Ind. Utility Regulatory Commission (IURC) opened formal investigation into Ameritech’s massive service problems last year, as had it promised to do earlier this month when informal negotiations on expanded customer compensation for outages collapsed. IURC Exec. Dir. Michael Leppert said agency’s previous informal approach “has run its course. It’s time we take the next logical step” to examine Ameritech’s customer service and network management practices, and how they contributed to last year’s service debacle. Up to now, IURC has concentrated its efforts on getting quick improvement in Ameritech phone service rather then seeking reasons for mess. IURC said Ameritech service performance, although improved, still hadn’t met state’s service quality standards, and said investigation was necessary to build case it could use to petition state courts for fines against company. Ameritech spokesman said company wasn’t surprised by probe, but stood by its efforts to improve service and its commitment going forward to keep up its service quality. Consumer watchdog Ind. Citizens Action Coalition applauded IURC action but predicted Ameritech would be “very formidable adversary” as investigation proceeded. IURC will set procedural schedule in next few weeks.

Comsat said it won 4-year, $1 million contract to provide high-speed (128 kbps) data and voice satellite communications to Radisson Seven Seas Cruises (RSSC) Seven Seas Mariner.

Fifth U.S. Appeals Court, New Orleans, ruled 2-1 that La. PSC wasn’t immune under 11th Amendment from federal judicial review of its decisions on carrier interconnection agreements under Telecom Act. Court was ruling on AT&T challenge to PSC arbitration decision in interconnection dispute with BellSouth. Fifth Circuit held that La. PSC had waived its sovereign immunity rights when it agreed to arbitrate interconnection dispute under terms of Telecom Act. Court also ruled that “ex parte Young” doctrine applied in cases involving states’ alleged contraventions of Act’s Sec. 251 and 252. That doctrine allows federal lawsuits against states to halt violations of federal law. This was 4th federal appeals court to deny states 11th Amendment protection for their interconnection contract decisions. Previous decisions against states have come from 6th, 7th and 10th Circuits. U.S. Supreme Court last Oct. refused to review matter.

AOL Time Warner announced plans to repurchase up to $5 billion of merged company’s common stock and file universal shelf registration statement for $10 billion. After first board meeting Thurs., AOL Time Warner said it would begin buyback next month, making purchases from time to time over next 2 years, depending on market conditions. At same time, it will use $10 billion shelf registration to cover issuance of debt securities, common stock, series common stock, preferred stock, warrants. Company said moves would give it “greater financial flexibility” to take advantage of marketplace opportunities, boost return on capital, build shareholder value. Separately, AOL Time Warner CEO Gerald Levin donated $10 million to new National Cable Television Center and Museum in Denver in honor of his late son, Jonathan, N.Y.C. high school teacher murdered several years ago.

FCC rejected 5 petitions for reconsideration of modified rules for C- and F-block PCS auction that began Dec. 12. Petitions challenged rules that split C-block spectrum into 10 MHz blocks for 422-license auction. In order (CD Aug 28 p1), Commission reconfigured 30 MHz of C-block spectrum into 2 tiers, with first covering populations of at least 2.5 million and 2nd below that threshold. Two of three 10 MHz blocks in first tier and one of 3 blocks in lower tier are subject to open bids. Others are closed for entrepreneurial bidders. Alpine PCS, National Telephone Cooperative Assn., Northcoast Communications, OPASTCO, Rural Telecommunications Group (RTG) and U.S. Small Business Administration petitioned for reconsideration. On spectrum blocks, agency reiterated finding that “10 MHz is a viable minimum license size.” Order also: (1) Rejected Northcoast request to eliminate tiers and allow open bids only for single 10 MHz C-block license in each market. Northcoast raised concerns it wouldn’t be able to meet business plans to vie competitively for licenses in larger markets. (2) Rejected contentions by Alpine that by eliminating some entrepreneur eligibility restrictions, agency failed to follow statutory objectives, such as avoiding excessive license concentration. Some petitioners pointed to recent news reports in which large carriers said they had enough spectrum. Agency said by doing away with some, but not all, of eligibility restrictions for small business bidders, it balanced as many statutory goals as possible. (3) Denied request by Nextel to put in place bulk bidding procedure. (4) Rejected petitions for Northcoast, OPASTCO and RTG to increase bidding credits in open bidding as well as Alpine request on legislation passed by Congress in Aug. that granted qualifying Alaska Native regional corporations relief from transfer restrictions for small business bidders, as well as from unjust enrichment payment requirements. Legislation had effect of allowing Cook Inlet Region Inc. (CIRI) to transfer license to large carrier without paying unjust enrichment penalties. Alpine wanted agency to give same relief to entrepreneur bidders. If FCC were to reject that request, Alpine wanted it to amend auction rules to exclude CIRI from PCS auction altogether. Agency denied request, saying: “The relief accorded CIRI under the statute was specifically authorized by Congress and narrowly tailored.” Congress could have chosen to broaden relief to all similar bidders, but instead created exemption that applied to CIRI, order said.

Independent Cable & Telecom Assn. changed its name to Independent Multi-Family Communications Council (IMCC) and elected new 31-member board. Group, which represents private cable operators, multifamily dwelling unit (MDU) owners and product manufacturers and vendors, said it made switch to focus more on “improved products and services for multifamily community residents” and MDU owners. IMCC said it would continue pushing for repeal of cable mandatory access laws in states and elimination of “barriers to competition” at FCC.

Bidding in FCC’s C- and F-block PCS auction continued to edge up in small increments Fri., with total hitting $16.8 billion. Bids for top 3 participants were little changed, with Verizon Wireless at $8.9 billion, AT&T-backed Alaska Native Wireless $2.8 billion and Cingular Wireless-backed Salmon PCS $2.4 billion. DCC PCS had $539.4 million, followed by Cook Inlet/VoiceStream GSM with $510.4 million, VoiceStream PCS with $479.4 million, and Leap Wireless with $342.3 million. Competition appeared to have cooled somewhat for N.Y.C. licenses, whose highest bids have remained unchanged for last several rounds. Verizon has top bids of $2.05 billion and $2.03 billion for 2 licenses in that market, with Alaska Native Wireless bidding $1.5 billion for 3rd. Verizon also has top bids for licenses in L.A. and Chicago, at much lower price levels of $513.5 million and $494.6 million, respectively. Auction for 422 licenses began Dec. 12 and has gone 73 rounds, with FCC stepping up bidding last week to 6 rounds daily from 4 to accelerate pace. Among 15 most populous markets, Verizon Wireless has high bids for 9 licenses, Alaska Native Wireless for 2, Salmon PCS for 3 and DCC PCS for one in Washington.

Bill introduced in N.J. Assembly effectively would prohibit Verizon from seeking deregulation of retail or wholesale rates and services until its local market share fell below 50%. Measure declares that Verizon’s loss of half its current market share would be proof that effective local competition existed in state. At that point, company would be allowed to seek rate and service deregulation. Legislation (AB-3122/S-1522) would act by tying variety of regulatory requirements to market share test, including requirement for cost-based Verizon rates for unbundled network elements and carrier access, performance standards for wholesale services to CLECs, mandatory service quality standards, caps on retail basic service rates. Bill also would require full 3rd party testing of Verizon operation support systems and 90-day monitored commercial operation study as soon as practical, new service performance standards for all local exchange providers within 9 months of enactment, review of state’s service quality standards within 12 months of enactment. Bill would establish state universal service fund for high-cost areas. Another new Assembly bill (A-3103) would allow Board of Public Utilities to suspend payment of dividend distributions by any operating unit of an energy or telecom utility if board found company was providing inadequate service or was guilty of other major rule violations. Measure would allow company to place dividend payments in escrow pending finding that it had remedied problem. Bill is similar to Ohio law that state regulators last year used against Ameritech because of company’s inadequate service. Both N.J. bills are before Assembly’s Telecom & Utilities Committee.

In series of DTV technical decisions, FCC affirmed 8-VSB modulation, started rulemaking on requiring TV sets to have DTV tuner and took several other actions. FCC Chmn. Kennard said decisions would give broadcasters “the clarity and flexibility… to accelerate the buildout of their DTV operations.” He said he was pleased DTV tests “put… to rest” debate over modulation standard. Comr. Ness said FCC actions removed transition uncertainty and it was “time for all industries involved in the digital broadcast food chain to come together and redouble their efforts to achieve a speedy transition.”

Women in Cable & Telecom (WICT) expressed concern about FCC’s recent report showing that women held fewer jobs in cable industry than year ago (CD Jan 18 p10). Of 2,752 overall jobs lost in cable 1998-1999, group said women lost “a startling 2,025, or 74%.” WICT called it “even more troubling” that women made up “just 34.4% of officials and managers for cable operators” in 1999, down from 35.2% in 1998 and 36% in 1997. Group warned again that if trend continued, “it would begin to cripple” cable industry as it competed with other industries for top talent. It urged cable operators to “make the fundamental changes that will address these employment issues” and provide women with more female role models, more opportunities for advancement and greater recognition of company contributions.