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Telecommunications Reports presents....

                                  TR DAILY
                                  Oct. 22, 2001
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Table Of Contents
Click here for the full issue:
http://www.tr.com/online/trd/2001/td102201/index.htm

FCC MAY RAISE SPECTRUM CAP,
EVENTUALLY LIFT IT ENTIRELY
http://www.tr.com/online/trd/2001/td102201/Td102201.htm

SBC COMMUNICATIONS SHOWS LOW REVENUE GROWTH,
PLANS TO CUT SEVERAL THOUSAND JOBS 
http://www.tr.com/online/trd/2001/td102201/Td102201-01.htm

U.S. BANKRUPTCY COURT RESCHEDULES NextWave 
HEARING ON DISCLOSURE. STATEMENT
http://www.tr.com/online/trd/2001/td102201/Td102201-02.htm

CenturyTel TO PAY $2.15B FOR VERIZON's 
ALABAMA, MISSOURI EXCHANGES
http://www.tr.com/online/trd/2001/td102201/Td102201-03.htm

VERIZON SEEKS END TO UNBUNDLED 
LOCAL SWITCHING
http://www.tr.com/online/trd/2001/td102201/Td102201-04.htm

CLEARER VISION ON BROADBAND POLICY
REQUIRED, 3COM EXECUTIVE SAYS
http://www.tr.com/online/trd/2001/td102201/Td102201-05.htm

TELECOM EARNINGS ROUNDUP
http://www.tr.com/online/trd/2001/td102201/Td102201-06.htm

NEWS IN BRIEF 
http://www.tr.com/online/trd/2001/td102201/Td102201-07.htm


*****************************************************************
FCC MAY RAISE SPECTRUM CAP,
EVENTUALLY LIFT IT ENTIRELY

The FCC is considering raising for 18 months the cap on how much
spectrum wireless carriers may hold in any one market before
eliminating the restriction, sources said on Monday. 

Currently, wireless carriers can only hold 45 megahertz of
spectrum in urban markets and 55 MHz in rural markets.  FCC
Chairman Michael K. Powell has proposed raising the limit to 55
MHz in urban markets for 18 months, according to sources.  Some
other Commissioners have indicated they would be willing to
establish a higher limit, according to one source.

Under proposals being discussed, after 18 months, the FCC would
either "sunset" the restriction or forbear from enforcing it, a
source said.  The Commission plans to vote on the proposed
changes at its Nov. 8 meeting, sources said.

Much of the wireless industry has long urged the FCC to remove
the cap, saying it is no longer needed to ensure competition in
the marketplace and instead is thwarting carriers' growth.  Since
the Sept. 11 attacks, industry officials have stressed that
carriers need access to additional frequencies to handle the
increased traffic after emergencies.

"We think the time has come to eliminate the cap altogether,"
said Diane Cornell, vice president-regulatory policy for the
Cellular Telecommunications & Internet Association.  "The market
is very competitive."  She added that the Commission and the
Justice Department have the authority to "reach out and address
any competition issues."

But smaller providers and some consumer advocates contend that
the cap is still necessary to ensure that smaller players are not
forced out of the market.

-- Paul Kirby, pkirby@tr.com


*****************************************************************
SBC COMMUNICATIONS SHOWS LOW REVENUE GROWTH,
PLANS TO CUT SEVERAL THOUSAND JOBS 

SBC Communications Inc. posted year-over-year revenue growth of
just 0.8% in the third quarter excluding one-time items, and said
on Monday it plans to eliminate several thousand jobs and cut
capital spending by up to 20% next year.

For the quarter ended Sept. 30, SBC generated $13.5 billion of
revenues, less than one percentage point above the year-ago
total.  Driving top-line performance during the quarter were $2.2
billion in data revenues, up from $2.0 billion in last year's
third quarter, a net gain of 150,000 DSL (direct subscriber line)
Internet service lines, and 13.6% revenue growth at Cingular
Wireless, in which SBC holds a 60% equity stake. 

Net income of $2.0 billion, or $0.59 per share, met forecasted
levels, and was slightly higher than the $1.96 billion of profit
recorded in the year-ago quarter.  SBC said it continues to "work
toward" its previously-stated full-year earnings target of $2.35
per share.  

With larger financial performance gains hard to come by, SBC
management indicated the firm will be concentrating on expense
savings to shore up future results. "The impact of a tough
economy is being exacerbated by an adverse and uncertain regula-
tory environment, so we've taken the steps required to maintain
our keen focus on controlling expenses, strengthening margins and
maintaining financial flexibility," said Edward Whitacre Jr.,
chief executive officer. 

"Overall conditions have worsened in recent months, making for
one of the most challenging business environments in recent memo-
ry," Mr. Whitacre said.  He added that the current downturn is
expected to hamper business and consumer demand through 2002, in
turn putting "significant pressure" on SBC's ability to improve
its financial performance next year. "In response to these
challenges, we must reduce our work force by several thousand
jobs and cut our capital spending by approximately 20% in 2002,"
the CEO said.  

In particular, Mr. Whitacre blamed existing federal telecom
regulations for exerting a significant drag on expansion of the
firm's DSL business and adding hundreds of millions of dollars to
SBC's costs in providing the service.  And because of the heavy
hand of regulations, SBC said, the company will slow its build-
out of broadband service.  "No responsible company could justify
fully deploying broadband capabilities and investing in new
advanced networks in the face of this uncertain environment," Mr.
Whitacre said. 

Cutting against the grain of a broader market rally, SBC common
stock fared poorly on Monday, closing down $2.24 per share, or
about 5%, at $41.40.  Goldman Sachs telecom analyst Frank
Governali noted that while SBC made its bottom-line target for
the quarter, the earnings report revealed a "greater than expect-
ed" erosion in revenue growth.  As a result, the analyst trimmed
expectations on SBC's 2002 revenue growth to 2.0% from a previous
figure of 4.7%, and cut the 2002 full-year earnings estimate from
$2.45 per share, to $2.35 per share. 

-- John Curran, jcurran@tr.com


*****************************************************************
U.S. BANKRUPTCY COURT RESCHEDULES NextWave 
HEARING ON DISCLOSURE. STATEMENT

A bankruptcy court on Monday rescheduled a NextWave Telecom,
Inc., hearing that had been scheduled for today.  NextWave had
asked for the hearing to be continued until Nov. 1, but the
session was set for Nov. 2 because of an attorney's scheduling
conflict, according to a court clerk.

At the hearing, the court will consider the adequacy of
NextWave's disclosure statement, which accompanied its bankruptcy
reorganization plan, and whether to approve the carrier's tech-
nology cooperation and subscription agreements with QUALCOMM,
Inc.

The action by Judge Adlai S. Hardin Jr. of the U.S. Bankruptcy
Court for the Southern District of New York (White Plains) came
as several wireless carriers that bid on NextWave's spectrum at
an auction earlier this year continued negotiating an agreement
with NextWave and the FCC that could settle the 5-year-old
dispute involving NextWave's "C" and "F" block PCS (personal
communications service) licenses.

Last Friday, the federal government asked the U.S. Supreme Court
to review a lower court's ruling that the FCC illegally reclaimed
the carrier's licenses (TR, Oct. 22).  Filing separate petitions
for a writ of certiorari were Verizon Wireless, and VoiceStream
Wireless Corp., Arctic Slope Regional Corp., and Council Tree
Communications LLC.  Arctic Slope is the managing member of
Alaska Native Wireless LLC, the second-highest bidder at the
auction of NextWave's spectrum.

Like the government, the carriers filed their petitions to
preserve their rights in the case, according to a source.  "We
want a settlement to work," the source told TR Daily today.

-- Paul Kirby, pkirby@tr.com


*****************************************************************
CenturyTel TO PAY $2.15B FOR VERIZON's 
ALABAMA, MISSOURI EXCHANGES

CenturyTel, Inc.'s plan to expand its rural wireline operations
via the acquisition route took a big step forward today, as the
company announced an agreement to purchase all of Verizon Commu-
nications, Inc.'s access lines in Alabama and Missouri for $2.159
billion.  

The proposed transactions includes 90 wireline telephone exchang-
es and 306,000 access lines in Alabama, and 98 exchanges and
about 369,000 access lines in Missouri, the companies said.  Upon
completion of the transaction, about 450 Verizon wireline employ-
ees in Alabama and 500 Missouri workers will become employees of
CenturyTel, they said.

"This transaction will allow us to sharpen our focus on competing
in targeted markets and on growing the company," said Verizon
President and Vice Chairman Lawrence T. Babbio Jr.  "We will
focus resources on states where we have greater critical mass in
terms of operations support and clustered markets," he said. 
"Verizon and CenturyTel worked together to reach an agreement
that provides for the fair and equitable treatment of the affect-
ed Verizon employees in Alabama and Missouri."

For CenturyTel, the deal fits with its strategy of becoming the
"leading pure-play rural local exchange carrier."  In rebuffing
ALLTEL Corp.'s takeover bid earlier this year, CenturyTel offi-
cials said the company planned to expand its rural wireline
operations and sell its wireless business (TR, Aug. 22 and Aug.
27).

The proposed transaction with Verizon requires approval by the
Alabama and Missouri public service commissions, the FCC, and the
Department of Justice, the companies said.  They hope to complete
the transaction during the second half of next year.

-- Ryan Oremland, roremland@tr.com


*****************************************************************
VERIZON SEEKS END TO UNBUNDLED 
LOCAL SWITCHING

The FCC should eliminate, "or at a minimum significantly limit,"
incumbent local exchange carriers' obligation to provide local
switching to competitors as an unbundled network element (UNE),
Verizon Communications, Inc., told the FCC late Friday, Oct. 19.

In response to a federal appellate court's remand of an earlier
FCC order that listed the UNEs incumbent telcos must provide
competitors, the Commission is currently considering which
network elements it is "necessary" for a competitor to have
access to.  It is also considering whether failure to provide
access to a given UNE would "impair" a competitor's ability to
provide service.  The U.S. Court of Appeals in Washington had
remanded the FCC's previous UNE order in Common Carrier docket
96-98 because it failed to consider the "necessary" and "impair"
standards laid out section 251(d)(2) of the Telecommunications
Act of 1996.

In an ex parte letter filed late Friday, Oct. 19, Verizon told
the FCC that "the deployment and use of competitive local switch-
ing is a success story," and that therefore unbundled provision
of local switching is not necessary.  It also argued that the
availability of unbundled local switching at prices based on the
TELRIC (total-element long-run incremental cost) methodology
"undermines investment in competing facilities."

-- Lynn Stanton, lstanton@tr.com


*****************************************************************
CLEARER VISION ON BROADBAND POLICY
REQUIRED, 3COM EXECUTIVE SAYS

A significant problem with the slow deployment of broadband
services is a lack of clear policy vision on the issue, as well
as a commonly shared definition of "broadband" itself, said Eric
Benhamou, chairman of 3Com Corp. and Palm, Inc., on Monday in a
talk before the New America Foundation. "Our expectations have
been significantly disappointed," he said.

For some, the definition of broadband is 256 kilobits per second,
while others think an ISDN (integrated services digital network)
line is broadband, Mr. Benhamou said.  "We have set our sights
fairly low. . .in trying to use existing architectures like
[copper wires or coaxial cable].  It's not how you would build it
from scratch," he said.

But while the Telecommunications Act of 1996 failed to create
competition in the local market and to spur CLEC (competitive
local exchange carrier) broadband deployment, the Act did bring
more options for broadband services from other sources such as
wireless, cable TV, and even incumbent local exchange carriers,
he said.

Mr. Benhamou said the information technology industry has lacked
a "powerful, inspiring vision" for broadband.  IT executives need
to get together and create a strong vision, such as, "Delivery of
100 megabits per second to 100 million households by the end of
the decade," he said.  That focus on a common goal would create a
technology-neutral policy transformation, he said, and advances
in technology and innovation would make that goal possible.

He also urged against government favoritism in promoting the
availability of broadband.  "There should be no policy for the
promotion of any technology [for example, DSL (digital subscriber
line) or cable modem services].  It's bad when government picks
the technology."

-- Ed Rovetto, erovetto@tr.com


*****************************************************************
TELECOM EARNINGS ROUNDUP

Brightpoint Inc., an Indianapolis-based mobile phone distributor,
disclosed that revenues for the third quarter of this year are
expected to total $499 million -- below the guidance previously
supplied by management.  Brightpoint expects to report third
quarter losses in the range of $0.12 to $0.14 per share.  Helping
to drive the losses were especially difficult conditions in
Brazil and Venezuela, the company said.  Brightpoint is due to
report official third quarter results on Nov. 1.  

Network Plus Corp. reported third quarter revenues of $76.2
million, up 23% from the $62.1 million of revenues generated in
the same quarter last year.  Net loss for the most recent quarter
widened to $28.7 million, from a loss of $20.7 million last year. 
Network Plus, a competitive local exchange provider, noted that
it broke into positive EBITDA (earnings before interest, taxes,
depreciation and amortization) territory during the third quarter
with a $104,096 EBITDA profit, compared to a $4.9 million EBITDA
loss in the year-ago quarter. 

Cogeco Cable Ltd., based in Montreal, generated $69.7 million in
revenues for its fiscal fourth quarter ended Aug. 31, up 12.7%
from the $61.8 million in revenues booked in the year-ago quar-
ter.  Net income in the most recent quarter totaled $2.1 million,
versus $410,000 last year.  For the full fiscal year 2001, Cogeco
reported revenues of $277.7 million and net income of $3.6
million, compared to $235 million of revenues and $7.3 million of
net income last year.   The company said it expects to achieve 9%
revenue growth in fiscal 2002. 

ANADIGICS, Inc. said that third quarter revenues sank to $16.3
million, from $51.0 million in the year-ago quarter.  The compa-
ny, which makes radio frequency integrated circuits for broadband
and wireless communications, posted a $22.3 million net loss in
the most recent quarter, compared to a $7.0 million profit in the
same quarter last year.  ANADIGICS said it expects to generate up
to $18.5 million in revenues during the fourth quarter, and
forecasts a return to profitability during the second half of
2002.  

360networks Inc., the Vancouver fiber optic network services
provider in bankruptcy proceedings, announced that revenues for
the first half of 2001 fell to $17 million, from $234 million in
the comparable period last year.  "The decreases are due to the
renegotiation of a number of dark fiber contracts," the company
said, adding that it took an asset impairment charge of $4.4
billion to reflect the downturn in telecom and data communica-
tions markets.  EBITDA loss for the first six months of 2001 was
$429 million, versus positive EBITDA of $51 million for the same
period last year.   

*****************************************************************
NEWS IN BRIEF 

Eagle Broadband has named Manny M. Carter president and chief
operating officer.  He was president and chief executive officer
of Mobile Oil Caribe.  H. Dean Cubley will remain Eagle's chair-
man and CEO.  The company also promoted Roger Ihde to VP-adminis-
tration and strategic planning, and James Futer to executive VP
and director-international activities.  Eagle, based in League
City, Texas, is a wireline and wireless broadband provider.... 

Jose A. Segrera has been named chief financial officer of
Terremark Worldwide, Inc.  Before joining the company in Aug.
2000, he was with First Com (now AT&T Latin America).  Terremark
is an Internet data company based in Miami....

At Westell Technologies, Inc., Kurt Nelson has been named region-
al sales vice president (channel sales), and Lisa East has been
named product line director-customer network equipment.  Mr.
Nelson has held sales and management posts at @LinkNetworks,
Inc.; Ameritech; and the Ohio Bell Telephone Co.  Ms. East was
product line manager-DSL (digital subscriber line) products at 3-
Com, Inc.  Westell is a broadband access company based in Aurora,
Ill....

The World Trade Organization's fourth Ministerial Conference,
scheduled in Doha, Qatar from Nov. 9-13, will go ahead as sched-
uled, according to WTO Director-General Mike Moore.  "We are
going ahead. I am confident with the planning and preparations
here in Doha.  If something seismic or catastrophic happens we
will reconsider.  But we're planning to come here to Doha in just
over two weeks time," Mr. Moore said today in a press release.

Commerce Secretary Donald L. Evans issued a statement today
calling on the Senate to vote "as soon as possible" to reinstate
the ban on Internet taxes for "at least two years."  The three-
year moratorium expired yesterday.  The House last week approved
legislation that would have extended the moratorium until Nov. 1,
2003, but the Senate failed to consider the bill before the ban
expired (TR, Oct. 22).  In his statement today, Mr. Evans said,
"In a time of uncertainty, we must continue to reassure consum-
ers, businesses, and markets that we continue to create the right
environment for growth.  Extending the moratorium will do that." 

Motorola Inc. revealed plans to raise more than $1.2 billion
through the sale of equity units consisting of senior notes plus
contracts to buy Motorola common stock, as well as senior unse-
cured notes.  Proceeds are slated to reduce short-term debt and
for other corporate purposes. 

RCN Corp. said it closed its "dutch auction" debt buyback offers
with agreements to purchase $593 million face amount of outstand-
ing junk bonds for $161 million. 

L-3 Communications completed a previously announced sale of $350
million of 4% senior subordinated convertible contingent debt
securities due 2011.  The securities are convertible into L-3
common stock at $107.62 per share.  Proceeds from the offering
may be used to fund acquisitions, the company said. 

UbiquiTel Inc. completed the sale of the California spectrum of
VIA Wireless to VoiceStream Wireless.  Purchase price was $50
million.  VIA Wireless was acquired in August by UbiquiTel, a
Conshocken, Pa.-based provider of Sprint PCS digital wireless
services....

Cable Design Technologies Corp. entered agreements to purchase a
79% stake in Prague-based Kabelovna Decin - Podmokly S.A., a
manufacturer of communications and fiber optic cable.  Terms were
not disclosed, but Cable Design said the acquisition is expected
to be accretive to earnings....

Brightpoint, Inc. completed its acquisitions of the common stock
of Mega-Hertz SARL, and assets of Dirland S.A., both of France.
Terms of the deals were not disclosed, but Brightpoint said that
the acquired businesses generated about $46 million of revenues
last year....

AOL Time Warner Inc. announced an agreement to distribute its
CETV channel to cable television subscribers in the southern
region of the People's Republic of China.  The agreement was
hailed by AOL as the first instance in which a foreign TV insti-
tution has been permitted cable TV carriages rights in mainland
China.  CETV is a 24-hour Mandarin language information and
entertainment channel. As part of the deal, AOL Time Warner will
carry a 24-hour channel produced by China Central Television, the
country's national television network....

Viasystems Group, a supplier of electronic manufacturing services
to the telecom sector, among others, said its shareholders
approved a transaction enabling the firm to issue ten million
share of common stock to Hicks, Muse, Tate & Furst Inc.  The
stock would be issued to Hicks Muse upon exercise of warrants
associated with a $100 million note that Hicks Muse placed with
Viasystems in July....

Telex Communications, Inc. extended the expiration date of its
subordinated note exchange offers to Oct. 26.  The extension was
announced as Telex continues to seek financing for its proposed
debt restructuring plan, of which the exchange offers are a
part....

McLeodUSA Inc. said it deferred payment of a quarterly stock
dividend on its outstanding Series A preferred stock.  The
dividend historically has been paid in shares of McLeodUSA Class
A common stock.  However, since the market price of the common
stock has declined substantially in recent months, McLeodUSA said
it deferred the payment rather than issue more than seven million
shares of new common stock to cover the payment....

Startec Global Communications Corp. shareholders approved a
measure to increase the company's authorized common stock to 300
million shares.  The increase was sought by management to further
a "preliminary and tentative agreement" with Startec bondholders
to restructure the firm's $160 million of outstanding senior
notes.  Based in Potomac, Md., Startec is a facilities-based
provider of Internet Protocol telecom services....

IntelliSpace said it that it secured an additional $10 million in
venture financing through funders including Halpern Denny & Co.,
bringing its fund-raising total to $110 million since inception. 
Based in New York, IntelliSpace is an Ethernet IP broadband
services provider....  

Ikanos Communications, Inc. announced that it raised an addition-
al $5.1 million of venture financing from funders including Intel
Capital and VentureTech LLC.  Ikanos, based in Fremont, Calif.,
develops next-generation broadband semiconductors. 


********************************************************
TR DAILY Copyright 2001 Telecommunications Reports International,
Inc., (ISSN 1082-9350) is transmitted weekdays, except for
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Published by the Business & Finance Group of CCH INCORPORATED.

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