5/7. The House passed HR 766, the Nanotechnology Research and Development Act of 2003, a bill to authorize the appropriation of over $2 Billion over three years for research and development at the National Science Foundation (NSF) and other federal agencies.

It passed by a vote of 405-19. See, Roll Call No.167. The bill enjoys broad bipartisan support. However, all nineteen of the no votes were cast by Republicans.

The bill is sponsored by Rep. Sherwood Boehlert (R-NY). Its lead cosponsor is Rep. Mike Honda (D-CA), who represents a Silicon Valley district. He stated that "The funding for nanotechnology research and development will fuel the growth and maturation of the industry, and will lead to the three most important priorities in Silicon Valley -- jobs, jobs, jobs".

The House narrowly rejected two amendments offered Rep. Chris Bell (D-TX). One would have expanded the scope of the bill to also include "research on the potential of nanotechnology to produce or facilitate the production of clean, inexpensive energy". Another would have expanded the bill's language pertaining to studying "societal and ethical concerns, including environmental concerns" to also include "toxicological studies".

The Senate has not yet passed this bill. However, Sen. George Allen (R-VA) and Sen. Ron Wyden (D-OR) have introduced and held a hearing on related legislation in the Senate. See, S 189, the "21st Century Nanotechnology Research and Development Act".

See also, related stories: "House Science Committee Approves Bill to Authorize Funding for Nanotech Research" in TLJ Daily E-Mail Alert No. 654, May 2, 2003; "Senate Commerce Committee Holds Hearing on Nanotechnology" in TLJ Daily E-Mail Alert No. 654, May 2, 2003; "House Science Committee Holds Hearing on Nanotechnology" in TLJ Daily E-Mail Alert No. 641, April 10, 2003; Commerce Department Official Addresses Nanotechnology in TLJ Daily E-Mail Alert No. 641, April 10, 2003; "Representatives Introduce Bill To Authorize Nanotech R&D Funding" in TLJ Daily E-Mail Alert No. 606, February 18, 2003; "Rep. Honda Introduces Nanotechnology Bill" in TLJ Daily E-Mail Alert No. 582, January 14, 2003; "Senate Commerce Committee Approves Nanotechnology Bill" in TLJ Daily E-Mail Alert No. 513, September 20, 2002; and "Senators Introduce Nanotechnology R&D Bill" in TLJ Daily E-Mail Alert No. 511, September 18, 2002.

5/7. Federal Communications Commission (FCC) Commissioner Kathleen Abernathy gave a speech [5 pages in PDF] titled "Trust the Market". She praised the FCC's trust of market forces in its regulatory decisions pertaining to wireless phone service and unlicensed wireless devices, but criticized the FCC's failure to rely on market forces in its triennial review order.

Abernathy (at right) began by praising the FCC's decisions, long ago, regarding the wireless industry. She said that "the wireless experience illustrates how Commission policy ought to work: We establish policies that encourage entry into the marketplace; firms compete with one another based on price and service quality; and consumers make choices that maximize their welfare. In the end, some firms succeed while others fail, and it is the role of regulators to referee between carriers and consumers and among providers -- not to pick winners and losers."

"Regulators are often hesitant to trust markets to operate rationally", said Abernathy. "There is always a tendency to believe that direct intervention and manipulation will somehow yield a better result for consumers." She contrasted the decisions long ago not to impose common carrier type regulation on the cellular sector, and the decisions now being made regarding unlicensed spectrum use, with the UNE-P portions of the FCC's triennial review order.

She said that currently the FCC is "moving towards increasing the amount of unlicensed spectrum that is available for new entrants to provide telecommunications services" such as WiFI, Bluetooth, cordless telephones and garage door openers. She added that "the FCC does intervene to establish certain rules of the road to avoid harmful interference and allow multiple devices to operate in the same frequency band", but that the FCC has resisted "the urge to impose heavy handed regulation."

She continued that "the FCC affirmed its decision to allow ultra-wide band devices on an unlicensed basis to be deployed in a large portion of the lower frequency bands. ... The Commission is also looking at additional frequency bands at 70, 80 and 90 MHz for other unlicensed devices. And just last month the FCC issued a notice of inquiry seeking information on what technical rules are required to allow power line broadband carrier services to be utilized. We are hopeful that power lines might offer a new broadband pipe to the home and office over the existing power infrastructure by operating in unlicensed frequency bands."

The FCC's ultrawideband (UWB) proceeding is ET Docket No. 98-153. The FCC adopted its First Report and Order [118 pages in PDF] on February 14, 2002 (released April 22, 2002). See also, Memorandum Opinion and Order [91 pages in PDF] adopted on February 13, 2003. The FCC's broadband over powerline (BPL) proceeding is ET Docket No. 03-104. The FCC adopted its Notice of Inquiry [21 pages in PDF] at its April 23, 2003 meeting. See, stories titled "FCC Announces NOI Regarding Broadband Over Powerlines" in TLJ Daily E-Mail Alert No. 648, April 24, 2003; and "FCC Releases NOI on Broadband Over Power Lines" in TLJ Daily E-Mail Alert No. 656, May 7, 2003.

In contrast to the FCC's action in these proceedings, Abernathy stated that the FCC "has taken a step back from relying on competitive market forces" in other areas. "Such slippage will ultimately harm consumers by stifling innovation and choice in the marketplace which may ultimately lead to fewer choices and higher rates for consumers. It can also lead to unintended consequences, such as uncertainty and a lack of capital investment. This is what happened in part of the recently adopted triennial review order."

See, TLJ stories on the FCC's February 20, 2003 order:
 • FCC Announces UNE Report and Order
 • FCC Order Offers Broadband Regulatory Relief
 • FCC Announces Decision on Switching
 • Commentary: Republicans Split On FCC UNE Order
 • Congressional Reaction To FCC UNE Order
See also, TLJ story titled "Commerce Committee Holds Hearing on FCC Triennial Review Order", February 26, 2003.

She summarized the content of the order, which the FCC announced in February, but has not yet released.

She then criticized the portion of the order that eliminates line sharing over copper loops. She elaborated that "new fiber investment, copper loops are already in place. So giving competitors like Covad the ability to share those loops does not deter investment at all. In fact, allowing competitors to offer DSL through line sharing promotes competition and investment. If the incumbent wants to find a way to differentiate its service offerings, it can build new fiber loop facilities without being subject to the TELRIC unbundling regime."

She also said that the UNE-P portions of the order represent a "failure to put some faith in the market". She continued that "I believe the majority’s decision to allow each state commission to decide the fate of unbundled switching, based on a largely subjective analysis, was bad for the telecom market and, in the long term, will be bad for consumers."

She added that this part of the order is "legally indefensible", and will result in litigation and uncertainty.

She concluded that "I am disappointed by this outcome, because the FCC had an opportunity to put us on a path towards more sustainable facilities-based competition and, ultimately, a greater reliance on market forces. Instead, the majority opted for an extraordinary degree of regulatory oversight and uncertainty. And while I have no doubt that the state commissions will attempt in good faith to make economically sound decisions, I also know that different states will reach diametrically opposed conclusions based on the same underlying facts."

5/7. The World Trade Organization (WTO) authorized the European Union (EU) to impose $4 Billion in retaliatory tariffs on U.S. exports. The WTO previously ruled that the U.S. Foreign Sales Corporation (FSC) tax regime, its replacement, the Extraterritorial Income (ETI) tax regime, constitute illegal export subsidies. This ruling permits the EU to impose retaliatory tariffs. On February 26, 2003, the EU released a revised list of items that may be subject to retaliatory tariffs.

The WTO's Dispute Settlement Body (DSB) stated in a release that "The EC requested authorization from the DSB to take appropriate countermeasures (see WT/DS108/26) and to suspend concessions vis-à-vis the US for an amount of US$4.04 billion per year according to the arbitration report WT/DS108/ARB issued in August 2002. The EC added on a more positive note that obtaining the authorization did not mean that they would immediately resort to countermeasures. The EC said that they were still willing to give the US a short additional period to make the necessary legislative changes."

Bills have been introduced to bring U.S. tax law into compliance with the WTO rulings, including HR 1769, the Job Protection Act of 2003. It was introduced by Rep. Phil Crane (R-IL), Rep. Charlie Rangel (D-NY), and others on April 11, 2003. The Senate Finance Committee and House Ways and Means Committee have jurisdiction over trade issues.

Sen. Charles Grassley (R-IA) (at right), the Chairman of the Senate Finance Committee, stated in a release [PDF] that "It's important to remember that today's action doesn't mean that the EU will impose extra duties any time soon. The Europeans know we're working on this issue. I've encouraged them to exercise restraint before moving forward with any sanctions so our legislative process can move toward a resolution of this issue. They're exercising that restraint. I believe this will be helpful as we continue to move forward."

The House Ways and Means Committee issued a release in which it stated that "Today, the European Commission’s (EC) spokeswoman, Arancha Gonzalez, cast serious doubts on legislative efforts to phase out the illegal U.S. tax regime known as FSC-ETI. The leading proponent of such an approach is Rep. Charlie Rangel (D-NY), who with cosponsor Rep. Phil Crane (R-IL) introduced H.R. 1769."

Also on May 7, EU Trade Commissioner Pascal Lamy (at right) stated in a release that "I am encouraged by the determination of the US Administration and Congressional leaders to ensure repeal of FSC/ETI during the course of the current fiscal year. I also trust that any solution found by the US will be fully compatible with WTO rules. The Commission will review the situation in the autumn, and if there is no sign that compliance is on the way at that time, it would then start the legislative procedure for the adoption of countermeasures by 1 January 2004."  

Sen. Grassley continued that "I'm committed to complying with the WTO decision once the Finance Committee has completed action on an economic growth package, and the threat of sanctions won't change our timetable for addressing this issue. Already one bill has been introduced in the House providing for the repeal of FSC/ETI. I'm studying several proposals, and I'll continue working with Senator Baucus to reach agreement on introducing legislation in the Senate. I intend to work to enact legislation this year, before the end of this year's congressional session."

Sen. Grassley added that "Imposing sanctions would only disrupt this ongoing process and cause further delays in achieving a resolution. The retaliation list targets many important exports, among them a number of agricultural exports including both corn and soybean products. Sanctions would needlessly elevate bilateral trade tensions in the targeted areas and derail our efforts to resolve this issue in a timely way. Sanctions could also lead to a deeper economic slowdown when we need to do all we can to expand world trade and economic growth."

5/1. The Department of Justice's (DOJ) Antitrust Division filed a Response to Public Comments with the U.S. District Court (NDOhio) in the proceeding titled USA v. Village Voice Media and NT Media. It addresses the First Amendment and antitrust enforcement against publishers of city newspapers and web sites.

The two companies, Village Voice Media and NT Media, publish weekly city newspapers and associated web sites. They entered into an agreement to allocate markets. The agreement also provided that they would redirect internet traffic to their closed newsweeklies' web sites to the remaining newsweeklies' web sites.

In January, the DOJ filed a complaint alleging violation of antitrust law. The two count complaint alleges both per se and rule of reason violations 15 U.S.C. § 1. The DOJ and the two companies settled the matter. The DOJ also prepared a Proposed Final Judgment that requires the companies to terminate their agreement.

As required by 15 U.S.C. § 16, the DOJ published in the Federal Register a Competitive Impact Statement and Proposed Final Judgment, and solicited public comments.

In the present Response to Public Comments, the DOJ addresses, among other things, the effect of the First Amendment upon the antitrust actions against publishers. The DOJ wrote that "The restraints imposed by these private arrangements are not protected by the First Amendment."

The DOJ continued that "Neither news gathering nor news dissemination are being regulated by the Proposed Final Judgment, which addresses only the Defendants' per se illegal restraints on certain business or commercial practices. The Defendants' unreasonable restraints on competition -- which the Proposed Final Judgment remedies -- comport neither with the antitrust laws nor with the First Amendment."

The DOJ then quoted from the Supreme Court's opinion in Citizen Publishing Co. v. United States, 394 U.S. 131 (1969), which in turn quoted from Associated Press v. United States, 326 U.S. 1 (1945): "It would be strange indeed ... if the grave concern for freedom of the press which prompted adoption of the First Amendment should be read as a command that the government was without power to protect that freedom. The First Amendment, far from providing an argument against application of the Sherman Act, here provides powerful reasons to the contrary. That Amendment rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public, that a free press is a condition of a free society. Surely a command that the government itself shall not impede the free flow of ideas does not afford nongovernmental combinations a refuge if they impose restraints upon that constitutionally guaranteed freedom."

See also, story titled "DOJ Files Antitrust Complaint Against Newspaper and Web Site Publishers for Allocation of Markets" in TLJ Daily E-Mail Alert No. 592, January 28, 2003. See also, DOJ's notice in the Federal Register of its proposed Final Judgment and Competitive Impact Statement (February 12, 2003, Vol. 68, No. 29, at Pages 7132-7147).

The House will meet at 10:00 AM. It is scheduled to take up HR 1261, the Workforce Reinvestment and Adult Education Act of 2003. See, Republican Whip Notice.

9:30 AM. The Senate Judiciary Committee is scheduled to hold an executive business meeting. The agenda includes consideration of several pending judicial nominations, including John Roberts (U.S. Court of Appeals for the District of Columbia Circuit), Michael Chertoff (3rd Circuit), Carolyn Kuhl (9th Circuit), Consuelo Callahan (9th Circuit), David Campbell (D Arizona), Maurice Hicks (WD Louisiana), and Scott Coogler (ND Alabama). The agenda also includes the nomination of William Emil Moschella to be Assistant Attorney General for Legislative Affairs. See, notice. Location: Room 226, Dirksen Building.

10:00 AM. The House Judiciary Committee will hold an oversight hearing titled "Direct Broadcast Satellite Service in the Multichannel Video Distribution Market". The witnesses will include Rupert Murdoch (Ch/CEO of News Corporation), Kevin Arquit (former Director of Competition at the Federal Trade Commission), Neal Schnog (President of Uvision and Vice Chairman of the American Cable Association), and Gene Kimmelman (Director of the Consumers Union). The hearing will be webcast. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. See, release. Location: Room 2141, Rayburn Building.

10:00 AM. U.S. Court of Appeals (FedCir) will hear oral argument in Atmel v. Silicon Storage Technology, No. 02-1522, an appeal from the U.S. District Court (NDCal). This is a patent infringement case involving semiconductor technology. Location: Courtroom 201, 717 Madison Place, NW.

TIME CHANGE. 1:00 PM. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing titled "Trade in Services and E-Commerce: The Significance of the Singapore and Chile Free Trade Agreements". See, notice. The hearing will be webcast. Press contact: Ken Johnson or Jon Tripp at 202 225-5735. Location: Room 2123, Rayburn Building.

1:00 PM. The Federal State Joint Board on Universal Service, which is chaired by Federal Communications Commission (FCC) Commissioner Kathleen Abernathy, will hold a forum on "potential rule changes to strengthen compliance and oversight over the schools and libraries component of the federal universal service support mechanisms, often called the ``e-rate´´ program". For more information, contact Matthew Brill at 202 418-2400. See, notice [PDF]. Location: FCC.

2:00 PM. The Senate Judiciary Committee' will hold a hearing the nomination of Robert McCollum to be Associate Attorney General at the Department of Justice (DOJ), and Peter Keisler to be Assistant Attorney General in charge of the DOJ's Civil Division. See, notice. Press contact: Margarita Tapia at 202 224-5225. Location: Room 226, Dirksen Building.

2:00 PM. Howard Beales, Director of the Federal Trade Commission's (FTC) Bureau of Consumer Protection, will participate in a panel discussion titled "Privacy" hosted by Financial Services Roundtable (FSB). The FSB is holding a two day meeting on May 8-9. The event is closed to all but FSB members. For more information, contact Richard Whiting at rich@fsround.org. Location: St. Regis Hotel, Crystal Ballroom, 16th & K Streets, NW.

Day four of the Federal Trade Commission's (FTC) trial in the Rambus matter, Docket No. 9302. Location: FTC, 600 Pennsylvania Avenue, NW, Room 532.

The House will meet at 10:00 AM. It is scheduled to take up HR 2, the Jobs and Growth Tax Act of 2003. See, Republican Whip Notice.

9:30 AM - 4:00 PM. George Mason University School of Law will host a conference titled "Critical Infrastructure Protection: Legal Questions at the Forefront of National Security". Lunch will be provided. See, notice and agenda [PDF]. The event is free. However, an RSVP is required. Contact Emily Frye at 703 993-4170 or ffrye@gmu.edu. Location: 3301 North Fairfax Drive, Arlington, VA.

2:00 PM. The Copyright Office (CO) will hold a hearing regarding the exemption of certain classes of works from the Digital Millennium Copyright Act's (DMCA) prohibition against circumvention of technological measures that control access to copyrighted works. See, notice in the Federal Register, March 20, 2003, Vol. 68, No. 54, at Pages 13652 - 13653, and revised notice in the Federal Register, April 23, 2003, Vol. 68, No. 78, at Pages 19966 - 19967 (changing the dates, times and locations). See also, CO web page on rulemakings on anticircumvention, the relevant statutory sections at 17 U.S.C. §§ 2101-2105, and story titled "Copyright Office to Hold Hearings on DMCA Anti Circumvention Exemptions", TLJ Daily E-Mail Alert No. 628, March 21, 2003. Location: Postal Rate Commission, 1333 H Street, NW., Third Floor.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in New England Pub Comm v. FCC, No. 02-1055. Judges Ginsburg, Rogers and Tatel will preside. Location: 333 Constitution Ave., NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Coolsavings.com v. Brightstreet.com, No. 02-1568, an appeal from the U.S. District Court (NDCal). Location: Courtroom 201, 717 Madison Place, NW.

12:15 PM. The Federal Communications Bar Association's (FCBA) Wireless Telecommunications Committee and Legislative Committee will host a luncheon. The topic will be "Congressional Perspectives on Wireless Issues". The scheduled speakers are Bill Bailey, James Assey, Will Nordwind and Gregg Rothschild. The price is $15. RSVP to Wendy Parish at wendy@fcba.org by May 7 at 5:00 PM. Location: Sidley Austin, 1501 K St., NW, Conference Room 6E.

5:00 PM. Deadline to submit applications to the National Telecommunications and Information Administration (NTIA) for PEACESAT Program grants. Pan-Pacific Education and Communications Experiments by Satellite (PEACESAT) grants are intended to support the acquisition of satellite communications to service Pacific Basin communities and to manage the operations of this network. See, notice in the Federal Register, April 9, 2003 Vol. 68, No. 68, at Pages 17354 - 17356.

Deadline to submit requests to the Federal Trade Commission (FTC) to participate as panelists at the FTC's June 18, 2003, public workshop on the costs and benefits to consumers and businesses of the collection and use of consumer information. See, FTC release.

Day five of the Federal Trade Commission's (FTC) trial in the Rambus matter, Docket No. 9302. Location: FTC, 600 Pennsylvania Avenue, NW, Room 532.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Starpower Communications v. FCC, No. 02-1131. Judges Ginsburg, Rogers and Tatel will preside. Location: 333 Constitution Ave., NW.

10:00 AM - 3:00 PM. Day one of a two day meeting titled "Wireless Innovations: New Technologies and Evolving Policies", hosted by the Federal Communications Commission (FCC), National Telecommunications and Information Administration (NTIA), and Department of State. The first day will be a technology showcase. See, notice in the Federal Register, April 24, 2003, Vol. 68, No. 79, at Page 20117 - 20118. Location: Department of Commerce Lobby and Auditorium, 1401 Constitution Ave., NW.

Deadline to submit nominations to the U.S. Patent and Trademark Office (USPTO) for members of the Patent Public Advisory Committee and Trademark Public Advisory Committee. See, notice in the Federal Register, April 4, 2003, Vol. 68, No. 65, at Pages 16480 - 16481.

9:00 AM - 5:00 PM. Day two of a two day meeting titled "Wireless Innovations: New Technologies and Evolving Policies", hosted by the Federal Communications Commission (FCC), National Telecommunications and Information Administration (NTIA), and Department of State. The second day will be a panel discussion on policy. See, notice in the Federal Register, April 24, 2003, Vol. 68, No. 79, at Page 20117 - 20118. Location: Department of Commerce Lobby and Auditorium, 1401 Constitution Ave., NW.

9:30 AM. The Senate Commerce Committee will hold another hearing on media ownership. Press contact: Rebecca Hanks at 202 Location: Room 253, Russell Building.

2:00 PM. The Senate Finance Committee's International Trade Subcommittee will hold a hearing to examine the status of the free trade area of the Americas, focusing on negotiations and preparations for the Miami Ministerial.

4:00 - 5:00 PM. The U.S. Chamber of Commerce will host an event titled "Homeland Security Business Forum: Science and Technology Under DHS". Charles McQueary, Under Secretary for Science and Technology, Department of Homeland Security, will speak. See, notice and online registration page. The price to attend is $35 (members) or $100 (others). For more information, contact ncfevents @uschamber.com or 202 463-5500. Location: 1615 H Street, NW.

The Federal Communications Commission (FCC) will begin Auction 48 (upper and lower bands paging licenses).

The Federal Trade Commission (FTC) will hold a one day workshop on the role of technology in helping consumers protect the privacy of personal information, including the steps taken to keep their information secure. See, FTC release and notice in the Federal Register, February 26, 2003, Vol. 68, No. 38, at Pages 8904 - 8906. Location: FTC, 601 New Jersey Ave., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [MS Word] titled "In the Matter of Second Periodic Review of the Commission’s Rules and Policies Affecting the Conversion To Digital Television". This is MB Docket No. 03-15, RM 9832, and MM Docket Nos. 99-360, 00-167, and 00-168. See also, FCC release and notice in the Federal Register, February 18, 2003, Vol. 68, No. 32, at Pages 7737-7747.

5/7. The Federal Communications Commission (FCC) released an Order and Consent Decree [12 pages in PDF] that fines Qwest Communications $6.5 Million for providing in region interLATA services in violation of the FCC's merger order approving the merger, in 2000, of U S West and Qwest.

Specifically, the Consent Decree recites that "Qwest admits that, with respect to the following matters, Qwest violated the Qwest/U S WEST Merger Order by not terminating, suitably modifying or divesting by the close of the merger (June 30, 2000) the following services provided to the following customers: a. Two leases of dark fiber: one to Timing Solutions Corp. in Arizona and one to MEANS, Inc. in Minnesota. b. Six private line services: one DS3 to Electric Lightwave, Inc. between Medford, OR, and Portland, OR; four DS3s to Triumph Communications each of them having one end point in Denver, CO, with the other end points in Chicago, IL, Kansas City, MO, Los Angeles, CA, and Sacramento, CA; and one DS3 to Teleglobe USA Inc. between Seattle, WA, and Los Angeles, CA."

It further states that "Qwest agrees that it shall make a voluntary contribution to the United States Treasury in the amount of $6.5 million. This amount shall be paid within 10 calendar days after the Commission order adopting this Consent Decree becomes final." See also, FCC release [PDF].

5/2. Federal Trade Commission (FTC) General Counsel William Kovacic gave a speech titled "The Modern Evolution of U.S. Competition Policy Enforcement Norms".

5/6. The General Accounting Office (GAO) released testimony [15 pages in PDF] titled "Telecommunications: Data-Gathering Weaknesses in FCC's Survey of Information on Factors Underlying Cable Rate Changes". The GAO wrote that "Based on interviews with 100 randomly sampled cable franchises that completed FCC’s 2002 survey, GAO’s preliminary analysis indicates that FCC's survey may not be a reliable source of information on the cost factors."