Ariz. Attorney Gen. Janet Napolitano ruled expansion of Ariz. Corporation Commission to 5 members from 3, which voters approved in Nov., won’t be effective until 2 additional commission members are selected by voters in 2002 general election. She said plain language of ballot question and fact that legislature didn’t budget for additional members in 2001-02 fiscal cycle clearly showed it didn’t intend that ballot proposition create vacancies that required interim gubernatorial appointments. On related question, Napolitano said current commissioners could be elected to one additional 4-year term when their present terms expired. She said past commissioners, who previously were barred by law from seeking commission seat ever again, could run for 2nd term on agency starting with 2002 elections. With legal questions settled, agency Comrs. Marc Spitzer and Jim Irvin agreed Tues. that Comr. William Mundell was commission’s new chmn. Chmn. serves indefinite term and always casts final vote.
BellSouth told FCC it was opposed to request by Dept. of Justice and FBI for additional security requirements under Communications Assistance for Law Enforcement Act (CALEA). DoJ/FBI asked agency in Nov. to require carriers to: (1) Submit name, phone number, e-mail address and other contact information for person designated as point of contact for CALEA issue. (2) Notify FCC in writing or by e-mail of any change in such contact information. BellSouth said requirements were “unnecessary, burdensome and inconsistent with the Commission’s minimal set of guidelines for compliance with CALEA’s systems security and integrity provisions.”
Hearst-Argyle TV will take over management of WMUR-TV (Ch. 9, ABC) Manchester, N.H., under local management agreement, companies said. Deal is effective until Hearst-Argyle completes acquisition of station from Imes Communications.
Research firm pulver.com forecast that wireless revenue would top local wireline revenue by 2003, based on recent price reductions by mobile providers. “The wireless industry has erased the twentyfold wireline price advantage that existed in 1984, completely changing the business case for who represents a potential wireless customer,” pulver.com CEO Jeff Pulver said. Report said if 25% of residential wireline customers convert to wireless, industry would gain 26 million subscribers, representing $14 billion potential revenue increase. That would give wireless industry revenue of $91 billion in 2003, compared with $90 million for local wireline industry, pulver.com projected.
Helgi Walker, aide to FCC Comr. Furchtgott-Roth, will move to White House as assoc. White House counsel and special asst., his office said. Walker, who specialized in mass media and cable issues, will be replaced by Ben Golant of FCC Cable Bureau.
U.S. Appeals Court, D.C., ruling Tues. that rejected SBC’s advanced services subsidiary (CD Jan 10 p1) appeared to have raised more questions than it answered. Observers questioned Wed. whether decision might pressure Congress to revise Telecom Act to account for advanced services, how ruling would affect similar arrangement at Verizon and how it might play out under new Republican FCC. Court overturned trade-off FCC made with SBC: FCC allowed SBC to provide advanced services free of interconnection requirements if company formed separate affiliate to provide those services. In response to appeal filed by Assn. of Communications Enterprises (ASCENT), court ruled FCC didn’t have authority to forgo interconnection requirements of Sec. 251(c) just because SBC was providing advanced, rather than basic, services and using separate subsidiary. ASCENT represents competitive carriers, particularly those that resale ILEC service.
Ameritech told Ind. Utility Regulatory Commission (IURC) it wouldn’t agree to agency’s request that Ameritech give bigger credits to customers that suffered lengthy service outages during last summer’s service quality crisis. Ameritech last fall voluntarily offered residential customers flat $12 credit and small-business customers flat $40 credit. But IURC last month said compensation was insufficient and strongly suggested company should pay up to $20 per outage day to residential customers and up to $40 per outage day to businesses, similar to outage compensation plan Ameritech agreed to in Wis. But in meeting Tues. with IURC Executive Dir. Michael Leppert, Ameritech Ind. Pres. George Fleetwood said his company wouldn’t be able to honor IURC’s request and further negotiation would be pointless. Ameritech spokesman said carrier believed best use of its resources was investing in network improvements, not issuing additional credits. He said different conditions in Wis. prompted Ameritech to issue larger outage credits there, but he didn’t elaborate. IURC’s Leppert said IURC up to now had hoped informal prodding of Ameritech through requests would have been enough to improve service and get adequate compensation for customers. He said next step would be formal investigation into Ameritech’s network operations and service management. But IURC has no legal power to fine utilities except as part of negotiated regulatory agreements. Pending proposal for renewal of Ameritech price cap regulation, which comes up for hearing Jan. 16, includes up to $30 million in annual penalties for service quality failures, $746 million in network investments and $180 million in rate cuts.
Moody’s assigned B3 rating to XO Communications’ proposed $450 million convertible subordinated notes to “reflect the relatively early development stage of the company with positive cash flow generation… still likely to be approximately 1 to 2 years away.”
N.Y. PSC approved rate restructuring plan for Citizens Telecom that will make rates uniform in all of carrier’s service areas across state by 2005. New rate structure will replace hodgepodge of rates from company’s acquisitions of small telcos over last 20 years that led to situations where customers were charged substantially different rates for similar services without cost justification for difference. Plan adopted Tues. provides for phasing in new rates over 4 years, starting in 2002, with annual increases limited to $1 monthly for residential customers and $3 per line monthly for business customers. Customers receiving rate cuts under restructuring will see them implemented this month. New rates also will cover Citizens’ revenue losses from expiration in near future of long-term intercarrier compensation agreements with Verizon for extended local calling. Plan also eliminates Citizens’ rural zone charges to customers beyond base rate areas of its local exchanges and makes Citizens’ local calling areas similar in size to those of Verizon. Citizens is 4th largest incumbent in N.Y., with 307,000 lines in 126 exchanges scattered across state.
Paxson announced series of TV station transactions, including: (1) It agreed to sell KBPX (Ch. 13) Flagstaff and WPXS (Ch. 13) Mt. Vernon, Ill., to Equity Bcstg., terms not disclosed. Stations will remain Pax affiliates. It said sales were move toward complying with FCC ownership cap. Deals mean Paxson stations will reach 33.1% of U.S. households, it said. (2) Pax TV signed joint sales agreements with Scripps-owned NBC stations in Kansas City (KSHB-TV, Ch. 13), Palm Beach (WPTV, Ch. 5), Tulsa (KJRH, Ch. 2). NBC stations will provide sales and marketing infrastructure for Pax stations. (3) Paxson signed joint sales agreement with Dispatch Bcst. station WTHR-TV (Ch. 13) Indianapolis (NBC). WTHR-TV will provide sales and marketing for WIPX-TV (Ch. 63) Bloomington, Ind.