Despite earlier public statements of support, Globalstar wants General Accounting Office (GAO) to overturn deal that awarded rival Iridium $72 million contract last month for satellite telephone service without open bidding (CD Dec 13 p7). Globalstar charged lack of open competition and bidding process violated Dept. of Defense (DoD) bidding procedures, which should invalidate deal. Globalstar filed complaint with GAO Dec. 15. U.S. Defense Information Systems Agency (DISA), which oversaw contract, disagreed with Globalstar and predicted deal would pass legal muster with federal auditors. Military officials have suggested all along that Iridium contract was signed in “best interests” of providing global communications to military and govt. Govt. also played significant part in convincing Motorola “it was in the best interests of national security” to keep Iridium satellites in orbit when company went bankrupt, official said. DISA, which responded to complaint by saying Globalstar lacked capacity to service contract, said it planned to respond to complaint by Jan. 16 deadline. Iridium spokesman said company had no comment. GAO scheduled hearing for March 26.
LAS VEGAS -- FCC Comr. Powell endorsed free market vs. govt. regulation, pleasing consumer electronics officials at the CES here Sat. But reaction was more muted when he also indicated reluctance for govt. to move aggressively to spur DTV transition. Powell, who is widely rumored to become next chmn. of FCC, was interviewed one-on-one by CEA Pres. Gary Shapiro, also rumored to be candidate for position in new Bush Administration, despite recently signing new 10-year contract with CEA.
TechNet formally announced appointment of former Rep. Rick White (R-Wash.) as its new CEO. White founded Congressional Internet Caucus and was involved in numerous Internet-related laws, including Internet Tax Freedom Act. He has been partner in Perkins, Coie since losing reelection bid in 1998. “I'm really excited about it,” White told us in interview. He said TechNet would set its agenda for year in executive committee meeting Jan. 11, but he expected hot issues to be trade and education. “I don’t see a whole lot of threats from the government,” White said. “Both parties still want to do business with us. We still have a window of opportunity” for key issues, and “frankly I can’t think of a lot of people opposed to technology.” He said that during his time in Congress, “there was an aversion in the technology community to spend time with government, and government quite frankly didn’t get it… There’s been a gradual evolution in the right direction.”
Bidding in FCC’s C- and F-block auction slowed Fri., but reached $13.07 billion, with Verizon Wireless maintaining wide lead of $5.52 billion in net high bids. Other top bidders include AT&T Wireless-backed Alaska Native Wireless with $2.75 billion and Cingular Wireless-backed Salmon PCS with $1.94 billion. AT&T Wireless doesn’t appear in list of top 15 bidders, and Cingular isn’t competing as standalone entity. In all, top 15 bidders now include 13 designated entities, most of which have links to larger carriers. While Verizon is by far highest bidder, $2.26 billion of its total is in bids for 2 N.Y.C. licenses at $1.17 billion and $1.1 billion. Alaska Native Wireless bid $758 million for 3rd license in that market. After 31 rounds, Verizon had highest bids on licenses in Washington, Boston, L.A., Chicago, San Francisco, Philadelphia. Alaska Native Wireless had high bids for spectrum in L.A. and Atlanta and Salmon PCS in Dallas license. Dobson Communications DCC PCS edged into upper echelon of bidders, placing 4th with $957.68 million, followed by VoiceStream with $540.12 million, affiliated Cook Inlet with $348.69 million, Leap Wireless with $293.47 million. Last week marked exit of several large carriers, including Sprint PCS and Alltel. Of 87 bidders who qualified at Dec. 12 start of auction, 49 remained as of late Fri. SVC BidCo, designated entity in which Sprint has 60% noncontrolling investment, still was in auction. Other bidders who have left auction include Nextel, Sprint affiliate Alamosa PCS, Nextel-affiliated designated entity Connectbid, Cincinnati Bell Wireless.
While CLEC industry is far from strong overall, upbeat news from McLeod and XO Communications shows CLECs with good management and business plans are persevering, analysts said Fri. McLeod announced bond offering and better-than-expected financial expectations Thurs. while XO announced Fri. it is selling $450 million of 5.75% convertible subordinated notes in private placement. Lehman Bros. analyst Daniel Zito said successful market transactions “should alleviate some pressure on the better names which have been cast away with everything else in the sector downdraft.” It shows “funding is still available at reasonable terms for the better management teams,” he said.
Largest AT&T affiliate TeleCorp PCS said it added 145,231 customers in quarter ended Dec. 31. TeleCorp PCS was created last year after merger of TeleCorp Wireless, which added 95,656 subscribers in 4th quarter, and Tritel, which added 49,575. Combined entity had year-end subscriber base of 666,425. Tritel said it expected to take premerger one-time charge related to reductions in roaming revenue. TeleCorp PCS said that was likely to mean $4 million reduction in roaming revenue guidance for quarter for Tritel.
FCC issued Notice of Proposed Rulemaking (NPRM) Fri. that examines potential spectrum that could be tapped for 3rd- generation wireless and other advanced services. Agency seeks comments on providing mobile and fixed services in 1755-1850 MHz band now used by military, various approaches for 2500-2690 MHz now occupied by Multichannel Multipoint Distribution Service (MMDS) and Instructional TV Fixed Service (ITFS) licensees, proposed allocation of 1710-1755 MHz for fixed and mobile services, and other options (CD Jan 5 p1). Interim report on 3G spectrum issued by FCC last fall said segmenting MMDS and ITFS bands to allow operation of advanced mobile services would pose technical challenges. NPRM seeks comments on scenarios that would allow operation of advanced wireless services in that frequency. One possibility, FCC said, is allocating spectrum for fixed and mobile services on co-primary basis, which would allow spectrum to be used for advanced offerings such as 3G. Comment is invited on “public interest costs and benefits” of adding mobile allocation to bands without mandatory relocation. NPRM asks whether there are steps that could bolster secondary market in those bands so they could “evolve to their highest value use,” whether fixed or mobile. “Could current ITFS/MDS licensees reorganize their systems to continue providing current services and also offer new mobile services on a competitive basis with other wireless system providers, such as cellular or PCS,” FCC asked. It wondered whether part of spectrum could be made available for new entities. It asked ITFS licensees whether adding mobile service allocation to 2500-2690 MHz would help educators and, “if so, how such operations could be utilized in an educational context.” MMDS licensees are asked whether adding mobile service would benefit their band plans. If part of band were cleared for advanced wireless services and incumbents had to be moved, notice asks how licensees could be accommodated elsewhere. In that area, agency is looking for cost estimates for relocation and whether equipment would need to be retuned or facilities would have to be replaced altogether. Second phase of FCC’s 3G spectrum report, due in March, is to cover potential relocation options and related costs. NPRM also seeks comment on several band pairing schemes and pairing options. In general terms, FCC solicits feedback on range of advanced wireless services that could be introduced in future and their cost impact on manufacturers, system operators, consumers. Comment is sought on how much additional capacity is needed for advanced services, including high-speed data and multimedia applications such as full-motion video. Specifically, NPRM asks what size of spectrum blocks would be appropriate and when extra spectrum will be needed.
Qualcomm reached CDMA modem card license agreement with Korea’s Qualified Mobile Telecommunications (QMtel), terms not disclosed. Royalty-bearing deal allows QMtel to develop and manufacture CDMA and cdma2000 1xEV modem card products for use in wireless data devices, including personal digital assistants. QMtel said it also was developing CDMA products such as e-books.
Month after postponing consideration of thorny DTV transition issues, FCC intends to tackle at least some DTV matters at its Jan. 11 open meeting. Well-placed sources said Commission was likely to approve bid by new DTV-only station to gain cable must- carry status and require consumer electronics manufacturers to put digital tuners in all new TV sets by date certain, among other less controversial items. But what’s not clear was whether agency would tackle core issue of whether cable operators and DBS providers should carry broadcasters’ analog and digital signals during current DTV transition. Action on dual-carriage issue, which has been hanging over federal regulators for more than 2 years, has been postponed repeatedly by Commission.
CWA and IBEW members ratified 2-year extension of existing collective bargaining agreement with Qwest. Contract, negotiated in 4th quarter last year, covers wage and pension increases, including 3.5% wage hike effective Aug. 19. Original CWA contract, covering most Qwest union employees, was signed in Sept. 1998 following 3-week strike. Agreement was to expire Aug. 16, with extension now keeping it in place until Aug. 16, 2003. Other provisions include: (1) 5% wage increase that takes effect Aug. 18, 2002. (2) 6% pension increase effective July 1, 2002. (3) 10% pension raise July 1, 2003. IBEW extension with Dex directory unit provides similar increases with different timelines depending on contract schedules, Qwest said. Contract extension between Qwest Dex management and CWA has been tentatively ratified and must be approved by union members, Qwest said. Company said it expected to be informed of Dex vote results next month. “The union membership voted 98% in favor of ratification,” said Peter Pusateri, business mgr. of IBEW Local 1269.