News from April 26-30, 2002
Sen. Breaux Introduces Broadband Regulatory Parity Act
4/30. Sen. John Breaux (D-LA) and others introduced the Broadband Regulatory Parity Act of 2002, a bill that would require the Federal Communications Commission (FCC) to pass regulations subjecting all providers of broadband services, and broadband access services, to the same regulatory requirements.
Moreover, the bill would require that the FCC do so without increasing the regulatory requirements of any service provider. The immediate effect of the bill would be to remove regulatory requirements that are imposed upon the incumbent local exchange carriers (ILECs) in the provision of DSL service, but that are not imposed upon cable companies in the provision of cable modem service. Like HR 1542, the Tauzin Dingell bill, this bill is supported by ILECs.
FCC Promulgation of Regulatory Parity Regulations. The bill would add a new Section 262 to Title 47. It would require that the FCC, within 120 after passage, "prescribe regulations to ensure that (1) all broadband services, and all broadband access services, are subject to the same regulatory requirements, or no regulatory requirements; (2) all providers of broadband services, and all providers of broadband access services, are subject to the same regulatory requirements, or no regulatory requirements, with respect to the provision of such services and the facilities and equipment used to provide such services in the provision of such services; and (3) paragraphs (1) and (2) are implemented without increasing the regulatory requirements applicable to any provider of broadband services, or broadband access services, on any such service or on any facilities or equipment used to provide any such service in the provision of such service."
No State Jurisidiction Over Broadband. Furthermore, the bill provides that "broadband services and broadband access services, and the facilities and equipment used to provide such services in the provision of such services, shall not be subject to the jurisdiction of any State."
Obligations of ILECS to ISPs. The bill also provides that "each incumbent local exchange carrier has the duty to provide all Internet service providers with the telecommunications necessary for such provider to provide broadband access service to its subscribers. Such telecommunications shall be offered on rates, terms, and conditions that are just and reasonable."
The bill also states that "Nothing in this section affects the requirements of section 271", "Nothing in this section affects the obligations of incumbent local exchange carriers under section 251(c) to provide requesting telecommunications carriers with services and access to facilities and equipment necessary for the provision of switched band voice telecommunications service" and "Nothing in this section affects section 251(f)."
256 kpbs. The bill defines broadband as "256 kilobits per second in at least one direction".
The bill's original cosponsors are Sen. Don Nickles (R-OK), Sen. Max Cleland (D-GA), Sen. Sam Brownback (R-KS), Sen. Zell Miller (D-GA), and Sen. Kay Hutchison (R-TX).
Sen. Breaux stated in a release that "To ensure and encourage the widespread deployment of broadband networks in this country, Congress must level the regulatory playing field in the broadband market ... Unfortunately, different rules for competing high speed Internet companies are stifling competition. This bill aims to make regulations more simple and more fair, insisting that all broadband service providers play by the same rules."
Walter McCormick, P/CEO of the U.S. Telecom Association (USTA), a group that represents ILECs, stated in a release that "We commend Senators Breaux and Nickles for their introduction of this important legislation that will spur the deployment of broadband infrastructure, unleash vigorous head to head competition for broadband service providers, increase consumer choice, and stimulate the nation's economy."
BellSouth's Herschel Abbott stated that "this is a reasonable approach that deserves wide and immediate support in Congress. Passage will encourage broadband providers to compete for consumers who will be offered improved service, better access and more choices in internet service providers."
SBC issued a release in which it stated that "While the Breaux Nickles bill takes a different approach than that of the House passed Internet Freedom and Broadband Deployment Act (H.R. 1542), both recognize the fundamental need for all providers of broadband services to compete under the same rules and regulations."
In contrast, Russell Frisby, President of CompTel, a group that represents competitive local exchange carriers, stated in a release that "Members of the Senate should not be fooled; Breaux's bill is the Tauzin Dingell bill. It was a bad bill in the House and will continue to be a bad bill in the Senate."
CTIA Files Petition with FCC to Eliminate Rules
4/30. The Cellular Telecommunications and Internet Association (CTIA) filed a Petition for Rulemaking [incomplete copy, in PDF] with the Federal Communications Commission (FCC) asking that it eliminate unnecessary regulations pertaining to Customer Proprietary Network Information (CPNI), E-911, local number portability, tower citing, and other topics.
The CTIA's petition relies on the February 19, 2002, opinion in U.S. Court of Appeals (DCCir) in Fox v. FCC, 280 F.3d 1027, which applies a plain meaning construction to Section 202(h) of the Telecom Act of 1996. This section requires that the FCC "shall review its rules adopted pursuant to this section and all of its ownership rules biennially as part of its regulatory reform review under section 11 of the Communications Act of 1934 and shall determine whether any of such rules are necessary in the public interest as the result of competition. The Commission shall repeal or modify any regulation it determines to be no longer in the public interest."
Tom Wheeler, P/CEO of CTIA, stated in a release that "The Fox decision gave clear direction to the FCC: prove a regulation is vital and indispensable or get rid of it ... We want to help the Commission meet this standard by jump starting the 2002 Biennial Review Process."
On April 19 the FCC filed a Petition for Rehearing En Banc [40 pages in PDF] in the Fox case with the Court of Appeals. The FCC argues for less literal construction of Section 202(h). It wants "A less stringent interpretation of the term ``necessary´´ ". It argues that the Court should construe this word in its "statutory context" rather than "in its most literal sense".
CPNI. The CTIA stated in its release that "The FCC should eliminate its CPNI rules that were recently vacated by the 10th Circuit Court and adopt modified rules based on the Federal Trade Commission's Fair Information Practices."
47 U.S.C. § 222 provides, in part: "Except as required by law or with the approval of the customer, a telecommunications carrier that receives or obtains customer proprietary network information by virtue of its provision of a telecommunications service shall only use, disclose, or permit access to individually identifiable customer proprietary network information in its provision of (A) the telecommunication service from which such information is derived, or (B) services necessary to, or used in, the provision of such telecommunications service, including the publishing of directories."
The FCC adopted rules pursuant to § 222 in its CPNI Order on February 26, 1998. US West and other telecommunications carriers challenged the constitutionality of the order on First Amendment free speech grounds. The 10th Circuit agreed, and vacated that part of the order pertaining to opt in requirements. See, opinion of the U.S. Court of Appeals (10thCir) in U S WEST v. FCC, 182 F.3d 1224 (10th Cir. 1999), cert. denied, 120 S. Ct. 2215 (Jun. 5, 2000).
On September 7, the FCC released a document [32 pages in PDF] titled "Clarification Order and Second Further Notice of Proposed Rulemaking."
The CTIA wrote in its petition that "While the Commission takes the position that the Tenth Circuit's vacatur applied only to a single provision of the CPNI rules, 47 C.F.R. 64.2007(c), the court vacated the entire Section 64.2007 rulemaking as constitutionally inadequate. ... the Commission must eliminate all of its rules on the use of CPNI that were vacated by the Tenth Circuit. Furthermore, in light of the Tenth Circuit.s vacatur Order, the Commission should abandon its prior approach to CPNI rules, and adopt modified rules based on the Federal Trade Commission's Fair Information Practices." (Footnotes omitted.)
Biden Bill Would Ban Illicit Authentication Features
4/30. Sen. Joe Biden (D-DE) and others introduced S 2395, the Anticounterfeiting Amendments of 2002. The bill would amend 18 U.S.C. § 2318, regarding trafficking in counterfeit labels and documentation for software, movies, and records. The bill would criminalize "illicit authentication features", and create a private right of action for copyright owners.
Sen. Biden said "The criminal code has not kept up with the counterfeiting operations of today's high-tech pirates, and it's time to make sure that it does. The Anticounterfeiting Amendments of 2002 update and strengthen the Federal criminal code, which currently makes it a crime to traffic in counterfeit labels or copies of certain forms of intellectual property, but not authentication features. For example, we can currently prosecute someone for trafficking in fake labels for a computer program, but we cannot go after them for faking the hologram that the software maker uses to ensure that copies of the software are genuine."
He added that "many actions that violate current law go unprosecuted in this day and age when priorities, such as the fight against terrorism and life threatening crimes, necessarily take priority over crimes of property, be they intellectual or physical. Moreover, the victims of this theft often do not have a way to recover their losses from this crime. For this reason, the Anticounterfeiting Amendments of 2002 also provide a private cause of action, to permit the victims of these crimes to pursue the criminals themselves and recover damages in federal court." See, Cong. Rec., April 30, 2002, at S3561.
Section 2318(a) currently provides, in part, that "Whoever ... knowingly traffics in a counterfeit label affixed or designed to be affixed to a phonorecord, or a copy of a computer program or documentation or packaging for a computer program, or a copy of a motion picture or other audiovisual work, and whoever ... knowingly traffics in counterfeit documentation or packaging for a computer program, shall be fined under this title or imprisoned for not more than five years, or both."
The current law applies to "counterfeit labels" and "counterfeit documentation". The bill would extend the prohibition to "an illicit authentication feature affixed to or embedded in, or designed to be affixed to or embedded in" phonorecords, computer programs, and copies of motion pictures or other audiovisual works.
The bill defines the term "authentication feature" as "any hologram, watermark, certification, symbol, code, image, sequence of numbers or letters, or other physical feature that either individually or in combination with another feature is used by the respective copyright owner to verify that a phonorecord, a copy of a computer program, a copy of a motion picture or other audiovisual work, or documentation or packaging is not counterfeit or otherwise infringing of any copyright".
The bill defines the term "illicit authentication feature" as "an authentication feature, that (A) without the authorization of the respective copyright owner has been tampered with or altered so as to facilitate the reproduction or distribution of (i) a phonorecord; (ii) a copy of a computer program; (iii) a copy of a motion picture or other audiovisual work; or (iv) documentation or packaging; in violation of the rights of the copyright owner under title 17."
The bill would also create a private right of action. It provides that "Any copyright owner who is injured by a violation of this section or is threatened with injury, may bring a civil action in an appropriate United States district court."
The Senate Foreign Relations Committee, of which Sen. Biden is the Chairman, held a hearing on the theft of American intellectual property on February 12, 2002. See, "Senate Committee Holds Hearing on IP Theft Abroad", TLJ Daily E-Mail Alert No. 367, Feb. 13, 2002.
Microsoft's Jeff Raikes praised the Biden bill in a release. He said that "Microsoft commends Senator Biden for taking action to close a significant gap in the federal protection of copyrighted works".
The original cosponsors of the bill are Sen. George Allen (R-VA), Sen. Ernest Hollings (D-SC), Sen. Barbara Boxer (D-CA), Sen. Patti Murray (D-WA), Sen. Gordon Smith (R-OR), Sen. Ben Nelson (D-NE), and Sen. Byron Dorgan (D-ND).
Powell Addresses U.S. Chamber on Broadband Policy
4/30. Federal Communications Commission (FCC) Chairman Michael Powell gave a speech on broadband policy to the U.S. Chamber of Commerce in Washington DC.
He stated that four principles will guide the FCC's actions in the broadband space. "First, we will promote the ubiquitous availability of broadband capable infrastructure to al Americans."
"Second, the Commission will conceptualize broadband broadly to include any platform that is capable of fusing communications power with computing power to provide high bandwidth intensive content to meet the broad needs and demands of consumers. That is, we recognize that broadband is not merely cable modem service or DSL."
"Third, at this stage in the development, any broadband regulatory environment must serve to promote investment and innovation." And "Fourth, sound regulatory policy should, where appropriate, harmonize regulatory rights and obligations that are attached to the provision of similarly situated services across different technological platform."
Powell was the keynote luncheon speaker at a Chamber event titled Beyond Broadband: Policy and Business Strategies for Next Generation Applications and Services.
FRB Governor Addresses Impact of Technology on the Financial Services Industry
4/30. Federal Reserve Board Governor Mark Olson gave a speech titled "Risk Management in a Changing Economic Environment" to the Bank Administration Institute, in Phoenix, Arizona.
He said that there are four "environmental factors that have changed in the financial services industry ... industry consolidation, increased competition, technological changes, and management focus on shareholder value." He then elaborated on technological changes.
"First, technological advances from the past decade have allowed real time access to credit information and public records. This ability to mine data allows providers of financial products to identify target markets with minimal geographic restraint. It has fostered development of monoline credit card and mortgage lenders that have become major market participants in a very short time. Second, technology has allowed organizations to separate the various business functions, such as product marketing, credit review and administration, and asset funding, and to locate each of these functions based on separate criteria, such as the availability of labor or the tax environment. Third, technology has helped institutions monitor and manage risk by hedging exposure to credit risk and interest rate risk or by selling certain assets in secondary markets."
However, he added that use of new technologies "also has potential negatives ... Sophisticated technology can at times be its own risk as a system failure or software error can have extremely negative consequences."
USTR Releases Annual Special 301 Report
4/30. The Office of the U.S. Trade Representative (USTR) released its annual "Special 301" report identifying foreign countries that fail to protect intellectual property rights.
The Trade Act of 1974 requires the USTR to identify annually foreign countries that deny adequate and effective protection of intellectual property rights or fair and equitable market access for U.S. persons that rely on intellectual property protection.
The sole priority foreign country is the Ukraine. The report states that it retains this categorization "due to its persistent failure to take effective action against significant levels of optical media piracy and to implement intellectual property laws that provide adequate and effective protection."
The report states that "In this year's review, USTR devoted special attention to the growing issue of Internet piracy, as well as the ongoing campaign to reduce production of unauthorized copies of ``optical media´´ products such as CDs, VCDs, DVDs, and CD-ROMs. Optical disk piracy is an increasing problem in many countries, in particular, Ukraine, Indonesia, Malaysia, the Philippines, Russia, Thailand and Taiwan. In addition, USTR continued to focus on other critically important issues including proper implementation of the TRIPS Agreement by developing country WTO Members and full implementation of TRIPS standards by new WTO Members at the time of their accession. USTR also continued to encourage countries to ensure that government ministries use only authorized software."
"Strong IPR protection should also be a priority for other countries because it will help them attract investment and technology," said USTR Robert Zoellick in a release. "This report reflects the Administration's continued commitment to ensure effective intellectual property protection around the world. We will continue to work with Congress to identify our priorities in this area."
Robert Holleyman, President of the Business Software Alliance (BSA), stated in a release that "Piracy is the largest trade barrier for the software industry. While we have made great progress in our efforts to get foreign governments to establish effective legal protections for intellectual property, piracy costs the software industry more than $11 billion a year. To combat this growing trend, it is important that we have the government's help in identifying countries and regions that continue to allow software piracy and theft in violation of their international treaty obligations".
International Intellectual Property Alliance (IIPA) President Eric Smith stated in a release that "The U.S. copyright industries are one of the most productive and fastest growing sectors of the U.S. economy, accounting for over 5% of the U.S. GDP and creating new U.S. jobs at over three times the rate of the remainder of the economy.  Reducing copyright piracy in overseas markets is vital to this sector’s continued health and growth.  IIPA and its members are particularly gratified with the U.S. government’s attention on the ever growing scourge of optical media piracy and its new initiatives against Internet piracy."
Hillary Rosen of the Recording Industry Association of America (RIAA) stated that "Today's announcement by Ambassador Zoellick reflects the importance that he and this Administration place in ensuring that our trading partners live up to their international obligations in the protection of these critical US assets. On behalf of the creators of today and tomorrow, I thank Ambassador Zoellick and his dedicated team for their essential support."
Hollings to Hold Hearing On Muris James Merger Review Deal
4/30. The Senate Commerce Committee will hold a hearing on the Memorandum of Agreement between the Federal Trade Commission (FTC) and the Department of Justice's (DOJ) Antitrust Division regarding division of responsibility for merger reviews. The hearing is set for Tuesday, May 7 at 9:30 AM. The witness list has not yet been set.
Sen. Hollings is the Chairman of the Committee, and an opponent of the deal, which was negotiated by FTC Chairman Timothy Muris and Assistant Attorney General Charles James.
This agreement defines, by market, which transactions will be reviewed by which agency. For example, the FTC will have responsibility for transactions involving companies that provide computer hardware, professional services, and satellite manufacturing and launch, and launch vehicles. The DOJ will have responsibility for transactions involving media and entertainment, telecommunications services and equipment, and financial services.
Back on January 22, the Consumers Union and the Consumer Federation of America wrote a letter to Sen. Hollings, regarding "the Bush administration's plans to transfer the oversight of media industry mergers" from the FTC to the DOJ. They wrote that "this jurisdictional gerrymandering seems to have been motivated more by politics and ideology than a desire to better serve the public. Such a move would be extremely detrimental to the public interest and to media consumers. We urge you to continue to do your utmost to persuade the administration to abandon its plans."
State Department in Cyber Security Talks in India
4/30. Lincoln Bloomfield, Assistant Secretary of State for Political Military Affairs, held a press conference in New Delhi, India, at which he addressed cyber security. Bloomfield traveled to New Delhi for the inaugural session of the Indo US Cyber Security Forum. See, transcript.
He stated that "These talks marked the start of what will be a regular relationship between India and the US on cyber security." He said that the U.S. is also engaged in cyber security "dialogues with a number of our closest friends and partners in the economic sphere. It is quite appropriate that we should come to New Delhi insofar as India's presence in the international cyber environment and in the global market is significant and is destined to grow quite substantially."
In addition, Bloomfield addressed the U.S. response to cyber threats generally. "Cyber security is a relative newcomer to the bureaucratic environment in Washington and it is clearly an outgrowth of the phenomenal proliferation of computers and information technology and the Internet. The organizations represented on the US delegation in the last two days in the main did not exist very few years ago. Now we find that our own government bureaucracy, our defense and intelligence establishments must guard its information infrastructure against all manner of cyber threats. In addition, most of the critical infrastructure in the United States is not government owned or government operated. It belongs to the private sector, the financial markets in particular, and the entire range of corporations and small businesses. So, in the United States, the government needs to enlist the cooperation of the private sector to work collegially for their own mutual benefit."
House Subcommittee to Mark Up Federal Courts Improvement Act
4/30. The House Judiciary Committee's Subcommittee on Courts, the Internet and Internet and Intellectual Property will meet to mark up HR 4125, the Federal Courts Improvement Act of 2002, on Thursday, May 2. The bill includes various provisions, but only one that relates to technology and communications. Section 104 of the bill would affect the timing of reports regarding the expiration of wiretap orders, and the denial of requests for wiretap orders.
Section 2519 of the Criminal Code pertains to reports concerning intercepted wire, oral, or electronic communications. Currently, this section begins, "(1) Within thirty days after the expiration of an order (or each extension thereof) entered under section 2518, or the denial of an order approving  an interception, the issuing or denying judge shall report to the Administrative Office of the United States Courts--". The statute then lists the information that must be reported. See, 18 U.S.C. § 2519.
HR 4125 would change this language to read as follows: "(1) In January of each year, any judge who has issued an order (or extension thereof) under section 2518 which expired during the preceding year or who has denied approval of an interception during that year, shall report to the Administrative Office of the United States Courts--". HR 4125 would not affect the information that must be reported.
Section 104 of HR 4125 affects when judges must be report. In most cases, it would delay the reporting of information about the expiration of wiretap orders, and the denial of requests for wiretap orders.
People and Appointments
4/30. WorldCom announced that Bernie Ebbers resigned his position as P/CEO/Director of WorldCom. John Sidgmore, who was previously Vice Chairman, is now the P/CEO. Bert Roberts remains as Chairman of the Board. See, WC release.
4/30. Louis Reigel was named deputy chief financial officer for the Federal Bureau of Investigation (FBI). See, FBI release.
4/30. The Senate confirmed the nominations of Michael Baylson and Cynthia Rufe to be a Judges of the U.S. District Judge for the Eastern District of Pennsylvania. See, Cong. Rec., April 30, 2002, at S3578.
More News
4/30. Delaware Chancery Court dismissed the lawsuit of Walter Hewlett seeking to block the merger of HP and Compaq.
4/30. The Copyright Office (CO) published a notice in the Federal Register that it is waiving its regulation regarding mail delivery. It stated that "Due to the continued disruption in the delivery of mail, the Copyright Office of the Library of Congress is announcing alternative methods for the filing of claims to the cable and satellite royalty funds for the year 2001. In order to ensure that their claims are timely received, claimants are encouraged to file their cable and satellite claims electronically, utilizing the special procedures described in this document." See, Federal Register, April 30, 2002, Vol. 67, No. 83, at Page 21176 - 21178.
FCC Receives Comments on AT&T Comcast Merger
4/29. April 29 was the deadline to file original comments with the Federal Communications Commission (FCC) in its AT&T Comcast merger review proceeding. This proceeding is titled "In the Matter of Applications for Consent to the Transfer of Control of Licenses, Comcast Corporation and AT&T Corp., Transferors, To AT&T Comcast Corporation, Transferee". This is MB Docket No. 02-70. Oppositions and responses are due by May 14. See, FCC notice.
The Progress and Freedom Foundation (PFF) submitted a comment [PDF] in which it stated that "in the context of today's rapidly changing and converging digital environment, the Commission should view the proposed merger as procompetitive, efficiency enhancing, and consistent with the public interest. And it should not allow the indeterminate nature of the public interest standard to serve as an opportunity for opening a ``regulation by condition´´ bazaar, as has often been the case in the past with respect to the Commission’s handling of merger proposals."
CapNet submitted a comment [5 pages in PDF] expressing its "enthusiastic support for the merger". It stated that "Comcast's commitment to the widespread deployment of broadband services has been abundantly demonstrated in the Washington, D.C. metropolitan area, as well as elsewhere, and the merger will accelerate the upgrading of AT&T's cable systems to speed broadband deployment in communities across the country. The merger will also spur much needed, facilities based competition for telephone services. The merger therefore should be approved." CapNet is a technology group whose members includes Microsoft, Oracle, Computer Associates, Gateway, IBM, HP, and StorageTek. AT&T is also a member.
BellSouth submitted a comment [PDF] which focused more on FCC regulation of its DSL service, than the FCC's review of the AT&T Comcast merger. It wrote that "Cable modem service is an interstate information service and currently is not regulated by the Commission. It is the dominant technology serving the mass market for high speed Internet access. Digital subscriber line (``DSL´´) service provided by incumbent local exchange carriers (``ILECs´´) is the only significant competitor to cable modem service. Thus, absent competition from ILEC DSL services, AT&T Comcast unquestionably would have an increased ability to raise prices for their cable modem services."
It continued that "Current Commission rules regulate ILEC delivery of DSL service far more heavily than they regulate cable modem service. These regulatory disparities already hamper the effectiveness of DSL service as competition for cable modem service. They 1) create significant disincentives to ILEC investment in DSL and other new broadband equipment, 2) delay the rollout of DSL and other broadband services, and 3) raise the costs of those services. Providing AT&T Comcast with additional competitive advantages while retaining regulatory disparities that already make DSL service providers less effective competitors in the marketplace would exacerbate AT&T Comcast's ability to dominate the mass market for broadband services."
BellSouth concluded that the FCC should "condition its approval of the instant Applications of AT&T Corporation, Comcast Corporation and AT&T Comcast Corporation on the elimination of the disparities in regulation between ILEC DSL services and cable modem services."
American Cable Association (ACA) submitted a comment [19 pages in PDF] in which it stated that the merger would "combine in one entity control of the essential digital programming distribution service for small systems -- Headend In The Sky, along with substantial satellite and terrestrially delivered programming. Access to these services is essential for smaller market cable systems to: (i) deliver diverse programming; (ii) deploy broadband services over cable; and (iii) compete with the two national DBS providers EchoStar and DirecTV, both of which will not distribute satellite programming to small cable operators."
It concluded that "AT&T Comcast will control HITS digital distribution services as well as substantial satellite and terrestrially delivered programming. ACA members will have no choice but to transact with the combined company. AT&T Comcast will have ultimate leverage over many smaller cable businesses and smaller market consumers. The question then becomes: How will AT&T Comcast use this leverage?"
The ACA stated that it represents "more than 930 independent cable companies serving about 7.5 million customers predominantly in smaller markets and rural areas."
The Media Access Project (MAP) and other groups submitted a comment [88 pages in PDF] in which in which they requested that the FCC deny the request. They complained about rising cable TV rates and market concentration. They asserted that cable and satellite service providers do not compete with each other. They also stated that the merger would create a huge purchaser for set top boxes, and "allow AT&T/ Comcast to dictate standards. Microsoft's relationship with AT&T and Comcast is also a matter of significant concern. AT&T/ Comcast have given Microsoft preferential treatment for MSN Internet services and for operating software on set top boxes."
Groups Write Commerce Committees About .us Domain Names Sale
4/29. Jerry Berman (Center for Democracy and Technology), Scott Harshbarger (Common Cause), and Andrew Schwartzman (Media Access Project) wrote a letter to the Chairman and ranking members of the House and Senate Commerce Committees, and their telecom subcommittees, regarding the .us Internet domain.
They wrote that "Last week, unbeknownst to most Americans, a major sell-off was held for domain names in .us, such as churches.us. Thousands of names -- many of which are of significant public interest -- were sold off based on flawed policies developed with almost no public input or public accountability. We urge you, as part of your oversight responsibilities, to hold hearings investigating this matter."
GAO Reports on International E-Commerce
4/29. The General Accounting Office (GAO) released a report [100 pages in PDF] titled "International Electronic Commerce: Definitions and Policy Implications". This is a wide ranging report that covers the meaning of international electronic commerce, the available data on growth of e-commerce, barriers to e-commerce, the legal framework affecting e-commerce, and international trade agreements and negotiations.
GAO Reports on Building Security Technologies
4/29. The General Accounting Office (GAO) released a report [72 pages in PDF] titled "National Preparedness: Technologies to Secure Federal Buildings". The report reviews commercially available security technologies, such as magnetic swipe cards, proximity cards, smart cards, keypad entry devices, and biometric systems, metal detectors, x-ray scanners, explosive detection, and video surveillance.
GAO Reports on Desktop Outsourcing by Federal Agencies
4/29. The General Accounting Office (GAO) released a report [PDF] titled "Desktop Outsourcing: Positive Results Reported, but Analyses Could Be Strengthened".
The report addresses six "federal agencies' efforts to engage in an information technology (IT) outsourcing alternative for acquiring distributed computing services (typically those pertaining to desktop management) known as ``seat management.´´" With seat management, the contractor owns the desktop, and other computing hardware, software and services are bundled and provided on a per seat basis.
The report found that "No single overarching reason emerged regarding why agencies decided to adopt seat management to address their distributed computing needs."
The report also found that "we could not determine whether any of the agencies were achieving expected costs and benefits because they did not (1) perform sufficient up-front analyses of their baseline and projected costs and benefits and (2) routinely monitor all actual seat management costs and benefits." Hence, it recommended that the six agencies "monitor all actual seat management costs and benefits."
The report was prepared for Rep. Tom Davis (R-VA), the Chairman of the House Government Reform Committee's Subcommittee on Technology and and Procurement Policy. The GAO is an arm of the Congress.
Federal Circuit Rules in Genentech v. Amgen
4/29. The U.S. Court of Appeals (FedCir) issued its opinion in Genentech v. Amgen, a patent infringement case.
Genentech is the owner of U.S. Patent Nos. 4,704,362 (titled "Recombinant cloning vehicle microbial polypeptide expression"), 5,221,619 (titled "Method and means for microbial polypeptide expression"), and 5,583,013 (titled "Method and means for microbial polypeptide expression"). These patents disclose methods and cloning vehicles for the introduction and expression of genetic information -- deoxyribonucleic acid (DNA) or genes -- in unicellular organisms that do not naturally contain or express that genetic information. The patents thus enable introduction of a DNA sequence, such as a synthetic gene that expresses a usable protein, into cells via a cloning vehicle.
Genentech filed a complaint in U.S. District Court (NDCal) against Amgen alleging patent infringement. The District Court held that Amgen did not literally infringe Genentech's patents. It also barred Genentech from proceeding on a theory of infringement under the doctrine of equivalents.
The Court of Appeals affirmed as to the doctrine of equivalents, but vacated and remanded the judgment of noninfringement because the District Court erred on a matter of claim construction.
People and Appointments
4/29. The National Telecommunications and Information Administration (NTIA) published a notice that it has extended its deadline for applications for the position of Associate Administrator for Spectrum Management to to May 28.
4/29. Verizon announced that Vice Chairman and CFO Frederic Salerno will retire later this year. Verizon did not name a successor.
4/29. Nokia announced that JT Bergqvist, SVP for IP Mobility, and Pertti Korhonen, SVP for Mobile Software, have been appointed to the Group Executive Board, effective July 1, 2002. See, Nokia release.
4/29. Sen. John Warner (R-VA) spoke in the Senate about Henry Hudson, President Bush's nominee for a seat on the U.S. District Court (EDVa). Sen. Warner praised him as "highly qualified for this judgeship". See, Cong. Rec., April 29, 2002, at S3499.
More News
4/29. President Bush gave a speech at a campaign event in Albuquerque, New Mexico, for Rep. Heather Wilson (R-NM). Wilson is a member of the House Commerce Committee, and its Telecom and Internet Subcommittee. She is the sponsor of HR 718, the Unsolicited Commercial Electronic Mail Act of 2001, an anti spam bill. She was also one of the leading opponents of the Tauzin Dingell bill in the House Commerce Committee. However, President Bush did not address these issues at the event.
4/29. The House Ways and Means Committee's Subcommittee on Social Security held a field hearing in the state of Florida titled "Protecting the Privacy of Social Security Numbers and Prevent Identity Theft". See, hearing advisory. The General Accounting Office (GAO) submitted a report titled "Social Security Numbers: SSNs Are Widely Used by Government and Could Be Better Protected".
4/29. The Federal Communications Commission (FCC) announced that it adopted a Report and Order pertaining to the ability of public safety answering points (PSAPs) to call back a 911 caller who is disconnected when that caller is using a non initialized wireless telephone. The FCC stated in a release that the Report and Order concludes that "it is still technically infeasible to require carriers, and manufacturers of 911-only phones, to develop and implement technical solutions that would provide PSAPs with a call back number for calls from non-initialized phones". This is WT Docket No. 94-102.
Bush Asks Senate to Pass TPA Bill
4/27. President Bush gave a radio address in which he advocated passage of trade promotion authority (TPA) legislation. He stated that "The Senate should pass the pending trade legislation without delay. Trade promotion authority would give me the flexibility to negotiate with other countries to open their markets and get the best deals for American producers and workers. Congress would still have the final up or down vote on any trade agreement."
Bush also stated that "I recognize that some American workers may face adjustment challenges as a result of trade. I support helping these workers by reauthorizing and improving trade adjustment assistance programs that will give workers impacted by trade new skills, help them find new jobs quickly, and provide them with financial assistance."
The House passed its TPA bill, HR 3005, on December 6. The Senate Finance Committee approved its version of the bill later in December. Sen. Tom Daschle (D-SD), the Senate Majority Leader, has yet to schedule the bill for consideration by the full Senate.
7th Circuit Affirms Convictions of ELF Antenna Saboteurs
4/26. The U.S. Court of Appeals (7thCir) issued its opinion in USA v. Urfer, affirming the convictions of two people who sawed down poles that support an antenna for the U.S. Navy's Extremely Low Frequency (ELF) system for transmitting signals to its submerged ballistic missile submarines.
ELF. The U.S. Navy's ELF Communication System enables communications with submerged submarines. Radio signals attenuate rapidly when they pass through water. Submarines on patrol tend to be deep under the water, because traveling at or near the surface are more likely to be located by hostile parties. However, the rate of attenuation varies with radio frequency, with low frequency signals attenuating more slowly. The U.S. Navy sends messages to submerged submarines around the world using the frequency of 76 Hz. Generating a radio signal requires an antenna, the necessary length of which is inversely proportional to its frequency. Extremely low frequency transmissions require extremely long antennas. The U.S. Navy has strung several of these transmitting antennas to wooden poles located on federal land in the states of Wisconsin and Michigan. The antenna at issue in this case is 28 miles long and resembles a power line.
The defendants in this case, seeking to disable the U.S. Navy's nuclear missile submarine capability, sawed down a series of poles supporting an ELF antenna.
District Court. Defendants were prosecuted in U.S. District Court (EDWisc) for willfully injuring federal property in violation of 18 U.S.C. § 1361 and § 1362. They asserted in defense, among other things, that they had been advised by an attorney -- one Anabel Dwyer -- that sawing down these antenna poles would be legal. The District Court allowed this attorney to testify. It also instructed the jury on a "defense of counsel" defense; it instructed the jury that it could not convict the defendants if they "honestly believed their attorney's advice and acted in honest ignorance of their legal duties". The jury nevertheless returned verdicts of guilty. Defendants appealed on the grounds that they were not permitted to present evidence on "dangers to world peace".
Court of Appeals. The Court of Appeals held that "The only error committed at trial was in the defendants' favor. No advice of counsel instruction should have been given. There is no such thing as an ``advice of counsel´´ defense."
Judge Richard Posner, who wrote the opinion of the Court, noted that "There are almost a million lawyers in the United States. Not all of them are competent; not all are honest." He added that "the lawyer's advice to these defendants was indeed unreasonable".
Posner also concluded that "It would be especially bizarre to suppose that antiwar activists have a right to disable the United States from using nuclear weapons when many other nations, not plagued by such activists, possess these weapons."
AT&T Fined for Antenna Violations
4/26. On April 25 the Federal Communications Commission (FCC) released two Notices of Apparent Liability (NAL), finding AT&T and SpectraSite Communications liable for forfeitures in the amounts of $153,000 and $111,000, respectively, for violation of 47 U.S.C. § 303(q), and FCCs rules, relating to antenna structure construction, marking, and lighting.
Section 303(q) provides that the FCC shall "Have authority to require the painting and/or illumination of radio towers if and when in its judgment such towers constitute, or there is a reasonable possibility that they may constitute, a menace to air navigation." The NALs were adopted by the FCC on April 18, and released on April 25. See, AT&T NAL, SpectraSite NAL, and FCC release.
Urfer and Sprong (see preceding story) sawed down poles supporting ELF antennas, in an attempt to shut down the U.S. Navy's ability to send messages to its submerged submarines, and compromise national security. They received light sentences and were ordered to "pay restitution of several thousand dollars". In contrast, AT&T and SpectraSite were fined $264,000 for failure to "paint antenna structures, and failure to replace lights" on antennas.
FCC Commissioner Copps Addresses Regulation of Communications
4/26. Federal Communications Commission (FCC) Commissioner Michael Copps gave a speech [PDF] to the U.S. Conference of Catholic Bishops in Dallas, Texas. He addressed universal service subsidies, the FCC's public interest standard, media consolidation, regulation of broadcast speech, and other issues.
Copps stated that "Communications technologies can enlighten minds, convey powerful ideas, educate, enable, and lay a solid foundation for economic growth and human development. Or, they can twist minds, dumb down the exchange of ideas, coarsen the national dialogue and unbalance both economic and human development. The decisions we will make in the next years immediately before us will have much to do with which path is taken."
He praised Instructional Television Fixed Service (ITFS), and the FCC's e-rate program.
Broadband Internet Access as Universal Service. Copps also addressed other FCC run universal service subsidies. He said that "Each and every citizen of this great country should have access to the marvels of communications." He characterized this as "a civil right". He said that "Today, that means broadband".
Public Interest Standard. Copps also defended the public interest standard. "Not only do I find the concept attractive personally, but Congress made it the foundation of our communications statutes. In fact, the term ``public interest´´ appears 112 times in the Telecommunications Act". He did not, however, offer an explanation of its meaning.
Media Consolidation. Copps also discussed media consolidation at length. He said that "We have experienced a great wave of mergers and acquisitions over the past half dozen years. Many formerly independent broadcast stations are now parts of huge ownership groups comprising hundreds of outlets. This consolidation has no doubt created efficiencies ... But this consolidation also presents us with serious questions of public policy."
He continued that "our people have always harbored a deep suspicion of excessive industrial consolidation, and they have always wanted sentinels at the gate to guard against it. Each proposed industry combination needs to be looked at on its merits -- some are good, some are not -- but the public interest test must be rigorously applied to every one of them. This is exactly what I have attempted to do in my first year at the Commission."
He concluded that "One of our most important jobs at the FCC must be the preservation of a bustling marketplace of ideas, a diversity in sources of content in each community, and a multiplicity of voices to stir discussion and debate throughout the land. This is what nurtures our democracy."
Regulation of Speech. Copps also stated that media have a "responsibility to act in the public interest".
"Broadcast and cable programming, in addition to being entertaining, should enhance our democratic discourse and educate our children", said Copps. "It is incumbent upon us at the FCC ... to ensure that that the bottom line does not displace the public interest as broadcasters' driving force."
"It is up to us at the FCC to make sure that there continue to be outlets for independent programming. We need to ensure that local broadcast stations continue to carry programming that serves the needs of the local community, covering local public affairs and serving the needs of all aspects of the community. In order to ensure that local communities are adequately served, there must be diverse sources of programming in each community -- not just a variety of programming formats but true diversity, providing a variety of voices and viewpoints."
Program Related Entities? Commissioner Copps also discussed the obligations of "program related entities". He said that "Right now broadcasters' only affirmative programming obligations are to serve their communities and to provide some programming that serves the educational needs of children. They need to do more. So do other program related entities. In the area of Public Service Announcements, cable programmers, local cable system operators and satellite providers -- not subject to the same public interest obligations as broadcasters -- nonetheless have obligations to be good corporate citizens. These programming providers, like broadcasters, have the ability to deliver targeted messages to specific audiences, and thereby to serve the public."
Copps also addressed efforts to regulate indecency.
Evans Responds to House Commerce Committee Re ICANN
4/26. Commerce Secretary Donald Evans wrote a letter to Rep. Billy Tauzin (R-LA), the Chairman of the House Commerce Committee, and others, regarding the Internet Corporation for Assigned Names and Numbers (ICANN).
On March 13, Rep. Billy Tauzin (R-LA), Rep. John Dingell (D-MI), Rep. Fred Upton (R-MI), Rep. Ed Markey (D-MA), and Rep. John Shimkus (R-IL) wrote a letter to Secretary Evans in which they stated that "According to the Memorandum of Understanding between ICANN and the Department for implementing a transition for ICANN's technical management of Internet names and addresses, ICANN was to be founded upon the principles of ``stability, competition, bottom-up coordination, and representation.´´ Since its inception, however, ICANN has increasingly departed from that limited role. Its unchecked growth into general Internet policymaking and regulation of commercial rights and interests is very disturbing."
They also offered several recommendations. For example, "The Department should ensure that ICANN's Board of Directors is fully representative of all stakeholders, including corporate stakeholders and members of the general Internet community".
They also recommended that "ICANN should limit its activities to its initial scope of jurisdiction, i.e., coordinating core Internet functions and the technical aspects of naming and address allocation issues". They also suggested that "There should be clear, written procedures for approving new gTLDs, as well as any future technical issues, including an impartial appeals process for those who have process or substantive complaints."
Finally, the group stated that "we want to strongly reiterate our support for continued Department of Commerce control over the so-called ``A-root´´ server. We believe that any assumption of control over that asset by any outside entity would be contrary to the economic and national security interests of the United States."
Evans wrote back that "we support efforts to reform the organization in a manner that takes into account the views of Internet stakeholders." He also stated that "We view the proposal tabled by ICANN President Stuart Lynn as a starting point, not an ending point, for reform discussions. In this regard, we are pleased that at its recent meeting the ICANN Board of Directors took action to establish a process and a Committee on Evolution and Reform through which these important matters can be further considered and discussed by all stakeholders and the Internet community at large."
Reps. Tauzin and Dingell are the Chairman and ranking Democrat of the House Commerce Committee. Reps. Upton and Markey are the Chairman and ranking Democrat of the Telecom and Internet Subcommittee.
FTC Commissioners Comment on Hollings' Online Privacy Bill
4/26. All five Commissioners of the Federal Trade Commission (FTC) wrote letters to Sen. John McCain (R-AZ) in response to his request to them for comments on S 2201, the Online Personal Privacy Act (OPPA), a bill to regulate the information collection and dissemination practices of web site operators and ISPs. Three Commissioners offered criticism of online privacy legislation. Two supported legislation.
Sen. McCain is the ranking Republican on the Senate Commerce Committee. Sen. Ernest Hollings (D-SC) is the sponsor of S 2201 and the Chairman of the Committee.
FTC Chairman Timothy Muris wrote in his letter that he has five concerns about the bill. First, he wrote that as attempts to implement the financial privacy provisions of the Gramm Leach Bliley bill have demonstrated, "Drafting workable legislative and regulatory standards is extraordinarily difficult." Second, "Whatever the potential of the Internet, most observers recognize that information collection today is also widespread offline. Legislation subjecting one set of competitors to different rules, simply based on the medium used to collect the information, appears discriminatory." Third, "We have insufficient information about costs and benefits." Fourth, "the online industry is continuing to evolve rapidly." He cited recent progress in privacy related practices identified in a report [PDF] prepared for the Progress and Freedom Foundation titled "Privacy Online: A Report on the Information Practices and Policies of Commercial Web Sites". And fifth, Muris wrote that "there is a great deal the FTC and others can do under existing laws to protect consumer privacy".
Commissioner Orson Swindle wrote in his letter that "there has been no market failure that would justify the passage of legislation regulating privacy practices concerning most types of information. Even if such a market failure exists, I am not persuaded that the benefits of such legislation, including the proposed Online Personal Privacy Act, exceed its costs." He added that "the best means of protecting consumer privacy without unduly burdening the New Economy is through a combination of industry self regulation and aggressive enforcement of existing laws that are relevant to privacy by the FTC and other appropriate regulatory agencies."
Commission Thomas Leary wrote in his letter that "I do not believe it is my place to advise Congress on the bottom line issue of whether it is or is not a good idea to legislate on privacy issues." Nevertheless, he went on to criticize the bill at length.
In contrast, Commissioner Mozell Thompson wrote in his letter that "Online privacy legislation is needed". He wrote that S 2201 "addresses many of the most delicate problems associated with a legislative privacy framework. First, it contains the fair information principles and allows for flexibility and change. The OPPA avoids a "one size fits all" approach to the notice requirements and provides a reasonableness test for access. The OPPA is also more reflective of a "real world" consumer environment because it employs a sliding scale that affords more protection to more sensitive information."
"Second, by preempting state law, the OPPA will prevent the possibility of multiple standards that could "Balkanize" e-commerce and prove overly burdensome to business and too confusing for consumers. Finally, in granting the FTC rulemaking authority, the OPPA will permit strong enforcement, with special sensitivity to industry and consumer needs, while also providing a means for state participation."
Commissioner Sheila Anthony wrote in her letter that the Hollings bill "provides long awaited, strong protection measures for consumers in the online world. My only concern with this proposed legislation is its limited reach. In my view, federal legislation is necessary to protect the privacy of personally identifiable consumer information in the offline as well as online commercial realms."
GAO Reports on DTV Deadline
4/26. The General Accounting Office (GAO) released a report [PDF] titled "Telecommunications: Many Broadcasters Will Not Meet May 2002 Digital Television Deadline".
The report concluded that "at least 24 percent of all commercial television stations are broadcasting a digital signal. At least 113 of the 119 broadcast stations that were mandated to be broadcasting a digital signal by 1999 are doing so. In addition, at least 185 of the remaining 1,121 commercial television stations that are to be broadcasting in digital by May 1, 2002, are on the air with a digital signal."
The report also found that "Once on the air, 74 percent of current DTV stations reported providing some amount of high definition content -- an average of 23 hours per week for those stations showing some high definition content. However, current DTV stations reported that they perceive little interest in DTV among consumers in their viewing areas at the present time."
The report also referenced DTV and the Internet. It stated that "Another advantage of digital television is that ``digital compression´´ technologies allow for more efficient use of the radiofrequency spectrum than analog technologies. Using digital compression, broadcasters will have the opportunity to use the 6 megahertz of spectrum required to broadcast one analog television show to transmit four or five different digital ``standard definition´´ television shows simultaneously." The reported noted that "The idea of broadcasters as ``multichannel´´ operators could make broadcast television more competitive with cable and satellite television providers. A transition to digital technology also opens doors to future links between television sets and computers and the Internet, possibly making television viewing more of an interactive experience."
The report was prepared at the request of Rep. Ed Markey (D-MA), the ranking Democrat on the House Commerce Committee's Subcommittee on Telecommunications and the Internet.
More News
4/26. The U.S. Attorney for the Southern District of New York charged Richard Eitelberg by complaint with the unauthorized intrusion of the computer network. He is accused of remotely accessing the computers of his former employer and deleting records. See, CCIPS release.

Go to News Briefs from April 21-25, 2002.