In Demand signed deal with AtomFilms to offer some of latter’s short films to digital cable operators and subscribers on video-on-demand (VoD) basis, starting in March. Companies said AtomFilms would make available 10 movie titles, as well as compilations of 5 comedy and action shorts, TV series episodes and other programming. Deal comes after In Demand signed several VoD licensing agreements with Comedy Central and Court TV.

OpenTV signed deal with Bell ExpressVu to offer interactive TV services to Canadian DBS subscribers, starting in summer. OpenTV said services would include interactive weather and TV commerce. Bell ExpressVu will add 725,000 subscribers to OpenTV’s potential reach of more than 30 million TV viewers worldwide.

Nextel is buying 900 MHz Specialized Mobile Radio (SMR) spectrum from Arch Wireless for $175 million plus agreement to invest $75 million in preferred stock. Nextel, which dropped out of FCC’s C-block PCS auction in recent weeks as prices climbed, said it planned to advance $250 million in loans to newly created Arch subsidiary that would hold 900 MHz licenses until transfers were approved, which Nextel expects will be finalized in 6 months. Nextel Pres. Timothy Donahue said agreement would give company 20 MHz of SMR spectrum in 800 and 900 MHz bands in 52 of top 100 markets. Arch Chmn. Edward Baker said decision to sell SMR spectrum was result of company’s upgrade of its 2-way network, which is designed to increase capacity. As result, SMR licenses would be redundant to its spectrum requirements, he said. Arch has 5 narrowband-PCS licenses. Separately, Fitch assigned B+ rating to Nextel’s $1.25 billion senior note offering. Fitch said rating reflected company’s “strong operating performance,” improving credit measures, strong liquidity position. Fitch said those positive factors were “somewhat offset by an increasingly competitive wireless industry and uncertainty with respect to Nextel’s possible participation in the upcoming 700 MHz auction.”

FCC issued order Wed. requiring incumbent LECs to make their directory assistance databases accessible to competing directory providers. Agency said it was essential for competitive directory providers to have access to those updated databases. Because ILECs derive their databases from their telephone service order processes, they continue to maintain control over most listings, FCC said. Commission said access must be on nondiscriminatory basis and be available at reasonable rates. CLECs often don’t have resources to provide their own directory assistance so they depend on those alternative providers, FCC said in order. However, Commission said ILECs didn’t have to grant access to national or “nonlocal” directory assistance databases because ILECs didn’t have monopoly control over them. Agency also resolved some outstanding issues relating to access to subscriber information by Internet-based directory publishers. It said Internet publishers should have same nondiscriminatory access and reasonable rates as other directory providers. Commission also concluded that publishers of telephone directories on Internet shouldn’t be restricted in how they displayed or allowed customers to access such data. Like several other orders issued this week, this one was approved on Fri. and included then-FCC Chmn. Kennard’s vote.

Provision of entertainment is merely incidental to cable operator’s demonstrated function of transmitting clear, viewable signal, N.Y. State Supreme Court Appellate Div. ruled in overturning state Tax Appeals Tribunal’s finding that 2 state cable operators were taxed properly as general business as opposed to transmission corporations. Acting on petition challenging tribunal’s finding by NewChannels and Upstate Community Antenna, court in 5-0 decision termed as “entirely irrational” tribunal’s conclusion that transmission was merely means by which cable operators conveyed their products to subscribers and therefore was incidental to their actual business of providing entertainment. Primary basis for tribunal’s conclusion that petitioner’s weren’t engaged in transmission business, court said, stemmed from its belief that focus of cable service wasn’t transmission of various signals but provision of entertainment. Court said record made plain that cable operators: (1) Have limited capacity to manipulate signals they capture from cable programmers and transmit to subscribers. (2) Have no control over content of signal received aside from getting “rid of ghosts,” clarify signal or amplify it. (3) Can’t dictate when or how many times particular program will be broadcast. (4) Can’t sell ads on local or premium channels they offer. With exception of local origination programming they are required to carry, petitioners offered no original programming, court said. NewChannels and Upstate Community Antenna filed suit after tribunal upheld state Dept. of Taxation & Finance decision to assess deficiencies against 2 companies on ground that they should have filed tax returns as general business corporation rather than transmission corporation.

FCC ruling on 700 MHz spectrum auction (CD Jan 24 p6) will “demonstrate to shareholders the value of the television spectrum,” Pax TV said. Chmn. Lowell Paxson said new rules would allow market to determine adequate compensation for broadcasters to vacate spectrum early. He said company, which owns 18 TV stations in band, plans to “take a leadership position and set the tone for negotiations with the wireless telecom winners in the upcoming auction in an effort to speed the transition to digital television and monetize the value of our spectrum.”

Request by Verizon Wireless last week that FCC postpone 700 MHz auction received broader wireless industry backing Wed., with submission of comments by Cellular Telecommunications & Internet Assn. (CTIA) supporting postponement. CTIA reiterated arguments made by Verizon that delay until Sept. 6 was warranted, in part to allow enough separation between current PCS auction and start of 700 MHz bidding. CTIA also cited factors such as additional time needed by bidders to prepare for first FCC auction that would use combinatorial bidding. “Conducting the auction under the existing uncertainty would devalue the 700 MHz spectrum and increase the likelihood that the American public would not realize the full economic and public benefits of a 700 MHz auction,” CTIA said.

PBS Pres. Pat Mitchell received $315,000 salary, excluding bonuses or other incentives, in fiscal year ending June 30, 2000. Salary is twice as much as $151,658 her predecessor, Pres. Ervin Duggan, received in FY 1999, when salary cap was in place.

FCC Wireless Bureau’s Auctions Financing & Mkt. Analysis Branch denied waiver request by IVIDCO to be deemed eligible to participate in agency’s restructuring plan for 218-219 MHz. Company argued it had pending grace period or waiver request on file at Commission before it missed payment for 218-219 MHz licenses, resulting in automatic cancellation. However, Bureau granted IVIDCO request that it be able to examine grace period requests filed by current and former licensees. In 1999, FCC issued order that modified rules for 218-219 MHz, formerly Interactive Video & Data Service band, and created financial restructuring plan for eligible licensees. Ineligible licensees included those that weren’t current in their installment payments as of March 16, 1998.

“We need to move the process of Sec. 271 into high gear,” new House Commerce Committee Chmn. Tauzin (R-La.) told us in Wed. interview on his priorities for House session that begins Jan. 30. On none of his core issues was Tauzin ready to propose specific legislation. He said panel would explore several options for getting Bell companies into long distance, depending on FCC cooperation. Tauzin also said he still was unsure how much legislation would be required to reform FCC and how much new agency Chmn. Powell could accomplish on his own. He said he would ask Committee “literally to do a top-down review of the digital [TV] transition,” which he said was “really off track now.”