Federal Communications Commission (FCC)

One way or another, a court decision that effectively would allow unrelated Internet service providers to piggyback on cable’s broadband lines (CD Oct 7 p1) will not take effect, NCTA officials said confidently Wed. in a press briefing. NCTA Pres. Robert Sachs said that while the decision by the 9th U.S. Appeals Court, San Francisco, had left some cable companies uneasy, for the most part they saw that development as one of many to come along a path toward deregulation.

In long-awaited guidance on wireless-to-wireless local number portability (LNP), the FCC said in an order Tues. a carrier couldn’t bar a subscriber from taking a number along when switching service if the user had an overdue bill. The Commission declined to require wireless carriers to negotiate interconnection agreements with one another for LNP and “encouraged” operators to complete simple ports within 2-1/2 hours of a customer request in line with an industry- established interval.

The 9th U.S. Appeals Court, San Francisco vacated the FCC’s declaratory ruling that cable modem service was an interstate information service because it was bound by its earlier conclusion in AT&T v. Portland that cable-delivered Internet service contained both information service and telecom components. In a per curiam opinion Mon., the 3- judge panel remanded to the Commission for further proceedings portions of the earlier decision that weren’t consistent with the court ruling.

The FCC should dismiss petitions from EchoStar and SES Americom concerning the proposed transaction between Intelsat and Loral, and instead grant the assignment applications, said Loral and Intelsat. SES didn’t ask the Commission to deny the application, but to condition it so Intelsat won’t be able to offer bundled services to include international and domestic capacity (CD Sept 16 p9). EchoStar said the lack of an Intelsat IPO raises issues that should result in the denial of the application (CD Sept 19 p8). In separate filings, Intelsat and Loral said neither petition provided any evidence of their claims. SES’s proposals “would serve SES’s self-interest in protecting its ‘preeminent’ position in the provision of service to the Federal [Govt.] by hamstringing a potential new, stronger competitor -- they would not serve the public interest… SES mischaracterizes market realities, misrepresents the availability of international market access opportunities, and underestimates the ability of the Federal [Govt.] to procure services on competitive terms and conditions,” Intelsat said. The company said SES mischaracterizes certain routes as dominated by Intelsat, when in reality, those are “routes where SES and other competitors have made a commercial decision not to provide service.” Loral said EchoStar wants the application denied so its potential bid for the assets can be considered by the Commission, but the Commission is expressly restricted from doing that: “To consider the assignment at issue, not on its own merits, but in comparison with an alternative, hypothetical transaction that is not before the Commission for approval would be contrary to the [Communications] Act and to the Commission’s precedent.” As far as EchoStar’s concerns about Intelsat’s IPO, the latter said those concerns should be a part of a different proceeding: “Moreover, contrary to EchoStar’s claims, Intelsat is in full compliance with the ORBIT Act.”

Media watchdog Commercial Alert filed complaints this week with the FCC and FTC, arguing that broadcasters were violating federal law by failing to prominently identify product placement techniques as advertising. “Advertisers can puff and tout and use all the many tricks of their trade, but they must not pretend that their ads are something else,” Gary Ruskin, exec. dir of Commercial Alert, wrote in the complaint to the FCC. Commercial Alert said networks, by failing to prominently identify product placements as advertising, “broadly and systematically” violate the Communications Act.

Federal statutory and administrative rules aren’t so limited that they permit the FCC to intervene in pole attachment rate cases only after negotiations between the parties have broken down, the 11th U.S. Appeals Court, Atlanta, ruled. The court was denying a petition by Georgia Power for review of an FCC order reducing its $53.35 annual pole rental rate for Teleport Communications to $6.56-$8.24. Among other things, Georgia Power had argued that the plain language of the Telecom Act required parties to negotiate pole rents before filing a complaint with the Commission. Because there had been no “real negotiation” between it and Teleport, the parties hadn’t “failed to resolve the dispute” and the FCC intervened prematurely by ruling on the Teleport complaint, it said. The court said: “When negotiations fail, the FCC rates will govern, but the statute is not written to limit the jurisdiction of the FCC to cases in which extensive rate negotiations have failed.” Even if Georgia Power were correct that the FCC could intervene only after negotiations had failed, its argument that the FCC intervened too quickly still failed, the court held. The FCC had concluded that Georgia Power and Teleport’s limited discussions had not resolved their pole attachment rate dispute and further negotiations would be fruitless, it said. In Oct. 2000, Georgia Power notified Teleport that it was imposing an annual pole attachment rate of $53.35, and after limited negotiations the latter filed a complaint with the FCC Cable Bureau.

The biggest early questions facing the recently created FCC Advisory Commission on Diversity in the Digital Age seem to make real change on a $10,000 budget, and how to do it without raising crippling legal challenges, participants said.

The FCC is likely to have a DTV broadcast flag item on its Oct. meeting agenda and “there’s a good deal of unanimity on the Commission on this issue,” said the former chief of staff of Chmn. Powell. Speaking at the Computer & Communications Industry Assn. (CCIA), Marsha MacBride said that despite outside concerns about the FCC’s acting, there was a narrow window if any flag standard could be incorporated in the next production cycle of DTV sets, following the plug-&-play agreement: “If we do it in 3 months we might as well do it in a year.” CCIA would be fine with a year’s wait, as it opposes the flag and believes it won’t work. MacBride said “there’s no sense in adopting a regulation that’s not going to work,” but said the FCC had its own experts studying the issue. She said the agency also had to examine “if it’s not going to do everything, are there still benefits [in imposing a flag] that outweigh the harms?” Some in Congress have questioned whether the FCC has the authority to impose a flag. “We're taking it very seriously the jurisdiction issue, and if we weren’t, we are now after yesterday” when the do-not-call list was thrown out by U.S. Dist. Court, Oklahoma City. She said if the FCC didn’t promote a flag, Congress must do so because otherwise some broadcasters won’t put out top content. Sen. Brownback (R- Kan.) repeated his criticism of possible FCC plans to mandate a DTV broadcast flag. Last week, he introduced S-1621 that would ban federal technology mandates. Brownback said a more appropriate way to handle protecting DTV signals would be the industry-crafted plug-&-play agreement between the cable and CE industries and ratified by the FCC. He was less enamored of a possible FCC rulemaking on a broadcast flag: “I don’t think this is the way to go.”

The full FCC will rule soon on wireless local number portability (LNP) implementation issues, including Wireless Bureau guidance on which 5 carriers have sought Commission review, Wireless Bureau Chief John Muleta told reporters Tues. He stressed that the FCC was holding to a Nov. 24 LNP deadline, noting that Verizon and Verizon Wireless reached an LNP pact this week. “If there’s a will, there’s a way,” he said. “So that’s going to be the motto for LNP because carriers that are interested in doing it find ways of being able to do it.”

DirecTV CEO Eddy Hartenstein said Tues. that his company and News Corp. were committed to providing local programming in all 210 DMAs by 2008: “The goal is to get there by ‘06 but there are a lot of hurdles to get there -- technology, spectrum and all of that.” His comments came at a presentation and news briefing during the Satellite Bcstg. & Communications Assn.’s (SBCA’s) first Retailer Rally. The event attracted 289 registrants including retailers and corporate members.