headcount.
National Assn. of Minorities in Communications (NAMIC) Foundation partnered with eBay to raise funds through web site www.ebay.com/charity for its “Digital Bridge Alliance (DBA)” initiative. Telecom content and distribution companies can donate items to be auctioned at web site with proceeds benefitting initiative, NAMIC said. DBA initiative was launched this year by NAMIC to “raise awareness and reinforce the value of home computers and Internet access among African-American, Hispanic and Asian-American/Pan Pacific households.” Auction site featuring NAMIC’s charitable initiative was launched at recent Western Cable Show. Alliance has been endorsed by NCTA, Cal. Cable TV Assn., Walter Kaitz Foundation and National Assn. of Minority Media Executives, NAMIC said.
Fla. PSC elected Leon Jacobs new chmn., effective Jan. 2, succeeding Terry Deason, who stays on as commissioner…. Fla. Gov. Jeb Bush (R) reappointed Comr. Lila Jaber to full 4-year PSC term; Jaber was named to PSC in Feb. to complete term of Julia Johnson… Iowa Utilities Board named Judi Cooper acting exec. secy., replacing retiring Raymond Vawter… Jay Walker stepped down as vice chmn., Priceline.com, after becoming CEO, Walker Digital… Arjun Valluri becomes sole CEO, Intelligroup after Ashok Pandey resigned as co-CEO and board member.
NxGen and Touch America announced strategic partnership Fri. linking NxGen’s IP/ATM network with Touch America’s wireless and fiber-optic network. Companies plan to offer next-generation applications and services. Touch America is subsidiary of Montana Power Co.
FTC gave AT&T Broadband final legal clearance to complete sale of Salt Lake Tribune newspaper to Denver-based Media News Group, nation’s 7th largest newspaper chain. Decision was given Dec. 22 but official publication was delayed. Companies cleared first legal hurdle Dec. 15 when U.S. Dist. Court, Salt Lake City, denied request by newspaper’s managers to block sale on grounds AT&T had promised that managers’ group would have right to manage Tribune until 2002, when managers would receives option to buy paper. Managers had unsuccessfully contended new ownership would bring changes that would violate their management and option agreement. Court ruled managers’ pact with AT&T was tentative and not binding since major issues like price hadn’t been resolved. Managers didn’t appeal decision after court assured them it would be willing to hear any complaint involving violations of managers’ rights by new owners. AT&T acquired Tribune when it bought TCI in 1999. TCI bought paper in 1997.
VSB/COFDM report sent to key broadcasters late Fri. included “some good news and some bad news” for both DTV modulation systems, we're told. Reports, based on field testing completed in mid-Dec., were said to have been adopted unanimously by technical groups, which include VSB critic Sinclair Bcst. “I think it was pretty well balanced,” one official familiar with report said. He discounted claim that report strongly supports VSB (CD Dec 29 p4). Technical groups preparing report have kept tight lid on results, with even steering committee members generally not told in advance, we're told. In letter of appreciation to technical group members, Project Chmn. Gary Chapman of LIN TV and Vice Chmn. Craig Dubow of Gannett said they're “confident that the process was inclusive, fair and scientifically sound,” but they admitted that “even these most comprehensive and authoritative tests cannot fully resolve all issues. Opinions may differ as to the precise implications of the data.” Steering Committee is to meet Jan. 10 to discuss results and submit reports to MSTV board. Then, series of meetings will lead up to joint session of NAB and MSTV boards Jan. 15 in Carlsbad, Cal. Broadcasters spent $2.1 million on testing of competing DTV modulation schemes, following what they acknowledged to be “stalemate” as result of dispute over benefits of each system. TV group CEO told us “the direction we take will be charted” at industry summit of station executives in Washington Jan. 11. But, he said, unless study shows COFDM with “an overwhelming preference” industry should proceed with VSB. Then, he said, “we will need to press the FCC very, very hard” for such things as digital must carry and TV networks for more digital programming.
Fla. PSC approved BellSouth plan to refund $48 million to residential and business customers. Refund is final step for BellSouth to complete $209 million refund required under 1994 rate settlement with PSC and Fla. Office of Public Counsel. Refunds will be paid out as bill credits of $3.50-$5 per residential line and $10-$15 per residential line, and are to be completed by Feb. Meanwhile, PSC ordered prepaid calling card provider RJM Card Services to show cause within 21 days why it shouldn’t be fined $22,000 or have its operating authority cancelled for PSC rule violations. Company is accused of failing to list all surcharges and fees on its prepaid cards and of ignoring PSC staff inquiries regarding complaints against company.
Cyclone-3 rocket carrying 6 Russian communications satellites failed after launch Thurs., resulting in loss of all 6 spacecraft. Spokesman for Strategic Missile Forces said first and 2nd stages of rocket functioned normally, but 3rd failed. Launch failure from Plesetsk cosmodrome in Russian Arctic is 2nd in 2 months for agency, as EarthWatch lost satellite in Nov. 21 launch on Cosmos-3 from Plesetsk (CD Nov. 24 p4). Satellites burned up after re- entry into atmosphere, scattering debris into Arctic Ocean, but officials said debris caused no damage. Russian Aerospace Agency suspended launches on Cyclone-3 rockets until agency can determine cause of failed launch, agency spokesman said. Similar failure nearly cost agency 6 Strela military satellites 2 years ago, but agency saved them.