|News Briefs from
April 21-25, 2001
4/25. Sen. Charles Grassley (R-IA),
Chairman of the Senate Finance
Committee, gave a speech
[PDF] to the European - American Business Council
in which he discussed a new round of trade negotiations, the foreign sales
corporation tax regime, fast track trade negotiating authority. He stated that
"the message I want to send today is that I want to work with Democrats and
Republicans to find common ground to move trade promotion authority this year.
It's important. By doing so, we'll provide additional momentum to launching a
new round of negotiations in Qatar."
4/25. The Business Software Alliance (BSA)
announced that G.L. Homes of Florida Corp., a real estate developer based in
Coral Springs, Florida, paid $119,922 to settle claims relating to unlicensed
copies of Autodesk, Microsoft and Symantec software installed on its computers.
4/25. Rep. Robert Andrews (D-NJ) and
Rep. Lindsay Graham (R-SC) introduced
HR 1545, a
bill to amend the Fair Labor Standards Act of 1938 to clarify the exemption
from overtime compensation requirements for some computer professionals. It
provides that an "employee who is a computer systems, network, or database
analyst, designer, developer, programmer, software engineer ... compensated at a
rate of not less than $27.63 an hour ... shall be considered an employee in a
professional capacity ..." The bill was referred to the House Education and
4/25. Sen. George Allen (R-VA) and Sen. Conrad Burns (R-MT) introduced S 777,
a bill to permanently extend the moratorium enacted by the Internet Tax
Freedom Act. The bill was referred to the Senate Commerce Committee. On April
24, Rep. Chris Cox (R-CA), Rep. Bob Goodlatte (R-VA), and Rep. Tom Davis (R-VA)
1552, a bill to extend the moratorium enacted by the Internet Tax Freedom
Act through 2006.
4/25. The House Commerce Committee
held a hearing on HR 1542, the "The Internet Freedom and Broadband
Deployment Act of 2001." This bill is sponsored by Rep. Billy Tauzin (R-LA) and Rep. John Dingell (D-MI), the Chairman
and ranking Democrat of the Committee, and by many other members. It was also
introduced in the 106th Congress as HR 2420.
The 1996 Telecom Act, at Section
271, provides that the Regional Bell Operating Companies (RBOCs, such as
Verizon and SBC) may not provide in region interLATA service (that is, long
distance) without first complying with a 14 point checklist of items
demonstrating that they have opened up their facilities to competitors. The
underlying goal is to create local competition in telecommunications services.
The RBOCs and some members of Congress now seek to exempt data, but not voice,
traffic from the requirements of Section 271. The main thesis which they advance
is that doing so will promote the deployment of DSL service by the RBOCs, and
hence, make broadband Internet access more widely available. However, this
thesis is hotly contested by others.
The long hearing gave members of the Committee the opportunity to express their
support for, or opposition to, the bill. Almost all of the members of the
Committee attended at least part of the hearing. Many spoke. Rep. Tauzin said in
his opening statement
that "To give carriers a greater economic incentive to deploy broadband
services more rapidly everywhere in the United States, Congress needs to
complete the deregulation begun by the Telecommunications Act by deregulating
broadband services. Currently, there are regulations imposed upon the broadband
services and facilities provided by incumbent local exchange carriers (ILECs)
that are not imposed upon any other broadband carriers." Rep. Dingell said
in his opening statement
that HR 1542 will "make sure that competition for broadband Internet
service is strong; that high speed Internet connections are delivered to
Americans quickly; and, above all else, that no single sector of the industry is
give a de facto monopoly ..." In a departure from his written statement, he
added that "cable companies now have a fine monopoly." Rep. Fred Upton (R-MI), the Chairman of
the Telecom Subcommittee, which is scheduled to mark up the bill on April 26,
offered his qualified support. He said that "we need to provide
deregulatory parity for broadband -- regardless of the platform by which it is
delivered -- be it by telephone, wire, cable, wireless, or satellite." He
suggested that the bill will be amended in mark up, particularly to increase
penalties for phone companies which may be assessed by the FCC. Reps. Rick Boucher (D-VA), Eliot Engel (D-NY), Steve Buyer (R-IN),
and Gene Green (D-TX) also offered their support for the bill.
The Commerce Committee often conducts its debates and disputes in private, and
then presents a unified position at its public hearings and markups. This
hearing was an exception. Opponents of the bill spoke adamantly. Rep. Ed Markey (D-MA) said in his
opening statement that
"this legislation is highly flawed for three key reasons. It is undigital,
unnecessary, and unfair." He elaborated that "this legislation creates
a technological land of make-believe where bits travelling through networks can
be magically separated into voice and data. ... Ripping certain bits out of a
network to be treated by regulators differently turns back the clock. It
presents once again the problem of trying to force certain services into
particular regulatory boxes even as technology renders such classification
antiquated or meaningless." He added that "This bill is also
unnecessary. The Bells dont need legislation in order to provide digital
services. They can and do offer DSL services today. The Bells dont need
legislation to offer Internet access. Again, they offer such services
Rep. Chris Cox (R-CA), who sits on the
opposite end of the political spectrum from Rep. Markey, found himself in the
unusual position of agreeing with all that Rep. Markey had said. Rep. Cox, like
Rep. Markey, also condemned the scheduling of the mark up just one day after the
hearing. Rep. Anna Eshoo (D-CA)
represents Silicon Valley, and rarely takes confrontational position in public
hearings. However, she stated that the proposal contained in this bill has been
around for a long time, but "has never been less necessary than it is
today." She said it would harm the competitive local exchange carriers (CLECs).
"This bill drives the last nail into their coffin." She also
questioned whether the RBOCs are interested in providing broadband services in
rural areas. Rep. Chip Pickering
(R-MS) called the bill "fundamentally flawed. It cannot be fixed." He
said that it would "kill competition, kill convergence." He added that
the bill will not pass in the Senate. Rep. Henry Waxman (D-CA) said that "my
view is that 1542 will do more harm than good." Reps. Davis, Largent,
Wilson, McCarthy, and Harmon also made statements critical of the bill, or its
The hearing also gave industry representatives a chance to state their
positions. See, prepared testimony of:
Ashton (Bear Stearns)
Henry (Greenfield Hill)
The representatives of the RBOCs (Tauke and Mancini) praised the bill. Mancini
said it "will encourage broadband deployment." The representatives of
long distance and competitive phone companies (Cicconi, McLeod, and McGinn)
attacked it. McGinn said the bill "is a poison pill for the high tech
WorldCom's Bernie Ebbers was not a witness, but released a statement
in which he said that "This ill-conceived legislation sounds a death knell
for the Internet economy." See also, statements of opposition from Sprint,
CompTel, and the ITAA.
See also, statements of support from the RBOCs; BellSouth,
4/25. The U.S.
Court of Appeals (FedCir) issued its opinion in Telemac
Cellular v. Topp Telecom, a patent infringement case which
pertains to U.S.
Patent No. 5,577,100, which discloses a mobile phone system with internal
accounting capabilities for real time call debiting. Plaintiff, Telemac,
obtained the patent in 1996. In 1998, Telemac filed a complaint in U.S. District
Court (NDCal) against Topp alleging that
Topp's TRACFONE system infringed several claims of this patent. The District
Court granted Topp's motion for partial summary judgment that certain claims are
invalid under 35 U.S.C. § 102(b) as anticipated by U.S.
Patent No. 5,631,947. The Court then granted Topp's motion for summary
judgment that none of the claims were infringed. The Appeals Court affirmed.
4/25. David Markey, BellSouth's
VP for Governmental Affairs, will retire from BellSouth effective June 1, 2001.
He will be replaced by Herschel Abbott, who is currently President of
BellSouth's Louisiana operations. The new Chairman of the House Commerce Committee is Billy Tauzin, also from Louisiana. See, BellSouth
4/25. The House Science Committee
held a hearing on the proposed budgets for FY 2002 for several research and
development agencies. See, opening statement by
Chairman Sherwood Boehlert (R-NY),
and prepared testimony of Daniel
Goldin (NASA), Rita
Colwell (NSA), James
Decker (Energy Dept.), and Scott
4/25. The FCC stated that it adopted an
order approving the applications of VoiceStream, Powertel, and Deutsche Telekom
(DT) for authority to transfer control of licenses and authorizations held by
VoiceStream and Powertel to DT in connection with the applicants' proposed
merger. See, FCC
release and DT release.
(IB Docket No. 00-187.)
4/24. Rep. Chris Cox (R-CA), Rep. Bob Goodlatte (R-VA), and Rep. Tom Davis (R-VA) introduced HR
1552, a bill to extend the moratorium enacted by the Internet Tax Freedom Act
through 2006. The bill was referred to the House Judiciary Committee, of which
Rep. Goodlatte is a member.
4/24. Rep. David Dreier (R-CA), Rep. Zoe Lofgren (D-CA), Rep. Jeff Flake
(R-AZ), and Rep. Mike Honda (D-CA) introduced HR 1553, a bill to repeal export
controls on high performance computers. The bill was referred to the
Committee on International Relations and to the Committee on Armed Services.
See, Lofgren release.
Sen. Bob Bennett (R-UT) and Sen. Harry Reid (D-NV) are sponsors of a similar
bill in the Senate, S 591.
4/24. Rep. Sheila Lee (D-TX)
1562, the Immigration Restructuring and Accountability Act of 2001, a long
bill that would, among others things, require the INS to establish "an
Internet web-based system" that will allow any person or employer to track
their filings under the Immigration and Nationality Act.
4/24. Rep. Marcy Kaptur (D-OH), a
leading protectionist, addressed free trade and fast track trade
negotiating authority in the House. She stated that "In Quebec City,
President Bush said, 'Our commitment to open trade must be matched by a strong
commitment to protecting our environment and improving labor standards.' But
then he did a pirouette and he said, 'We should not allow labor and
environmental codicils to destroy the spirit of free trade.' He had it right the
first time. Those of us on the other side of the argument have been saying for
years that these trade agreements should give individuals the same rights as
4/24. Rep. Dana Rohrabacher
(R-CA) addressed trade with the People's Republic of China in the House.
He stated that "Large financial interests in our country whose only goal is
exploiting the cheap, near-slave labor of China have been leading our country
down the path to catastrophe. ... We have made a monstrous mistake, and if we do
not face reality and change our fundamental policies, instead of peace, there
will be conflict. Instead of democratic reform, we will see a further
retrenchment of a regime that is run by gangsters and thugs, the world's worst
human rights abusers. ... the barkers for open markets kept singing their song:
'Most-favored-nation status, just give us this and things will get better.' It
was nonsense then and it is nonsense today."
4/24. Rep. Billy Tauzin (R-LA) and Rep. John Dingell (D-MI), the Chairman
and Ranking Democrat on the House Commerce Committee, reintroduced their bill to
provide interLATA data relief to regional Bell companies. The bill would exempt
long distance data services from the requirements of Section 271. The bill is titled
"The Broadband Deployment Act of 2001." Tauzin and Dingell describe
their bill as a way to promote the deployment of broadband Internet access.
Competitive local exchange carriers and long distance companies criticize the
bill. The previous version of the bill (HR 2420, 106th Congress) had 224
cosponsors. The House Commerce
Committee will hold a hearing on the bill on April 25; it will mark up the
bill on April 26. See also, CompTel release, Sprint
release, and USTA
4/24. The U.S. Court of Appeals (9thCir)
issued its opinion
[PDF] in Auburn v. Qwest, a case
regarding who bears the expense for a facility relocation made necessary by
right of way improvements.
4/24. A "structural separation" bill was introduced in the Minnesota
legislature. It would require Qwest to
separate its retail and wholesale operations. AT&T praised the bill. See, AT&T release.
Qwest condemned the bill. See, Qwest
4/24. The FTC
released a follow-up
report [PDF] to its September 2000 Report titled "Marketing Violent
Entertainment to Children." The follow-up report states that "it
appears that the motion picture and electronic game industries have taken a
number of significant steps to limit marketing violent R-rated films and M-rated
games to children and to provide parents with more information regarding the
content of their products. In contrast, the music recording industry has not
taken any visible steps with respect to explicit-content labeled music."
The FTC will write a third report in the fall of 2001.
4/24. The U.S.
Court of Appeals (9thCir) issued its opinion
Out Productions v. Oskar, a trademark infringement case. Far Out
Productions filed a complaint against Howard Scott, an original member of the
musical group WAR, and other artists, alleging infringement of the federally
registered trademark WAR (Trademark Registration No. 1,169,651). Scott
counterclaimed alleging fraud, conversion, and trademark infringement. Harold
Brown, another original member of the group, filed a separate complaint against
Far Out and its president, Jerry Goldstein, alleging that they had obtained the
trademark fraudulently. The District Court consolidated the cases, and granted
summary judgment to Far Out and Goldstein. The Appeals Court affirmed.
4/24. The U.S.
Court of Appeals (6thCir) issued its opinion
v. Champion, a sentence appeal. Champion plead guilty to four
charges, including use of the Internet to coerce and entice a minor to engage in
a sexual act in violation of 18 U.S.C. § 2422(b), and sexually exploiting a
minor in violation of 18 U.S.C. § 2251(a). The victim was a 13 year old girl.
He appealed the District Court's determination, during sentencing, that his
offence was a "crime of violence". The Appeals Court affirmed.
4/24. The FCC received two reply comments
in its proceeding on location privacy for mobile devices. See, comment
of the CTIA [PDF] and comment
of Cingular [PDF]. Both want the FCC to conduct a rule making proceeding.
This proceeding concerns privacy rules for cell phones, PDAs, in car map
and traffic services, wireless tollbooth collection systems, Blackberry e-mail pagers, Bluetooth enabled devices, and anything
with an embedded GPS chip. The CTIA filed a petition
[PDF] with the FCC on Nov. 22, 2000, requesting a rule making proceeding. In
response, the FCC issued a Public
Notice [PDF] on March 16, 2001 requesting comments on the CTIA's petition.
The FCC received a dozen original comments on or before April 6. (See, WT Docket
4/24. The Senate Banking Committee
held a hearing on several nominations. See, prepared statements of nominees, Grant Aldonas
(Under Secretary of Commerce for International Trade), Kenneth Juster
(Under Secretary of Commerce for Export Administration), Maria Cino
(Assistant Secretary of Commerce and Director General of the United States and
Foreign Commercial Service), and Robert Hubbard
(Council of Economic Advisors).
Kenneth Juster stated in his testimony that "It is essential to the health
of our nation's industrial and technological base that U.S. companies be able to
export their goods, services, and technology without being hindered by arbitrary
and unnecessary export controls." However, he added that "I fully
appreciate the critical importance of protecting this country's national
security by ensuring that our sensitive technologies do not fall into the wrong
4/24. Sen. Kent Conrad (D-ND) introduced
the Technology Education and Training Act of 2001 (TETA). The bill would provide
tax credits to businesses that train workers in information technology skills.
The bill is cosponsored by Sen. Olympia Snowe (R-ME), Sen. Harry Reid (D-NV),
Sen. Tim Johnson (D-SD) and Sen. Mike DeWine (R-OH). See, Conrad
4/23. Todd Dickinson, former head of the USPTO, joined the Washington DC
office of the law firm of Howrey Simon as a partner and head of
the firm's Intellectual Property Group's licensing, counseling, prosecution and
patent portfolio management practice. See, release.
4/23. April 23 was the deadline to file comments with the FCC in
response to its requests for comments regarding whether ILECs, such as Verizon, must
allow competitive fiber providers to connect to CLECs in ILEC central offices.
On March 15 the Coalition of Competitive Fiber Providers filed a Petition
for Declaratory Ruling [PDF] with the FCC requesting a determination that
competitive fiber providers may, pursuant to § 251(b)(4)
and § 224(f)(1)
of the Communications Act, extend fiber to CLECs collocated in the ILEC central
offices and place distribution frames in ILEC central offices. On March 22 the
FCC issued its request
Verizon submitted a long and angry comment
[PDF] opposing the fiber providers. It argued that they "seek complete
freedom to place fiber and equipment anywhere in ILEC central office space that
ILECs have placed their own facilities. They want this freedom in order to
connect with their CLEC customers, without the need to collocate themselves. The
Commission must reject this takeover proposal as wholly inconsistent with the
Act, ... under the Petitioners' reasoning, however, third parties could
collocate virtually any equipment, anywhere, for almost any purpose, simply by
re-casting space in the central office as "conduits,"
"ducts," or "rights-of-way." This is nonsensical." On
the other hand, the Competitive
Telecommunications Association (CompTel) submitted a comment
[PDF] in which it argued that the FCC should promptly grant the petition. Reply
comments are due by May 8, 2001. See, Docket No. 01-77.
Director General Mike Moore gave a speech in
Berlin, Germany, in which he again advocated a new trade round. He also stated
that "WTO members will never agree to use trade sanctions to enforce labour
standards. It is a line in the sand that developing countries will not cross.
They fear that such provisions could be abused for protectionist purposes. They
also believe such matters are more appropriately considered in other
international fora." President Bush, who is seeking fast track trade
negotiating authority from the Congress, is engaged in a debate with some
members of Congress over whether such authority should extend to labor
4/23. The U.S.
Court of Appeals (3rdCir) issued its opinion
in Eichorn v. AT&T, Lucent, NCR and Texas
Pacific Group, a case regarding whether a no-hire agreement
violated the Sherman Act. In 1995 AT&T decided to sell one of its
affiliates, Paradyne, a manufacturer of network access products for the telecom
industry. To make Paradyne more attractive to buyers, AT&T adopted a human
resource plan that placed restrictions on Paradyne employees' ability to
transfer to any other division of AT&T. Then, AT&T reorganized into
three companies, AT&T, Lucent, and NCR. AT&T transferred ownership of
Paradyne to Lucent. Paradyne employees, now employed by Lucent, were precluded
from seeking re-employment at any other AT&T division or affiliate after
this trivestiture. Then, Lucent sold Paradyne to Texas Pacific Group, after
agreeing that it would not hire any Paradyne employee or consultant whose annual
income exceeded $50,000 for eight months. Plaintiffs, who are former employees
of Paradyne, filed a complaint alleging violation of the Sherman Act and the ERISA.
The District Court ruled against the plaintiffs on both counts. The Court of
Appeals upheld the District Court on the antitrust claim, but reversed on the
4/23. Verizon filed a Section 271 petition with the FCC requesting permission to provide long
distance service in Connecticut. Verizon provides phone service to only two
communities in the state -- Byram and Greenwich. See, release.
4/23. President Bush formally submitted 13 previously announced nominations to
the Senate, including Timothy Muris to be a Federal Trade Commissioner, Peter
Allgeier to be Deputy USTR, Viet Dinh to be an Asst. Atty. General, Roger
Ferguson to be a Member of the Board of Governors of the Federal Reserve System,
and Elizabeth Jones to be an Assistant Secretary of State for European Affairs.
4/23. Eric Wohlschlegel was named Director of Media Relations for the U.S. Chamber of Commerce. Previously, he
briefly worked at the public affairs firm of Chlopak
Leonard Schechter. Before that he was a spokesman for the House Commerce Committee. See, release.
4/23. The U.S. Copyright Office
published a notice
in the Federal Register that it will hold a public roundtable discussion on the intellectual
property aspects of the preliminary draft Convention on Jurisdiction and
Foreign Judgments in Civil and Commercial Matters being negotiated by the Hague
Conference on Private International Law. See, Federal Register, April 23, 2001,
Vol. 66, No. 78, at Pages 20482 - 20483.
4/23. The IRS
published a notice
in the Federal Register requesting nominations for the Electronic Tax
Administration Advisory Committee. The ETAAC provides an organized public
forum for discussion of electronic tax administration issues in support of the
goal that paperless filing should be the preferred and most convenient method of
filing tax and information returns. Nominations are due by May 23, 2001. See,
Federal Register, April 23, 2001, Vol. 66, No. 78, at Pages 20525 - 20526.
4/22. Government leaders meeting at the Summit of the Americas in Quebec City,
Canada, issued a joint declaration
titled "Connecting the Americas." It states that "We are
committed to promoting the development of the telecommunications infrastructure
needed to support and enhance all sectors of society and the economy and will
seek to provide affordable universal access. We agree to promote the
modernization of the telecommunications sector, noting the leading role of the
private sector in deploying infrastructure and services ..." It also states
that "We agree to establish conditions, taking into account national legal
frameworks, that promote and strengthen free and fair competition in all
telecommunications services." It states too that "Our governments will
strive to encourage the growth of e-commerce and to promote Connectivity by
providing government services and information on-line, to the extent
possible." See also, transcript
of joint press conference.
4/21. President Bush gave an address
at the Summit of the Americas in Quebec City, Canada, in which he
advocated free trade, fast track trade negotiating authority, and a new
e-business fellowship program. He stated that "The United States will work
for open trade at every opportunity. We will seek bilateral free trade
agreements with friends and partners, such as the one we aim to complete this
year with Chile. We will work for open trade globally through negotiations in
the World Trade Organization. And here in the Americas, we will work hard to
build an entire hemisphere that trades in freedom."
President Bush stated that "I'm committed to attaining trade promotion
authority before the end of the year. I'm confident that I will get it."
President Bush also used his Quebec address to announce an electronic
business fellowship program. He said that "we will sponsor the creation
of the new Latin E-business Fellowship program. This will give young
professionals from throughout the Americans the opportunity to learn about
information technology by spending time with United States companies. It will
empower them with the skills and background to bring the benefits of these
technologies to their own societies."
President Bush stated in his Quebec address that "Our commitment to open
trade must be matched by a strong commitment to protecting our environment and
improving labor standards. Yet, these concerns must not be an excuse for
self-defeating protectionism." On the previous day, the Office of the USTR
announced that the Bush Administration will conduct written environmental
reviews of major trade agreements. See, release.
Go to News Briefs from April 16-20, 2001.