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March 25, 2005, 9:00 AM ET, Alert No. 1,103.
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Copps Addresses Satellite and Communications Issues

3/23. Federal Communications Commission (FCC) Commissioner Michael Copps gave a speech [PDF] at an event hosted by the Satellite Industry Association (SIA) and the Satellite Broadcasting and Communications Association (SBCA).

Michael CoppsCopps (at right) stated that "the Commission needs to provide more certainty that satellite spectrum will remain satellite spectrum. We also need to guarantee that internationally harmonized spectrum isn't used for other purposes because such harmonization was won only after hard battles."

He discussed homeland security and public safety at length. He discussed, or referenced, communications readiness, communications infrastructure vulnerability, interoperability, redundancy, CALEA, E911 and GPS. And, he said that the new Chairman, Kevin Martin, should appoint one of the other Commissioners to "specifically to lead the FCC's efforts".

He also said that the FCC is "not adequately addressing" how "to integrate our hospitals, health centers, and doctors much more closely into the emergency response communications system".

Finally, he discussed the lack of transparency of other governments' regulation of communications. He said that "we should work harder internationally to improve the transparency of foreign regulatory regimes and ensure that they are not discriminatory."

In a related matter, on February 9, 2005, Copps and former Chairman Michael Powell wrote a letter [PDF] to Sen. Ted Stevens (R-AK), the Chairman of the Senate Commerce Committee, in which they stated that the open meeting requirement of the Government in Sunshine Act should no longer be applied to meetings of the FCC's Commissioners.

GAO Finds Weak Information Security At SEC

3/24. The Government Accountability Office (GAO) released a report [29 pages in PDF] titled "Information Security: Securities and Exchange Commission Needs to Address Weak Controls over Financial and Sensitive Data".

The report finds that the Securities and Exchange Commission (SEC) "did not effectively implement information system controls to protect the integrity, confidentiality, and availability of its financial and sensitive information. Specifically, the commission had not consistently implemented effective electronic access controls, including user accounts and passwords, access rights and permissions, network security, or audit and monitoring of security-relevant events to prevent, limit, and detect access to its critical financial and sensitive systems."

In addition, the GAO report identifies "weaknesses in other information system controls, including physical security, segregation of computer functions, application change controls, and service continuity, further increase the risk to SEC’s information systems.

This means that the SEC's "sensitive data -- including payroll and financial transactions, personnel data, regulatory, and other mission critical information -- were at increased risk of unauthorized disclosure, modification, or loss, possibly without being detected."

SEC Sues Time Warner for Overstating Online Ad Revenues

3/21. The Securities and Exchange Commission (SEC) filed a civil complaint [29 pages in PDF] in U.S. District Court (DC) against Time Warner Inc. alleging securities fraud in violation of Section 10b of the Exchange Act and Section 17a of the Securities Act, as well as violations of the reporting and record keeping provisions of federal securities law, in connection with its materially overstating online advertising revenue and the number of its internet subscribers.

The complaint alleges that AOL, and its successor, AOL Time Warner, "artificially inflated reported online advertising revenues and Internet subscriber counts -- two key measures by which investors and analysts evaluated the Company. The Company reported inflated online advertising revenue in periodic reports filed with the Commission and other public statements from October 2000 through February 2003 based on transactions entered into from June 2000 through December 2001. The Company also inflated its Internet subscriber counts in 2001." AOL Time Warner has since reverted to the name Time Warner.

The complaint further alleges that AOL "inflated its online advertising revenues by engaging in ``round-trip´´ transactions with a host of companies with which it had commercial relationships. These transactions ranged in complexity and sophistication, but in substance, the Company provided its customers with funds to purchase online advertising from AOL. Simultaneously, the customer would enter into an agreement to ``purchase´´ online advertising from AOL in an amount corresponding to the payment from the Company. AOL and AOLTW improperly recognized as online advertising revenue the amounts received pursuant to these purported advertising agreements and improperly accounted for the funds it provided to the customers."

The SEC also announced that Time Warner consented to the entry of a judgment that orders Time Warner to pay $300 Million in civil penalties. See, SEC release.

FEC Approves NPRM on Internet Speech

3/24. The Federal Election Commission (FEC) adopted its draft [48 page PDF scan] notice of proposed rulemaking (NPRM) regarding exempting certain unpaid individual communications on the internet from the Federal Election Campaign Act's (FECA) regulatory regime. The FEC approved the above hyperlinked NPRM with two minor changes.

The FEC inserted a date for a public hearing on this matter -- June 28 and 29, 2005. The FEC also made one minor change in wording. Also, public comments will be due 60 days after publication in the Federal Register.

FEC Commissioner Ellen Weintraub stated at the meeting that "We are not the speech police. The FEC does not tell private citizens what they can or cannot say, on the Internet, or elsewhere." The vote was 5-1. The one negative vote was cast by Commissioner David Mason. He did not oppose exempting certain internet activities. Rather, he stated that he voted against the NPRM because it does not go far enough in exempting internet speech. He favors a blanket internet exemption.

The vote is a setback for Sen. John McCain (R-AZ), Sen. Russ Feingold (D-WI), Rep. Christopher Shays (R-CT), and Rep. Marty Meehan (D-MA). Sen. McCain and Sen. Feingold were the Senate sponsors, and Rep. Shays and Rep. Meehan were the leading House proponents, of the 2002 act that required the FEC to write new regulations. The FEC did so, but added an exemption for internet communications.

Rep. Shays and Rep. Meehan challenged the FEC regulations in court, and won. Sen. McCain and Sen. Feingold supported their legal action. The FEC is undertaking the present rulemaking proceeding at the direction of the court. The four wrote a cautionary letter to the FEC on March 22.

The four authors of the opposition letter wrote that the overturned regulation "served to seriously undermine the law", and warned that the FEC should write new regulations "without creating loopholes".

See also, stories titled "Bloggers Dodge McCain Feingold Bullet" in TLJ Daily E-Mail Alert No. 1,102, March 24, 2005, "FEC to Consider Rules Regarding Internet Speech" in TLJ Daily E-Mail Alert No. 1,100, March 22, 2005, "Sen. Reid Introduces Bill to Exempt Internet Communications From Certain FEC Regulation" in TLJ Daily E-Mail Alert No. 1,101, March 23, 2005, and "Democratic Representatives Urge FEC Not to Regulate Blogs" in TLJ Daily E-Mail Alert No. 1,101, March 23, 2005.

TLJ intends to publish a more detailed story on this proceeding in the next issue.

More News

3/24. The Federal Trade Commission (FTC) announced that the FTC, University of North Carolina -- Chapel Hill School of Law, and UNC -- Chapel Hill School of Journalism and Mass Communication will host a day long workshop titled "Green Lights & Red Flags: FTC Rules of the Road for Advertisers" on April 19, 2005. The agenda includes discussion of the National Do Not Call Registry, DOT.COMpliance, the CAN-SPAM Act, and information privacy and security. See, FTC notice. The workshop will be held at the William and Ida Friday Continuing Education Center in Chapel Hill, North Carolina.

3/24. The Federal Election Commission (FEC) announced the assessment of thirteen administrative fines. See, FEC release. One of the fined entities is titled "Friends of John Conyers". The FEC fined this committee $1,350 for not filing a 12 day pre-primary report. Rep. John Conyers (D-MI) is the ranking Democrat on the House Judiciary Committee. On March 11, he signed a letter to the FEC urging it not to impose the Federal Election Campaign Act's (FECA) regulatory regime upon individual bloggers. See, story titled "Democratic Representatives Urge FEC Not to Regulate Blogs" in TLJ Daily E-Mail Alert No. 1,101, March 23, 2005.

3/16. The Progressive Policy Institute (PPI) released a report [16 pages in PDF] titled "Internet Telephone Service: A New Era of Competition in Telecommunications". See also, summary of report. The report was written by Robert Atkinson, Director of the PPI's Technology & New Economy Project.

3/9. Viviane Reding, the European Commission for Information Society and Media, gave a speech in Hannover, Germany, titled "Stimulating Innovation and Enterprise in Europe's ICT Sector". She advocated more government spending on research and development, more private R&D spending, more collaborative research, and more public private partnerships. She also discussed regulation. She said that "the goal is to continue to create an internal market in information goods and services in Europe, in particular through simpler and better regulation". She also said that the EU is "developing and reinforcing an open and competitive internal market for such networks and services -- through more focused and better adapted regulation." Finally, she discussed intellectual property. She said that "We need to emphasise the leverage of our research results. We need to be setting the agendas internationally, not least through measures for instance for intellectual property protection, industrial consensus building and standards setting."

Washington Tech Calendar
New items are highlighted in red.
Friday, March 25

The House will not meet. It will return from its Spring recess at 2:00 PM on Tuesday, April 5. See, House calendar.

The Senate will not meet. It will return from its Spring recess at 2:00 PM on Monday, April 4. See, Senate calendar.

5:00 PM. Deadline to submit initial comments to the Copyright Office (CO) in response to its notice of inquiry (NOI) regarding orphan works -- copyrighted works whose owners are difficult or impossible to locate. The CO stated in a notice in the Federal Register that it seeks public comments on "whether there are compelling concerns raised by orphan works that merit a legislative, regulatory or other solution, and what type of solution could effectively address these concerns without conflicting with the legitimate interests of authors and right holders." See, Federal Register, January 26, 2005, Vol. 70, No. 16, at Pages 3739 - 3743.

Day four of a four day convention and expo hosted by the Access Intelligence (formerly named PBI Media) titled "Satellite 2005". See, notice. Location: Washington Convention Center.

Sunday, March 27

Easter.

Monday, March 28

RESCHEDULED FROM MARCH 16. 12:30 PM. The Federal Communications Bar Association (FCBA) will host a luncheon. The speaker will be Federal Communications Commission (FCC) Commissioner Michael Copps. See, registration form [PDF]. The deadline for reservations and cancellations is March 24 at 5:00 PM. Prices range from $35 to $65. Location: J.W. Marriott Hotel, 1331 Pennsylvania Avenue, NW, Lower Level.

Tuesday, March 29

The Supreme Court will hear oral argument in MGM v. Grokster. See, March calendar [PDF].

The Supreme Court will hear oral argument in the Brand X case. See, March calendar [PDF].

10:00 AM - 1:00 PM. The Federal Communications Commission's (FCC) Network Reliability and Interoperability Council (NRIC) will meet. See, notice in the Federal Register, March 1, 2005, Vol. 70, No. 39, at Page 9951. Location: FCC, Room TW-305, 445 12th St., SW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding the progress made by the states in implementing E911 solutions for multi-line telephone systems (MLTSs). See, notice in the Federal Register, January 13, 2005, Vol. 70, No. 9, at Pages 2405 - 2406.

Wednesday, March 30

12:00 PM. The Cato Institute will host a panel discussion titled "The Case for CAFTA: Consolidating Central America’s Freedom Revolution". The speakers will be Daniel Griswold and Daniel Ikenson of the Cato's Center for Trade Policy Studies. See, notice and registration page. Lunch will be served. Location: Room B-354, Rayburn Building, Capitol Hill.

Day one of a two day conference hosted by the National Institute of Standards and Technology (NIST), the Department of Homeland Security (DHS), and other entities titled "Workshop on Biometrics and E-Authentication Over Open Networks". See, NIST notice and conference web site. Location: NIST, Gaithersburg, MD.

Day one of a two day conference hosted by Isen.com titled "F2C: Freedom to Connect". Prices ranges from $250 to $350. See, conference web site. Location: AFI Silver Theatre and Cultural Center, 8633 Colesville Road, Silver Spring, Maryland.

Deadline to submit to the Federal Communications Commission (FCC) petitions to deny Nextel's and Sprint's joint applications for FCC approval of the transfer of control to Sprint of the licenses and authorizations held both by Nextel. That is, this is a merger review proceeding. See, FCC Public Notice [7 pages in PDF], No. DA 05-502, in WT Docket No. 05-63. On December 15, 2004, the two companies announced a "definitive agreement for a merger of equals". See, Nextel release and release.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its notice of proposed rulemaking regarding changes to patent and trademark fees. See, notice in the Federal Register, February 28, 2005, Vol. 70, No. 38, at Pages 9570-9573.

Thursday, March 31

Day two of a two day conference hosted by the National Institute of Standards and Technology (NIST), the Department of Homeland Security (DHS), and other entities titled "Workshop on Biometrics and E-Authentication Over Open Networks". See, NIST notice and conference web site. Location: NIST, Gaithersburg, MD.

Day two of a two day conference hosted by Isen.com titled "F2C: Freedom to Connect". Prices ranges from $250 to $350. See, conference web site. Location: AFI Silver Theatre and Cultural Center, 8633 Colesville Road, Silver Spring, Maryland.

Deadline to submit comments to the Office of the U.S. Trade Representative's (USTR) Trade Policy Staff Committee on the scope of the environmental review of the multilateral negotiations of the Doha Development Agenda (DDA) conducted under the auspices of the World Trade Organization (WTO). The deadline to submit comments is March 31, 2005. See, notice in the Federal Register, January 14, 2005, Vol. 70, No.10, at Pages 2695 - 2696.

Deadline to submit initial comments to the Federal Communications Commission (FCC) regarding TSA Stores, Inc.'s Petition for Declaratory Ruling to preempt a provision of the statutes of the state of Florida as applied to interstate telephone calls. This is CG Docket No. 02-278, which pertains to rules implementing the Telephone Consumer Protection Act of 1991 (TCPA). See, notice in the Federal Register, March 1, 2005, Vol. 70, No. 39, at Pages 9875-9876.

Friday, April 1

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Report and Order and Further Notice of Proposed Rulemaking (FNPRM) [54 pages in PDF] regarding the children's programming obligations of digital television broadcasters. This item is FCC 04-221 in MM Docket 00-167. See, story titled "FCC Adopts Report and Order Re Children's Programming Obligations of DTV Broadcasters" in TLJ Daily E-Mail Alert No. 975, September 13, 2004.

People and Appointments

3/24. Daniel Bryant, the Assistant Attorney General in charge of the Department of Justice's (DOJ) Office of Legal Policy resigned, effective Friday, March 25, 2005. See, statement by Attorney General Alberto Gonzales.

3/24. President Bush announced his intent to nominate Sean McCormack to be Assistant Secretary of State for Public Affairs. See, White House release.

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