| Senate Holds Hearing on
Media Concentration |
7/17. The Senate
Commerce Committee held a hearing on the 35% national
television broadcast ownership cap and the newspaper broadcast
cross ownership rule. Sen.
Ernest Hollings (D-SC), the Chairman of the Committee,
said in his prepared
statement [PDF] that "the rules are under attack from
an insatiable industry that is unsatisfied with the tremendous
consolidation that has already taken place, in the courts from
judges who appear to be ignoring Supreme Court precedent about
the government's strong interest in preserving a 'multiplicity
of information sources' in the marketplace, and, most
importantly, at the FCC, from a Commission that seems intent
on relaxing or eliminating many of the existing ownership
rules ..."
Sen. Hollings also stated that he intents to introduce a bill,
along with Sen. Daniel
Inouye (D-HI) and Sen.
Byron Dorgan (D-ND). "Our bill, which we may
introduce today, requires FCC licensees to alert the
Commission when they acquire a newspaper that creates a cross
ownership situation. The FCC is then directed to review the
appropriateness of the acquisition, and determine whether any
action is needed to bring the licensee in compliance with the
rule."
Sen. John McCain
(R-AZ), the ranking Republican, did not agree. He said in his prepared
statement [PDF] that "In the digital era, insight and
commentary on matters of public policy will no longer be
dominated by Cronkite, Brinkley, the Times and the Post. In
their place have arisen CNN, CNBC, MSNBC, Salon, Wired, Slashdot and innumerable
other sources of information and news. This new mass media
market is dominated, not by broadcasters and newspapers, but
by multichannel mass media entities like cable TV, direct
broadcast satellite TV, wireless cable, and, of course, the
Internet. These new media are not only powerful economic
competitors; they are also driving all forms of media to
become more interactive. ... In the face of these new
competitors, new technologies and new market demands,
ownership restrictions on traditional media have not only
become unnecessary, they have become anticompetitive."
See also, prepared testimony in PDF of witnesses: Mel
Karmizan (Viacom), Jack
Fuller (Tribune Publishing Company Alan
Frank (Post-Newsweek Stations), William
Baker (WNET), Gene
Kimmelman (Consumer’s Union), and Eli
Noam (Columbia Business School). Karmizan, who opposes the
rules, stated that "a worldwide technological tsunami has
crashed upon the world, flooding the broadcast industry with
competition in unprecedented proportions. Broadcast radio now
competes head-to-head with Internet radio" and "As
for broadcast television, it competes directly with cable ...
That service, subscribed to by nearly 70% of the country’s
households, has developed into a multi-channel video
programming distribution platform that not only carries
hundreds of cable networks but serves as a high-speed gateway
to the Internet ..." In contrast, Kimmelman argued that
"consumers' interests will best be served if the Federal
Communications Commission (FCC) is instructed to maintain
previous media ownership rules ..." |
|
|
| FCC Authorizes MSS Systems
in 2GHz Band |
7/17. The FCC's International
Bureau (IB) authorized eight new mobile satellite services
(MSS) systems in the 2 GHz band. The systems will be capable
of providing mobile voice, data, Internet access and other new
satellite communications services. The authorizations were
issued to Boeing, Celsat America, Constellation Communications
Holdings, Globalstar, ICO Services, Iridium, Mobile
Communications Holding, and TMI Communications. See, FCC
release.
The FCC's IB also stated that each of the "systems will
be authorized to operate in an equal, 3.5 megahertz segment of
spectrum in each of the 1990-2025 MHz and 2165-2200 MHz bands.
... The Bureau is delaying full implementation of the 2 GHz
MSS licensing order with regard to an incremental .38
megahertz of spectrum per licensee in each band until the
Commission has the opportunity to fully consider various
pending proposals related to the 2 GHz frequencies."
Newly appointed FCC Commissioner Michael Copps
released a separate statement
praising the action.
The Cellular
Telecommunications Industry Association (CTIA) is not
happy. CTIA P/CEO Tom Wheeler stated that "we hope the
Commission will revisit soon whether 70 MHz of spectrum needs
to be locked up for this use at all." On July 12, the
CTIA sent a letter
[PDF] to the FCC in which it stated that "It is
reasonable to expect that most – and perhaps all – of the
current MSS applicants will ultimately not launch and provide
service in that band. Given increasing spectrum needs for
other services, the track record of underutilized MSS spectrum
in other bands, the financial condition of numerous MSS
companies, and the claims made by New ICO that MSS is not
viable without terrestrial flexibility, the Commission should
consider whether it is in the public interest to license an
additional 70 MHz for MSS." See also, CTIA
release. |
|
|
| House Holds Hearing on IPR
and Government R&D |
7/17. The House
Government Reform Committee's Technology and Procurement
Policy Subcommittee held an oversight hearing titled
"Toward Greater Public-Private Collaboration in Research
and Development: How the Treatment of Intellectual Property
Rights Is Minimizing Innovation in the Federal
Government?" Subcommittee Chairman Tom Davis (R-VA)
said in his opening
statement that "three-fourths of the country's top 75
information technology companies will not do research for the
Government, citing both difficulty in contracting with the
Government and the treatment of intellectual property in
R&D contracts. Thus, at the same time that Government is
no longer driving technological innovation, many commercial
firms that invest billions in R&D every year are refusing
to do business with the Government. This has serious
implications for the well being of the United States."
See, prepared testimony of witnesses: Jack
Brock (General Accounting Office), Deidre
Lee (Department of Defense), Eric
Fygi (Department of Energy), Richard
Carroll (Digital Systems Resources), Richard
Kuyath (3M Corporation), and Christopher
Hill (George Mason University). |
|
|
| NCTA Writes Report on Cable
Telephony |
7/17. The National Cable
Telecommunications Association (NCTA) released a report
[PDF] on cable telephony. See also, NCTA
release. The report reviews cable companies' ongoing
research and testing of Voice over Internet Protocol
telephony. However, it continues that cable companies' initial
forays into residential telephony have been through
traditional circuit switched technology, although this
technology has been updated to provide digital, rather than
analog service. There are now 1.3 million cable telephony
access lines.
The report continues that "only facilities based
competitors are likely to provide sustainable long term
competition. Such competitors are less dependent on incumbents
to provide needed inputs into the provision of the competitive
service. Even so, incumbent phone companies have often done
much to frustrate facilities based competition. They have
attempted to impose onerous interconnection terms and
conditions, delayed connecting facilities, processing orders,
and porting numbers, and generally placed barriers in the way
of competitors."
The report also addresses the regulatory environment of cable
telephony. "Cable companies have also faced difficulty in
persuading regulators of the importance of promoting
facilities based competition over the less viable resale and
unbundled network element (UNE) competitive entry strategies
envisioned by the Telecommunications Act of 1996. The reality
is that it is difficult to implement a business model that
relies heavily on purchasing essential inputs from one's
fiercest competitor. A far more reliable approach is to make
capital investments in one's own infrastructure and to
decrease reliance on the ILECs as much as possible." |
|
|
| NCTA CEO Sachs Addresses
Open Access |
7/17. NCTA P/CEO Robert Sachs gave a speech
at the NARUC
conference in Seattle, Washington. He stated that the Telecom
Act of 1996 has been a great success in spurring the
deployment of broadband services over cable. See also, NCTA
release.
He also addressed open access. He stated that "some of
the RBOCs
and large ISPs, have sought to have the government require
that cable share its facilities with all ISPs. This regulatory
effort has been variously known as "open access" or
"forced access", or the term I prefer
"government mandated access." While only a handful
of the more than 30,000 local cable franchising authorities
have passed ordinances to mandate access to cable's
facilities, the federal courts have rejected such efforts --
invalidating mandated access ordinances in Portland, Oregon;
Broward County, Florida; and, just last week, in Henrico
County, Virginia."
He also stated that "States too have been skeptical -- at
least twenty-three of them considered legislation in 1999 and
2000 -- but not one passed such legislation -- in fact, not
one bill even made it out of committee in a single state. And
NARUC, I'm pleased to say, has wisely chosen not to endorse
mandated access to cable facilities. I say "wisely",
because the market is addressing this issue. About a year and
a half ago cable companies began to announce that they would
voluntarily carry multiple ISPs ..." |
|
|
|
| Goodlatte and Boucher
Introduce Net Tax Moratorium Bill |
7/17. Rep. Bob
Goodlatte (R-VA) and Rep. Rick Boucher
(D-VA) introduced the Internet Tax Fairness Act of 2001, a
bill to make permanent the existing moratorium on multiple and
discriminatory Internet taxes, and taxes on Internet access.
The bill would also limit the imposition of business activity
taxes (BATs) on electronic and other interstate commerce by
state and local taxing authorities. The bill does not address
sales taxes.
Reps. Goodlatte and Boucher spoke at a press conference
announcing the introduction of the bill. Rep. Boucher stated
that this bill "will encourage the growth of electronic
commerce by extending the moratorium on Internet taxes and by
setting forth concrete guidelines for the collection of taxes
by States and localities for business activities with their
jurisdiction."
Congress passed the Internet Tax Freedom Act (ITFA) in 1998,
creating the existing three year moratorium, which expires on
October 21 of this year. The Goodlatte Boucher bill would make
permanent the moratorium contained in the ITFA.
The bill would prohibit several Internet related BATs,
including taxes on "The use of the Internet to create or
maintain a World Wide Web site accessible by persons" in
the taxing jurisdiction. The bill would also prohibit BATs on
the use of an ISP, on-line service provider, internetwork
communication service provider, or other Internet access
service provider, or web hosting service. It would also
prohibit BATs on the "use of any service provider for
transmission of communications, whether by cable, satellite,
radio, telecommunications, or other similar system."
Also, the bill would prohibit BATs based on the "presence
or use of intangible personal property ... including patents,
copyrights, trademarks, logos, ... electronic or digital
signals, and web pages ..."
With respect to BATs generally, the Goodlatte Boucher bill
provides that no state or local taxing authority may impose a
BAT unless the taxed entity "has a substantial physical
presence" in the jurisdiction. The bill further prohibits
BATs on the leasing or owning of property in the jurisdiction
for less than 30 days, and on the assigning of employees,
representatives or agents in the jurisdiction for less than 30
days. Finally, the bill prohibits BATs based on contracts,
licenses, permits, loans, deposits, and securities. |
|
|
| Zoellick Addresses New
Trade Round and Antitrust |
| 7/17. USTR Robert
Zoellick released a statement
in which he advocated a new round of multilateral trade
negotiations. Zoellick also focused on antitrust law
enforcement. Bush administration officials have expressed
concerns that the EU is employing antitrust enforcement, not
to protect competition and benefit consumers, but to protect
EU companies from non-EU competition. Zoellick's statement was
diplomatic: "In competition policy, U.S. trade and
antitrust authorities recognize the significance of the issue.
Therefore, we are working to understand more clearly what the
EU seeks, and are discussing with the EU how it can
accommodate the concerns of the United States and other
countries. The United States can see merit in adherence to
core competition principles of transparency,
non-discrimination, and procedural fairness. We also can
support consultative and capacity building efforts to help
countries develop modern competition policy that promotes
efficient, effective, and dynamic markets." |
|
|
| Bush Addresses Trade Issues |
7/17. Bush gave a speech
in Washington DC in which he advocated free trade, trade
promotion authority, and a new round of multilateral trade
negotiations.
Free Trade. He stated that a goal of free trade
"is to ignite a new era of global economic growth through
a world trading system that is dramatically more open and more
free. One of the most important objectives of my meetings
with other G-7 leaders in Italy will be to secure their strong
endorsement for a launch of a new round of global trade
negotiations later this year."
Trade Promotion Authority. Bush stated that "one
of my most important legislative priorities will be to secure
from Congress trade promotion authority that five other
Presidents have had -- an authority necessary so that when our
United States enters into agreement, the countries with whom
we've agreed to will understand we mean business. It's
time for Congress to act." He also addressed the debate
over inclusion of labor and environmental issues:
"Legitimate concerns about labor standards, the
environment, economic dislocation should be, and will be,
addressed. But we must reject a protectionism that
blocks the path of prosperity for developing countries. We
must reject policies that would condemn them to permanent
poverty." |
|
|
| Bush on Cyberterrorism |
| 7/17. President Bush also touched on cyberterrorism in his
speech on world trade. He stated that "The United States
and her allies will pursue a balance of world power that
favors human freedom. This requires a new strategic framework
that moves beyond Cold War doctrines and addresses the threats
of a new century such as cyberterrorism, weapons of mass
destruction, missiles in the hands of those for whom terror
and blackmail are a very way of life." |
|
|
| Privacy Coalition Lobbies
FTC for Stricter Privacy Enforcement |
7/17. Members of the Privacy Coalition met with, and
presented a letter
to, FTC Chairman Timothy
Muris. The letter list nine things that the group wants the
FTC to do with respect to privacy. The group wants the FTC to
make public more information about privacy related complaints,
and FTC investigations.
The group also wants the FTC to interpret the Federal Trade
Commission Act (FTCA) and FTC rules in a manner that would
greatly expand its authority. First, it wants the FTC to
"Increase enforcement of the Telemarketing Sales Rule and
the Telephone Consumer Protection Act not only for cases of
fraud but also for invasions of privacy."
The Privacy Coalition also wants the FTC to "Revise the
interpretation of an "unfair and deceptive practice"
and take into account the principles of Fair Information
Practices when examining or endorsing industry practices, such
as the NAI proposal to limit online profiling by means of a
mandatory cookie or the unilateral revision of privacy
policies by companies." Former FTC Chairman Robert
Pitofsky expressed the opinion on several occasions that the
FTC does not have this authority. However, he recommended that
the Congress pass new legislation expanding its authority to
regulate online privacy. |
|
|
| USPTO Issues HP Molecular
Electronics Patent |
7/3. The USPTO issued U.S.
Patent No. 6,256,767, which discloses a demultiplexer for
a molecular wire crossbar network. This may facilitate
molecular based computing. The inventors are Philip Kuekes and
Stanley Williams; the assignee is Hewlett
Packard (HP).
"We have a strategy to reinvent the integrated circuit
with molecular rather than semiconductor components,"
said Williams in an HP release.
"We've received two key patents and have several more
pending that we believe will eventually enable computers to be
millions of times more efficient than they are today."
See also, U.S.
Patent No. 6,128,214, issued on October 3, 2000. |
|
|
| People and Appointments |
7/17. The Software &
Information Industry Association (SIIA) announced the
election of officers for the 2001 - 2002 term. Michael
Morris, SVP, General Counsel and Secretary of Sun
Microsystems, will be Chairman of the Board. Graham Beachum,
Ch/CEO of Edge Technologies, will be Vice Chairman. Glenn
Goldberg, SVP for Corporate Affairs of McGraw-Hill, will
be Secretary. Daniel Cooperman, SVP, General Counsel
and Secretary of Oracle, will be as Treasurer. See, release.
7/17. Microsoft name Skip Pizzi to head up a new
position within its Microsoft TV Group as TV standards and
regulatory affairs manager. Pizzi will be based in Washington,
D.C., See, release. |
|
|
| Senate Committee Holds
Hearing on Security Risks for e-Consumers |
| 7/16. The Senate
Commerce Committee's Science, Technology, and Space
Subcommittee held a hearing on security risks for the
e-consumer. Sen. Ron Wyden
(D-OR), said in his prepared
statement [PDF] that "Law enforcement can provide the
tools to track down attackers and the consequences that will
discourage them". Also, "government can encourage
education and incentivize research and development of security
services. Government can also facilitate information sharing
that might not otherwise occur in the private sector,
fostering discussions to identify the best practices that
might better serve the public Internet wide." See also,
prepared testimony in PDF of witnesses: Vinton
Cerf (WorldCom), Harris
Miller (ITAA), and Bruce
Schneier (Counterpane Internet Security). |
|
|
|
| Internet Caucus Hosts
Debate on Internet Taxes |
7/17. The Congressional Internet Caucus Advisory Committee
hosted a panel debate on taxes on Internet and other remote
sales, business activity taxes, and the existing moratorium on
new and discriminatory Internet taxes and Internet access
taxes.
Rep. Goodlatte, who is a Co-Chair of the Internet Caucus, called
for a permanent extension of the existing moratorium, and
legislation regarding business activity taxes (BATs). Rep. Spencer Bachus
(R-AL) advocated Congressional legislation permitting state
and local sales taxes on remote sales, including Internet
sales. He stated that "our public schools are being
annihilated today because they depend on the sales tax for
funding."
Currently, Quill
v. North Dakota, 504 U.S. 298 (1992), provides that state
and local taxing authorities are barred under the Commerce
Clause from requiring remote sellers without a substantial
nexus to the taxing jurisdiction to collect sales taxes for
sales to persons in the jurisdiction; however, the Court added
that Congress may extend such authority. Congress has passed
no such legislation. However, there are several bills pending
in the Congress that would provide this authority. See, for
example, HR
1410 and S
512.
Two panelists at the Internet Caucus debate advocating giving
state and local governments authority to tax remote sales --
Jeff DeBoer (Real Estate Roundtable) and Frank Shafroth
(National Governors Association). They argued that there is
currently an unlevel playing field that favors Internet
retailers and other remote sellers. Michael Mazerov (Center on
Budget & Policy Priorities) advocated ending "abusive
tax avoidance" practices by corporations with respect to
BATs. Three panelists defended online commerce -- Adam Thierer
(Cato Institute), Frank Julian (Federated Department Stores),
and Art Rosen (Coalition for Responsible & Fair Taxation).
Bill Whyman (The Precursor Group) moderated.
Adam Thierer stated, "don't blame the Internet for the
problems with the sales tax." He said that local
governments' tax collection problems are the fault their own
tax policies. "The sales tax system in America is the
most unlevel playing field you can possibly find. We play more
politics with the sales tax in America than any other tax
code. And the fact is, that is what is eroding the sales tax
base, not the Internet." He pointed out that online sales
account for less than 1% of aggregate retail sales. In
contrast, state and local governments exempt from their sales
taxes such things as services, agriculture, food, and
clothing. He concluded that only 42% of consumption in America
is subject to sales taxes. |
|
|
| Wednesday, July 18 |
10:00 AM. The Senate
Judiciary Committee will hold a hearing on Federal Bureau of Investigation
management reform issues. Location: Room 226, Dirksen
Building.
10:00 AM. The House
Judiciary Committee will hold a mark up session. The
agenda includes HR 2047, the Patent and Trademark Office
Authorization Act of 2002. Location: Room 2141, Rayburn
Building.
10:00 AM - 12:00 NOON. The U.S. International
Telecommunication Advisory Committee Telecommunication
Development Sector (ITAC-D) will hold a public meeting. 48
hour pre-clearance is required. See, notice
in Federal Register, July 16, 2001, Vol. 66, No. 136, at Pages
37086 - 37087. Location: Room 2533A, Department of State, 2201
C Street, NW, Washington DC.
12:15 PM. The Federal
Communications Bar Association's Mass Media Practice
Committee will host a brown bag lunch with Roy Stewart and the
FCC's Mass Media Bureau's front office. RSVP to Tami Smith of Sidley & Austin at
202-736-8257. Location: FCC, Second Floor South Conference
Room, 445 12th Street, SW, Room TW-C305, Washington DC.
2:00 PM. The House
Judiciary Committee will hold a hearing on HR 1410, the
Internet Tax Moratorium and Equity Act. Location: Room 2141,
Rayburn Building. |
|
|
| Thursday, July 19 |
10:00 AM. The Senate
Banking Committee will hold a hearing on the nomination of
Harvey Pitt to be Chairman of the Securities and
Exchange Commission. Location: Room 538, Dirksen Building.
10:00 AM. The Senate
Judiciary Committee will hold a business meeting. The
agenda includes many items, including consideration of the
nomination of Ralph Boyd to be Assistant Attorney
General for the Civil Rights Division, and the nomination of Robert
McCallum to be Assistant Attorney General for the Civil
Division. The agenda also includes mark up several bills,
including S
407, the Madrid Protocol Implementation Act, a bill to
amend the Trademark Act of 1946 to provide for the
registration and protection of trademarks in order to carry
out provisions of certain international conventions. Location:
Room 226, Dirksen Building.
2:00 PM. The Senate
Appropriations Committee will hold a business meeting to
mark up the Commerce, Justice, and State, the Judiciary, and
related agencies appropriation bills. Location: Room S-128,
U.S. Capitol Building. |
|
|
| Senate Finance Committee
Delays Approval of Jordan FTA |
7/17. The Senate
Finance Committee met to mark up SJRes 16, approving the
U.S. Vietnam Trade Agreement, and S 643, approving the U.S.
Jordan Free Trade Agreement. Both agreements were
negotiated by the Clinton administration. The Committee
approved the Vietnam agreement, but postponed action on the
Jordan FTA over disputes about labor and environmental laws.
There was no dispute that an FTA with Jordan is appropriate
for political reasons. However, this FTA includes labor and
environmental (L&E) paragraphs that are controversial.
They provide that neither party "shall fail to
effectively enforce its" L&E laws. Trade with Jordan
is minimal, and neither Jordan nor the U.S. cares about the
other's L&E records. Rather, the Clinton administration
insisted on these provisions with the idea that this FTA would
serve as a model for future FTAs. Hence, this FTA is a vehicle
for debate over what future FTAs and other trade agreements
should contain.
The Jordan FTA, which was signed on October 24, 2000, is also
a model on intellectual property rights and electronic
commerce. However, this is not controversial. The FTA
addresses patents, trademarks, copyright, and enforcement of IPR.
Jordan agreed to ratify and implement the WIPO's
Copyright Treaty and WIPO Performances and Phonograms Treaty
within two years. The FTA also provides that "each Party
shall seek to refrain from: (a) deviating from its existing
practice of not imposing customs duties on electronic
transmissions; (b) imposing unnecessary barriers on electronic
transmissions, including digitized products; and (c) impeding
the supply through electronic means of services ...". |
|
|
| More News |
7/17. The U.S.
Copyright Office (CO) published a notice
in the Federal Register announcing new rules for group
registration of photographs. The new regulations permit
submission of groups of published images in a variety of
formats as deposit copies, together with an application and
filing fee. This option applies to groups of works created by
an individual photographer that are published within one
calendar year. The CO will accept deposits on CD-ROM in either
JPEG, GIF, TIFF, or PCD formats. See, Federal Register, July
17, 2001, Vol. 66, No. 137, at Pages 37142 - 37150.
7/17. The Recording Industry
Association of America (RIAA) and the International
Federation of the Phonographic Industry (IFPI), released a Request
for Information on Audio Fingerprinting Technologies [PDF].
7/17. The NTIA
posted a reminder in its web site regarding the deadline for
submitting responses to the Request for Quotations regarding
the .us top level domain. The notice stated: "On
June 13, NTIA issued a Request for Quotations (RFQ) for
management and coordination of the usTLD. On July 16,
responses to all questions received in response to this
solicitation were posted as Amendment 1. On July 17, an
amended answer to Question 36 in Amendment 1 was posted as
Amendment 2. The RFQ as well as Amendments 1 and 2 are
available at http://www2.eps.gov/.
The final date for responses to the RFQ remains July 27."
7/13. The SEC filed a
civil complaint in U.S. District Court (DColo) against
William Brotherton and International Business Consortium, a
business founded by Brotherton, for perpetrating a fraudulent
and unregistered securities offering over the Internet. (Civil
Action No. 01-WM-1340.) See, SEC
release. |
|
|
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