AT&T passed on chance to petition FCC for permission to use company’s planned spinoff of Liberty Media Group to satisfy Commission’s MediaOne divestiture requirements. FCC’s Jan. 16 deadline for written petition came and went without word from AT&T, which wrestled with agency last month over how to meet merger divestiture conditions. AT&T spokesman said MSO hadn’t planned to file petition and preferred to “not elaborate” on its previous statements. FCC Cable Bureau spokeswoman also declined comment. In unexpectedly tough order Dec. 21, Commission told AT&T to carry out its stated commitment to shed its 25.5% stake in Time Warner Entertainment (TWE) or place it in irrevocable trust for sale by May 19 even though company said it preferred to meet merger conditions by spinning off its Liberty Media programming unit (CD Dec 26 p1). But FCC said AT&T still could petition agency to modify order by Jan. 16 by submitting written request “with an appropriate showing as to why such a modification would serve the public interest.” AT&T spokesman said company stood by its earlier statements in which it agreed that it had elected to divest TWE to meet Commission’s Dec. 15 election requirement but insisted that it also was proceeding with plans to spin off Liberty. Issue also is key to FCC’s recent approval of AOL’s takeover of Time Warner (TW). In accepting AOL-TW deal last week, both outgoing FCC Chmn. Kennard and Republican Comr. Powell, widely expected to succeed him, stressed importance of severing ownership links between AT&T and TW.

Public broadcasters’ DTV transition will run $779 million shortfall with no funding increases from federal govt., White House said in final Economic Outlook report. PTV made list of “pending policy proposals” -- Clinton Administration budget items that were cut severely by Congress -- after receiving only $44 million of requested $110 million for FY 2001. White House also said FCC’s spectrum auction authority had reaped $20 billion since 1994, and failure to renew it past 2008 would cost federal govt. $500 million annually.

Internet telephony provider IP Services Inc. (IPS) said it would petition Colo. PUC for guidance on access charges in light of ruling last week by Colo. Dist. Court Judge Michael Mullins in Denver. State court judge held that IPS was liable for intrastate access charges whenever it used public switched telephone network of Qwest or other telephone carriers for call completion. IPS Pres. Martin McDermott said Colo. PUC specifically exempted Internet telephony companies from paying intrastate access charges. He said ruling could force his company to pay at least $1 million in damages to Qwest, which brought lawsuit in state court seeking access charges. McDermott said state court’s ruling was so broad as to make any alternative carrier, regardless of technology used, liable for payment of access charges. Judicial ruling (CD Jan 17 p9) was state action, not federal.

DirecTV is facing another class action lawsuit for alleged monopolistic practices that resulted in increase in price subscribers must pay for its products and services. Suit filed last Sept. in U.S. Dist. Court, L.A., alleged that DirecTV engaged in activities intended to stifle competition in violation of various federal and state antitrust laws. Suit said all DirecTV subscribers from March 1996 to Sept. 2000 had been damaged by DirecTV conduct and were entitled to damages. Best Buy, Circuit City, RadioShack and Thomson Consumer Electronics also were named in suit. Sears Roebuck also sued DirecTV claiming, among other things, that latter had canceled its contract after Sears didn’t stop selling EchoStar products and services.

FCC released 2000 biennial regulatory review Wed. that includes details on items that agency accepts for further review that were part of staff report released last fall. On wireless spectrum, review said agency accepted staff recommendation that spectrum caps that limited spectrum entity could hold in single market be considered. CTIA and several wireless carriers have been pressing agency to consider lifting spectrum cap on 45 MHz in all markets except rural areas, where cap is 55 MHz. Agency plans to consider notice of proposed rulemaking in “near future” that will consider “existing competitive conditions and technological developments that could affect the continued need for the cap.” Agency also accepted staff’s recommendation to consider excluding rural ILECs from requirement that independent (non-Bell) ILECs must offer long distance service through separate subsidiary. FCC said it would begin proceeding to seek comment on idea. In addition, it will ask whether it should consider waivers of that requirement for other independent ILECs that showed it created hardship for them. FCC Comr. Furchtgott-Roth said he was “heartened” by more detailed analysis in 2000 Biennial Review issued by agency Wed. Review includes staff report that analyzes regulations on “subpart-by-subpart” basis to determine whether they are needed, action that Furchtgott-Roth has championed in past. That level of detail offers “meaningful opportunity for debate about each section of our rules,” he said. He urged regulated companies to take active role in commenting on process that he said was “opportunity to keep our regulations consistent with marketplace and technological change.”

Lucent Technologies and Time Warner announced $100 million fiber network system deal for former to supply TW with its newest system. Time Warner Telecom will deploy Lucent’s WaveStar OLS 1.6T, DWDM system, with initial capacity of 800 Gbps.

STM Wireless and Alcatel said Wed. they signed OEM partnership agreement under which Alcatel will integrate STM’s VSAT products into its range of carrier grade systems and software in order to offer satellite broadband solutions to service providers using current satellites and emerging Ka-band systems.

Ill. Commerce Commission Chmn. Richard Mathias this week asked other 4 Ameritech state commissions whether they ought to call another joint session with top SBC and Ameritech officials to get explanations for seeming contradictions between what companies were telling states and what they were telling securities analysts about service quality, competition and regulatory compliance burdens. In letters Tues. to heads of Ind., Mich., Ohio and Wis. commissions this week, Mathias cited “discrepancies” in statements by SBC Chmn. Edward Whitacre and other top SBC/Ameritech officials to state regulators in Oct. 16 summit meeting, and what Whitacre and other officials told securities analysts in Dec. 16 briefing. He asked other states “whether it would be helpful to know” which story contained real reasons for company’s troubles of past year. Mathias said SBC/Ameritech told securities analysts service problems of 2000 were caused by aging outside plant and capacity difficulties but told states problems were caused by technician shortages coupled with weather problems and surges in demand. He also said SBC/Ameritech had been telling Great Lakes state regulators and legislators company was being hammered by local competitors, while telling securities analysts that Tex. was where most local competition was happening, and that elsewhere companies expected growth in vertical service revenues would offset access line losses to CLECs. Mathias also questioned SBC/Ameritech’s blaming regulators for delays in entering long distance and other new markets when companies were paying millions of dollars in penalties for failing to serve retail and wholesale customers they already had. He said that while Ameritech seemed to have improved service for retail customers, it still was falling short in wholesale service to its competitors. “We should determine whether the seeming discrepancies between the comments by SBC/Ameritech to securities analysts and to state regulators demand immediate clarification,” Mathias wrote, and asked whether states wanted another summit with Whitacre to hear explanations. Ameritech spokesman said there wasn’t any pressing reason for another joint session with regulators because service problems that led to first session in Oct. “by and large have been addressed.” He said Ameritech hired hundreds of technicians and its service performance was at or close to state service quality standards. In related action, SBC’s Whitacre Tues. publicly apologized for Ameritech’s poor phone service in appearance before 250 Mich. business leaders at Economic Club of Detroit. “I know we stumbled coming out of the gate” following Ameritech-SBC merger, he said: “I'm not saying the problems are over. We are all embarrassed by them, but we are well on the way to correcting them.” He said Ameritech was upgrading its network to digital fiber system, which he said should cut down on maintenance problems, and has hired and trained more technical workers. He said service quality in Mich. still wasn’t quite as good as in other states, but vowed that it “will be and will be quickly” as good as elsewhere in region.

VoiceStream and Deutsche Telekom (DT), in brief filing Wed. with SEC, disclosed they had entered into agreement with U.S. Dept. of Justice and FBI on issues related to proposed mergers of VoiceStream, DT, Powertel. Pact addresses national security and law enforcement matters in proposed deal, companies said, but didn’t outline details. They said they and federal law enforcers jointly had petitioned FCC to defer granting applications for merger approval until after agreement was reached with DoJ and FBI. Merger still must be approved by Commission, Committee on Foreign Investment in U.S., VoiceStream and Powertel shareholders.

Hearst-Argyle TV will use Harris Corp. DTV transmitters under new agreement. Deal at start covers 17 stations, allowing them to begin DTV broadcasting this year, companies said. Hearst-Argyle owns or manages 26 stations.