NorthPoint and Verizon are arguing over legal venue in their merger breakdown suits. Verizon’s motion for stay to halt suit brought in Cal. court, heard Jan. 3, was countered by NorthPoint’s motion for stay to keep proceedings out of Del., where Verizon began proceeding. NorthPoint said it would be “hardship” to litigate in Del., its counsel said, but Verizon said Del. was appropriate. Hearing on NorthPoint’s motion is scheduled Jan.17.

WSNet said it signed strategic agreement with Ashe County Cable TV of Fleetwood, N.C., to offer its subscribers privately branded direct-to-home (DTH) digital satellite TV service using WSNet’s satellite programming technology. Agreement marks official entry of WSNet into small and rural franchise cable market. Other terms of deal weren’t announced.

Verizon urged N.Y. state lawmakers to consider legislation this year to require that drivers use hands-free mobile phones. Carrier said if mobile phone usage restrictions were needed, they should be imposed statewide rather than through patchwork of local ordinances. N.Y.C. and at least 6 other local govts. are considering handheld mobile phone bans, in addition to the 2 N.Y. counties that adopted restrictions last year. Verizon said statewide uniformity was critical and municipal or county laws would only confuse drivers. It also said statewide law would ensure uniformity in defining offenses and in penalties. N.Y. legislature opened its 2001 session Wed.

Sprint PCS became latest carrier to drop out of FCC’s C- and F-block auction, which resumed Thurs. and reached $12.01 billion in net high bids. Sprint’s bidding eligibility was reduced to zero after 27 rounds Thurs., FCC said. Lehman Bros. research note issued before auction resumed after holiday hiatus said Sprint was among carriers likely to abandon bidding, path already taken by Nextel and several other carriers since auction started Dec. 12. (Bidding was suspended between Dec. 22 and Thurs. for holidays). Lehman said Sprint PCS didn’t place bids Dec. 21, using waivers instead. “It seems as if Sprint PCS feels the prices are too high and is going to exit the auction shortly after bidding resumes,” Lehman said. Following CDMA agreement with Palm, Sprint shares soared 15.41% Thurs. to close at $23.88. (Pact covers Sprint’s provision of first CDMA solutions for Palm’s handheld devices). Meanwhile, Verizon maintained strong lead with $4.06 billion in net high bids, followed by AT&T-backed designated entity Alaska Native Wireless with $2.67 billion and Cingular Wireless-backed Salmon PCS with $2.19 billion. Verizon Wireless had been high bidder for 2 N.Y. licenses for last several rounds, but ended Thurs. with high bid for only one license at $968.6 million. Alaska Native Wireless bid $716.57 million for another N.Y. license, with Salmon PCS vying for 3rd with $714.45 million. Lehman Bros. indicated auction could wrap up in several weeks. DCC PCS placed high bid of $519.7 million for L.A. license. Verizon also placed high bids for licenses in L.A., Chicago, San Francisco, Philadelphia, Boston, Seattle. Alaska Native Wireless placed high bid for L.A. and Salmon for Atlanta. In top 15 markets, VoiceStream had high bid for Washington license.

As FCC continued to wrestle with imposing additional regulatory conditions on AOL’s pending purchase of Time Warner (TW), Microsoft and other online rivals of AOL pressed their furious campaign for instant messaging (IM) requirements. In latest letter to FCC Chmn. Kennard Thurs., Microsoft called again for “imposition of a meaningful and enforceable condition that facilitates IM interoperability by enabling consumers to communicate with each other regardless of the IM system they use.” Along with brief letter, Microsoft and its allies sent 2-page fact sheet listing 8 consumer groups, 53 companies and associations, 10 senators, 12 House members and 7 publications that are calling for IM interoperability. At minimum, Microsoft argued in separate filing with FCC Tues., “the Commission should obligate AOL to enter into multiple contracts with leading IM providers to allow for interoperability prior to offering any advanced services over the broadband infrastructure of Time Warner’s cable systems.” In earlier filing with Commission, nationwide group of ISPs that had brought class action lawsuit over AOL’s 5.0 and 6.0 software urged agency to force company to modify its offending software feature. They argued that regulatory condition changing that feature, which directs modem calls away from user’s desired ISP to AOL access number, “would do more to introduce competition in Internet access than the instant messaging condition that has been the subject of recent press reports.” Meanwhile, new op-ed piece published by Cato Institute said FTC’s open access conditions on AOL-TW merger would hurt consumers and hamper competition and innovation by dampening incentives for rivals to build competing high-speed data systems. “The entire forced access campaign is an unfortunate example of unelected regulators overstepping their bounds,” wrote Clyde Crews, Cato technology studies dir. “They are exploiting their power over industries to make regulatory ‘law’ that should require an act of Congress. Forced access represents a regrettable new incarnation of industrial policy.”

Me. PUC opened docket to consider replacing current nonoptional extended local calling plans with optional programs customers can select. Currently, extended local calling surcharges become mandatory if majority of local customers want expansion and PUC approves. PUC said Tues. it was considering replacing current system with either selective extended calling, where customer may add one or more distant exchanges to local area for flat monthly fee per exchange or contiguous extended calling, where customer can add groups of contiguous distant exchanges for flat monthly fees. PUC will hold Jan. 31 workshop with industry to address implementation issues such as intercarrier compensation, specific rates and terms for customers, whether extended calling should be time-unlimited.

MPAA filed several major objections to CableLabs’ full final draft of its anticopying technology license for advanced digital cable set-top boxes, signaling that fight over controversial encryption technology wasn’t over (CD Dec 29 p1). In comments submitted to FCC late last month, MPAA said it was “concerned with a number” of provisions in POD Host Interface License Agreement (PHILA) and was “uncertain as to how some of these and other provisions will work in practice.” Group said its concerns included technology’s: (1) “Apparent ineffective protection against unauthorized Internet retransmission of all content, including broadcast.” (2) “Unprotected high-resolution output of most categories of content from those devices.” (3) “Copying and permanent storage in those devices of all content, including high- value content, which individual copyright owners and cable operators may have voluntarily negotiated to treat as ‘copy never.'” To ease such concerns, MPAA said “the only alternative” for cable operators would be to “turn off the OpenCable box” and prevent DTV programming from reaching consumers. It said such result “would have a negative effect on consumer expectations, particularly if they were not given adequate notice from equipment manufacturers.” MPAA said it would continue to work through those and other issues with CableLabs and 5C companies “in a prompt, good-faith and constructive manner.”

Arianespace announced twice-delayed launch of Turksat 2A/Eurasiasat 1 on Flight 137 was rescheduled for Jan. 8 in 5:18 p.m.-7:26 p.m. ET window, after authorizing resumption of launch preparations Wed. Arianespace delayed 2nd launch when Alcatel Space, primary contractor for satellite payload, requested verifications Dec. 11 after Arianespace ran its own set for Dec. 11 rescheduling.

Tex. PUC Comr. Judy Walsh resigns to take position with President-elect Bush’s energy policy development team; she will stay on until Tex. Gov. Rick Perry (R) appoints replacement to fill remaining 3 years of her term. Walsh was first appointed to PUC in 1995 by then Gov. Bush… WorldCom names Donna Sorgi, northern region public policy vp, to head its Washington-based federal regulatory group… Rosemary Kimball moves from FCC Office of Media Relations to press liaison at agency’s Consumer Information Bureau… Douglas Hanson, CEO, Internet Commerce & Communications, named CompTel chmn., replacing Global Crossing’s Anthony Cassara, who stepped down… Named partners in Wiley, Rein & Fielding law firm: Mary Borja, John Burgett, Tanja Hens, Scott McCaleb and Suzanne Yelen; named of counsel to firm are Christopher Kelly, ex-U.S. Patent & Trademark Office, and David Southall, ex-Information Management Consultants.

Congress returned Wed. and immediately began wrangling over its rules and makeup for 107th session. Democrats questioned Republican plan to break off financial services oversight from the House Commerce Committee and give it to Banking Committee to resolve battle for Commerce leadership between Reps. Tauzin (R- La.) and Oxley (R-O.) (CD Jan 3 p1). However, it appeared at our deadline proposal would pass. Another unsettled issue in both houses was what percentage of each panel’s seats would belong to Democratic minority. In House, Democrats agitated for ratio closer to current 221-211 party breakdown (51-49%). Last year, Republicans held 29 of 53 Commerce Committee seats (54.7%) and 21 of 37 Judiciary positions (56.8%), and Democrats said they should get 2 more on each panel. GOP leaders offered counterproposal under which each party would get one additional seat on each major committee. Meanwhile, Democrats in Senate continued to push for equal representation on committees since chamber is split 50-50. Last year, Republicans held 11 of 20 Commerce seats (55%) and 10 of 18 on Judiciary (55.6%). GOP in House was expected to begin naming chairmen today (Thurs.), but committee assignments can’t be finalized until agreement is reached on panel ratios.