FCC issued Notice of Proposed Rulemaking (NPRM) Fri. that examines potential spectrum that could be tapped for 3rd- generation wireless and other advanced services. Agency seeks comments on providing mobile and fixed services in 1755-1850 MHz band now used by military, various approaches for 2500-2690 MHz now occupied by Multichannel Multipoint Distribution Service (MMDS) and Instructional TV Fixed Service (ITFS) licensees, proposed allocation of 1710-1755 MHz for fixed and mobile services, and other options (CD Jan 5 p1). Interim report on 3G spectrum issued by FCC last fall said segmenting MMDS and ITFS bands to allow operation of advanced mobile services would pose technical challenges. NPRM seeks comments on scenarios that would allow operation of advanced wireless services in that frequency. One possibility, FCC said, is allocating spectrum for fixed and mobile services on co-primary basis, which would allow spectrum to be used for advanced offerings such as 3G. Comment is invited on “public interest costs and benefits” of adding mobile allocation to bands without mandatory relocation. NPRM asks whether there are steps that could bolster secondary market in those bands so they could “evolve to their highest value use,” whether fixed or mobile. “Could current ITFS/MDS licensees reorganize their systems to continue providing current services and also offer new mobile services on a competitive basis with other wireless system providers, such as cellular or PCS,” FCC asked. It wondered whether part of spectrum could be made available for new entities. It asked ITFS licensees whether adding mobile service allocation to 2500-2690 MHz would help educators and, “if so, how such operations could be utilized in an educational context.” MMDS licensees are asked whether adding mobile service would benefit their band plans. If part of band were cleared for advanced wireless services and incumbents had to be moved, notice asks how licensees could be accommodated elsewhere. In that area, agency is looking for cost estimates for relocation and whether equipment would need to be retuned or facilities would have to be replaced altogether. Second phase of FCC’s 3G spectrum report, due in March, is to cover potential relocation options and related costs. NPRM also seeks comment on several band pairing schemes and pairing options. In general terms, FCC solicits feedback on range of advanced wireless services that could be introduced in future and their cost impact on manufacturers, system operators, consumers. Comment is sought on how much additional capacity is needed for advanced services, including high-speed data and multimedia applications such as full-motion video. Specifically, NPRM asks what size of spectrum blocks would be appropriate and when extra spectrum will be needed.
As FCC continued to wrestle with imposing additional regulatory conditions on AOL’s pending purchase of Time Warner (TW), Microsoft and other online rivals of AOL pressed their furious campaign for instant messaging (IM) requirements. In latest letter to FCC Chmn. Kennard Thurs., Microsoft called again for “imposition of a meaningful and enforceable condition that facilitates IM interoperability by enabling consumers to communicate with each other regardless of the IM system they use.” Along with brief letter, Microsoft and its allies sent 2-page fact sheet listing 8 consumer groups, 53 companies and associations, 10 senators, 12 House members and 7 publications that are calling for IM interoperability. At minimum, Microsoft argued in separate filing with FCC Tues., “the Commission should obligate AOL to enter into multiple contracts with leading IM providers to allow for interoperability prior to offering any advanced services over the broadband infrastructure of Time Warner’s cable systems.” In earlier filing with Commission, nationwide group of ISPs that had brought class action lawsuit over AOL’s 5.0 and 6.0 software urged agency to force company to modify its offending software feature. They argued that regulatory condition changing that feature, which directs modem calls away from user’s desired ISP to AOL access number, “would do more to introduce competition in Internet access than the instant messaging condition that has been the subject of recent press reports.” Meanwhile, new op-ed piece published by Cato Institute said FTC’s open access conditions on AOL-TW merger would hurt consumers and hamper competition and innovation by dampening incentives for rivals to build competing high-speed data systems. “The entire forced access campaign is an unfortunate example of unelected regulators overstepping their bounds,” wrote Clyde Crews, Cato technology studies dir. “They are exploiting their power over industries to make regulatory ‘law’ that should require an act of Congress. Forced access represents a regrettable new incarnation of industrial policy.”
President-elect Bush “is increasingly turning his attention to the agencies, and so I think you can anticipate announcements on those at any time,” Press Secy. Ari Fleischer told reporters Thurs. after being asked when FCC and SEC chairmen would be named. He said Administration would appoint someone at Office of Management & Budget to focus on technology issues, and said it still was undecided whether higher level “technology czar” would be appointed.
TMI Communications and EMS Technologies unveiled packet data terminal for U.S. transportation industry Jan. 3 after FCC approved modification in TMI’s license that allowed them to operate EMS PDT-100 packet data terminal in U.S. exclusively on TMI mobile satellite network. Firm said technology gives truck fleets tracking and messaging capabilities, doesn’t interfere with emergency communications services, reduces costs.
FCC unanimously adopted notice of proposed rulemaking (NPRM) that eyes frequencies, including those now occupied by military users, for 3rd-generation and other advanced wireless services. Commission also denied petition by Satellite Industry Assn. (SIA) seeking additional spectrum for mobile satellite services (MSS), move that Multichannel Multipoint Distribution Service (MMDS) licensees opposed (CD Aug 30 p1). FCC adopted notice Dec. 29, meeting White House’s year-end deadline for approving item, although text hadn’t been released by our deadline.
Sprint PCS became latest carrier to drop out of FCC’s C- and F-block auction, which resumed Thurs. and reached $12.01 billion in net high bids. Sprint’s bidding eligibility was reduced to zero after 27 rounds Thurs., FCC said. Lehman Bros. research note issued before auction resumed after holiday hiatus said Sprint was among carriers likely to abandon bidding, path already taken by Nextel and several other carriers since auction started Dec. 12. (Bidding was suspended between Dec. 22 and Thurs. for holidays). Lehman said Sprint PCS didn’t place bids Dec. 21, using waivers instead. “It seems as if Sprint PCS feels the prices are too high and is going to exit the auction shortly after bidding resumes,” Lehman said. Following CDMA agreement with Palm, Sprint shares soared 15.41% Thurs. to close at $23.88. (Pact covers Sprint’s provision of first CDMA solutions for Palm’s handheld devices). Meanwhile, Verizon maintained strong lead with $4.06 billion in net high bids, followed by AT&T-backed designated entity Alaska Native Wireless with $2.67 billion and Cingular Wireless-backed Salmon PCS with $2.19 billion. Verizon Wireless had been high bidder for 2 N.Y. licenses for last several rounds, but ended Thurs. with high bid for only one license at $968.6 million. Alaska Native Wireless bid $716.57 million for another N.Y. license, with Salmon PCS vying for 3rd with $714.45 million. Lehman Bros. indicated auction could wrap up in several weeks. DCC PCS placed high bid of $519.7 million for L.A. license. Verizon also placed high bids for licenses in L.A., Chicago, San Francisco, Philadelphia, Boston, Seattle. Alaska Native Wireless placed high bid for L.A. and Salmon for Atlanta. In top 15 markets, VoiceStream had high bid for Washington license.
Coalition of major broadcasters, cable networks, movie studios, record companies, sports leagues and other content owners lobbied FCC for strong copy protection technology for advanced digital cable set-top boxes. In joint 4-page letter to FCC Chmn. Kennard Thurs., ABC, BMI, CBS, ESPN, Fox, Minor League Baseball, MPAA, NBC and RIAA argued that “cable interface devices must include the capability to protect certain high-value content against unauthorized copy and Internet retransmission” because of “the economics of producing and distributing high-value programming.” Responding to letter by House Telecom Subcommittee member Boucher (D-Va.) to Kennard last month, group also contended that advanced digital set-tops must be capable of providing some level of content protection “so consumers that purchase such devices will be able to receive the widest variety of program choices, including high-value programs that may be made available only if content protections are in place.” It said “alternative is to introduce devices in the marketplace that cannot provide content protection, and therefore cannot receive certain types of high-value programming.” Content owners also disputed Boucher’s contention that “freely broadcast programming should remain freely copyable,” contending that local broadcasters would be relegated to “the position of ‘low-value’ content distributors.” They questioned whether there was any public interest “in allowing consumers to make multiple copies of broadcast programming, or to retransmit broadcast programs over the Internet.”
NCTA submitted 2nd brief to U.S. Supreme Court, seeking to convince high court to review appellate court ruling that struck down FCC’s authority over pole attachment rates for cable lines carrying Internet service. In 10-page reply brief filed Jan. 2 in Gulf Power case, NCTA argued that decision by 11th U.S. Appeals Court, Atlanta, “improperly rejected the FCC’s reasonable construction of Section 224” of Telecom Act and wrongfully concluded that “Congress intended to repeal the regulatory authority that the FCC admittedly possessed over pole attachments regardless of the type of service provided over the equipment attached to the poles.” NCTA also contended that “this case squarely presents an issue of national importance that was improperly decided” by lower court. It said utilities’ claims that “they are constitutionally entitled to recover so-called monopoly ‘market rates’ for providing access to essential bottleneck facilities is contrary to settled law and, if accepted, would render all rate regulation of monopoly enterprises unconstitutional.” Cable operators charged that utilities had been increasing pole attachment rates substantially since 11th Circuit ruling last spring. But utilities contended that they were entitled to get what market would bear.
FCC will consider possible reform of intercarrier compensation at its Jan. 11 open meeting but long-awaited reciprocal compensation didn’t show up as companion item (CD Jan 4 p1). FCC is overdue to act on reciprocal compensation, which is one of many intercarrier payment schemes that will be addressed in broader notice of inquiry listed on agenda. Other agenda items agency will consider at meeting: (1) Proposal for technical and operational rules for use of frequencies by public safety entities. Idea is to assure various jurisdictions could talk to each other. (2) Memorandum opinion and order on reconsideration concerning rules that require broadcasters, cable operators and other video programming distributors to provide video description and make emergency information more accessible to visually impaired. (3) DTV transition and reception issues for broadcasters. (4) Declaratory ruling in case of DTV-only Fla. station that’s seeking cable must-carry status. (5) Implementation of Satellite Home Viewer Improvement Act, including DBS local-into-local, must-carry, network non-duplication, syndicated exclusivity and sports blackout rules.
“Nothing would be gained by further delaying a decision” on core DTV must-carry issues, NAB Pres. Edward Fritts said in letter Thurs. to FCC in which he said Commission could defer decision on must-carry itself while adopting some “rules of the road” for carriage of DTV stations. He said there would be no benefit in delay, “certainly nothing that would be worth the harm to the progress of the transition.” NAB also pressed FCC for requirement that all new TV sets have tuner capable of receiving DTV.