7/8. The Federal Communications Commission's (FCC) Media Bureau (MB) released its annual report [27 pages in PDF] titled "Report on Cable Industry Prices. See also, FCC release [PDF].

The FCC collected information about average monthly rates for the basic service tier (BST), which consists of local stations plus a few satellite channels, and major cable programming service tier (CPST).

The report concludes that "the average monthly rate for cable service, both programming and equipment, increased by 8.2% from $37.06 to $40.11, over the 12-month period ending July 1, 2002. This compares with a 5-year compound annual rate of increase of 7.1% from July 1997 to July 2002. The 8.2% increase reflects average increases in monthly charges of 3.7% for the BST, from $13.93 to $14.45; 10.8% for the CPST, from $19.88 to $22.02; and 12.0% for equipment, from $3.25 to $3.64. The average number of channels increased from 59.0 to 62.7 channels, an increase of 6.3% for the year ending July 1, 2002. To reflect this growth in channels, we calculated the average rate per channel. On this basis, the monthly rate per channel increased from 65.6 cents to 66.4 cents per channel, an increase of 1.2%. This compares with a 5-year average increase of 0.9%." (Footnotes omitted.)

FCC Commissioner Michael Copps wrote in a dissenting statement that the data and analysis contained in the report are insufficient.

He also wrote that "The data show the continuation of a troubling trend -- rates increased 8.2 percent in one year, significantly more than inflation and more than the average over the preceding five years. We hear from consumers who are fed up with continual increases in their cable bills. When consumers keep getting hit in the pocketbook year after year, we must commit the resources necessary to gather the information so we can make informed decisions to ensure that consumers are protected."

FCC Commissioner Jonathan Adelstein wrote in a concurring statement that "this year's Report omits statistical analyses conducted in previous years. The Commission traditionally has undertaken econometric analyses to determine whether specific factors influence rates, and to measure the extent of that influence. Such analyses would isolate and account for certain factors such as the number of channels, the impact of clustering and the type of competition faced by cable operators. For example, one question relevant to today’s cable environment is the effect on competition for cable from local-into-local DBS service. Analyzing this and other factors is related to our statutory mandate and would provide a more complete picture to the Congress in setting cable policy, and to the Commission in implementing it."

Bob Stoddard of the National Cable Telecommunications Association (NCTA) stated in a release that "Although cable prices have increased, cable consumers are also enjoying increased value for their entertainment dollar. Compared with taking a family of four to a single movie, concert or professional sports event, a month of basic cable remains a superior entertainment value. Cable customers are enjoying greater choice and quality in basic channels plus additional optional digital TV services. They’re also watching more basic cable programming than ever before. During 2002 and the first half of 2003, viewership of basic cable networks surpassed primetime viewership of the broadcast networks, a trend that shows no signs of abating."

The FCC is required to compile this report by the Cable Act of 1992. This is MM Docket No. 92-266.

7/8. The House passed HR 2658, the Department of Defense Appropriations for Fiscal Year 2004, by a vote of 399-19. See, Roll Call No. 335. See also, statement by President Bush praising the House. The Senate has yet to pass its version of the bill.

This is an appropriations bill. However, several provisions are technology related.

Total Information Awareness. Section 8124 of the bill places a limitation upon the Department of Defense Advanced Research Projects Agency (DARPA) Terrorism Information Awareness (TIA) program. This is DARPA's new name for Total Information Awareness.

The bill provides that "if and when research and development on the Terrorism Information Awareness program ... or any component of such program, permits the deployment or implementation of such program or component, no department, agency, or element of the Federal Government may deploy or implement such program or component, or transfer such program or component to another department, agency, or element of the Federal Government, until the Secretary of Defense--
  (A) notifies Congress of that development, including a specific and detailed description of (i) each element or component of such program intended to be deployed or implemented; and (ii) the method and scope of the intended deployment or implementation of such program or component (including the data or information to be accessed or used); and
  (B) has received specific authorization by law from Congress for the deployment or implementation of such program or component, including (i) a specific authorization by law for the deployment or implementation of such program or component; and (ii) a specific appropriation by law of funds for the deployment or implementation of such program or component."

However, the bill provides two exceptions, for "Lawful military operations of the United States conducted outside the United States", and for "Lawful foreign intelligence activities conducted wholly overseas, or wholly against non-United States citizens."

See also, stories titled "Senate Approves Total Information Awareness Amendment" in TLJ Daily E-Mail Alert No. 590, January 24, 2003; "House and Senate Pass FY 2003 Appropriation Package With TIA Amendment" in TLJ Daily E-Mail Alert No. 604, February 14, 2003; and "DARPA Releases TIA Report" in TLJ Daily E-Mail Alert No. 666, May 21, 2003.

Supercomputer Purchases. Section 8061 of the bill provides that "None of the funds in this Act may be used to purchase any supercomputer which is not manufactured in the United States, unless the Secretary of Defense certifies to the congressional defense committees that such an acquisition must be made in order to acquire capability for national security purposes that is not available from United States manufacturers."

DOD Chief Information Officer. Section 8084 of the bill provides that "None of the funds appropriated in this Act may be used for a mission critical or mission essential financial management information technology system (including a system funded by the defense working capital fund) that is not registered with the Chief Information Officer of the Department of Defense." (Parentheses in original.)

GPS. Section 8090 of the bill provides that "Funds available to the Department of Defense for the Global Positioning System during the current fiscal year may be used to fund civil requirements associated with the satellite and ground control segments of such system's modernization program."

Also on July 8 the Senate Appropriations Committee's Defense Subcommittee passed its version of the defense appropriations bill.

7/8. The Federal Communications Commission (FCC) released its Fourth Notice of Proposed Rulemaking [49 pages in PDF] in a proceeding to support the introduction of new advanced wireless services, including Third Generation (3G) wireless systems.

Current plans call for reallocating the 1710-1755 MHz band, which is used by the Department of Defense, for advanced wireless services (AWS), such as 3G services. 3G is intended to bring broadband internet access to portable devices. In the present 4th NPRM, the FCC proposes to make spectrum available for federal government operations that will be moved to make room for AWS and 3G services.

This 4th NPRM states, "Specifically, we propose to allow the U.S. Department of Defense ("DOD") to use the band 2025-2110 MHz, on a co-equal, primary basis with non-Federal Government operations, for earth stations at 11 sites that support military space operations (also known as tracking, telemetry, and commanding or "TT&C"). Over time, DOD access to the band 2025-2110 MHz for TT&C Earth-to-space transmissions ("uplinks") may make more spectrum available in the band 1755-1850 MHz for absorbing certain DOD systems displaced from the band 1710-1755 MHz. In addition, we propose to permit the military services to operate stations in the fixed and mobile except aeronautical mobile services in the band 2025-2110 MHz on a secondary basis at six sites in the southwestern region of the United States." (Footnotes omitted.)

This NPRM continues that "We also propose to make numerous allocation changes to the band 2360-2400 MHz, the most significant of which would rescind the recent establishment of Wireless Communications Services ("WCS") at 2385-2390 MHz, allow Federal and non-Federal Government flight test stations to operate in the band 2385-2395 MHz, and no longer make the band 2390-2400 MHz available for use by unlicensed Personal Communications Services ("PCS") devices. These allocation changes would permit DOD to relocate all aeronautical mobile systems out of the band 1710-1755 MHz, which is a major objective for facilitating the introduction of AWS. In addition, these allocation changes would provide needed replacement spectrum for use by DOD and commercial flight test stations, which may shortly lose access to the 35 megahertz of spectrum at 1525-1535 MHz and 2320-2345 MHz. Specifically, with regard to the Federal Government Table of Frequency Allocations, we propose: (1) to allocate the band 2385-2390 MHz to the mobile and radiolocation services on a primary basis and to the fixed service on a secondary basis; (2) to allocate the band 2390-2395 MHz to the mobile service on a primary basis; and (3) to limit use of the primary mobile service allocation at 2360-2395 MHz to aeronautical mobile applications, except that other mobile uses may be authorized on a secondary basis to aeronautical mobile applications." (Footnotes omitted.)

This NPRM also states that "With regard to the Non-Federal Government Table of Frequency Allocations, we propose: (1) to allocate the band 2390-2395 MHz to the mobile service on a primary basis, (2) to limit use of the existing mobile service allocation in the band 2385-2390 MHz and the proposed mobile service allocation in the band 2390-2395 MHz to flight test stations, and (3) to delete the unused fixed service allocation from the band 2385-2390 MHz. In addition, we propose to no longer make the band 2390-2400 MHz available for use by unlicensed Personal Communications Services ("PCS") devices. Consequently, we propose to rescind the WCS service rules for the band 2385-2390 MHz and to rescind the technical rules for unlicensed PCS operations in the band 2390-2400 MHz." (Footnotes omitted.)

Public comments will be due within 60 days of publication of a notice in the Federal Register, which has not yet occurred. Reply comments will be due within 90 of publication in the Federal Register.

This is ET Docket No. 00-258 and WT Docket No. 02-8.

7/8. The Senate Commerce Committee held a hearing on Federal Communications Commission's (FCC) recently released changes to its media ownership rules, focusing on the new rules on local radio ownership.

The FCC announced its changes to its media ownership rules at its June 2 meeting. See, FCC press release [10 pages in PDF] summarizing the changes. See also, story titled "FCC Announces Revisions to Media Ownership Rules" in TLJ Daily E-Mail Alert No. 672, June 3, 2003. The FCC released the Report and Order and Notice of Proposed Rulemaking [257 pages in PDF] on July 2, 2003.

The FCC summarized the radio portion of its report and order as follows: "FCC found that the current limits on local radio ownership continue to be necessary in the public interest, but that the previous methodology for defining a radio market did not serve the public interest. The radio caps remain at the following levels:
• In markets with 45 or more radio stations, a company may own 8 stations, only 5 of which may be in one class, AM or FM.
• In markets with 30-44 radio stations, a company may own 7 stations, only 4 of which may be in one class, AM or FM.
• In markets with 15-29 radio stations, a company may own 6 stations, only 4 of which may be in one class, AM or FM.
• In markets with 14 or fewer radio stations, a company may own 5 stations, only 3 of which may be in one class, AM or FM."

Sen. John McCain (R-AZ), the Chairman of the Committee, wrote in his prepared statement that the FCC's report and order "determined numerical limits on local radio ownership are ``necessary in the public interest to protect competition in local radio markets.´´ However, the FCC found its existing methodology of defining local markets based on a station owner’s signal contour to be ``flawed as a means to protect competition in local radio markets.´´ As a result, the FCC will now use an advertising metric provided by Arbitron, a market research company, as the basis for determining market definitions, rather than engineering data."

Sen. Ernest Hollings (D-SC), who attended the defense appropriations subcommittee's markup of the FY 2004 defense appropriation bill, rather than this one, wrote in his prepared statement that "Since 1996, there has been massive consolidation in the radio market. The number of radio owners has dropped 34% and the average revenue share of the top two owners in a local market is 74%. The result has been downsized local staff, elimination of local news and homogenized playlists. Opportunities for local and regional artists have been limited and even some popular artists have found themselves at odds with powerful radio owner groups."

He also wrote that "In selecting Arbitron Metros for the new radio market definition, the FCC has chosen to throw out the contour rule in its entirety in favor of a market definition created for the purpose of determining advertising metrics, not radio ownership. Moreover, Arbitron generates its revenues from the very radio broadcasters the FCC seeks to regulate. While the contour market definition was admittedly flawed, replacing it with a new definition with unknown and potentially unintended consequences may create more problems than it solves."

See also, prepared testimony of witnesses: Lewis Dickey (Cumulus Broadcasting), Jon Mandel (MediaCom), Simon Renshaw (The Firm), Irving Azoff (Azoff Music Management), and Alex Kolobielski (First Media Radio).

7/8. Microsoft announced that "Starting in September 2003, employees will be granted Stock Awards instead of stock options. The Stock Award program offers employees the opportunity to earn actual shares of Microsoft stock over time, rather than options that give employees the right to purchase stock at a set price." See, MSFT release.

It added that "As a result of the changes in its compensation approach, Microsoft indicated that starting with its 2004 fiscal year, the company will begin expensing all equity-based compensation, including previously granted stock options."

See also, instructions for audio replay of Microsoft CEO Steve Ballmer's conference call.

Rep. Anna Eshoo (D-CA), who is a sponsor of HR 1372, the Broad-Based Stock Option Plan Transparency Act of 2003, stated in a release that "In the past few months, a wide range of companies have decided to either expense or not expense employee stock option plans. My position remains unchanged. No company or entity has developed an accurate method of valuing these plans. Until that happens, we shouldn't force companies to penalize themselves by assigning arbitrary values to options which may never even be exercised. If we do, the only losers will be rank-and-file employees."

Rep. Eshoo (at right), who represents a Silicon Valley district, added that "In Silicon Valley, many start-ups and high technology companies offer stock options plans as a tool for attracting innovative, entrepreneurial employees. Often times, these are the only incentives a small company can afford to offer until it grows and goes public. I will continue to fight for legislation that improves the clarity of a company's financial position without arbitrarily penalizing its rank-and-file employees or their bottom line."

The House will meet at 10:00 AM for legislative business. See, Republican Whip Notice.

Day two of a two day conference titled "Supernova 2003". The topic will be "decentralization of communications, software, and media". See, agenda. Location: Hyatt Regency, Crystal City, Virginia.

9:30 AM - 12:30 AM. The Federal Communications Commission's (FCC) Office of Engineering and Technology (OET) will host a tutorial on Time Division Duplex (TDD). The FCC stated in its notice [PDF] that "Unlike the legacy cellular and PCS systems that have traditionally been circuit switched and focused on voice, these new systems can be optimized for the transmission of packet-switched data, which are characterized by asymmetric traffic flows both to and from the user. Increasingly, TDD is becoming increasingly popular for new broadband wireless access systems, including LAN systems like 802.11, and advanced broadband wireless access systems". Location: FCC, Commission Meeting Room, TW-C305 at 445 12th St., SW.

9:30 AM. The Joint Economic Committee will hold a hearing titled "Technology, Innovation, and the Costs of Healthcare". The Committee's notice [PDF] states that "In most sectors of the economy the introduction of new technologies and other innovations often results in greater efficiencies and lower production costs. In health care the opposite appears to be true. The hearing will explore what is unique to the health care industry that produces this result ..." Location: Room 628, Dirksen Building.

10:00 AM. The House Judiciary Committee will meet to mark up numerous bills, including HR __, implementing legislation for U.S. Chile free trade agreement (FTA), HR __, implementing legislation for U.S. Singapore FTA, and HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2003". The meeting may continue on July 10 at 10:00 AM. Location: Room 2141, Rayburn Building.

10:00 AM. The House Science Committee's Subcommittee on Research will hold a hearing on on HR 2183, the "Minority Serving Institution Digital and Wireless Technology Opportunity Act". Press contact: Heidi Tringe at 202 225-4275. The hearing will be webcast. Location: Room 2318, Rayburn Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Ericsson v. Harris, No. 02-1571. This is an appeal from the U.S. District Court (NDTex) in a patent infringement case involving wireless and cellular technology (D.C. No. 3-98 CV 2903-M). Location: Courtroom 402, 717 Madison Place, NW.

10:30 AM - 12:00 NOON. The Department of State's U.S. International Telecommunication Advisory Committee (ITAC) will hold a meeting to discuss matters related to the World Summit on the Information Society (WSIS), which will take place on December 10-12, 2003 in Geneva, Switzerland. See, notice in the Federal Register, June 18, 2003, Vol., 68, No.117, at Page 36623. Location: National Academy of Sciences, 2100 C St., NW.

10:30 AM. The Senate Appropriation Committee's Homeland Security Subcommittee will meet to mark up proposed legislation making appropriations for the Department of Homeland Security. Location: Room 124, Dirksen Building.

Approx. 11:00 AM. The House Commerce Committee's Subcommittees on Commerce, Trade and Consumer Protection and on Telecommunications and the Internet will hold a hearing titled "Legislative Efforts to Combat Spam". The scheduled witnesses are Timothy Muris (Chairman of the Federal Trade Commission), Charles Curran (Assistant General Counsel of America Online), Charles Betty (P/CEO of EarthLink), Paul Misener (Amazon.com), Kenneth Hirschman (Digital Impact), Christopher Murray (Legislative Counsel of the Consumers Union), and Christine Gregoire (Attorney General of the state of Washington). Press contact: Ken Johnson or Jon Tripp at 202 225-5735. The hearing will begin 30 minutes after completion of the Committee's markup of HR 1950, the Foreign Relations Authorization Act, which is scheduled for 10:00 AM. See, notice. Location: Room 2123, Rayburn Building.

2:30 PM. The Senate Judiciary Committee will hold a hearing on several pending judicial nominations. See, notice. Press contact: Margarita Tapia at 202 224-5225. See, notice. Location: Room 226, Dirksen Building.

Day two of a two day workshop hosted by the National Institute of Standards and Technology (NIST) on interoperability among storage and processor card systems. The price to attend is $275. See, notice. For more information, contact Curt Barker at 301 975-8443 or wbarker@nist.gov. Location: NIST, Gaithersburg, MD.

The House will meet at 10:00 AM for legislative business. See, Republican Whip Notice.

7:45 - 11:30 AM. The Business Software Alliance (BSA) and the Center for Strategic & International Studies (CSIS) will host an invitation only policy forum titled "Securing Information Infrastructure in the E-Gov Era". The speakers will include Robert Holleyman (BSA), Jim Lewis (CSIS), Dan Burton (Entrust), Scott Charney (Microsoft), Mark Forman (OMB), Tim Hoechst (Oracle), Drew Ladner (Department of the Treasury), John Landwehr (Adobe Systems), Rep. Zoe Lofgren (D-CA), Tim McNulty (Carnegie Mellon University), George Newstrom (Virginia Secretary of Technology), Rep. Adam Putnam (R-FL), Douglas Sabo (Network Associates), and Rep. Pete Sessions (R-TX). Press contact: Jeri Clausing at jeric@bsa.org or 202 530-5127. Others may contact Dan Fix at danf@bsa.org or Joelle Laszlo at jlaszlo@csis.org. Location: Room HC-5, Capitol Building.

9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. First, representatives of the FCC's International Bureau will report on the World Radio Conference 2003, which took place in Geneva, Switzerland from June 9 through July 4. Second, the FCC will consider a Report and Order regarding the compatibility of digital wireless phones and hearing aids. This is WT Docket No. 01-309. Third, the FCC's Homeland Security Policy Council will report on its accomplishments and future activities. See, agenda [PDF]. The meeting will be webcast. Press contact: Audrey Spivack or David Fiske at 202 418-0500. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. The agenda includes consideration of the proposed free trade agreements with Chile and Singapore, the nomination of Christopher Wray and Jack Goldsmith (to be Assistant Attorneys General), and several judicial nominations, including William Pryor (11th Circuit), Allyson Duncan (4th Circuit), Robert Brack (U.S. District Court, New Mexico), Samuel Der-Yeghiayan (Northern District of Illinois), Louise Flanagan (Eastern District of North Carolina), Lonny Suko (Eastern District of  Washington), and Earl Leroy Yeakel (Western District of Texas). Press contact: Margarita Tapia at 202 224-5225. See, notice. Location: Room SDG 50, Dirksen Building.

10:00 AM. The House Ways and Means Committee's Subcommittee on Social Security will hold a hearing on use and misuse of social security numbers. Location: Room B-318, Rayburn Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Superguide v. DirecTV, No. 02-1561. This is an appeal from the U.S. District Court (WDNC) in a patent infringement case involving Interactive Program Guides (IPG) software and systems used in connection satellite television services. Location: Courtroom 402, 717 Madison Place, NW.

2:00 PM. The Senate Finance Committee will meet to review and make recommendations on proposed legislation implementing the U.S. Singapore free trade agreement and the U.S. Chile free trade agreement. Location: Room 215, Dirksen Building.

Day one of a two day conference titled "Municipal Broadband". The price to attend is $895. For more information, call 206 621-1938. Location: Pier 5 Hotel, Inner Harbor, Baltimore, MD.

The Commerce Department's Bureau of Industry and Security (BIS) will host a one day seminar titled Essentials of Export Controls. The BIS charges for admission.

The House will meet at 9:00 AM for legislative business. See, Republican Whip Notice.

The Federal Communications Commission's (FCC) Consumer Advisory Committee (CAC) will hold a meeting. See, notice in the Federal Register, June 25, 2003, Vol. 68, No. 122, at Pages 37824 - 37825. Location: FCC, Room TW-C305, 445 12th Street, SW.

Day two of a two day conference titled "Municipal Broadband". Ed Thomas, Chief of the Federal Communications Commission's (FCC) Office of Engineering and Technology (OET) is schedule to speak at 8:30 AM. The price to attend is $895. For more information, call 206 621-1938. Location: Pier 5 Hotel, Inner Harbor, Baltimore, MD.

The Commerce Department's Bureau of Industry and Security (BIS) will host a one day seminar titled Export Management Systems (EMS). The BIS charges for admission. Location: Washington DC.

2:00 PM. The Senate Judiciary Committee will hold a hearing to examine temporary entry provisions of the proposed free trade agreements with Chile and Singapore. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Judiciary Committee will hold a hearing "Bankruptcy and Competition Issues in relation to the WorldCom Case". Press contact: Margarita Tapia at 202 224-5225. Location: Room 226, Dirksen Building.

10:00 AM. Federal Reserve Board Chairman Alan Greenspan will testify before the House Financial Services Committee. He will deliver his semiannual report on monetary policy. See, notice. Press contact: Peggy Peterson or Scott Duncan at 202 226-0471. Location: Room 2128, Rayburn Building.

Deadline to submit to the Internal Revenue Service (IRS) outlines of topics to be discussed at the IRS's September 10, 2003, hearing on proposed regulations relating to the definition of toll telephone service for purposes of the communications excise tax. See, notice in the Federal Register, June 17, 2003, Vol. 68, No. 116, at Pages 35828 - 35829.

7/8. The Senate confirmed David Campbell to be a Judge of the U.S. District Court (DAriz) by a vote of 92-0. See, Roll Call No. 263.