Datacasting company iBlast said it began field tests of its broadcast data service at TV stations KTLA L.A., KICU-TV San Jose, KGTV San Diego, KPNX Phoenix-Mesa, WOFL Orlando. IBlast expects to deliver data to PCs via network of 225 stations when it starts commercial service. Data being delivered include video clips, software, MP3 audio, games, other broadband content. Field tests are to last through March and company expects to reach 50% of U.S. households by end of year.

Buyout firm Forstmann, Little agreed to buy Citadel Communications for $1 billion plus assumption of $1 billion debt, companies said. Citadel owns 143 FM and 66 AM stations in 44 markets.

WorldCom asked Mo. PSC to suspend its review of Southwestern Bell Telephone (SBT) Sec. 271 interLATA long distance bid. WorldCom said Jan. 8 decision by 8th U.S. Appeals Court, St. Louis, striking down PSC- approved interconnection agreements based on total element long run incremental costs (TELRIC) meant local exchange competitors had no legal access to SBT’s network. WorldCom contended it was impossible to have legal interconnection agreements based on illegal prices. It said most other CLECs in Mo. based their interconnection agreements on AT&T- SBT contract, so court’s action also voided those agreements, meaning SBT couldn’t be in compliance with Sec. 271 checklist. SBT said it would continue to honor rates company agreed to before its long distance application, but some CLECs and Mo. Office of Public Counsel said competitors were in position of relying on SBT’s oral promises, with nothing in writing that was enforceable. Court’s decision was on an SBT appeal of PSC arbitration decision in interconnection pricing dispute that upheld AT&T’s position favoring TELRIC-based prices. Mo. PSC is considering asking for clarification from court, but also could ask that decision be stayed pending appeal to U.S. Supreme Court.

With FCC Chmn. Kennard scheduled to leave Fri., there’s still no word from Bush Administration on replacement, sources close to process said Tues. Comr. Powell remained likely choice, at least in interim, but rumor that he already had talked to one bureau chief about staffing proved unsubstantiated.

Verizon resubmitted its application to FCC Tues. to offer long distance service in Mass. under Sec. 271 of Telecom Act. Verizon Senior Vp Thomas Tauke said new version incorporated company’s original application “and adds further evidence demonstrating that the company provides competitors nondiscriminatory access to DSL-capable telephone lines.” Verizon filed original petition Sept. 22 but withdrew it Dec. 18 after FCC Common Carrier Bureau said it didn’t have enough information to substantiate Verizon’s claim that it offered competitors nondiscriminatory access to DSL lines. Similar concerns were expressed by Dept. of Justice in Oct.

FCC’s compromise approval of AOL takeover of Time Warner (CD Jan 16 p1) received generally good early reviews among Hill staffers. While instant messaging (IM) conditions won’t have immediate impact, said one, at least “FCC has put its imprimatur on IM interconnection.” Less pleased was economist Rick Warren-Boulton of Microeconomic Consulting Research & Assoc. (MiCRA), which submitted report to FCC detailing dangers of allowing AOL not to interconnect to IM competitors. Warren-Boulton told us FCC’s conditioning its IM interconnection requirements on AOL-Time Warner’s (TW) offering new broadband IM services wasn’t “the kind of thing that an economist would construct.” He said there were 2 possible outcomes, and FCC’s order wasn’t ideal either way: (1) AOL-TW offers new services quickly, in which case FCC “would be better off saying just do it.” (2) AOL-TW delays new offerings to avoid requirements, creating “problem for technical change in general.”

Qwest said it’s buying back 22.22 million shares of its stock from BellSouth for $1 billion ($45 per share). That will leave BellSouth with 51.8 million Qwest shares -- 3.1% of those outstanding. BellSouth also agreed to buy $250 million in services from Qwest over 5 years. BellSouth will pay for those services in Qwest stock over 4-year period. Qwest said it would continue its business relationship with BellSouth, which was developed to help both companies more effectively provide large business customers with complete packages of business services. Qwest said it agreed to repurchase its shares because it thought “Qwest stock is a good value at $45 per share.” BellSouth said funds would go toward its data and wireless operations.

Although she hasn’t formally announced her resignation, FCC Cable Bureau Chief Deborah Lathen confirmed she planned to leave Commission soon after its new Republican chairman took over. Lathen, who has run Cable Bureau since spring 1998 and presided over further deregulation of cable industry, told us Fri. that she hadn’t decided on departure date but “will ensure a smooth transition” to next bureau chief. She said she also hadn’t decided what she would do next. At Western Cable Show in L.A. in late Nov., Lathen said her plan was to complete AOL- Time Warner merger review and then “wiggle my toes in the sand.” She brushed off questions about her legacy, saying she wasn’t focusing on that and considered it “the height of arrogance” to spin others about one’s record of accomplishments. “The way you live your life is your legacy,” she said. “Everyone in Washington is always talking about their legacies… I've tried to have broader aspirations.”

Tom Paro, 77, pres. of MSTV 1979-1988, died Jan. 11 at Suburban Hospital near Washington, D.C., of Parkinson’s disease and pneumonia. Before his stint at MSTV, Paro was an NBC vp and gen. mgr. of WRC-TV Washington. Survivors include his wife, 3 children, 2 stepchildren, brother, 8 grandchildren.

LCC International said it revised contract with XM Satellite Radio to include engineering support, initial operating and maintenance services and construction of smaller number of repeater sites due to shift to more tower-site-based network. LCC also will provide network monitoring and project management. Financial terms weren’t disclosed, but LCC said change would have $5 million negative impact 4th-quarter earnings.