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VOLUME 19, NUMBER 1
February 5, 2002
COMMISSIONER WEFALD
ANNOUNCES
RE-ELECTION BID
Public Service Commissioner Susan Wefald said last week she will run for another six-year term on the panel, calling herself a fiscal conservative who keeps consumers in mind when regulating utility and phone companies.

"When I consider rate cases, I consider the people who may be having trouble paying their present utility bills," Wefald told a news conference in Fargo.

Wefald is seeking the Republican endorsement for another race for the PSC, a three-person panel that regulates electric and gas utilities, telephone and pipeline companies, grain elevators, railroads, coal mining and auctioneers.

No Democrat has announced plans to run for the job. The state Democratic Party director, Vern Thompson, said he has discussed a race with two potential candidates, but would not name them. Thompson ran unsuccessfully for a seat on the Commission two years ago against Commissioner Tony Clark.

Wefald, 54, was appointed to the Commission in December 1992 to succeed Dale Sandstrom, who was elected to the North Dakota Supreme Court. She was elected in 1994 to serve out the remaining two years on Sandstrom's term and won her own six-year term in 1996.

 

QWEST RETREATS ON
SHARING CUSTOMER
INFORMATION

Qwest announced this week that complaints about their proposal to share customer information among its different divisions have persuaded them to temporarily shelve the proposal. Qwest chairman, Joseph P. Nacchio said the company will wait until the Federal Communications Commission issues new rules on customer records later this year before developing another plan.

Nacchio said Qwest will notify its 12 million local telephone customers that it will not be sharing account information such as phone numbers called and received.

Qwest included notices in December bills telling customers they had 30 days to contact the company if they wanted to keep their information private, according to the Associated Press. The proposal was poorly received by customers and regulators in the company's 14 State region, which includes North Dakota, because it was not clear whether Qwest would sell the information to outside companies. Qwest attempted to clarify the situation last week by saying it was only planning on sharing the data with their own divisions such as Qwest Wireless or Qwest Dex.

 

CONGRESSMAN
FCC OUTRAGED AT AT&T'S
USF SURCHARGE
Congressman John Dingell (D-Mich) has asked Chairman Michael Powell to investigate AT&T's recent decision to increase its monthly line item universal service fee for residential customers from 9.9 percent to 11.5 percent.

The actual fee for the first quarter of 2002 is 6.86 percent.

"No carrier should be permitted by law to charge its customers more for the universal service line item fee than it actually contributes to the government for this purpose," Congressman Dingell wrote to Chairman Powell.

According to AT&T, the Commission's "flawed" methodology, plus decreased interstate long distance revenue, forced the company to increase its line item universal service fee. AT&T said if the lag were eliminated and it could use revenue estimates closer to the actual figures it could reduce the residential USF fee to 9 percent, according to BloostonLaw's newsletter.

 

COLORADO SEEKS TO
END INEQUALITY
BETWEEN WIRELINE
AND WIRELESS
The National Telephone Cooperative Association reports the telephone association in Colorado has adopted a statement of concern relating to the inequality of regulatory treatment between wireline and wireless eligible telecommunications carrier (ETC) competitors.

The Colorado Telecommunications Association has said if "sufficient interest is expressed and adequate financial commitments can be secured," they will take steps to satisfy registration and reporting requirements and direct the lobbying effort to pursue a regulatory parity agenda with Congress.

The Association will provide members of the board with the statement during the next North Dakota Association of Telephone Cooperatives board meeting.

 

N.D. TELCOS CONTINUE
TO PURCHASE RURAL
EXCHANGES
In late December, Polar Communications, Dickey Rural Telephone Cooperative and Red River Telecom announced that they have agreed to acquire five rural North Dakota telephone exchanges from Citizens Communications. The three companies will acquire approximately 4,300 telephone access lines within the five exchanges.

Polar Communications in Park River will acquire the Pembina exchange. Dickey Rural Telephone of Ellendale will purchase the exchanges of Gwinner and Lisbon; and Red River Telecom of Abercrombie will acquire the exchanges of Fairmount and Wyndmere. Minnesota access lines, which are part of the Pembina and Fairmount exchanges, are included in the transactions.

 

N.D. SUPREME COURT
SAYS WESTERN
WIRELESS DOES NOT
NEED PC&N
The North Dakota Supreme Court has ruled that a fixed wireless residential service is a commercial mobile radio service (CMRS) and exempt from the need to obtain a certificate of public convenience and necessity from the North Dakota Public Service Commission.

Consolidated Telcom of Dickinson had appealed a PSC ruling that it violated State and Federal law by refusing Western Wireless access to its local exchange service network for residential fixed line service.

Consolidated argued that Western Wireless was prohibited from offering fixed wireless residential service to its customers unless the company first obtained a certificate of public convenience and necessity from the PSC.

Under North Dakota law, a telecommunications company generally must apply for a certificate of public convenience and necessity if it wishes to compete with another company furnishing adequate local exchange service. However, Federal law does not permit State or local government from regulating the entry of or the rates charged by CMRS providers, according to a story in NTCA's newsletter.

 

DEMOCRATIC SENATOR
TO RETIRE
State Senator Ken Kroeplin said last week he will leave the legislature rather than challenge a Democratic colleague in an effort to remain in the Senate, according to the Associated Press.

Senator Kroeplin (D-Hope) and Senator Elroy Lindaas (D- Mayville) were put into the same district by the North Dakota Legislature's new redistricting plan, which was approved last November.

Senator Kroeplin's term is ending this year, while Senator Lindaas' term has another two years left. The decision means the new district 20 will not have legislative elections this year and that Senator Lindaas will be able to serve out his term. All of the Legislatures odd-numbered districts will have legislative races this year, along with at least two even- numbered districts, districts 22 and 26.

In districts 22 and 26, two other pairs of Democratic senators also live in the same districts: Joel Heitkamp of Hankinson and Jerome Kelsh of Fullerton is District 26 and Steve Tomac of St. Anthony and Aaron Krauter of Regent.

 

AT&T EXITS 900
NUMBER BUSINESS
AT&T announced last month that it would quit providing billing services for all 900 numbers by the end of the year and that it had stopped offering the service for new 900 numbers at the beginning of 2002.

The 900 numbers are a core part of the pay-for-service telephone business. It is anticipated the company's action will deal a severe blow to psychics, sex lines and other companies that use 900 numbers.

AT&T said the decision was primarily a financial one, but acknowledged that "the tawdry reputation" of some 900 services and concerns about AT&T's image may have played a part.

MCI also offers 900 numbers, but said they do not intend to make any immediate changes.

The 900 business was created in the 1980s. While 800 numbers are free to the caller and paid by the person or company at the other end, callers pay for the charges for 900 numbers. A popular psychic, for example, charges $4.99 a minute, according to the Associated Press.

At the beginning of the 1990s, there were forecasts that the 900 business would explode, reaching $3 billion by 1993 and $6 billion by 1995. It never attained those goals, although some of the industry's promise has been realized--software companies use 900 numbers to provide technical support, and other users have included state motor vehicle departments and charities. It is estimated the industry's income is about $700 million a year.

 

FCC EXPECTED TO
DELAY CELLULAR
NUMBER PORTABILITY
REQUIREMENT
It is anticipated the Federal Communications Commission will soon delay for up to two years a requirement that cell phone companies let customers keep their phone number when they switch carriers. The wireless industry has been seeking to have the mandate reversed altogether.

Critics say any FCC delay will hamper competition in the wireless industry.

The FCC approved the requirement in 1996 in a bid to foster competition within the wireless industry. The rule was modeled on similar language that requires regional Bell companies in certain markets to let customers keep their home or business phone number when they choose a rival local phone company.

The big wireless carriers fought it, arguing the software changes needed to ensure proper call routing are too complex, according to USA Today. The cell companies convinced the FCC to grant delays that have pushed the original June 1999 compliance deadline to November 2002. Now, Verizone Wireless, AT&T Wireless, Cingular Wireless and Sprint PCS argue the mandate should be scrapped because the market is competitive.

USA Today quoted a Cellular Telecommunications & Internet Association spokesman, Mike Altschul as saying, "There's no evidence that customers are locked into service providers." He said that 30% to 40% of customers switch providers each year.

AT&T, Cingular and Sprint want the FCC to approve another delay of at least two to three years. They say the software changes would be especially onerous to make while they're making other changes to comply with an FCC order aimed at conserving a dwindling supply of area codes.

Some say the big carriers are exaggerating the costs and should be forced to comply with the order.

In fact, Leap Wireless, a small carrier seeking customers from the big players, says the changes are "minor" and supports keeping the November deadline. "They're afraid of the competitive impact on their business," says Leap's Dan Pegg. He says many customers don't switch carriers because of hassles such as having to get new business cards.

 

FTC SEEKS TO CORRAL
TELEMARKETERS
The Federal Trade Commission last week announced plans to propose new rules for reducing the annoyance of unwanted telephone solicitations as it begins to push for the establishment of a national "do-not-call" list.

With such a list, people could make a single call to get their names removed from many telemarketing lists. The agency is also expected to propose that telemarketers be barred from blocking any identifying information from caller-ID equipment so people would be able to know who is calling.

Throughout the nation, about 20 States have adopted do- not-call laws, according to the Washington Post. The national list could preempt the State rules, which set a variety of monetary fines, from a few hundred dollars to more than $1,000 for marketers who telephone people after they have asked not to be called. Industry sources, however, said it was unclear whether the Federal agency could regulate marketing calls that never cross State lines.

 

MCLEODUSA TO SELL
DIRECTORY BUSINESS
McLeodUSA has announced its plans to sell its telephone directories business to the Yell Group for $600 million, although the deal includes some contingencies that require the seller to restructure some of its debt and complete all agreements by August 1st.

McLeodUSA has been shedding some of its non-core assets ever since it announced it was attempting to restructure overdue debt. The company also said in December that it may take advantage of Chapter 11 bankruptcy proceedings in an attempt to expedite the restructuring process.

 

".NAME" INTERNET
SUFFIX INTRODUCED
The new ".name" Internet suffix went live earlier this month, which allowed individuals to set up personal Web and e-mail addresses outside of established domains like ".com" and ".org."

Global Name Registry, the company responsible for running the new domain, said ".name" addresses could eventually be used for cell phones and privacy-enhancing encryption codes, as well.

The London-based firm said it had signed up 60,000 users so far.

The new domain name was one of seven chosen in November 2000 by the Internet Corporation for Assigned Names and Number (ICANN), to relieve overcrowding in established domains like ".com", ".net" and ".org."

".biz" for businesses and ".info", which carrier no restrictions, ".museum" for museums and ".coop" for cooperative organizations have been introduced already.

Scheduled to go live this year are ".aero" for the airline industry and ".pro", which is reserved for doctors, lawyers, accountants and other professionals.

 

GLOBAL CROSSING
FILES FOR BANKRUPTCY
Global Crossing, a company that spent $12 billion building fiber optic networks in the United States, Europe and Asia filed for bankruptcy this week. Its stock, which once traded at more than $60 a share in 1999 closed on Monday at 30 cents.

The company was launched in 1997 and promised to build a global data and voice network to compete with the world's established telecommunications carriers, such as AT&T and British Telecom, according to the Washington Post.

Global Crossing announced at the time of the bankruptcy that it had agreed to sell a majority stake in the company for $750 million to a consortium. The New York Times is reporting that existing common equity and preferred shareholders will receive nothing from their shares.

 

TELECOM CUSTOMER
RIGHTS GROUP FORMED
TeleTruth, a new national, independent, customer alliance focusing on telecommunications and broadband service issues, was launched last week by "a pro-customers alliance of 25 companies and independent industry observers," according to the organization's press release. They say they will defend the public's interests, educate and inform customers on how to combat monopoly control, promote competitive fairness and innovation within the industry, as well as accelerating the deployment of advanced networks and services.

The organization says it is totally independent of any company, association, political party or lobbying group, and is funded through memberships, donations and phone bill auditing refunds.

Their website can be seen at: http://www.teletruth.org.

 

COMPANIES ACCUSED
OF MONOPOLIES IN
WIRELESS
Verizon, AT&T Wireless and three competitors have been accused in a lawsuit of illegally monopolizing the market for wireless communications. The suit was filed earlier this month in Federal Court in New York and makes antitrust claims against Verizon, the largest U.S. wireless company; Cingular Wireless, the second largest; AT&T; Sprint Corporation and VoiceStream Wireless. The suit was filed by individuals who are seeking class action status.

The plaintiffs say the wireless companies have been able to gain nearly complete control over the market by agreeing not to sell telephones to one another's wireless customers, or wireless services to rivals' telephone customers. The lawsuit, according to press reports, targets what the plaintiffs describe as a requirement by the companies that customers buy both wireless services and telephones from the same company. The plaintiffs say that telephones sold by one company could be used with a wireless service sold by another company, but the wireless companies have agreed among themselves to force consumers to buy both the phone and the wireless service from the same vendor.

 

LATIN AMERICA
WIRELESS PASSES
LANDLINE
Mobile phones in Latin America now outnumber telephones linked to fixed lines, according to Pyramid Research, a telecommunications consulting firm. At the end of 2001, 18 countries in Latin America had 83.4 million mobile phone users compared to the region's 83 million fixed lines.

The survey excluded most of the Caribbean and small nations like Belize or the Guyanas.

The consultant said countries in the region "appear to be skipping the expense of upgrading poor fixed-line networks by using less cumbersome wireless and mobile-phone technology", but makes no mention of companies deploying wireless in previously unserved or underserved territories within those countries.

 

NEW PUC
COMMISSIONER
IN SOUTH DAKOTA
Governor Bill Janklow appointed Robert Sahr last month to the South Dakota Public Utilities Commission. Mr. Sahr fills the vacancy created by the death of Laska Schoenfelder last year.

Mr. Sahr, who served as legal counsel for the State Bureau of Personnel, will serve until the November 2002 election, when voters will choose someone to serve the remaining four years of Ms. Schoenfelder's term.

 

RUS ANNOUNCES
BROADBAND PILOT
PROGRAM LOAN FUNDS
The Rural Utilities Service (RUS) has announced that it will lend $80 million under its Broadband Pilot Loan Program for fiscal year 2002. The money will be available for the construction of facilities and transmission systems in rural communities with populations of less than 20,000.

NTCA quotes RUS as saying that it currently has loan applications from FY 2001 in excess of $350 million.

 

NASUCA SAYS SLC
INCREASE OVERCHARGES
CUSTOMERS BY
ALMOST $2 BILLION
The National Association of State Utility Consumer Advocates (NASUCA) has submitted a study to the Federal Communications Commission that objects to the planned increase to the subscriber line charge (SLC).

According to the advocacy group, the current $5.00 SLC, which became effective January 1st, already overcharges consumers by $641 million. Raising the SLC cap to $6.50 on July 1, 2003, would result in a $1.8 billion overcharge, the group said.

The FCC proposed raising the SLC caps to $6.00 on July 1, 2002 and to $6.50 on July 1, 2003, pending a cost review of price cap carriers. Failure to increase the caps could work to the disadvantage for rate-of-return carriers because they must recover their costs from end-users and the portable Universal Service Fund, according to the BloostonLaw Telecom Update. If the SLC caps do not increase it would put more pressure on the Universal Service Fund.

 

CHAIRMAN BUYING
WESTERN WIRELESS
STOCK
As Western Wireless stock shares continue to drop, the WESTERN WIRELESS company's chairman and CEO John Stanton spent $13 STOCK million from January 9 to 29 buying a million shares on the open market, according to The Puget Sound Business Journal.

On paper, the purchases translate into a substantial short- term loss. Stanton paid $19.80 for 150,000 shares on January 9th, and his average cost per share was $13.53. But the stock closed last Thursday at $9.07, after hitting a three- year low of $7.62 earlier in the week.

Market experts said that investors had been selling wireless stocks throughout the month, but aggressively sold Western Wireless lately after AT&T Wireless and Cingular said they would share in construction of a network that would reduce the roaming charges collected by Western Wireless.

 

DATES TO REMEMBER Feb. 10-14:
 NTCA Annual Meeting
 Anaheim, California

Feb. 26-28:
 Telephone AT&S Conference
 Radisson Inn
 Bismarck, N.D.

Mar. 17-19:
 NTCA Manager's Forum
 Tampa, Florida

Mar. 24-27:
 Minnesota Telephone Assoc.
 Annual Meeting
 Minneapolis, Minn.

April 3-4:
 NDTA Annual Meeting
 Radisson Inn
 Bismarck, N.D.

April 8-10:
 NTCA Legislative Conference
 Washington, D.C.

May 13-16:
 TOC
 Holiday Inn
 Fargo, N.D.