With FCC overdue to act on reciprocal compensation, Bell companies and CLECs competed Wed. to present their positions to Commission and news media just in case agency schedules vote on issue at its Jan. 11 agenda meeting. If item is placed on next week’s agenda, all lobbying will have to stop tonight (Jan. 4) under agency’s “sunshine” rules. FCC hasn’t said whether it will take up reciprocal compensation at meeting, but it originally planned to vote on issue by year’s end and then deal with broader proceeding on intercarrier compensation soon afterward. “It’s ripe for decision,” industry source said.

Citing lack of funding and fall-off in membership, founder Dorothy Swanson announced Viewers for Quality TV would shut down early this year. Founded in 1984, Va.-based group led efforts to keep on air many low-rated TV network programs that members considered high-quality.

In defiant response to AT&T Broadband’s request for waiver of franchise fees on cable modem service (CD Jan 3 p3), Lakewood City, Cal., warned company that withholding payment of franchise fee “will jeopardize your franchise or subject you to penalties.” Accusing AT&T of misstating federal policy in its letter requesting waiver, Asst. City Mgr. Michael Stover said city should neither agree to waive franchise fees nor indemnify AT&T against various potential costs. “We expect AT&T Broadband to continue to pay all required franchise fees, including those based on cable modem service revenue,” city said. Referring to AT&T’s contention that it passed through franchise fee on cable-delivered Internet service to subscribers under federal law, he said Telecom Act “only permits cable operators to pass through increases in franchise fees on regulated cable service rates. Federal law does not authorize or otherwise address the ability of cable operators to pass through franchise fees on cable modem and other services.” Although federal law allows cable operators to include line item on subscriber bills indicating amount assessed as franchise fee, Stover said including line item was “entirely different concept” than passing through those costs to subscribers. In City of Dallas v. FCC, 5th U.S. Appeals Court, New Orleans, “made it clear that, even when such a line item is included on subscriber bills, franchise fee are imposed upon cable operators, not on subscribers,” he said. As for concerns raised by AT&T over potential class action lawsuits, he said that since franchise fees were paid by AT&T and not subscribers, there were no fees collected from subscribers that could be refunded. “This imaginary exposure to litigation is not a legitimate basis for not paying the required franchise fees.” However, Stover proposed 2 options to allay AT&T concerns about potential litigation: (1) Refrain from itemizing franchise fees on cable modem service because federal law doesn’t require such action. Doing so won’t reduce amount company can collect from subscribers “because you can essentially set your rates at any level you choose.” (2) Agree, as alternative, to pay 5% telecom franchise fee on cable modem service. That appears to be consistent with 9th U.S. Appeals Court, San Francisco, ruling classifying cable modem service as telecom service, he said.

McLeod USA announced plans to offer $450 million of its senior notes due 2009 and said it expected to meet or exceed market expectations for 4th quarter and year-end. Company will host conference call today (Jan. 4) to discuss offering and expectations.

Four major MSOs swapped or purchased cable systems from one another as new year began, furthering trend toward industry consolidation that has snowballed in last 3 years. Adelphia, AT&T Broadband, Comcast and Mediacom all announced system exchanges or acquisitions that would result in 2.4 million subscribers, or more than 3% of all U.S. cable customers, changing corporate hands overnight. Transactions will create even bigger cable clusters in such large markets as N.Y.C., L.A., Washington, Chicago, Detroit, Philadelphia, Atlanta, southeastern Fla. But some industry observers said deals, concluded as FCC continued to weigh final govt. approval of AOL’s pending purchase of Time Warner (TW), would lead to even more as scale became ever more important. “Cable consolidation is not over,” ABN AMRO analyst John Martin said.

Portugal Telecom’s mobile business arm signed letter of intent Wed. to select Alcatel to provide multimedia technology. Alcatel will install infrastructure for 1,000-site UMTS/3G network. Company guaranteed high-speed, high-quality mobile UMTS service would start Dec. 1, 2001.

Ida. Dept. of Consumer Affairs began accepting names for its no-call list under 2000 state law that will take effect May 2. Ida. charges $10 registration fee for first 3 years on list, plus $5 renewal fee to keep name on list another 3 years. Ida. Attorney Gen. Albert Lance and Gov. Dirk Kempthorne were among first to sign onto list Tues., along with legislative leaders. Those who register by March 31 will be on first list published in April. Those who miss deadline will be on first quarterly update in July. Violators face penalties of $500 per call on first offense and up to $5,000 per call for subsequent offenses. Ida.’s no-call law exempts calls from tax-exempt nonprofit organizations and from businesses calling their established customers.

Cal. Gov. Gray Davis (D) declined to name immediate replacement for PUC Comr. Josiah Neeper, who left agency Jan.1 when his term expired. Political observers in Cal. said Davis might have delayed appointment to ensure bipartisan vote this week on controversial proposal for major emergency increase in retail electric rates. State’s 2 largest electric utilities say boost is necessary to stave off imminent bankruptcy due to soaring wholesale electric prices. Utilities say they need 30% boost, with PUC reportedly prepared to grant up to 20% in vote this week. Departure of Neeper leaves PUC with 2-2 partisan split. Observers said that if Davis had filled Neeper’s seat, his appointees would form PUC majority and his administration would bear all political heat for rate boost.

NATPE said its Jan. 21-25 convention in Las Vegas would highlight 3 major sessions designed to provide “insight about the hottest public policy issues” in Washington in new Bush Administration. One panel, “The Digital Spectrum: Repositioning TV as the Great Broadband Solution,” is to help broadcasters and programmers “better understand what the digital future holds,” Assn. said. Another session will focus on diversity behind and in front of camera, during which industry will be presented “report card” on its accomplishments in last 12 months. Third panel will be on “contentious issue of inappropriate television programming for children” -- subject that received attention of both major Presidential candidates last fall.

VoiceStream is partnering with RealNames to provide keyword wireless Web searching for Web-enabled cellphones. For example, typing in Zagat instead of full URL would take user directly to Web site. New Internet address system uses network of routers and proprietary “in-memory” databases created by RealNames that basically is “layered” over Internet, said Chief Technical Officer Nico Popp. In Nov., RealNames partnered with Phone.com, mobile internet software maker, by putting RealNames Keyword Navigation System on Phone.com’s UP.Link server. RealNames key word system is multilingual -- Japanese Kangi, for instance can be entered into system, Popp said.