FCC unanimously approved Deutsche Telekom’s (DT) merger with VoiceStream and Powertel, imposing no special conditions on $34 billion deal and provoking renewed commitment from Sen. Hollings (D-S.C.) to seek restrictions on foreign govt. ownership in U.S. telecom companies. FCC adopted order 4-0, with Comr. Furchtgott- Roth dissenting in part on separate deal on national security issues between federal agencies and companies. Order, approved Tues., is expected to be released as early as today (Thurs.) Commission said in news release it found DT would “have neither the incentive nor the ability to engage in unfair competition, specifically predatory pricing, in the U.S. domestic mobile telephony market.”
Export controls for satellite companies still are in flux while Commerce and State Depts. attempt to settle on uniform policy for licensing and controlling sensitive technology of satellite components, inspectors gen. (IG) said in March reports. Typical of problems is “political jostling” at State and Commerce over exports, satellite official said. They have agreed on 13 of 16 issues involving satellite components, but have been unable to reach consensus on others, Satellite Industry Assn. (SIA) Pres. Clay Mowry told us. Major regulation of satellite components is in “political limbo” as new officials take control of key govt. positions that provide oversight to industry.
Rep. Davis (R-Va.), chmn. of House Govt. Reform Subcommittee on Technology and Procurement Policy, sent letter to Social Security Administration (SSA) April 18 seeking more information on agency’s plans in response to recent General Accounting Office (GAO) decision. In decision made in Dec. but not released until earlier this month, GAO upheld protest by Rockwell Electronic Commerce on telecom contract awarded to WorldCom. GAO concluded that SSA hadn’t evaluated all related FTS 2001 costs linked to WorldCom bid. Rockwell argued WorldCom had edge in bidding because it didn’t include costs of FTS 2001 in its bid package. (WorldCom and Sprint share FTS 2001 contract awarded by General Services Administration [GSA]). In letter to SSA Comr. Larry Massanari, Davis said request for proposals cited by GAO decision “was one of the first significant competitive bids since the award of FTS 2001 and I would like to know how SSA handled the evaluation of FTS 2001 so it did not thwart the competitive process.” Davis said he was interested in learning how FTS 2001 was evaluated and “whether there was adequate competitive opportunity for private industry.” Davis said he was particularly interested in SSA’s plans to address “the concerns expressed by the GAO in their decision.” Letter came as Subcommittee planned to hold hearing on FTS 2001 Thurs. Expected to testify are officials of GAO, GSA, Dept. of Defense, Qwest, Sprint, WorldCom, AT&T.
Interagency task force led by Justice Dept. April 15 will publish final revised standards on federal appraisal of public lands, action that telecom and energy interests said could increase cost of using rights-of-way (ROW). They said such action also would violate restrictions last year set in 2001 Interior and Related Agencies Appropriations bill. Edison Electric Institute (EEI) spokesman said task force, known as Interagency Land Acquisition Conference, was attempting to slip under Congressional radar by publishing revised govt. land appraisal desk guide, rather than formal regulations, enabling federal appraisers to assess inflated costs on companies seeking to deploy fiber and other utility infrastructure on public land.
FCC would be required to conduct new e-rate rulemaking, altering program in ways that one supporter suspected could destroy it, under proposals tucked into President Bush’s budget proposal (CD April 10 p1). General provision in proposed Commerce Dept. budget would have Congress direct Commission to finish rulemaking by Sept. 30, 2002. However, e-rate foe thought program got boost when $2.25 billion in e-rate funds and similar amount for high-cost universal service money for first time were included as $4.5-billion line item (rising to $5.6 billion in FYs 2001 and 2002) in FCC budget.
Bush Administration’s fiscal year 2002 budget proposal would increase funds for FCC, but White House’s long term strategy is to level off agency’s spending over the next 4 years. According to govt. budget details released Mon., Bush would increase FCC’s FY 2002 budget to $248.5 million from current $230 million. Total proposed outlays, or “amount the [FCC] actually spends in a given fiscal year,” would increase to $320 million from $301 million. Spending in FY 2003 and 2004 would drop to $302 million, then increase by $1 million in FY 2005 and FY 2006, respectively, under plan.
White House announced Fri. it intended to nominate 3 Washington insiders as FCC Commissioners: (1) Kevin Martin, FCC transition leader for President Bush and former aide to FCC Comr. Furchtgott-Roth. (2) Kathleen Abernathy, vp of startup network provider Broadband Office Communications, who is former U S West regulatory vp and one-time adviser to ex-FCC Comr. James Quello. (3) Mike Copps, who worked for Sen. Hollings (D-S.C.) for 15 years before leaving Hill in 1980s to work in private industry and finally Commerce Dept. in international trade area. Formal nomination won’t happen for several weeks while paperwork is prepared and security clearances completed. After that comes Senate confirmation process.
Wireless CEOs plan to meet with Commerce Secy. Donald Evans April 24, apparent extension of dialog that he began with industry late last month on 3rd generation wireless issues. CTIA spokesman confirmed meeting, saying executives would meet with Evans one day before Wireless Issues Day on Capitol Hill April 25. Evans met with industry and other govt. officials late last month (CD March 31 p1), just before FCC and NTIA released separate reports on potential spectrum sharing and segmentation possibilities for advanced wireless services. Industry observers have said meeting with Evans last month signaled his interest in allaying fears over Dept. of Defense report released alongside NTIA document and indicating his direct interest in working on 3G spectrum solutions.
Panelists at Congressional Internet Caucus lunch Thurs. didn’t rule out need for congressional intervention of some type on pending Internet-capable 3rd generation wireless allocation decisions involving Dept. of Defense, NTIA and FCC. At lunch on Capitol Hill sponsored by advisory committee to caucus, several panelists suggested Congress could have role to play, specifically on mandatory auction date for certain bands now under consideration for 3G allocation. FCC is overseeing decisions on 2.5 GHz spectrum now occupied by Multipoint Distribution Service (MDS) and Instructional TV Fixed Service licensees and NTIA has purview over 1.7 GHz band occupied by govt. users, mostly military systems. Under Executive Memorandum signed by President Clinton last Oct., FCC would have to make spectrum allocation decision in July to meet congressional deadline of Sept. 30, 2002, for depositing proceeds in U.S. Treasury from auction of certain bands. “I hope that Congress recognizes that we may have to slow down just a little to speed up and get the right solution,” said Steven Berry, CTIA senior vp-govt. affairs. Issue of making sure there’s enough time for decisions is particularly important given bifurcation of 3G decision-making authority between NTIA and FCC in that area. “That’s where Congress has a role,” Berry said. FCC Wireless Bureau Chief Thomas Sugrue described potential for reaching solution on vacating incumbents from one of existing bands under consideration, although he said logistics for how some of that would happen were less clear-cut. “We would not resist and would in fact welcome some help from our friends in Congress to help make this happen,” Sugrue said. Panel was moderated by Washington attorney Gerry Waldron, with other speakers including NTIA’s Joseph Gattuso, Motorola Vp-Telecom Strategy & Regulation Richard Barth, Pegasus Communications Vp Cheryl Crate and consultant Leslie Harris for WEBNow, coalition representing ITFS licensees. Several panelists cited extent to which reimbursement, which is required for moving federal licensees from incumbent spectrum, is likely to make relocation decisions somewhat more tenable. “This is an area where the spectrum is potentially so valuable to 3G services, there should be enough money I think to make some of this work out,” Sugrue said. “The money makes things not a zero-sum game anymore. Otherwise, we're taking from DoD and giving it here, or we're taking from MMDS and giving it there and they move and someone else wins and that’s a hard way to get anybody to agree.” NTIA’s Gattuso said the NTIA report released Fri. on possibilities for 3G spectrum sharing and segmentation in 1.7 GHz left open options. “We have seen a lot of interest by the Secretary of Commerce and the Administration in general to look at this issue at the highest levels of government and to work with industry to look at our options,” he said. Harris stressed that ITFS licensees were in thick of deployment plans for rolling out wireless broadband services, including those covering “congressional” priorities of distance learning and service to typically underserved inner city and rural areas. “There is more at stake here than can you move incumbents,” Harris said. “There’s a real opportunity here -- DoD needs advanced, digital highly encrypted telecommunications capabilities for the 21st century,” Berry said, reiterating CTIA’s view that DoD spectrum would be best for 3G. “Right now they're in analog systems,” he said of Defense communications. He cited ITFS estimates for relocating incumbents of up to $30 billion, with DoD estimates closer to $4 billion. “Quite frankly I was surprised by the dollar number that DoD gave to NTIA."
Don’t expect FCC to be as eager to place issue-oriented conditions on merging companies as past Commissions, FCC Chmn. Powell told reporters in news conference Thurs. on telecom issues. He said FCC votes depended on all 5 commissioners but he wouldn’t be pushing for kind of conditions that were imposed on SBC- Ameritech, Bell Atlantic-GTE and other mergers. Powell held 2 news conferences for trade reporters Thurs., answering questions on video issues in morning session (see separate story) and telecom questions in afternoon.