Weekly Telecom Roundup

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Weekly Telecom Roundup

By David Sims

A look at the telecom news of the past week, while listening to The Steve Miller Band’s highly underrated Sailor album from 1968:

President Bush has nominated a Republican seat on the Federal Communications Commission, Tennessee lawyer Deborah T. Tate. Tate is currently serving a six-year term as director of Tennessee’s Regulatory Authority, which sets rates and service standards for private telephone, natural gas, electric and water utilities.

She was appointed to the position in February 2002 by the governor and confirmed by the Tennessee General Assembly. She has also served as a member of Governor Sundquist’s senior staff and was his designee to the Juvenile Justice Commission and the TennCare Partners Advisory Committee from 1996 to 2000.

According to the Washington Post, “telecom analysts and lawyers said they expected Tate to broadly support (FCC Chairman Kevin) Martin’s positions and the general deregulatory trend favored by the Republicans. As a former state regulator, they suggested she might be quicker to defend the prerogatives of states in battles over jurisdiction with Washington.”

In an FCC filing last year, the Post says, “Tate wrote that she wanted ‘the states and the FCC to reevaluate our overall regulatory program so that consumer welfare is the centerpiece of regulation rather than restraining the market power of increasingly hypothetical monopolists.’”

This would sound like Tate would be sympathetic to big phone companies like Verizon and SBC, and their pleas that they face “growing competition from cable, Internet phone and wireless providers despite their history as regulated monopolies.”

In great news for the telecom industry worldwide, India this past week India announced “a slew of relaxations in its telecom rules, which not only allows more players -- both local and foreign -- to enter the country’s burgeoning telecom sector, but also allows existing and newer players more flexibility, slashes call rates even further and makes internet telephony legal in the country,” according to UPI.

The annual license fee payable by operators for providing international long-distance call service and national long-distance call service has been slashed from 15 percent to 6 percent of gross revenues. The entry fee for ILD operations has been reduced by 90 percent, from $5.5 million to just $550,000 while for NLD operators, the reduction is from $22.2 million to $550,000.

Communication Minister Maran said, “I expect telephone calls rates to drop by at least 9 percent across the board immediately as a result of this reduction, which also removes artificial barriers and we hope to have a lot more competition in both ILD and NLD segments,” UPI reports. And as everybody knows, competition means better products at better prices for consumers. Way to go, India, this reporter salutes you.

The government has also decided to do away with the roll-out obligations, which means that the NLD license holders will no longer be required to have a point of presence in each long distance charging area, which could kind of suck for rural India, since operators don’t have to maintain infrastructure in unprofitable areas.

And currently, believe it or not, Internet-based telephony is not legal in India. “Users can only dial overseas phones from their PCs using Internet service providers. However, an Indian caller still cannot call normal telecom networks within the country from their PCs,” UPI explains. But now telecom service providers can offer IP telephony, said Amitabh Singhal, former president of the ISP Association of India.

Telecom itself is going gangbusters in India, the country’s overall telecom subscriber base grew by 3.24 million in October, compared to 2.87 million new subscribers added in September. 5.3 million mobile subscribers have been added since the beginning of September, for a total 67.95 million subscribers by the end of October.

And as if they didn’t have enough problems over there, France Telecom on Wednesday “was fined record high 80 million euros by the country’s Competition Council for monopolizing the ADSL broadband service during the period of 1999 to 2002,” the French media reported.

The council ruled that the French Telecom giant had “impaired the nation’s economy by abusing its dominant position in Asymmetrical Digital Subscriber Loop service to prevent other telecom companies from entering the broadband market till October 2002,” the French newspapers La Tribune and Les Echos reported.

France has 80 million ADSL users, with France Telecom owning the lion’s share of that.

In 1999, according to media reports, “a French telecom company NEUF Telecom lodged a lawsuit against the France Telecom, accusing the telecom giant of monopolizing the ADSL market by lowering the broadband service price, which forced other companies to withdraw from the market due to lack of profits.”

In May 2004, the Competition Council fined France Telecom 20 million euros after the company refused to open the network service to third-party operators. The fine was later doubled under the decree of the Paris’ court of appeal. Evidently France Telecom made more money keeping their lines closed than they had to pay out in fines.

Measat Global has purchased a namesake satellite from Orbital sciences for telecom coverage of Malaysia, Indonesia and points as far away as the Middle East, according to UPI.

A report in Malaysia’s Edge Daily said Friday the transaction for the Measat-1R spacecraft was “valued at nearly $70 million” and would give Measat C and Ku-band coverage and 36 Megahertz of bandwidth for 15 years.

Company officials said in a news release that the deal was prompted by growing demand for leasing on the Measat-3 satellite and the looming need to replace Measat-1.

This past week 32 Iowa communities voted on municipal communications proposals.

On Tuesday, the communities voted whether to form telecommunications utilities that could offer phone and Internet services, according to the Des Moines Register: “All seven of those cities served by Newton-based Iowa Telecom defeated the proposals. A total of 17 Iowa communities passed them.”

Guess Iowa Telecom’s doing a pretty good job with rural high-speed Internet access via DSL, seeing as how they added 4,600 DSL subscribers over the summer, offsetting declines in their basic landline customers. The company served 260,700 total telephone access lines, compared with 265,500 lines in the third quarter of 2004, the Register says.

In more good news of companies realizing that cutting rates actually increases bottom-line profits, government telecoms in Taiwan and Jordan will slash rates – albeit for one day only in Jordan’s case.

Taiwan’s Chunghwa Telecom will cut rates for calls made from mobile phones to fixed-line phones from the start of December.

The cuts will range from 3% to 15% with Chunghwa Telecom mobile phone clients expected to save a total of $23.8 million a year, according to Asia Pulse.

And according to MENAFN, Jordan Telecom will cut prices of local and international calls by 50 per cent until 9:00 p.m. Saturday to “help our brothers and sisters who want to comfort themselves about their loved ones... and who now want to reassure their friends and relations in all parts of the world,” according to a company official.

The telecommunications group affirmed its “confidence in the security and stability of Jordan,” adding that it intends to “stand by Jordan and its good people through thick and thin,” according to a company statement alluding to the recent al-Qaeda terrorist bombing of three Amman hotels.

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