| Powell Confirmation Hearing |
5/17. The Senate
Commerce Committee held a hearing on the nomination of
Michael Powell to be Chairman of the FCC. Members of
the Committee uniformly praised Powell. They used the occasion
to press their views, and to question Powell about his views,
on various issues that fall within the jurisdiction or
activity of the FCC. Sen.
John McCain (R-AZ), the Chairman of the Committee, stated
that the Committee would likely vote on the nomination on May
24. See also, opening
statement [PDF] of Sen. McCain.
3G Wireless. Sen. McCain discussed the future of Third
Generation (3G) wireless services with Powell. McCain asked if
the U.S. is falling behind Europe. Powell stated that the U.S.
is "strained and constrained" by having spectrum
management divided between the FCC (for commercial users) and
the Commerce Department (for federal government and military
users). He stated that "trying to coordinate coherently
spectrum policy across those realms has proven difficult. It
has proven difficult within our own agency." He
elaborated that spectrum at the FCC is managed by the mass
media, wireless, and satellite "realms." He said
that he "has reached out to Secretary Evans and the
Commerce Department to look for ways to harmonize our decision
..." Powell then turned to the Europeans. "I believe
that Europe may be ahead, but it depends on what they are
heading to. This stuff, in my mind, is a lot like a marathon
race; sometimes the best place to be is in 3rd slot on the
20th mile, not the first. And we are looking now at European
environments that went very fast on Third Generation spectrum.
The amount of money paid at auctions is breath taking. And, by
some estimates, there are venerable companies that may be
facing collapse purely as a consequence of getting ahead of
themselves on Third Generation wireless spectrum. British
Telecom may face a grim reaper ..." Sen. McCain
concurred: "I think the Europeans have gotten too far
ahead of themselves."
Spectrum Markets. Sen.
Ron Wyden (D-OR) made the case for shifting from the FCC's
current system of permanently licensing of spectrum, to a
system of trading rights. He stated that "incumbents
cling to these licenses like fleas to a dog." Powell
stated that the FCC has been moving towards secondary markets
for spectrum, and that the FCC has become more aggressive
about the return of spectrum. Powell also stated that a
spectrum license "ought to be more like a drivers
license." That is, once it is issued, the government
should only tell the driver what not do with it. Powell
concluded that markets should determine what use is made of
licensed spectrum.
E-Rate. Several Senators, including Jay Rockefeller
(D-WV), Jean Carnahan
(D-MO), and Max Cleland
(D-GA) expressed their support for the FCC's e-rate program,
which subsidizes telecommunications, Internet access, and
internal connections for schools and libraries. Powell stated
that "the program has been a tremendous success." He
added that "my responsibilities are to administer the
program as written by the Congress."
Location Privacy. Sen.
John Edwards (D-SC) advocated protecting data on
individuals' location that is generated by mobile devices with
GPS capacity. "My belief is that is information that
consumers' should have control over," said Edwards. He
added that he and Sen.
Byron Dorgan (D-ND) will introduce a bill to protect
location privacy. Powell stated that he is not familiar with
the bill, and that the FCC now has limited jurisdiction over
location privacy issues.
Rural Broadband. Several Senators, including Jay
Rockefeller (D-WV), Sam
Brownback (R-KS), and Ted Stevens (R-AK) pressed Powell on
the importance of deploying broadband Internet access services
in rural and underserved areas at prices comparable to urban
areas. Powell reviewed proceedings at the FCC relevant to
these topics. He also suggested that policies should incent
new technologies, such as satellite and terrestrial wireless,
for which there will not be a large cost difference between
urban and rural areas.
Antitrust Merger Reviews. Sen. Max Cleland (D-GA)
questioned Powell about the role of the FCC on mergers. Powell
said that the FCC "plays the role that is articulated in
the statute, which is, if a merging party owns a license ...
and that license will have to be transferred to the new entity
... then that license transfer has to be examined by the
Commission, and the Commission has to affirmatively approve,
as, in the public interest, the transfer of that license. That
is a different standard than that employed by antitrust
authorities which administer the standards of the Clayton Act,
principally, and the Sherman Antitrust Act. But as a practical
matter, more often than not, it also involves, on the part of
the Commission, a review of traditional horizontal and
vertical merger concentration analysis, in the examination of
that merger." He also stated that there have been delays
at the FCC in the past. He also suggested that the FCC should
ask itself "whether we are value adding as to that ...
concentration analysis, or are we simply duplicating the
activities of the Federal Trade Commission or the Antitrust
Division." He then commented that the FCC can add two
requirements based on its public interest analysis that the
FTC and DOJ cannot -- diversity, and compliance with FCC
rules.
Media Ownership Rules. Sen. Ron Wyden (D-OR)
argued against continued concentration of ownership of media
companies. Powell stated that he is aware of the antitrust
issues involved in concentration of ownership; he added that
diversity is an issue in media ownership. He also stated the
markets have changed since many of the FCC's media ownership
rules were written, and that the First Amendment limits the
FCC's power to impose restrictions on media. He also suggested
that the greatest threat to limits on media ownership comes
from the judiciary, not regulatory agencies.
Interactive TV. Sen.
Conrad Burns (R-MT) asked Powell if he supports
"continued rule making" in the area of
interactive television. Powell responded by noting that he had
voted for the FCC's notice of inquiry.
Structural Separation for Bells. Sen. Ernest Hollings
(D-SC) asked Powell for his views on structural separation.
Hollings stated that "we have got to have some kind of
structural separation ... wholesale and retail." Powell
stated that "doing it now would be possible", but
would also be "complex" and "disrupting to the
market." He added that "it would be a very difficult
thing to do."
FCC Enforcement Authority. Sen Hollings also raised the
issue of the FCC's authority to fine ILECs for violation of
the local competition provisions of the Telecom Act of 1996.
Powell restated his request for legislation that would give
the FCC authority to impose fines of up to $10 Million. He
stated that "my best judgment is that we don't have
enough to provide the deterrent value." |
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| Abernathy, Martin and Copps
Have Smooth Confirmation Hearing |
5/17. The Senate
Commerce Committee also held a hearing on the nominations
Kathleen Abernathy, Kevin Martin, and Michael Copps to be FCC
Commissioners. The hearing was quick and without controversy
or opposition. They will likely be approved by the Committee
at its May 24 mark up meeting, and by the full Senate shortly
thereafter.
Sen. Jay Rockefeller
(D-WV) sought commitments from all three that they will
support (1) the e-rate subsidy program, (2) continued
operation of the e-rate as a Section
254 universal service program, (2) continued coverage of
telecommunications, Internet access, and internal connections,
and (3) continued coverage of private and parochial schools
and libraries. All three, like Powell before them, made these
commitments. Sen. John
Edwards (D-NC) praised the nomination of Kevin Martin, a
Republican from North Carolina, who previously was a legal
advisor to outgoing Commissioner Harold Furchtgott-Roth. Sen. Ted Stevens (R-AK)
praised Abernathy. Sen.
Fritz Hollings (D-SC) talked about the importance of the public
interest standard. Sen.
Conrad Burns (R-MT) said that spectrum management
would be a major issue for the three. |
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| NTCA Requests Rural
Commissioner |
| 5/17. Michael Brunner, CEO of the National Telephone Cooperative
Association (NTCA), wrote a letter to Senate Minority
Leader Tom Daschle (D-SD) stating that the "fifth and
final commissioner needs to be someone who will ensure the
FCC's implementation of sound rural telecommunications policy
..." The NTCA is a group that represents rural
telecommunications companies. The FCC will shortly have
another opening, which must be filed by a Democrat to maintain
the 3-2 partisan balance required by law. |
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| New Bills |
5/16. Rep. Vernon
Ehlers (R-MI) and Rep.
James Barcia (D-MI) introduced HR
1860, a bill to reauthorize the Small Business
Technology Transfer Program. It was referred to the House
Small Business Committee and the House Science Committee.
5/16. Rep. Nancy
Johnson (R-CT) and others introduced HR 1877, a bill to
amend Title 18 to provide that certain sexual crimes against
children are predicate crimes for the interception of
communications. The bill would amend 18
U.S.C. § 2516 regarding authorization for interception of
wire, oral, or electronic communications. The bill was
referred to the House
Judiciary Committee. Former Rep. Bill McCollum (R-FL)
sponsored a similar bill, HR
3484, in the 106th Congress; it was passed in the House by
a voice vote. |
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| ICANN |
| 5/15. Rep. John
Dingell (D-MI) wrote a letter
to Commerce Secretary Donald Evans regarding the new agreement
negotiated by the ICANN
and VeriSign. Dingell
stated that "The agreement incorporates a most unusual
technique for encouraging competition. It awards VeriSign, the
current $500-million, monopoly registry and holder of the most
popular dot-com domain name, advantages in the registry
renewal process and in terms, pricing, dispute resolution and
many other contract provisions that the newer, much smaller
registries will not have." On May 14, Ted Kassinger,
General Counsel of the Commerce
Department, which must approve the agreement, released a statement
in which he said that "The Department of Commerce has
been reviewing the VeriSign-ICANN (Internet Corporation for
Assigned Names and Numbers) proposal. We have communicated our
general thinking, are pleased with the progress, and are
confident an agreement can be reached in the near term." |
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| More News |
5/17. The Senate
Appropriations Committee's Subcommittee on Commerce,
Justice, State, and the Judiciary held a hearing on proposed
budget estimates for FY 2002 for the Federal Bureau of Investigation,
Drug Enforcement Administration, and Immigration and Naturalization
Service.
5/17. The Senate Governmental Affairs Committee held a hearing
on several nominations, including that of John Graham
to be Administrator of the Office of Information and
Regulatory Affairs, Office of Management and Budget.
5/17. The Senate
Judiciary Committee voted 9 to 9 on the nomination of Ted
Olson to be Solicitor General. It was a straight party
line vote. Senator Majority Leader Trent Lott may now bring
the matter to a vote in the full Senate.
5/17. The House
Judiciary Committee's Subcommittee on the Courts, the
Internet, and Intellectual Property held a hearing titled Music
On The Internet. TLJ will write about this hearing in the
Monday, May 21 issue. |
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| New Documents |
Johnson:
HR
1848, a bill to amend the Internal Revenue Code regarding
the depreciable life of semiconductor manufacturing equipment,
5/15 (HTML, LibCong).
Ehlers:
HR
1860, a bill to reauthorize the Small Business Technology
Transfer Program, 5/16 (HTML, LibCong).
Dingell:
letter
to Commerce Dept. re ICANN VeriSign agreement, 5/15 (HTML,
Dingell). |
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| Quote of the Day |
"The FCC has become, and will be, the center of the
economic engine in this country for the next 25 or 30
years."
Sen. Conrad Burns (R-MT), at confirmation hearing for
FCC Chairman Michael Powell, May 17. |
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| RIM Files Blackberry Patent
Suit |
5/16. On April 17 the USPTO
issued U.S.
Patent No. 6,219,694 to Research
in Motion (RIM). The patent discloses a system and method
for pushing information from a host system to a mobile data
communication device upon sensing a triggering event is
disclosed. RIM produces the Blackberry wireless, always on,
e-mail devices. See, RIM
release.
On May 16 RIM filed a complaint in U.S. District Court (DDel)
against Glenayre
alleging patent infringement. The complaint alleges patent
infringement, trademark infringement, dilution, unfair
competition and false advertising, violation of the Lanham
Act, and violation of the Delaware Deceptive Trade Practices
Act. Glenayre, based in Charlotte, North Carolina, makes
wireless messaging products. RIM seeks injunctive relief and
damages. See, RIM
release. |
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| HP Settles Patent
Proceeding |
| 5/17. Hewlett Packard (HP)
announced that it settled patent proceedings pending before
the U.S. International Trade
Commission (USITC) regarding the importation of printer
cartidges which infringe HP patents. HP filed complaints with
the USITC against Printer Essentials, Microjet Technology, and
four other companies, alleging that the companies infringed
six HP patents by importing or selling inkjet cartridges
manufactured by Microjet, including one model intended to
replace the HP 51626A cartridge and another model intended to
replace the HP 51629A cartridge. Under the settlement, Printer
Essentials agreed to enter into a consent order through which
it agrees to stop importing and selling the disputed
cartridges. Printer Essentials also acknowledged that the
Microjet cartridges infringe HP's patents and that the patents
are valid. See, HP
release. |
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| ILEC Enforcement |
5/17. The House
Commerce Committee's Subcommittee on Telecommunications
and the Internet held a hearing on HR
1765, a bill to increase penalties for common carrier
violations that is sponsored by Rep. Fred Upton (R-MI).
The bill is related to HR 1542, a bill to give regulatory
relief to the Baby Bells, which the House Commerce Committee
approved last week. FCC Chairman Michael Powell has requested
that Congress enact legislation giving the FCC more
enforcement authority to deal with ILECs that violate the
local competition provisions of the Telecom Act of 1996.
David Solomon, who testified on behalf of the FCC, said in his
prepared
statement that "Given the vast resources of the
nation's large common carriers, including incumbent local
exchange carriers and long distance carriers, the existing
caps on common carrier forfeitures of $120,000 per violation
or per day of a continuing violation, up to $1.2 million
overall for a continuing violation, are an insufficient
sanction or deterrent in many instances. The proposed 10-fold
statutory increases -- to $1 million and $10 million -- would
significantly strengthen our enforcement authority against
incumbent local exchange carriers and other common
carriers."
See, prepared testimony of witnesses: David
Solomon (FCC Enforcement
Bureau), Albert
Halprin (Halprin
Temple), Lawrence
Sarjeant (USTA), Royce
Holland (Allegiance Telecom),
and Leon
Jacobs (Florida PSC).
See also, statement
of Rep. Tauzin.
HR 1542 is sponsored by Rep. Tauzin and Rep. John Dingell
(D-MI). Reps. Tauzin and Dingell did not make the language of
HR 1765 a part of HR 1542, citing lack of germaneness.
Instead, it will be submitted to the House Rules Committee for
permission to offer it as an amendment to HR 1542 on the House
floor. |
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| Defense Spectrum Management |
| 5/17. The GAO
released a report
[PDF] titled "Defense Spectrum Management: New Procedures
Could Help Reduce Interference Problems." The report,
which was prepared for members of the House and Senate Armed
Services Committees, addresses new Department of Defense
procedures for spectrum management, including electromagnetic
environmental effects, when acquiring and implementing new
weapon systems. It concludes that "the new procedures
established by DOD are reasonable and, if successfully
implemented, could help prevent problems related to radio
frequency interference." |
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