Federal Communications Commission (FCC)

NARUC officials, concerned about possible reduction in state authority, are scheduled to get briefed today (Wed.) on an industry proposal to reform intercarrier compensation (CD Aug 17 p1). The plan announced Mon. by the Intercarrier Compensation Forum (ICF) would unify the disparate intercarrier payment systems used by the telecom industry -- applying not only to interstate but also intrastate communications that tend to be state regulators’ bailiwick.

Cable overbuilder RCN, struggling to emerge from bankruptcy, told the FCC that it should implement a la carte pricing for cable networks, on a “voluntary, market-supported basis,” saying doing so would satisfy consumer demand for competition, choice and control. RCN’s comments were among many replies in the FCC’s proceeding on a la carte pricing for cable and satellite. The FCC is examining the issue at the behest of several members of Congress, including Sen. McCain (R-Ariz.)

Fifty executives from telecom, mass media and high-tech companies were among the 200 executives that publicly endorsed Sen. Kerry (D-Mass.) for president Wed. Kerry made the announcement in Davenport, Ia., a state then-Vice President Gore won by 4,144 votes (0.3%) in 2000; as it happens, President Bush was holding a rally mere blocks away. Kerry spoke with several executives in attendance, including News Corp. COO Peter Chernin and Oracle Pres. Charles Phillips. Most of the 50 executives have a long history of support for Democrats, although 6 have given to Bush, during the 2000 Presidential campaign or more recently. Many supported other Democratic candidates in the primaries.

One of the few surprises at Wed.’s FCC mostly well scripted meeting was a strong statement from Comr. Copps warning that the FCC is still falling short on homeland security. Shortly after the session’s start, Copps -- responding to an FCC report on post-Sept. 11 communications changes that led off a meeting largely focused on homeland security -- addressed at length Commission shortcomings. Sources involved with emergency communications said Thurs. that issues remain, echoing in part Copps’ statements. Copps, sources said, delivered what he viewed as a moderate speech.

The FCC tentatively concluded Wed. that CALEA applies to facilities-based providers of “any type of broadband Internet access service -- including wireline, cable modem, wireless and powerline -- and to managed or mediated [VoIP] services.” This was the wording of a rulemaking launched to determine the appropriate legal and policy framework for implementing CALEA, particularly regarding broadband access and services. The agency said the tentative conclusions were based on its proposal that such services fall under CALEA as “a replacement for a substantial portion of the local telephone exchange service.” But FCC officials said CALEA wouldn’t apply to “non-managed” P2P VoIP services such as those provided by Pulver.com or Skype. FCC Comrs. Copps and Adelstein concurred.

Little would change for Cox in terms of FCC reporting requirements if the company were to go private, officials told us. Cox Enterprises (CEI) announced it was proposing to take the company private by buying out the publicly held minority interest (38%)for $32 per share, or about $7.9 billion. Cox CEO James Robbins and other top industry officials have been saying for some time that cable stocks are trading at depressed levels. CEI said in a statement that it wanted to make additional infrastructure investments as the business grows increasingly competitive, and many on Wall St. would prefer immediate returns to more investment and possibly delayed returns.

House Commerce Committee Chmn. Barton (R-Tex.) pledged legislation next year to improve the administration of the federal E-rate program, beset by scandal at the local level. Speaking at a subcommittee hearing Thurs. that delved into fraud in E-rate funding in San Francisco, Barton told the audience “we're going to make structural changes in this program statutorily, probably in the next Congress… to make sure this doesn’t happen again.” The hearing before the Subcommittee on Oversight & Investigations was run by Rep. Walden (R-Ore.) because Subcommittee Chmn. Greenwood (R-Pa.) announced his retirement Thurs.

SAN FRANCISCO -- VoIP could drain Cal.’s universal service coffers of $400 million in 2008 as it grabs 43% of the state’s voice business, predicted the staff of the state PUC. The so-called High Cost Funds A & B -- to promote service in high-cost areas through subsidies to SBC, Verizon and 17 small companies -- are expected to lose $114-$253 million, said Jack Leutza, the PUC’s Telecom Div. dir. The Universal Lifeline Fund, providing subsidies to low-income users, is seen losing $48-$107 million, the Deaf & Disabled Communications Fund $13-30 million and the Cal. Teleconnect Fund for school, library and rural medical and community- based organizations $8-$17 million, he said on a Tues. night VoIP panel here organized by Women in Telecom.

Interoperable public-safety communications is still years away, govt. panelists told the House Govt. Reform National Security Subcommittee. The hearing focused on a GAO report released Tues. and featured witnesses who downplayed expectations for interoperability. FCC Wireless Bureau Chief John Muleta told Subcommittee Chmn. Shays (R-Conn.) it would be “significant” if it took just 5 years for the govt. to develop effective planning for interoperability. Shays said 5 years of work on “just planning” would be a “huge failure.”

FCC Comr. Abernathy encouraged minority broadcasters to take advantage of new communications technologies to increase minority business ownership. Opportunities lie “not just in radio or TV, but Wi-Fi, broadband. You don’t need as much capital and it’s kind of a free-for-all right now,” Abernathy said. Abernathy, speaking at the Minority Media & Telecom Council conference Tues., said minority broadcasters shouldn’t look only at existing media companies.