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.

Demand for applications will drive growth for public network and enterprise markets, Telecom Industry Assn. (TIA) said as it released its 2001 MultiMedia Telecommunications Market Review and Forecast. Enterprise spending on equipment and software reached $92.1 billion in 2000, and network service providers spending hit $53.2 billion, report said, and despite significant factors creating downward pressure, “we believe there are stronger factors creating upward pressure on spending.”

FCC Wireless Bureau is seeking comments on request by Verizon Wireless to postpone 700 MHz auction beyond scheduled date of March 6. Company wrote to FCC Wireless Bureau Chief Thomas Sugrue Jan. 18, asking that auction be postponed to ensure that there would be “reasonable interval” after close of current C- and F- block auction, bureau said in notice released Thurs. Verizon Wireless contended in letter that if auction were held on schedule, participants wouldn’t have enough time to “accurately assess” their interest in acquiring additional spectrum. FCC has Feb. 2 deadline for participants to file short-form applications to participate in bidding. Comments are due Jan. 24. Most recent postponement of auction came last year, when FCC agreed to move it from Sept. 6 at request of several carriers. Verizon Wireless is seeking 2-month delay as “prudent,” although it argues that longer delay is required. Verizon cited issues that remained with incumbent analog broadcasters in Ch. 60-69 spectrum that’s at stake in auction. Carrier said further notice of proposed rulemaking on possible mechanisms for clearing band in advance of DTV transition date of 2006 still was pending. “Consequently, no new band-clearing mechanisms have been established and there is no greater certainty today about the prospects for clearing the 700 MHz band than there was last summer,” Verizon wrote.

Broadcasters are averaging 4 hours of children’s TV programming per week, one more than FCC’s 3-hour guideline, FCC Chmn. Kennard said in letter to Capitol Hill Thurs. Letter accompanied FCC reports on children’s TV rules and on DTV public interest standard. On kidvid, Kennard said more still needed to be done, including limiting preemption of children’s programming and publicizing availability of shows. On DTV public interest, report listed 11 possible ways for broadcasters to “fulfill their statutory duty to serve the public interest,” Kennard said. He said principles should “provide useful guidance” for congressional discussions with broadcasters. Principles cited in report include airing local issue-oriented programs, carrying PSAs, “enriching children,” protecting children from harmful programs, “enhancing democracy,” providing disaster and emergency information, protecting consumer privacy, making programming accessible to disabled, using technology to enhance service.

By 4-1 vote, FCC adopted notice of inquiry (NOI) on interactive TV (ITV) services Thurs., starting formal proceeding that it promised when it approved AOL’s takeover of Time Warner (TW) with additional regulatory conditions late last week. But Commission backed away from weightier, more urgent proposed rulemaking on ITV issue that its Cable Bureau staff had recommended, bowing to strong lobbying from cable, to disappointment of consumer advocates and other cable critics. Move follows regulatory conditions imposed on AOL-TW deal last month by FTC that prohibited merged company from interfering with content supplied by other ISPs and ITV providers or discriminating against such competitors (CD Dec 15 p1).

Don’t hold your breath for FCC release of reciprocal compensation order because there’s nothing circulating right now, Comr. Furchtgott-Roth told reporters Thurs. at his monthly breakfast meeting. He said “outside parties” usually knew more than he did but this was exception: “I've never seen an item where the outside is more out of touch than reciprocal compensation. There isn’t an item being circulated. It was pulled back ages ago. It ain’t happening this week.” Furchtgott- Roth also said he was “cautiously optimistic” that “change in Administration will lead to improvements at the Commission,” such as toning down FCC’s merger review role. FCC chairman is “very powerful position relative to other agencies” because of its “CEO function,” Furchtgott-Roth said. In that role, chairman can “initiate new programs or stop discretionary programs.” Merger review is one of those discretionary programs because FCC doesn’t have statutory requirement to review mergers, other than acting on license transfers, he said. He said he didn’t anticipate deadlocks if agency ended up with 4 commissioners, split 2-2 on party lines. FCC rarely divides on party lines to begin with, he said. “A lot is made about partisan divisions but I don’t see it.” He again criticized FCC for “collusion with the FTC” because staff of 2 agencies worked together on some aspects of review of AOL takeover of Time Warner. Each agency has its own mandate in reviewing such transfers and it’s “very improper” to coordinate those reviews, he said.

Utah Gov. Mike Leavitt (R) called for collaboration between state’s telecom carriers and its “professional communities” to encourage high-tech companies to locate in state. In his “State of the State” address, he also called for coordinated efforts to bring all of state’s communities into “New Economy” by expanding high-speed telecom services in rural areas, announced formation of new “Utah/Silicon Valley Alliance” to acquaint new entrepreneurial startups with advantages of locating in Utah, called for state- funded bonuses of up to $20,000 for teachers of advanced technology and math skills who commit to staying at least 4 years in Utah high schools. He also announced associated life-style- oriented initiatives addressing education, housing, water and open space.

Speculation about replacement for FCC Chmn. Kennard continues. Among latest rumors: (1) One telecom source speculated Thurs. that Bush might name Republican Comr. Powell interim FCC chairman while also appointing Texas PUC Chmn. Pat Wood to Commission. Under this scenario, Powell would eventually move to high antitrust enforcement post in administration, allowing Wood to take over as FCC chairman. Besides role in Dept. of Justice, source said, Powell could become new FTC chairman, replacing Clinton appointee Robert Pitofsky. Source also speculated that Republican Comr. Furchtgott-Roth would leave Commission soon, opening another seat for Bush nominee. (2) Another source said one of FCC’s Democratic seats may be filled by Ivan Schlager, former Democrat staff dir. on Senate Commerce Committee and now at Skadden, Arps, at request of Sen. Hollings (D-S.C.), ranking minority member of Committee.

PBS won’t be affected by threatened strike on production of programming this spring (CD Jan 17 p6) because it has its guild agreements in place, Pres. Pat Mitchell told recent PBS executive session in Pasadena. Answering question, she said she didn’t want PBS or “anyone else to benefit from a strike, which is going to be a hardship for everyone.” PBS Vp-Programming (West) Coby Atlas said many independent producers worked through PBS individual stations, which have union agreements, “and so they can write for us. People have expressed gratitude, actually, that they can work for us during the strike, but we certainly don’t want to benefit from somebody else’s hardship.”