Tech Law Journal Daily E-Mail Alert
April 26, 2001, 8:00 AM ET, Alert No. 174.
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New Bills
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.
R&D Funding
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 Gudes (NOAA).
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.
4/24. 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 multinational corporations."
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."
New Documents
Tauzin: HR 1542, The Internet Freedom and Broadband Deployment Act of 2001, 4/24 (HTML, TLJ).
Quote of the Day
"It's an incumbency protection program, plain and simple. It shields the Bell companies while emptying a six-shooter into the heart of new economy companies. It's a competition killer. That's because in order to benefit these 4 corporate behemoths, thousands of companies will suffer the consequences. Beyond raising the specter of monopoly providers in certain regions and markets throughout the country, the bill accelerates the trend toward monopsony, where there will only be one buyer. Rather than dozens of companies building networks and buying equipment we'll have one major purchaser of manufactured goods and software for the network over vast regions of the country. That will stultify economic growth and innovation."

Rep. Ed Markey (D-MA), statement at hearing on HR 1542, April 25.
Broadband Debate
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 don’t need legislation in order to provide digital services. They can and do offer DSL services today. The Bells don’t need legislation to offer Internet access. Again, they offer such services today."
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 underlying premise.
The hearing also gave industry representatives a chance to state their positions. See, prepared testimony of:
 • Douglas Ashton (Bear Stearns)
 • James Cicconi (AT&T)
 • Joseph Gregori (InfoHighway)
 • James Henry (Greenfield Hill)
 • Gordon Hills (EOPENY)
 • Paul Mancini (SBC)
 • Clark McLeod (McLeod)
 • Charles McMinn (Covad)
 • Peter Pitsh (Intel)
 • Timothy Regan (Corning)
 • Thomas Tauke (Verizon)
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 economy."
MCI 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, Verizon, and USTA.
DT VoiceStream Merger
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.)
New Time. 9:00 AM. The House Commerce Committee's Telecom and Internet Subcommittee will meet to mark up HR 1542, the "The Internet Freedom and Broadband Deployment Act of 2001." This is the Tauzin Dingell bill to exempt interLATA data from Section 271 requirements. Location: Room 2123, Rayburn Building.
9:30 AM. The Senate Commerce Committee will hold a hearing on the nomination of Theodore Kassinger to be General Counsel of the Department of Commerce. Sen. John McCain (R-AZ) will preside. Location: Room 253, Russell Senate Office Building.
10:00 AM. The Senate Appropriations Committee's Subcommittee on Commerce, Justice, State, and the Judiciary will hold a hearing on the Department of Justice FY 2002 budget. Location: Room 192, Dirksen Building.
10:00 AM. The Senate Judiciary Committee will hold a business meeting. The agenda includes approval of the nominations of Larry Thompson to be Deputy Attorney General and Ted Olson to be Solicitor General. Location: Room 226, Dirksen Building.
11:00 AM. The Senate is likely to begin debate on S 149, the Export Administration Act.
11:30 AM. The Senate Finance Committee will hold a hearing on several pending nominations, including Grant Aldonas to be Under Secretary of Commerce for International Trade and John Taylor to be Under Secretary of the Treasury. Location: Room 215, Dirksen Building.
12:00 NOON - 1:30 PM. The Congressional Internet Caucus Advisory Committee will host a panel discussion titled "Consumer Privacy: The Policy of Choice." Lunch will be served. RSVP to Location: Room SC-5, U.S. Capitol Building.
2:30 PM. The Senate Commerce Committee's Communications Subcommittee will hold a hearing on unsolicited commercial e-mail, and legislative options to deter it. Sen. Conrad Burns (R-MT) will preside. Location: Room 253, Russell Building. The scheduled witnesses are:
 • Eileen Harrington (FTC).
 • Jerry Cerasale (Direct Marketing Association).
 • Jeremiah Buckley (Electronic Financial Services Council).
 • David Moore (24/7 Media).
 • Jason Catlett (Junkbusters Corp.).
 • Harris Pogust (Sherman Silverstein).
 • David McClure (US Internet Industry Association).
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 release.
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.
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