| Senate Holds Hearing on 3G
and Spectrum Management |
7/31. The Senate
Commerce Committee's Communications Subcommittee held a
hearing on spectrum management and third generation
wireless systems. This next generation of wireless
communications technology is intended, among other things, to
bring broadband Internet access to portable devices.
However, a significant amount of spectrum will have to be
allocated for use by 3G systems. There is not enough suitable
unused spectrum. Hence, spectrum allocated to other users
would have to be shared or reallocated.
Several bands have been identified for possible use by 3G
systems. The incumbent users of this spectrum, including the
Department of Defense (DOD) and ITFS users, such as schools
and churches, have adamantly opposed reallocation of spectrum
that they use. As a result, in the year since former President
Clinton made reallocation of spectrum for 3G use a major
policy goal, the agencies responsible for spectrum management,
the NTIA and FCC, have held meetings, issued reports, and
received comments, but made very little progress towards
making any spectrum available for 3G uses. Now, the Congress
has stepped in.
The Subcommittee heard testimony that paralleled a similar
hearing before the House Telecom Subcommittee last week, and
numerous other events in the last year. The spectrum managers
testify that spectrum is a nationalized resource; they license
its use in the public interest; and, they are working with
interested parties to locate spectrum for possible sharing or
reallocation. And, they testified to the Senate Communications
Subcommittee, they are still looking. The incumbent licensees
testify that the spectrum licensed to them cannot be
reassigned without causing grievous harm to national security,
education, rural communications, or other sacred services.
Finally, the communications companies that wish to develop 3G
ask for spectrum to be reallocated.
Several Senators suggested that one problem is that incumbent
users have no incentive to more efficiently use spectrum
licensed to them, or to relocate to other bands. Sen. Ted Stevens (R-AK)
used the hearing to explore a possible solution that is
specific to incumbent use by the DOD in the 1755 to 1850 MHz
band. He suggested that proceeds from the reauction of this
spectrum might go directly to the DOD.
Sen. Ron Wyden (D-OR)
suggested broader reform of the spectrum regime. He stated in
opening that "It seems to me that the central problem ...
is that we have got a Jurassic system. It is virtually
unchanged since the 1920s when spectrum was used for radio and
radio only, and it is creating all of the wrong incentives.
There is incumbent license holders who want to keep licenses
scarce, so they occupy as much spectrum as possible. They
fight tooth and nail against giving any out -- in effect, sort
of, collect ransom for holding the spectrum hostage. And if
you have got a bright new idea that needs spectrum, you better
have a lot of patience for a lot of red tape. It seems to me
that we have got a variety of reforms that we ought to be
looking at. To me, one of the centerpieces of that effort
ought to be to make sure that licensees in the future need to
have some flexibility incentives to sell or lease excess
spectrum, instead of hoarding it."
Sen. Wyden later added that "we have insufficient
financial incentives for the development of creative
technologies that improve efficiency". He continued that
the way things are going, "we are going to have a
proceeding. We will have another proceeding. Have another
proceeding. And a motion for a proceeding. And my sense is
that at the end of three or five years, if we don't speed this
up, and inject some real marketplace forces, the world isn't
going to look all that much different on the civilian
side." He concluded that we need "to retool the
system ... the system is the problem ... a dinosaur ... it is
a system skewed away from innovation."
Sen. Conrad Burns
(R-MT) suggested that reforming spectrum management would be
more complicated than passing the Telecom Act of 1996.
See, prepared testimony in PDF of government spectrum
managers: William
Hatch (National Telecommunications and Information
Administration) and Julius
Knapp (FCC's Office of Engineering and Technology). See
also, prepared testimony of incumbent users of spectrum
identified for possible reallocation for 3G systems: Linton
Wells (DOD) and Carroll
McHenry (Nucentrix Broadband Networks). See also, prepared
testimony by prospective 3G service providers: Denny
Strigl (Verizon Wireless), Mark
Kelly (Leap Wireless), Martin
Cooper (ArrayComm), and Thomas
Wheeler (CTIA). |
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| Technology, Privacy, and
Red Light Cameras |
| 7/31. The House
Transportation Committee's Highways and Transit
Subcommittee held a hearing on red light cameras. See, prepared
testimony of Rep. Dick Armey (R-TX). He stated that
"Technology can be a tool of freedom. Communication
advances like the Internet, for instance, have broken down
barriers and spread the message of democracy around the globe.
Unfortunately, technology can sometimes serve the opposite
effect. New technologies can actually undermine our freedoms
and create problems far greater than those they are meant to
solve. For years the federal government has spent millions of
dollars promoting photo enforcement systems and helping local
jurisdictions install them." |
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| 2nd Circuit Affirms Net
Gambling Conviction |
7/31. The U.S.
Court of Appeals (2ndCir) issued its opinion
in USA
v. Cohen, a criminal case involving Internet
gambling. Jay Cohen was charged by indictment with eight
counts of violation of the Wire Wager Act in connection with
his operation of an Antigua based gambling business that
advertised in, and took bets from, the U.S. over the Internet.
A trial jury of the U.S. District Court (SDNY)
convicted him on all eight counts. The Court of Appeals
affirmed.
18 U.S.C. § 1084 provides, in part, that "Whoever being
engaged in the business of betting or wagering knowingly uses
a wire communication facility for the transmission in
interstate or foreign commerce of bets or wagers or
information assisting in the placing of bets or wagers on any
sporting event or contest, or for the transmission of a wire
communication which entitles the recipient to receive money or
credit as a result of bets or wagers, or for information
assisting in the placing of bets or wagers, shall be fined
under this title or imprisoned not more than two years, or
both." |
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| People and Appointments |
7/31. The Senate
Judiciary Committee completed two days of hearings on the
nomination of Robert Mueller to be Director of the
Federal Bureau of Investigation.
7/31. The Senate
Finance Committee held a hearing on several pending
nominations, including Rosario Marin to be Treasurer of
the United States and Jon Huntsman to be a Deputy U.S.
Trade Representative. |
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| House Delays Votes on Trade
Promotion Authority and Bell Relief |
7/31. The House, which will likely break for its traditional
summer recess at the end of this week, has delayed
consideration of several major bills. The House will not vote
on either trade promotion authority (also known as fast track)
or the Tauzin Dingell bill, at least until September.
The Tauzin Dingell bill, which would provide regulatory relief
to the Bell companies, was reported by the House Commerce
Committee on May 9. It was reported unfavorably by the House
Judiciary Committee on June 13. Supporters had sought to move
it quickly to the House floor. The U.S. Telecommunications
Association, which represents the Bell companies, issued a
release
praising this latest development.
Meanwhile, the Information
Technology Association of America (ITAA) issued a release
condemning a bill in the Senate that would provide regulatory
relief to the Bells. |
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| House Passes Jordan FTA
Bill |
| 7/31.The House passed HR 2603, a bill to implement the U.S.
Jordan Free Trade Agreement. There is little trade between the
U.S. and Jordan. However, the FTA includes language pertaining
to labor and the environment, as well as e-commerce and
intellectual property, that may serve as a precedents for
future free trade agreements. The labor and environmental
provisions were controversial. |
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| Colin Powell Wants China to
Take Advantage of Information Technology |
| 7/28. Secretary of State Colin Powell was interviewed on
CCTV, the PR China's state television. He stated that "We
need no enemies, we want no enemies, we want to help people.
We want to help China and we want to help China take advantage
of the new 21st Century world of information technology,
access to international markets. Trade with us, let American
products come here -- Chinese products come to the United
States." See, transcript. |
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| House Holds Hearing on FASB
Rules for Combinations of Businesses |
7/31. The House
Commerce Committee's Subcommittee on Commerce, Trade, and
Consumer Protection held a hearing titled Current Issues
Before the Financial Accounting Standards Board. During
the last Congress the FASB
and some Members of Congress clashed over accounting standards
for combinations of businesses. Some members argued that FASB
proposals to eliminate the pooling of interests method would
have treated mergers of high tech companies unfairly and
unrealistically. The FASB revised its position on July 20,
2001. Members of the Subcommittee expressed satisfaction at
the July 31 hearing.
The FASB had proposed requiring that all mergers be viewed,
not as the melding of separate entities, but as a direct
purchase, requiring companies to accept the purchase method of
accounting. The rules at the time permitted a pooling system
of accounting favored by many high tech companies that own
considerable intangible assets. Many high tech companies to
took advantage of this pooling system of accounting when
merging. This method allows companies to merge without
attaching a goodwill accounting charge.
The House Commerce Committee held a hearing last year. Then,
Rep. Cal Dooley (D-CA) and Rep. Chris Cox (R-CA) introduced a
bill that would have placed a moratorium on FASB's ability to
eliminate the pooling method of accounting. The FASB is an
independent body that has been charged by the SEC with writing
accounting rules. Congressional actions were a shot across its
bow.
On July 20, 2001, the FASB revised its rules to accommodate
the new economy. It issued two Statements. Statement 141
requires that all business combinations be accounted for under
a single method - the purchase method. Use of the pooling of
interests method is no longer permitted. Statement 142
requires that goodwill no longer be amortized to earnings, but
instead be reviewed for impairment. This change provides
investors with greater transparency regarding the economic
value of goodwill and its impact on earnings.
Rep. Cliff Stearns, the Chairman of the Subcommittee, presided
throughout the hearing. He praised the FASB in his opening
statement. He said that "I find that the results of
the FASB’s business combinations project and the related
accounting treatment for intangible assets, as outlined in
Statements’ 141 and 142, speak well for having an private
independent standard setting board. The FASB should be
commended for an open process that included several public
hearings and working with all parties to understand their
concerns regarding business combinations." He also
focused on international accounting standards and on pro forma
reporting. He stated that "some level of standardization
should be applied to pro forma reporting."
Several members addressed the role of the Congress in the
setting of accounting standards. Rep. Billy Tauzin
(R-LA), the Chairman of the full Committee said in his prepared
statement that "this Committee asserts its
jurisdiction over the [FASB] precisely because this
organization's role in accounting standards setting is
extremely important to commerce in general and to the evolving
new economy, characterized by the high tech sector, in
particular." He praised the FASB for "modernizing
appraisals of intangible assets to reflect the realities of
many information based companies." He also said the the
Committee "will play a strong oversight role in the
adoption of any international standards by the United
States." Similarly, Rep.
Anna Eshoo (D-CA), who represents a Silicon Valley
district, stated that "there are tensions of values
between the FASB and the Congress," but this is
"healthy".
See also, prepared testimony of witnesses: Edmund
Jenkins (FASB), James
Leisenring (International Accounting Standards Board), and
Barry
Rogstad American Business Conference). |
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| More News |
7/31. The House
Science Committee's Research Subcommittee held a hearing
titled "Innovation in Information Technology: Beyond
Faster Computers and Higher Bandwidth." The hearing
examined the effect of federal research and development
spending on promoting innovation in information technology.
7/31. The USPTO published
the online version of USPTO
Today [PTO] for July/August.
7/31. The USPTO published
a final
rule in the Federal Register adjusting certain patent
fees. See, Federal Register, July 31, 2001, Vol. 66, No. 147,
at Pages 39447 - 39450. |
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| Intergraph Files Patent
Infringement Suit Against Intel |
7/30. Intergraph
filed a complaint
[PDF] in U.S. District Court (EDTex)
against Intel alleging
patent infringement. Intergraph alleges that Intel infringed
two Intergraph patent pertaining to parallel instruction
computing, through the manufacture and sale of processors and
computing systems based on Intel's IA-64 EPIC (explicitly
parallel instruction computing) architecture. IA-64 EPIC is
included in Intel's new Itanium
chips.
Patents in Suit. Intergraph alleges infringement of
U.S. Patent Nos. 5,794,003.
and 5,560,028,
of which it is the assignee. The '003 patent is titled
"Instruction cache associative crossbar switch
system". It discloses a "computing system as
described in which individual instructions are executable in
parallel by processing pipelines, and instructions to be
executed in parallel by different pipelines are supplied to
the pipelines simultaneously. The system includes storage for
storing an arbitrary number of the instructions to be
executed. The instructions to be executed are tagged with
pipeline identification tags indicative of the pipeline to
which they should be dispatched. The pipeline identification
tags are supplied to a system which controls a crossbar
switch, enabling the tags to be used to control the switch and
supply the appropriate instructions simultaneously to the
differing pipelines."
The '028 patent is titled "Software scheduled superscalar
computer architecture." It discloses a "computing
system is described in which groups of individual instructions
are executable in parallel by processing pipelines, and
instructions to be executed in parallel by different pipelines
are supplied to the pipelines simultaneously. During
compilation of the instructions those which can be executed in
parallel are identified. The system includes a register for
storing an arbitrary number of the instructions to be
executed. The instructions to be executed are tagged with
pipeline identification tags and group identification tags
indicative of the pipeline to which they should be dispatched,
and the group of instructions which may be dispatched during
the same operation. The pipeline and group identification tags
are used to dispatch the appropriate groups of instructions
simultaneously to the differing pipelines."
Request for Relief. Intergraph asks for a declaration
that the patents in suit have been infringed, preliminary and
permanent injunctive relief, actual damages, and enhanced
damages.
Forum Shopping. Intergraph is a Delaware Corporation
based in Huntsville, Alabama. Intel is a Delaware Corporation
based in Santa Clara, California. The inventors are residents
of California. Intergraph filed its complaint in Marshall,
Texas, a town of 25,000 located at the intersection of U.S.
Routes 59 and 80. |
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| Wednesday, August 1 |
9:30 AM. The Senate
Commerce Committee will hold a hearing on trade issues.
Location: Room 253, Russell Building.
10:00 AM. The Senate
Finance Committee will hold a hearing on whether to extend
the existing Internet tax moratorium, and whether to
allow state and local governments to impose sales taxes on
remote sellers, including Internet retailers. The scheduled
witnesses are: Tom Woodward (Congressional Budget Office),
Frank Shafroth (National Governors Association), David
Bullington (Wal-Mart), Frank Julian (Federated Department
Stores), Michael Grieve (American Enterprise Institute),
Steven Rauschenberger (Nat. Conf. of State Leg.), Jeff
Friedman (KPMG). Location: Room 215, Dirksen Building.
10:00 AM. The Senate
Banking Committee will hold a meeting to mark up
legislation and to vote on nominations. The agenda includes
the nominations of Michael Garcia to be Assistant
Secretary of Commerce for Export Enforcement and Henrietta
Fore to be Director of the Mint. Location: Room 538,
Dirksen 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.
10:15 AM. The House
International Relations Committee will meet to mark up
several bills, including HR
2581, the Export Administration Act of 2001,
sponsored by Rep.
Benjamin Gilman (R-NY). Location: Room 2172, Rayburn
Building.
10:30 AM. The House
Education Committee will meet to mark up several bills,
including HR
1992, the Internet Equity and Education Act of 2001,
sponsored by Rep.
Johnny Isakson (R-GA). The bill would make it easier to
obtain federal financial aid for web based education programs.
Location: Room 2175, Rayburn Building.
12:30 PM. Carl Yankowski, CEO of Palm will speak at an NPC
Luncheon. For more information, call 202-662-7501 or e-mail pnelson@press.org.
Location: National Press Club,
529 14th St. NW, 13th Floor, Washington DC.
2:30 PM. The Senate
Commerce Committee will hold a hearing on several pending
nominations, including Nancy Victory to be Assistant
Secretary of Commerce for Communications and Information.
Location: Room 253, Russell Building. |
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| Thursday, August 2 |
| 10:30 AM. Reps. Richard Neal (D-MA), Tom Davis (R-VA), Zoe
Lofgren (D-CA), and Jerry Weller (R-IL) will hold a press
conference to announce the introduction of legislation to
reform the Alternative Minimum Tax (AMT) treatment of
Incentive Stock Options (ISOs). Location: House Triangle. |
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| Correction |
| Yesterday's edition of the TLJ Daily E-Mail Alert reported
on the decision of the U.S. Court of Appeals (8thCir) in Steele
v. Bemidji. The hyperlink to the opinion in most copies of
the Alert was incorrect. See, correct
hyperlink. |
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