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July 25, 2001, 9:00 AM ET, Alert No. 234.
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House Telecom Subcommittee Holds Hearing on 3G Spectrum
7/24. The House Commerce Committee's Telecommunications and Internet Subcommittee held a hearing titled "U.S. Deployment of Third Generation Wireless Services: When Will It Happen and Where Will It Happen?" 3G is intended to bring broadband wireless Internet access and other communications services to mobile devices, including laptops, cell phones and PDAs. Locating spectrum for 3G systems is proving difficult for the agencies responsible for spectrum management -- the FCC and NTIA. Congress may soon seek a legislative solution.
The U.S. does not have very much unused spectrum to allot for 3G systems. Hence, spectrum currently allotted to the private sector or government entities for other purposes will have to be reallocated or shared. Incumbent users are steadfastly opposed to reallocation or sharing of spectrum that they currently use. Efforts by the Clinton administration, the FCC and NTIA have produced meetings, reports and studies, but little progress.
To date, three spectrum bands have been identified for possible use for 3G systems: 698 to 960 MHz, 1710 to 1885 MHz, and 2500 to 2690 MHz. Part of the 1710 to 1885 MHz band is currently being used by federal agencies, especially by the Department of Defense. The National Telecommunications and Information Administration (NTIA), which is a part of the Department of Commerce, has responsibilities regarding spectrum management for spectrum used by government entities. This includes the 1755 to 1850 MHz band. The FCC has spectrum management responsibilities for spectrum used by the private sector. This includes the 2500 to 2690 MHz band, which is currently being used for MMDS, MDS, and ITFS.
Monsignor Michael Dempsey, of the Catholic Television Network, which a major ITFS licensee of spectrum from the FCC, testified that the spectrum being used by the Catholic church for educational and other purposes is "not a viable choice" for reallocation for 3G systems, and Congress should "take it off the table." No member of the subcommittee debated this point with the Monsignor. Similarly, Linton Wells, of the Defense Department, testified that spectrum used by the Defense Department could not be reallocated without jeopardizing national security.
See, prepared testimony of witnesses: Michael Dempsey (Catholic Television Network), Linton Wells (Department of Defense), William Hatch (Commerce Dept.), Julius Knapp (FCC Office of Engineering and Tech.), Denny Strigl (Verizon Wireless), and Thomas Wheeler (CTIA).
Rep. Chip Pickering (R-MS) stated that he would likely introduce legislation to establish a process for reallocating spectrum for 3G services. He suggested that proceeds from the auction of spectrum currently being used by the military should go back to the military to fund the relocation process. However, Rep. Ed Markey (D-MA) stated that auction proceeds should be used for education, teacher training, and closing "the digital divide." Rep. Fred Upton (R-MI), the subcommittee Chairman, stated that he expected Rep. Pickering to introduce his bill after the August recess, and the subcommittee to hold a legislative hearing this fall.
Members of the subcommittee also used the hearing to discuss other spectrum issues. Rep. Karen McCarthy (D-MO) and Rep. Bobby Rush (D-IL) pressured witnesses to move more rapidly on deploying emergency 911 capabilities, including caller location. Rep. Clifford Stearns (R-FL) and others advocated lifting the current spectrum ownership caps.
Rep. Upton presided throughout the hearing. See, opening statement. Rep. Billy Tauzin (R-LA), the Chairman of the full committee, was not present, but submitted a statement for the record. 21 of the subcommittee's members participated in at least part of the hearing.
Reps. Shimkus and Markey Seek a .kids Domain
7/24. Rep. John Shimkus (R-IL) and Rep. Ed Markey (D-MA) held a press conference to promote HR 2417, the Dot Kids Domain Name Act of 2001, which they introduced on June 28. The bill would require the National Telecommunications and Information Administration (NTIA), which is a part of the U.S. Department of Commerce, to exercise its authority under its Memorandum of Understanding with the ICANN to work with ICANN to create a child friendly top level domain (TLD).
Rep. Shimkus stated in a release that "I introduced this bill to bring about the long talked about idea of creating safe haven for children on the World Wide Web where positive content is promoted. The Internet Corporation for Assigned Names and Numbers (ICANN) had the perfect opportunity to do create a safe zone for children in the last round of Top Level Domain Names (TLDs) selection, but failed to do so. Since ICANN has shown no interest in helping to achieve this goal, Congress must act."
Rep. Markey stated that "Rather than trying to send problematic material for children into a specific area, such as 'dot adult' ... the cyberspace zoning equivalent of an online 'red light district,' this legislation creates an Internet playground, a top level domain that is kids friendly from the start." See, Markey statement.
The bill provides that "... the Secretary of Commerce, acting through the National Telecommunications and Information Administration, shall (1) pursuant to the authority under section II.B. of the Memorandum of Understanding Between the U.S. Department of Commerce and the Internet Corporation for Assigned Names and Numbers, ... jointly with ICANN, develop a plan ... for ICANN to establish the new domain ..." The bill continues that "The new domain shall be established as a top-level, International domain having a domain name appropriate for its purpose" and "shall be available for voluntary use as a location only of material that is considered suitable for minors and shall not be available for use as a location of any material that is harmful to minors."
House Judiciary Committee Approves USPTO Authorization Bill
7/24. The House Judiciary Committee amended and reported HR 2047, the Patent and Trademark Office Authorization Act of 2002. The bill provides that "There are authorized to be appropriated to the United States Patent and Trademark Office for salaries and necessary expenses for fiscal year 2002 an amount equal to the fees collected in fiscal year 2002 ..." The committee adopted two minor technical amendments, and the bill as amended, without debate, by unanimous voice votes.
The USPTO is funded entirely out of fees collected from users. However, for several years the appropriations committees have been diverting some of these fees to subsidize other government programs. This practice is opposed by intellectual property owners, high tech companies, and members of the House Subcommittee on Courts, the Internet, and Intellectual Property. This authorization bill does not provide for diversion of user fees.
Senate Judiciary Committee to Hold Hearings on Microsoft
7/24. Sen. Patrick Leahy (D-VT), Chairman of the Senate Judiciary Committee, announced that his committee will hold hearings "beginning in September, on competition and innovation involving advanced computer and Internet technologies, to ensure the broadest possible consumer choices." The hearings will examine "network effects, licensing issues, exclusive contracting, convergence, access to digital content and other topics." See, Leahy release.
Sen. Leahy's release continued that the hearings will examine "instant messaging, digital photography, voice recognition, audio and video programming and editing, Web services, calendar management, navigation devices, data storage, Internet auctions, financial services, security, consumer privacy, and integration of new features".
The release also states that the hearings will address Internet related antitrust issues, including "portals to the Internet, high-speed Internet access, server markets, database and online technology in operating systems, networking effects, and access to services and consumers."
The Senate Judiciary Committee has jurisdiction over antitrust issues. Former Chairman Orrin Hatch (R-UT) also held a hearing on Microsoft on July 23, 1998. See, links to testimony.
Sen. Schumer Pressures Microsoft and DOJ on Windows XP
7/24. Sen. Charles Schumer (D-NY), who is also a member of the Senate Judiciary Committee, wrote a letter to Microsoft CEO Steve Ballmer regarding Windows XP and antitrust issues. He stated that he has defended Microsoft in the past, but that Microsoft is now loosing his support, because features of the soon to be released Windows XP operating system will harm two New York companies, Kodak and AOL Time Warner.
Kodak digital imaging software. He elaborated that "Windows XP throws up roadblocks for customers seeking to use Kodak's digital imaging software. All customers, even those who specifically install the Kodak software application, are presented with the Microsoft application, 'Scanner & Camera Wizard,' meaning additional steps are necessary for those consumers to access the Kodak software." Kodak is based in Rochester, New York. Sen. Schumer also wrote that "it would seem that Windows XP's license for digital photography may violate the D.C. Circuit Court's ruling, as Microsoft is preventing PC manufacturers from removing or replacing 'Scanner & Camera Wizard' with a competitor's application."
AOL Time Warner. Sen. Schumer also wrote than AOL Time Warner will be harmed by Microsoft's plans to bundle Windows Media Player 8.0 with Windows XP. He explained that "Windows XP will prevent PC manufacturers from removing or replacing the Windows Media Player with competitive alternatives, in seeming violation of the D.C. Circuit Court's recent ruling. In doing so, Windows XP is poised to extinguish Real Player or any other alternative music player in the same manner as it did Netscape."
Sen. Schumer concluded that "It appears to me that Microsoft intends to maximize its monopolistic power, using XP as a platform to enter new lines of business while encumbering competitors. It also appears that Windows XP will limit the ability of PC manufacturers to offer consumers a choice of products and services. In my opinion, Microsoft should be held to the same standard as other natural monopolies, like the cable industry -- Microsoft's operating system should be a gateway to the Internet, not a gatekeeper. Without open access, the fundamental principles of a free market are violated, innovation is stifled, and consumer welfare is harmed." He asked Microsoft to make changes to its Windows XP. If not, "regulators should closely scrutinize the antitrust implications of the release of Windows XP and should consider enjoining its release" and "the Senate Judiciary Committee should hold public hearings".
Sen. Schumer also wrote a letter to Charles James, Assistant Attorney General for the Antitrust Division, urging him to expand his "ongoing settlement negotiations with Microsoft to include negotiations over Windows XP".
House Holds Hearing on Internet Gambling Bills
7/24. The House Financial Services Committee's Financial Institutions Subcommittee held a hearing on HR 556, the Unlawful Internet Gambling Funding Prohibition Act, and other bills pertaining to Internet gambling. See, opening statement [PDF] of Rep. Michael Oxley (R-OH), Chairman of the full committee, and opening statement [PDF] of Rep. Spencer Bachus (R-AL), Chairman of the subcommittee. See also, prepared statements in PDF of witnesses: Michael Farmer (Wachovia Bank Card Services), Bob Frederick (NCAA), Mark VanNorman (National Indian Gaming Association), Edwin McGuinn (E-Lottery), and Timothy Kelly (National Gambling Impact Study Commission).
HR 556, which is sponsored by Rep. Jim Leach (R-IA), and HR 2579, the Internet Gambling Payments Prohibition Act, which is sponsored by Rep. John LaFalce (D-NY), both attempt to stop illegal gambling over the Internet by prohibiting the use of certain financial instruments, including credit extended via a credit card, electronic fund transfers, and checks. The House Finance Committee has jurisdiction over these instruments.
In addition, Rep. Jon Kyl (R-AZ) and Rep. Bob Goodlatte (R-VA) sponsored bills in the 105th and 106th Congresses that would ban some Internet gambling activities, and rely upon criminal prosecutions and actions by interactive computer service providers for enforcement. See, S 692 (106th) and HR 3125 (106th). Neither Kyl nor Goodlatte have reintroduced legislation in the current (107th) Congress. However, Rep. Goodlatte has stated that he may introduce a bill next week. The Judiciary Committees have jurisdiction over crime bills. Both Kyl and Goodlatte are members of these committees.
House Holds Hearing on Counterfeit Currency
7/24. The House Financial Services Committee's Domestic and Monetary Policy, Technology and Economic Growth Subcommittee held a hearing on the security and design of currency. Daniel Snow of the Counterfeit Division of the U.S. Secret Service stated in his prepared testimony [PDF] that "With reprographic equipment, computers, and computer software continuing to become more sophisticated and affordable, counterfeiters have been able to increase both the volume and the quality of their product. ... In response to this growing problem, the Secret Service is pursuing legislative changes to counterfeiting statutes that clearly define the fraudulent use of digital images as a violation of law." See also, prepared statement [PDF] of Rep. Mike Oxley (R-OH), Chairman of the full committee.
Wednesday, July 25
9:00 AM. The American Enterprise Institute (AEI) will host a panel discussion titled "The Law and Economics of Anticompetitive Behavior by Public Enterprises." The scheduled speakers are Dennis Logue (University of Oklahoma), John Lott (Yale University), Gregory Sidak (AEI), and Peter Wallison (AEI); the moderator will be Rick Geddes (Fordham University). See, online registration page. Location: AEI, 1150 17th Street, NW, Washington DC.
9:00 AM. The Department of Commerce's Bureau of Export Administration's Information Systems Technical Advisory Committee (ISTAC) will hold the first session of a two day meeting. Part of the meeting is open to the public, and part is closed. See, notice in Federal Register, June 29, 2001, Vol. 66, No. 126, at Page 34613. Location: Herbert Hoover Building, Room 3884, 14th Street between Pennsylvania Avenue and Constitution Avenue, NW., Washington DC.
9:30 AM. The Senate Appropriations Committee's Labor, Health and Human Services, and Education Subcommittee will hold a hearing to examine education technology issues. Location: Room 106, Dirksen Building.
9:30 AM. The Trade and Environment Policy Advisory Committee will hold a meeting on from 9:30 AM to 12:30 PM. The meeting will be closed to the public from 9:30 AM to 12:00 NOON. For more information, contact Heather Wingate (Office of the USTR) at 202-395-6120. See, notice in Federal Register. Location: USTR ANNEX Building in Conference Rooms 1 and 2, located at 1724 F Street, NW, Washington DC.
2:00 PM. The Senate Judiciary Committee's Technology, Terrorism, and Government Information Subcommittee will hold an oversight hearing on the FBI's National Infrastructure Protection Center and fighting cybercrime. Sen. Dianne Feinstein (D-CA) will preside. Location: Room 226, Dirksen Building.
Thursday, July 26
8:30 - 10:00 AM. Press breakfast on telecommunications issues with former FCC Commissioner Harold Furchtgott-Roth. RSVP to Veronique Rodman, Director of Public Affairs, AEI at 202-862-4871 or
9:00 AM. The Department of Commerce's Bureau of Export Administration's Information Systems Technical Advisory Committee (ISTAC) will hold the second session of a two day meeting. Part of the meeting is open to the public, and part is closed. See, notice in Federal Register, June 29, 2001, Vol. 66, No. 126, at Page 34613. Location: Herbert Hoover Building, Room 3884, 14th Street between Pennsylvania Avenue and Constitution Avenue, NW., Washington DC.
9:30 AM. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing titled "How Do Businesses Use Customer Information: Is the Customer’s Privacy Protected?" Location: Room 2322, Rayburn Building.
9:30 AM - 2:00 PM. The Federalist Society will host a conference titled Broadband Policy for an Internet Age. The price to attend is $30. There is no charge for students and Capitol Hill staff. See, online registration page. Location: The National Press Club, 529 14th Street, NW, Washington DC.
  • The first panel discussion is titled "What Path to Broadband Paradise?" The panelists will be David Baker (EarthLink), Robert Crandall (Brookings), James Glassman (American Enterprise Institute), Thomas Hazlett (American Enterprise Institute), Janusz Ordover (New York University), and John Frantz (Verizon).
  • The second panel is titled "Are Narrowband Regulators Ready for a Broadband World?" The panelists will be Kenneth Ferree, (FCC Cable Services Bureau), Raymond Gifford (Colorado Public Utilities Commission), Randolph May (Progress & Freedom Foundation), Howard Waltzman (House Commerce Committee), and David Lawson (Sidley & Austin).
  • There will be a lunch. The speaker will be Alfred Kahn (Cornell University). The title of his address will be "Knowing When To Let Go: The FCC and Broadband."
2:30 PM. The Senate Banking Committee will hold a hearing on several pending nominations, including that of Michael Garcia to be Assistant Secretary for Export Enforcement at the Department of Commerce. Location: Room 538, Dirksen Building.
People and Appointments
7/24. The Senate Banking Committee unanimously approved the nomination of Harvey Pitt to be Chairman of the Securities and Exchange Commission (SEC). See, release.
7/24. Thomas Navin was named a Deputy Chief of the FCC's Wireless Telecommunications Bureau's Policy Division. Navin was previously an Attorney Advisor in the Common Carrier Bureau's Policy and Program Planning Division. He was the team leader on SBC's Missouri Section 271 application. Navin previously worked as an associate in the law office of McDermott Will & Emery in its regulatory practice group.
More News
7/24. The Office of Science and Technology Policy (OSTP) and the National Security Council (NSC) published a notice of proposed rule making in the Federal Register regarding removing their regulation on Emergency Restoration Priority Procedures for Telecommunications Services. Comments are due by August 20, 2001. See, July 24, 2001, Vol. 66, No. 142, at Pages 38411 - 38412.
7/24. The U.S. Court of Appeals (FedCir) issued its opinion in In Re Roemer, a patent interference case involving to U.S. Patent No. 4,737,716, which pertains to nuclear magnetic resonance imaging. The Court of Appeals reversed in part, vacated in part, and remanded.
New Documents
Schumer: letter to Steve Ballmer re Windows XP, 7/24 (HTML, TLJ).
Schumer: letter to AAG Charles James re Microsoft, 7/24 (HTML, TLJ).
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