I think this is really going to heat up over the next few months - as we 
roll-out Blockbuster, possibly over cable systems, there are fees such as 
franchise fees and USF that have not been dealt with by the FCC.  As you can 
see below, this issue is being used as a weapon by the RBOCs (who mainly 
comprise USTA) against the cables.  Regardless of what happens with 
Blockbuster, EBS could get squeezed in the middle of this debate since the 
RBOCs are basically attempting to blow up the current exemptions for Internet 
access services and transit in order to beat on the cable companies.  We may 
end up participating on the open access issue not so much for Blockbuster but 
to protect our current USF exemptions on the  "information services" we 
provide.  

Possible weekly conference call topic?


USTA SEEKS EXPEDITED RULING ON CABLE OPERATOR USF OBLIGATIONS

The U.S. Telecom Association is pressing the FCC to speed up its
proceeding on cable operator universal service contributions, in
light of a recent decision by Cox Communications to cease paying
cable franchise fees on revenues from high-speed Internet-
services to several California municipalities.

Cox's decision to stop paying franchise fees came months after a
U.S. Court of Appeals for the Ninth Circuit (San Francisco)
decision that broadband transmission over cable TV systems is a
telecom service (AT&T Corp. v. City of Portland), and, thus,
exempt from cable TV franchise fees.  USTA said it worries that
broadband service providers also will attempt to shirk telecom
service provider universal service obligations.

USTA, which petitioned the FCC in September for a declaratory
ruling on contribution requirements, advised the agency in a ex
parte filing today that "immediate action is needed" to prevent
telecom service providers from failing to meet these obligations.
The Telecommunications Act of 1996 requires all interstate
telecom service providers, with few exceptions, to contribute to
the universal service fund.

"Cox apparently is seeking to reap what benefits it can from the
holding of the City of Portland [decision], without any known
commitment to meet its universal service obligations," said
Lawrence E. Sarjeant, USTA vice president-regulatory affairs and
general counsel.  "Cox's reasoning appears to be that high-speed
data service is not considered a cable service under [AT&T v.]
City of Portland, so that Cox no longer must pay cable
franchising fees for that service.

"However, to USTA's knowledge, Cox has not committed to paying
universal service contributions consistent with its obligations"
as a telecom service provider, he said.

To prevent additional companies from following Cox's lead, USTA
said, the Commission should move up the reply comment deadline to
Dec. 15, 2000.  The FCC in its notice of inquiry on competitive
"open access" to cable TV systems (GN docket no. 00-185) had set
a Jan. 10, 2001, deadline (TR, Oct. 2).