|House Passes Tauzin Dingell
|2/27. The House passed HR
1542, the Internet Freedom and Broadband Deployment
Act, also known as the Tauzin Dingell bill, by a vote of 273
to 157. See, Roll
Call No. 45.
The Tauzin Dingell bill provides regulatory relief to the Baby
Bell phone companies. It provides that "Except to the
extent that high speed data service, Internet backbone
service, and Internet access service are expressly referred to
in this Act, neither the Commission, nor any State, shall have
authority to regulate the rates, charges, terms, or conditions
for, or entry into the provision of, any high speed data
service, Internet backbone service, or Internet access
service, or to regulate any network element to the extent it
is used in the provision of any such service; nor shall the
Commission impose or require the collection of any fees,
taxes, charges, or tariffs upon such service."
It would also amend Section 251 to provide that "neither
the Commission nor any State shall require an incumbent local
exchange carrier to provide unbundled access to any network
element for the provision of any high speed data
The House approved an amendment
in the nature of a substitute [PDF] offered by Rep. Billy Tauzin
(R-LA) and Rep.
James Sensenbrenner (R-WI), as amended by an amendment
[PDF] offered by Rep.
Fred Upton (R-MI) and Rep. Gene Green (D-TX)
that increases the maximum penalties that may be imposed on
phone companies for violations of telecommunications law, and
[PDF] offered by Rep.
Steve Buyer (R-IN) and Rep. Adolphus Towns
(D-NY) that provides certain guarantees to competitive local
The House rejected a broader amendment
[PDF] offered by Rep.
Chris Cannon (R-UT) and Rep. John Conyers
(D-MI) by a vote of 173 to 256. See, Roll
Call No. 44.
After two years' of hearings, committee mark ups, speeches,
and media advertising, the final passage was relatively brief.
The House Rules
Committee had limited the matters which the House could
consider to one amendment in the nature of a substitute, and
three further amendments. The Rules Committee also strictly
limited time for the debate. Supporters argued that the bill
would spur broadband deployment. Opponents argued that it
would not. Supporters argued that it would increase
competition. Opponents argued that it would not. Finally, much
of the argument in the end focused on objections to the Rules
Committee's restrictions, and last minute procedural maneuvers
to get around them.
|Sen. Hollings Criticizes
Tauzin Dingell Bill
|2/27. While the House was debating the Tauzin Dingell bill, Sen. Ernest Hollings
(D-SC) held a press conference to criticize the bill. He
called it "blasphemy, a total fraud." He said that
"it has nothing to do with broadband; it has nothing to
competition." Rather, he said it is an attempt by the
Baby Bells to extend their monopolies to long distance.
He also commented on the lobbying and political contributions
by the Bells. "It is a cash and carry government,"
said Sen. Hollings.
Sen. Hollings stated that one way to promote broadband would
be to pass legislation giving tax credits for deployment of
broadband facilities in rural areas.
"No one can point to a law that prevents broadband,"
added Hollings. He said that most people could purchase
broadband service, if they wanted it. Rather, "it is a
lack of demand" that is limiting broadband use. He said
that people do not want to pay $50 per month just to get their
e-mail more quickly.
Sen. Hollings suggested that dealing with demand issues would
promote broadband use. He said that digital rights management
must be addressed, so that content providers will make more
material available online. The Senate Commerce
Committee, which Sen. Hollings chairs, is holding a
hearing on this topic on Thursday, February 28, at 9:30 AM.
Sen. Hollings also stated that the Congress must pass a
privacy bill. He added that "we are getting close, very
close. I think we can get one out this year." If the
Senate were to pass a privacy bill, it would then have to pass
the House Commerce
Committee, which is chaired by Rep. Billy Tauzin
(R-LA) -- the blasphemer.
|FCC Reports on Local Phone
|2/27. The Federal
Communications Commission (FCC) released a report
[21 pages in PDF] titled "Local Telephone Competition:
Status as of June 30, 2001". It states that
"Competitive local exchange carriers (CLECs) reported
17.3 million (or 9.0%) of the approximately 192 million
nationwide switched access lines in service at the end of June
2001, compared to 14.9 million (or 7.7% of nationwide lines)
at the end of the preceding year. This represents a 16% growth
in CLEC market size during the first six months of 2001."
It also states that "The 72 providers of mobile wireless
telephone services that reported data as of June 30, 2001
served about 114 million subscribers." See also, FCC
release [2 pages in PDF].
|FTC Releases Documents
Pertaining to FTC-ATR Agreement on Clearance Procedures
|2/27. The Federal Trade
Commission (FTC) published in its web site a collection of
documents that pertain to the controversial, and as yet,
of Agreement [2.3 MB PDF file] negotiated by Timothy Muris,
FTC Chairman, and Charles James,
Assistant Attorney General in the Department of Justice in
charge of the Antitrust
Division (ATR). See, FTC
See, ABA Antitrust Section Letter
[PDF 128KB], Letter
from the Business Roundtable, the National Association of
Manufacturers and the U.S. Chamber of Commerce [PDF 128KB], Number
of Enforcement Actions and Substantial Investigations by DOJ
and FTC, by Industry FY1997 - Present [HTML], Clearance
Delays [HTML], Initial
Recommendations [HTML], and Letters
from former antitrust enforcement officials [PDF 774KB].
|FRB Chair Greenspan
Testifies on Economy
|2/27. The House
Financial Services Committee held a hearing to receive the
testimony of Alan
Greenspan, Chairman of the Federal Reserve Board,
on monetary policy. He stated in his prepared
testimony that "increasing signs have emerged that
some of the forces that have been restraining the economy over
the past year are starting to diminish and that activity is
beginning to firm. ... One key consideration in the assessment
that the economy is close to a turning point is the behavior
He added that "Inventories, especially among producers
and purchasers of high-tech products, did run to excess over
the past year, as sales forecasts went badly astray; alas,
technology has not allowed us to see into the future any more
clearly than we could previously. But technology did
facilitate the quick recognition of the weakening in sales and
backup of inventories. This enabled producers to respond
forcefully, as evidenced by output adjustments that have
resulted in the extraordinary rate of inventory liquidation we
experienced late last year."
|FRB Vice Chair Addresses
High Tech and Productivity
Ferguson, Vice Chairman of the Federal Reserve Board,
gave a speech
in Canton, Ohio, titled "A Review of Economic
Developments in 2001 and the Economic Outlook". He stated
that "signs of economic recovery are increasing". He
also addressed the affect of information technology on
productivity and economic growth.
He stated that "Perhaps the most notable feature of our
economy in recent years, however, has been the acceleration in
productivity." He continued that "Productivity
growth continued over the four quarters of 2001. That it
increased is impressive, given the historical tendency of
productivity growth to turn negative when the economy enters
recession. This performance provides additional evidence that
the improvements in productivity growth that we have witnessed
since the mid 1990s have been largely structural and will
persist for a time."
"But the fundamental factor leading me to be cautiously
optimistic that much of the improvement is likely to be
sustained is my outlook for the state of technological
advancement in the United States," said Ferguson.
"Booming investment in the 1990s was due importantly to
steep declines in prices of high tech equipment, which largely
reflected rapid technical progress. About 1/2 percentage point
of the increase in productivity growth in the 1995-99 period
can be attributed to this so called capital deepening.
Although the extraordinary pace of investment spending in
those boom years was not sustainable, I believe that
technological progress will continue to drive down the cost of
information technology in the coming years, inducing still
robust growth of the capital stock. Moreover, businesses have
reaffirmed their intentions to improve productivity by
substituting cost saving high tech capital for labor."
|EPIC Releases Report on
Electronic Surveillance and the DOJ Budget
|2/27. The Electronic Privacy
Information Center (EPIC) released a report
[PDF] titled "Paying for Big Brother: A Review of the
Proposed FY2003 Budget for the Department of Justice." It
states that "Included in the DOJ Budget are many new
surveillance and electronic security programs."
The report warns that "the Budget documents released thus
far lack adequate transparency and level of detail concerning
the Departmentís programs that would allow a fair public
evaluation of their necessity, efficacy, and possible risks to
civil liberties and Constitutional values."
For example, the report states that "The Department
Justice plans a large scale Identification Systems Integration
(ISI) that would greatly increase the sharing and compilation
of personal information held by federal agencies. The FY2003
Budget requests a total increase in funding of $23.5 million.
There is no information in the budget materials provided to
the public that indicate privacy or security issues have been
considered in the development of ISI."
|Senate Commerce Committee
Holds Hearing on Digital Divide
|2/27. The Senate
Commerce Committee's Subcommittee on Science, Technology
and Space, held a hearing on S 414,
the NTIA Digital Network Technology Program Act, and a bill to
remedy various "digital divides". This bill would
authorize $250 Million per year for five years for a grant
program for digital network technologies.
S 414 is sponsored by Sen.
Max Cleland (D-GA), Sen.
Ernest Hollings (D-SC), and ten other Senators. It would
establish a grant program for educational institutions to be
administered by the Department of Commerce's National Telecommunications
and Information Administration (NTIA).
The entities that could receive grants under this bill include
historically black colleges and universities, Hispanic serving
institutions, tribally controlled colleges and universities,
Alaska Native serving institutions, Native Hawaiian serving
institutions, and other institutions that have "enrolled
a substantial number of minority, low income students".
Sen. Ron Wyden (D-OR),
the Chairman of the Subcommittee, stated that "the debate
about the digital divide is whether this country is going to
tolerate an information aristocracy or not." He added
that this is not a partisan issue.
Sen. George Allen
(R-VA) concurred that this should not be a partisan issue. He
also used the hearing to promote S
488, the Education Opportunity Tax Credit Act. This bill
would provide a $1000 per child tax credit for families
purchasing "computer technology or equipment". Sen.
Allen is the sponsor.
The Subcommittee heard from two panels of witnesses, all of
whom represent groups that would receive grants provided by
this bill. All expressed their support for the bill. The panel
of witnesses did not include a representative of the NTIA. Sen. Byron Dorgan (D-ND)
also participated in the hearing.
|Senate Judiciary Committee
Holds Hearing on Sovereign Immunity and IPR
|2/27. The Senate
Judiciary Committee held a hearing on sovereign immunity
and the protection of intellectual property. Sen. Patrick Leahy (D-VT),
the Chairman of the Committee, introduced S 1611,
the Intellectual Property Protection Restoration Act of 2001,
on November 1, 2001.
The bill states that one of its purposes is to "help
eliminate the unfair commercial advantage that States and
their instrumentalities now hold in the Federal intellectual
property system because of their ability to obtain protection
under the United States patent, copyright, and trademark laws
while remaining exempt from liability for infringing the
rights of others".
Sen. Leahy also sought unsuccessfully to pass similar
legislation in the last Congress, while Sen. Orrin Hatch (R-UT)
was Chairman of the Senate Judiciary Committee. In addition, Rep. Howard Coble
(R-NC) and Rep. Howard
Berman (D-CA) introduced HR 3204,
the companion bill to S 1611 in the House. Reps. Coble and
Berman are the Chairman and ranking Democrat on the House Judiciary
Committee's Courts, Internet and Intellectual Property
Waiver of Sovereign Immunity. The purpose of these
bills is to prevent states from infringing patents, copyrights
and trademarks. The bills would, among other things, prevent
states from recovering damages for infringement of state owned
intellectual property, unless they have first waive their 11th
Amendment sovereign immunity from suits against them for their
infringement of the intellectual property of others.
Abrogation under the 5th or 14th Amendments. The two
bills would also provide that states that violate intellectual
property rights "in a manner that deprives any person of
property in violation of the fourteenth amendment of the
United States Constitution, shall be liable to the party
injured in a civil action in Federal court for compensation
for the harm caused by such violation." The bills contain
similar language for violations which constitute takings under
the 5th Amendment.
Ex Parte Young Doctrine. Finally, these bills would
codify the Ex parte Young doctrine, which permits injunctions
against state officials. See, 209 U.S. 123 (1908).
Supreme Court Opinions. The problem addressed by these
bills arose in 1996 when the Supreme Court of the U.S. ruled
Tribe of Florida v. Florida that the Congress lacks
authority under Article I of the Constitution to abrogate the
States' 11th Amendment immunity from suit in federal courts.
See also, the 1999 opinions of the Supreme Court in Florida
Prepaid Postsecondary Education Expense Board v. College
Savings Bank (invalidating the Patent and Plant Variety
Protection Remedy Clarification Act) and College
Savings Bank v. Florida Prepaid Postsecondary Education
Expense Board (invalidating the Trademark Remedy
Eleventh Amendment. "The Judicial power of the
United States shall not be construed to extend to any suit in
law or equity, commenced or prosecuted against one of the
United States by Citizens of another State, or by Citizens or
Subjects of any Foreign State."
Director of the U.S. Patent
and Trademark Office (USPTO) stated in his prepared
testimony at the February 27 hearing that
"Intellectual property owners view the current situation
as inequitable. In their view, State institutions profit from
federally protected intellectual property and are permitted to
bring suit to protect their own intellectual property, but are
shielded from monetary damages as defendants. This inequity
skews our system of intellectual property protection, because
the penalties in place to discourage infringement do not apply
to State entities. The Administration shares some of these
Rogan added that "The Commerce Department supports the
objective of ensuring that owners of intellectual property
rights have a proper remedy when a State infringes upon those
intellectual property rights. As such, we believe that a
legislative answer to the questions raised by the Florida
Prepaid cases is appropriate."
Rogan also pointed out that "Although a State would be
required to waive its sovereign immunity in infringement suits
involving all types of federally protected intellectual
property in order to obtain patent, trademark, or copyright
damages, it is not clear under the current draft bill that a
State owner of a semiconductor chip design or plant variety
would be required to waive immunity in order to obtain damages
for infringement of this intellectual property." He
suggesting adding appropriate language to address this matter.
Peters, the Register of Copyrights, stated in her prepared
testimony that S 1611 is a "carefully balanced
bill. It provides copyright owners with effective tools to
restore their ability to obtain appropriate remedies for
infringement by States while remaining, I believe, within
Congress' constitutional authority. The Copyright Office
supports enactment of S 1611."
Michael Kirk, Executive Director of the American Intellectual Property
Law Association, expressed support for S 1611 in his opening
statement. He also stated that the recent Supreme Court
decisions render the U.S. vulnerable to World Trade Organization (WTO)
determinations that it is in violation of the Agreement on
Trade Related Aspects of Intellectual Property Rights (TRIPS).
William Thro, an attorney for the state of Virginia, opposed S 1611
in his prepared
testimony. He said that it is bad policy, and
unconstitutional. He asserted that "By forcing the States
to choose between waiving sovereign immunity and being able to
enforce their own intellectual property rights, it violates
the doctrine of unconstitutional conditions." He also
asserted that "States are not engaged in a widespread
practice of abusing intellectual property rights".
Keith Shraad, of the National Information Consortium,
testified regarding an egregious violation of intellectual
property rights in software by the state of Georgia, and its
abuse of sovereign immunity. See, prepared
testimony. See also, prepared
testimony of Paul Bender, a professor at the Arizona State
University College of Law, in support of S 1611.
|Ways & Means Committee
Holds Hearing on WTO Tax Rulings
|2/27. The House
Ways and Means Committee held a hearing on the World Trade Organization's
(WTO) extraterritorial income decision.
The WTO has ruled that the U.S. Extraterritorial Income
Exclusion Act (ETI), and its predecessor, the Foreign Sales
Corporation Act (FSC), constitute illegal export subsidies.
These tax regimes greatly benefit U.S. companies that export
their products, including high tech exporters such as
Microsoft, Cisco and Motorola. The U.S. unsuccessfully argued
to the WTO that the U.S. has a global tax system, while
European nations have territorial tax systems, that this puts
U.S. exporters at a competitive advantage, and that tax
regimes such as ETI and FSC that exempt certain foreign source
income from taxation merely level the playing field.
Rep. Bill Thomas
(R-CA), the Chairman of the Committee, stated in his opening
statement, that "Four times the WTO has sent the United
States this same clear message -- our tax system as it is
currently constituted violates international trade rules.
In the opinion of the Chairman of this committee, the time has
come for us to listen. Our corporate tax structure is in need
of major restructuring, not another attempt at a short term
fix. More fundamental reform is required."
Rep. Jim Ramstad
(D-MN) stated in his opening
statement that "we must begin to examine whether the
foundations of our worldwide tax system are sustainable if
American businesses are to remain competitive in our global
economy. We already have too many examples of former U.S.
companies that now are headquartered overseas because of our
burdensome international tax system. The WTO's most recent
decision and the resulting sanctions facing our businesses is
another wake-up call for reform."
Rep. Phil Crane
(R-IL), Chairman of the Trade Subcommittee, once again stated
that the solution is to abolish the corporate income tax
See, prepared testimony of witnesses: Peter
Davidson (General Counsel, United States Trade
Angus (Department of the Treasury), Gary
Hufbauer (Institute of International Economics), Peter
Merrill (Price Waterhouse), and Stephen
Shay (Ropes & Gray).
|Thursday, Feb 28
|9:30 AM. The Senate
Commerce Committee will hold a hearing titled Protecting
Content in a Digital Age -- Promoting Broadband and the
Digital Television Transition. Sen. Ernest Hollings
(D-SC) will preside. The scheduled witnesses are Michael
Eisner (Ch/CEO of Disney), Peter Chernin (P/COO of News
Corp.), Leslie Vadasz (EVP of Intel), Andreas Bechtolsheim
(Cisco), James Meyer (Thomson Multimedia), Robert Perry
(Mitsubishi Digital Electronics). Location: Room 253, Russell
10:00 AM. The Senate
Judiciary Committee is scheduled to hold a business
meeting. Location: Room 226: Dirksen Building.
12:15 PM. The FCBA's
Transactional Practice Committee will host a brown bag lunch
on mass media transactions. RSVP to Sue Fischer at 202
776-2000. Location: Dow
Lohnes & Albertson, 1200 New Hampshire Ave., NW.
1:00 - 5:00 PM. The FCC's Wireless
Telecommunications Bureau will hold a public forum
addressing issues related to the acquisition and analysis of
data on the state of competition in the commercial mobile
radio services industry for the 7th Annual CMRS Competition
Report. Location: FCC, 445 12th Street, SW, Room TW-C305.
3:00 PM. Rep. Bob
Goodlatte (R-VA) and Rep. Rick Boucher
(D-VA) will host a media roundtable on the Congressional
delegation trip to Europe last week to promote the Internet,
intellectual property rights, and electronic commerce. The
delegation met with members of the Russian Duma, Czech
Parliament, German Bundestag, and European Parliament. This
event had been scheduled for February 27, but was postponed
because of votes on the Tauzin Dingell bill. Location: Office
of Rep. Goodlatte, Room 2240, Rayburn Building.
4:00 PM. Adam
Mossoff (Professor at Northwestern Univ.
School of Law) will give a lecture titled "The
Relevance of Natural Rights in Intellectual Property
Today". For more information, contact Prof. Robert
Brauneis at rbraun
@main.nlc.gwu.edu or 202 994-6138. Location: George Washington Univ. Law
School, 2000 H Street, NW.
6:30 - 8:30 PM. FCC Commissioner Michael Copps
will speak at a FCBA
reception on "the value of mentoring in building a
career." Location: Kelley Drye & Warren, 1200 19th
Day two of a two day conference titled "Combatting Cyber
Attacks on Your Corporate Data". See, conference information
page. Location: Omni Shoreham Hotel.
|Friday, March 1
|The House will not be in session.
Deadline to submit public comments to the FTC
regarding the use of disgorgement as a remedy for competition
violations, including those involving the Hart Scott Rodino
Premerger Notification Act, FTC Act, and Clayton Act. See, FTC
and Federal Register notice.
Deadline to file comments with the FCC in response
to its notice of proposed rulemaking regarding the appropriate
regulatory requirements for incumbent local exchange carriers'
provision of broadband telecommunications services. The FCC
adopted this NPRM at its December 12 meeting. This is CC
Docket No. 01-337. See, notice
in the Federal Register.
Deadline to submit reply comments to the FCC regarding Verizon's Section
271 application to provide in region interLATA services in
the state of Vermont. See, FCC
notice [PDF]. This is CC Docket No. 02-7.
|Monday, March 4
|9:30 AM. The U.S.
Court of Appeals (DCCir) will hear oral argument in ACS
Anchorage Inc v. FCC, 01-1059. Judges Edwards, Randolph
and Williams will preside. Location: 333 Constitution Ave. NW.
|Tuesday, March 5
|9:00 AM - 5:00 PM. The National
Institute of Standards and Technology's (NIST) Computer System Security
And Privacy Advisory Board (CSSPAB) will meet to discuss
computer security legislation, privacy issues, critical
infrastructure protection, the USPS's electronic postmark
products, and other matters. The CSSPAB advises the Secretary
of Commerce and the Director of NIST on security and privacy
issues pertaining to federal computer systems. This is the
first day of a three day meeting. See, notice
in Federal Register. Location: General Services
Administration, 7th and D Streets, SW, Room 5700.
10:00 AM. The Senate
Appropriations Subcommittee's Subcommittee on Commerce,
Justice, State, and the Judiciary will hold a hearing
regarding the Department of
Justice (DOJ) budget request
for Fiscal Year 2003. Location: Room 138, Dirksen
10:00 AM. The U.S.
Court of Appeals (FedCir) will hear oral argument in Marketel
International v. Priceline.com, No. 01-1279, an appeal
from the U.S. District
Court (NDCal). Marketel filed a complaint against
Priceline alleging misappropriation of trade secrets,
misappropriation of business model, conversion, false
advertising, and entitlement to a correction of inventorship
of Priceline's U.S.
Patent No. 5,794,207. Marketel appeals the District
Court's dismissal of some of its claims. Location: Courtroom
203, LaFayette Square, 717 Madison Place, NW.
10:30 AM - 4:30 PM. The President's Council of Advisors on
Science and Technology (PCAST) will hold a meeting to discuss
the science and technology of combating terrorism, federal
spending on science and technology research and development,
demand issues related to deployment of broadband
infrastructure, and other topics. See, notice
in Federal Register. Location: Board Room, American Institute
of Architects, 1735 New York Ave., NW.
6:00 - 8:15 PM. The FCBA will
host a CLE seminar titled "U.S. Spectrum Policy:
Convergence or Co-Existence?" This is Part I of a two
part series. Part II will be on April 16. See, program agenda.
|Wednesday, March 6
|9:00 AM - 5:00 PM. The NIST's
Security And Privacy Advisory Board (CSSPAB) will meet to
discuss computer security legislation, privacy issues,
critical infrastructure protection, the USPS's electronic
postmark products, and other matters. The CSSPAB advises the
Secretary of Commerce and the Director of NIST on security and
privacy issues pertaining to federal computer systems. This is
the second day of a three day meeting. See, notice
in Federal Register. Location: General Services
Administration, 7th and D Streets, SW, Room 5700.
10:00 AM. The U.S.
Court of Appeals (FedCir) will hear oral argument in NeoMagic
v. Trident MicroSystems, No. 01-1631, an appeal from the
U.S. District Court (DDel) in a patent infringement and
antitrust case involving embedded memory semiconductors. The
District Court granted summary judgment of non infringement to
MicroSystems. Location: Courtroom 201, LaFayette Square,
717 Madison Place, NW.
10:00 AM - 4:00 PM. The SEC will hold
a roundtable meeting to examine proposals for better
protecting investors by reforming financial disclosure and
auditor oversight. The morning session (10:00 AM - 12:00 NOON)
will focus on financial disclosure. The afternoon session
(2:00 - 4:00 PM) will focus on auditor oversight. See, SEC notice.
Location: Douglas Room, Basement, SEC.
10:30 AM. The Senate
Judiciary Committee's Subcommittee on Antitrust,
Competition, and Business and Consumer Rights will hold a
hearing titled "Dominance in the Sky: Cable Competition
and the Echostar Direct TV Merger". Sen. Herb Kohl (D-WI) will
preside. Location: Room 226, Dirksen Building.
12:15 PM. The FCBA's
Online Committee will host a brown bag lunch. The speaker will
be Anthony Rutkowki, VP Internet Strategy, Verisign. He will address
"Broadband, When? -- Verisign's' View." RSVP to
Scott Harris at sharris
@harriswiltshire.com. Location: Lampert & O'Connor,
5th Floor, 1750 K Street, NW.
2:30 PM. The Senate
Commerce Committee's Subcommittee on Communications will
hold a hearing on wireless communications infrastructure.
Location: Room 253, Russell Building.
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