In split decision that left broadcast and cable officials scrambling for clarification, FCC voted 3-2 late Fri. against requiring cable operators and DBS providers to carry both analog and digital signals of TV stations right now. Commission hadn’t actually announced decision at our deadline Mon., although action was said to be imminent. Sources said Commission adopted further notice of proposed rulemaking (FNPRM) that would set high bar for broadcasters to prove that they were entitled to must-carry rights for 2 signals during digital transition. Notice apparently seeks comment on whether dual carriage would violate cable’s constitutional rights to free speech, as cable has insisted. But details remained fuzzy at our deadline.

FCC reaffirmed its Aug. 1999 decisions on TV ownership and attribution rules in decisions late Fri. Among rules reaffirmed were local TV ownership limits, national TV ownership, mass media attribution.

Broadcasters on TV Ch. 52-69 should have to give back their analog channels Dec. 31, 2006, regardless of whether 85% of U.S. households have access to DTV, outgoing FCC Chmn. William Kennard said in letter to Congress, and broadcasters on other channels should begin paying escalating spectrum fee to continue analog broadcasts. Changes were among several that Kennard proposed to Congress as way to speed DTV transition.

BURBANK, Cal. -- Saying current economic slowdown “is just a speed bump” and new technology offers his company exceptional opportunities, Disney Pres.-COO Robert Iger told us “we have a feeling of exhilaration at the Disney Co. right now… as a company, we're extremely optimistic.” He said, “I think the economy is still sound [but] a feeling of pessimism” has set in among industry executives and national advertisers that’s causing concern. “It’s still too early to tell” about overall TV economic performance in 2002, Iger said.

AT&T Wireless and Japan’s NTT DoCoMo began operating previously-announced alliance to develop next-generation wireless services. NTT DoCoMo bought 16% stake in AT&T Wireless Mon. through acquisition of 406 million shares of preferred tracking stock for $9.8 billion. DoCoMo also bought 5-year warrants to purchase equivalent of additional 41.7 million shares of tracker at $35 per share. Parent company AT&T said it decreased its interest in AT&T Wireless Group by 178 million shares, receiving $20.50 per share from DoCoMo. Remaining 406 million shares that DoCoMo bought came from 228 million newly issued tracker shares at $27 per share. Except for warrants and before AT&T Wireless completes planned spinoff later this year, AT&T said it still had about 70% economic stake in wireless unit. About 14% of economic interest in AT&T Wireless’s operating results will be represented by tracking stock that’s traded publicly, company said. AT&T Wireless reiterated it planned to use $6.2 billion in proceeds from share sale to continue to expand capacity, enlarge footprint, develop wireless Internet projects, invest in other “growth” areas. Parent AT&T plans to use its $3.6 billion part of deal to reduce debt.

FCC’s C- and F-block auction of 422 PCS licenses inched up to $16.8 billion Mon., as 36 bidders continued to vie for spectrum. Bidding appeared to have particularly slowed in top 15 markets, where Verizon Wireless has kept lock on top bids for 2 licenses in N.Y.C., bidding $2.1 billion and $2.04 billion. Many bids in 15 largest markets have remained unchanged for at least last 16 rounds. Verizon Wireless has 113 high bids totaling $8.8 billion, followed by AT&T Wireless-backed Alaska Native Wireless with 44 valued at $2.9 billion. Cingular Wireless-backed designated entity Salmon PCS had 78 high bids after 79th round of bidding, with $2.3 billion. Dobson Communications subsidiary DCC PCS had $536 million, Cook Inlet/VS GSM $509.2 million, Leap Wireless International $482 million.

U.S. Supreme Court agreed Mon. to hear appeal of decision by 8th U.S. Appeals Court, St. Louis, that vacated FCC’s Total Element Long-Run Incremental Cost (TELRIC) pricing standard for competitive interconnection (CD July 19 p1). Court said it would hear case (Verizon Communications v. FCC) in 2001-2002 session that begins in Oct., meaning decision probably won’t be handed down until about year from now. Appeals were filed by Verizon, WorldCom, FCC, AT&T, General Communications. FCC Gen. Counsel Christopher Wright said agency was pleased court had granted its petition in this case as well as another involving rates that utilities can charge for pole attachments (see below). In both cases, “Congress decided that utilities owning bottleneck facilities must lease them to competitors at reasonable rates,” Wright said.

LAS VEGAS -- Mandatory digital tuners in TV sets was subject of sharp exchanges at ALTV panel here Mon., with CEA Pres. Gary Shapiro arguing that consumers shouldn’t be required to buy unwanted tuners while Cox TV Pres. Andrew Fisher said mandatory tuners were “a must… if we're going to get this [DTV] going.” Paxson TV CEO Lowell Paxson said “I'm ready to go to the Supreme Court” on tuner issue, saying All-Channel Receiver Act passed by Congress in 1964 requiring UHF tuners “is the law.” Paxson also got into exchange with panelist Susan Fox, deputy chief of FCC Mass Media Bureau, on what he said was agency’s slowness in acting on DTV applications by TV stations.

In much-anticipated announcement, President Bush tapped FCC Comr. Powell as chairman Mon., just days after departure Fri. of FCC Chmn. William Kennard. Powell, who has been on FCC since Nov. 1997, had been widely viewed as front-runner for post, although official word didn’t come until White House spokesman Ari Fleischer announced appointment at news briefing Mon. Separately, executive memorandum issued by Bush Chief of Staff Andrew Card began circulating more widely at FCC Mon. Though it wasn’t clear how much authority Executive Branch has over decisions of independent agencies like FCC, memo is intended to suspend regulations that agencies have approved recently but which haven’t yet been published in Federal Register.

XM said Mon. it had signed manufacturing contract with Visteon for digital radio service and audio entertainment technology. XM also signed programming agreements with National Lampoon, Firesign Theater and Discovery Channel.