|NTIA Urges FCC to Permit
Limited Secondary Markets for Spectrum
|3/7. The National
Telecommunications and Information Administration (NTIA)
submitted a comment
to the Federal Communications
Commission (FCC) in its long running rule making
proceeding regarding taking tentative steps towards creating
secondary markets for spectrum. The NTIA submitted its comment
in the form of a letter from NTIA Director Nancy
Victory to FCC Chairman Michael Powell.
She urged the FCC "to move expeditiously to permit
leasing and eliminate other barriers to the development of
secondary markets for spectrum".
The FCC announced its Notice
of Proposed Rule Making [61 pages in PDF] at its open
meeting of November 9, 2000. Victory also urged the FCC to
This proceeding is titled "In the Matter of Promoting
Efficient Use of Spectrum Through Elimination of Barriers to
the Development of Secondary Markets". It is WT Docket
No. 00-230. See also, TLJ story titled FCC
Discusses Secondary Markets for Wireless Spectrum, and TLJ
news analysis titled Mobile
Internet Access Devices and the Internet, both dated
November 10, 2000. See also, DOC
release of March 7, 2002.
Victory wrote that "Leasing and other secondary market
activities promise to increase spectrum efficiency by allowing
radio frequencies to be used in ways that more closely follow
changing demand. Private sector leasing arrangements would not
only provide opportunities and incentives for licensees to
ensure full use of their spectrum, but also would address
changes or spikes in spectrum demand faster and more
effectively than the government licensing process."
She stated further that the FCC "should not attempt to
regulate or micromanage the leasing process or require
secondary user registration or secondary filings."
However, she stated that the FCC "should initially limit
secondary arrangements to spectrum allocated on an exclusive
basis for wireless radio services".
She also offered several terms and conditions that should
apply to secondary arrangements. She wrote that "In any
leasing or secondary market relationship, the licensee must
remain ultimately responsible for adhering to the obligations
of its license". She also wrote that "a lessee
should have no greater rights to use the spectrum than does
the licensee". Moreover, spectrum aggregation limits
should also be applied to spectrum used under secondary
arrangements. Finally, she wrote that "Other rules that
restrict the types of entities that can use particular
spectrum or the uses that can be provided in a set of
frequencies should apply to secondary market
|Bush Addresses Post Enron
|3/7. President Bush gave a speech
in Washington DC on corporate responsibility. He stated that
"To properly inform shareholders and the investing public
we must adopt better standards of disclosure and accounting
practices for all of corporate America." He then
enumerated his recommendations, some of which would require
either Congressional legislation, or Securities and Exchange Commission
(SEC) rule making.
For example, he stated that "to further ensure that
information is reliable, we will need reforms within the
accounting profession. Auditors are a critical external check
on management, and we must ensure that the integrity of their
work is never compromised. Accounting is one of the most and
one of the most respected professions in our country, and it
can help protect its own integrity by developing and enforcing
clear standards of conduct. The profession also needs an
independent regulatory board to hold accounting firms to the
highest ethical standards. And the SEC should exercise more
effective and broad oversight of accounting standards. The SEC
should also do more to guard against conflicts of interest,
requiring, for example, that an external auditor not be
permitted to provide internal audits to the same client."
Bush also stated that "It is important to provide sound
regulation and remedies where needed, without inviting a rush
of new lawsuits that exploit new problems instead of solving
them." However, he did not specifically reference the
Private Securities Litigation Reform Act (PSLRA) or the
Securities Litigation Uniform Standards Act (SLUSA), or class
action litigation generally, or any pending bills.
Technology companies may take comfort in the items not
included in President Bush's list of recommendations. For
example, he did not address proposed legislation that would
affect the tax treatment of stock options. S 1940,
sponsored by Sen. Carl
Levin (D-MI), Sen.
John McCain (R-AZ), and others, would provide that
corporate tax benefits from stock option compensation expenses
would be allowed only to the extent such expenses are included
in a corporation's financial statements.
|Greenspan Addresses Economy
Reserve Board Chairman Alan
Greenspan delivered his semi annual report on monetary
policy to the Senate
Banking Committee. He stated that "The recent
evidence increasingly suggests that an economic expansion is
already well under way, although an array of influences unique
to this business cycle seems likely to moderate its
speed." See, prepared
Greenspan also restated several themes regarding the effects
of technology and the technology sector on the economy. He
stated that "The retrenchment in capital spending over
the past year and a half was central to the sharp slowing we
experienced in overall activity. The steep rise in high tech
spending that occurred in the early post Y2K months was
clearly not sustainable. The demand for many of the newer
technologies was growing rapidly, but capacity was expanding
even faster, and that imbalance exerted significant downward
pressure on prices and the profits of producers of high tech
goods and services."
"New orders for equipment and software hesitated in the
middle of 2000 and then fell abruptly as firms re-evaluated
their capital investment programs. Uncertainty about economic
prospects boosted risk premiums significantly, and this rise,
in turn, propelled required, or hurdle, rates of return to
markedly elevated levels. In most cases, businesses required
that new investments pay off much more rapidly than they had
previously. For much of last year, the resulting decline in
investment outlays was fierce and unrelenting. Although the
weakness was most pronounced in the technology area,
reductions in capital outlays were broad based."
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."
|House Judiciary Committee
Approves Class Action Fairness Act
|3/7. The House
Judiciary Committee amended and approved HR
2341, the Class Action Fairness Act of 2001, by a vote a
16 to 10. The bill is sponsored by Rep. Bob Goodlatte
(R-VA), Rep. Rick
Boucher (D-VA), and others. It may come up for a vote in
the full House next week.
The bill would add new sections to Title 28 of the U.S. Code
pertaining to procedures governing interstate class actions
brought pursuant to Rule 23 of the Federal Rules of Civil
Procedure to ensure that the class members are treated fairly
in settlements. For example, if a settlement provides that the
class members would receive non cash benefits, the court must
make "a written finding that, the settlement is fair,
reasonable, and adequate for class members". This
provision is designed to limit the ability of class action
lawyers to negotiate settlements that provide the lawyers with
attorneys fees in cash, while leaving the class members with
no cash recovery.
The bill would also amend 28
U.S.C. § 1332, regarding diversity of citizenship. It
would provide federal jurisdiction in certain class actions
where "any member of a class of plaintiffs is a citizen
of a State different from any defendant" and the
aggregated claims exceed $2 Million. However, it would also
provide an exception when "the substantial majority of
the members of the proposed plaintiff class and the primary
defendants are citizens of the State in which the action was
originally filed". This provision is designed to limit
the ability of class action lawyers to bring suits in distant
forums that are particularly friendly to the class action bar.
See also, March 7 policy
statement released by the Republican House Policy Committee in
support of the bill.
|6th Circuit Rules on
Jurisdiction in Web Related Trademark Infringement Case
|3/6. The U.S.
Court of Appeals (6thCir) issued its opinion
v. Neo Gen, a trademark infringement case
involving the issue of personal jurisdiction over an out of
Background. Neogen is in the business of developing and
marketing a health care, food, and animal related products and
services, including diagnostic test kits. Neo Gen (also known
as NGS) performs diagnostic testing of blood samples. Neo Gen
both advertises and distributes test results through its web
site. It is a a Pennsylvania corporation with its sole
physical place of business in Pittsburgh.
District Court. Neogen filed a complaint in U.S. District Court (WDMich)
against Neo Gen alleging trademark infringement, federal
dilution and unfair competition, violation of the Michigan
Consumer Protection Act, violation of the Michigan Pricing and
Advertising Act, and unjust enrichment. The District Court
dismissed for lack of personal jurisdiction over Neo Gen.
Appeals Court. The Appeals Court applied International
Shoe, and reversed. It wrote that "Because NGS knew that
it was doing business with Michigan customers, and performed
part of its services in Michigan by mailing test results there
and providing special passwords to Michigan customers, NGS
could reasonably anticipate being haled into a court in
Michigan. Neogen has therefore overcome NGS's due process
challenge by establishing a prima facie case that the exercise
of personal jurisdiction over NGS by a court in Michigan does
not offend ``traditional notions of fair play and substantial
justice.´´ " See, International
Shoe v. Washington,
326 U.S. 310 (1945).
|1st Circuit Rules in
|3/7. The U.S.
Court of Appeals (1stCir) issued its opinion
Roofing Products v. Ideal Roofing Company, a
trademark infringement dispute involving roofing products
manufacturers. Plaintiff, Tamko, obtained an injunction and
monetary relief in the District Court. Defendant, Ideal,
appealed the award of attorneys fees, the award of damages
based on its profits, and the permanent injunction. The
Appeals Court affirmed in full.
|7th Circuit Rules on
Insurers' Duty to Defend Trademark Infringement Cases
|3/7. The U.S.
Court of Appeals (7thCir) issued its opinion
Technology v. Federal Insurance, a case
involving an insurer's duty to defend. Platinum Technology
sued Federal Insurance for failure to defend it in a trademark
infringement suit with Platinum Software Corporation. Platinum
Technology settled with Platinum Software, and then filed a
complaint against Federal Insurance to recover the settlement
amount. Platinum Technology prevailed in the District Court.
The Appeals Court reversed.
|Registration of Copyright
|3/7. The Copyright
Office (CO) published a notice
in the Federal Register announcing that it has amended its
Rule 202.3, regarding registration of copyrights. The CO did
not invite public comment. The changes pertain only to
registering a group of contributions to a periodical. See,
Federal Register, March 7, 2002, Vol. 67, No. 45, at Pages
CFR § 202.3 remains obsolete for registering works
written for, and published in, new media. It continues to
reference print newspapers, textbooks, and other old media,
but not the Internet, web sites, e-mail, and other new media.
|WCT and WPPT Treaties Enter
|3/6. The World Intellectual
Property Organization (WIPO) released a statement
regarding the WIPO
Copyright Treaty (WCT) and the WIPO
Performances and Phonograms Treaty (WPPT). The WCT and
WPPT, which pertain to protecting copyrights in cyberspace,
were negotiated in 1996. They each become effective three
months after ratification by 30 nations. Gabon became the 30th
country to join the WCT last December. Honduras became the
30th state to join the WPPT on February 20, 2002. Hence, the
WCT entered into force on March 6, and the WPPT will enter
into force on May 20, 2002.
WIPO Director General Kamil Idris stated that "While we
have reached the key number of 30 countries required for entry
into force, I urge all other countries to follow suit and to
incorporate the provisions of the WCT and WPPT into their
national legislation. This will create the conditions
necessary for the broad-based and legitimate distribution of
creative works and recordings on the Internet".
|3/7. The House passed HR
3090, the "Job Creation and Worker Assistance
Act" by a vote of 417 to 3. See, Roll
Call No. 52. The Senate will likely vote on the bill on
Friday morning, March 8. The bill would extend regular 26 week
jobless benefits by 13 weeks.
3/7. World Trade Organization
(WTO) Director General Mike Moore commented on President
Bush's decision to impose a tariff on certain steel imports.
He stated that "It is not appropriate for me to comment
on issues or negotiate in public ... Our rules and good
offices are always available. I have a policy of not
commenting on individual disputes, no matter how large or
small ... Of course, it is always preferable if issues are
settled between Members. That applies to each and every matter
of difference between Members". See, WTO
|House Subcommittee Approves
Dot Kids Domain Bill
|3/7. The House
Commerce Committee's Subcommittee on Telecommunications
and the Internet approved HR
3833 [PDF] without amendment by a unanimous voice vote.
The bill is titled the "Dot Kids Implementation and
Efficiency Act of 2002". It is sponsored by Rep. John Shimkus
(R-IL) and Rep. Ed
This bill provides that "The NTIA shall require the
registry selected to operate and maintain the United States
country code Internet domain to establish, operate, and
maintain a second level domain within the United States
country code domain that provides access only to material that
is suitable for minors and not harmful to minors".
An earlier version of the bill, HR 2417,
would have required a "top-level, International
domain". The Subcommittee held a hearing on HR 2417
on November 1, 2001. See, TLJ
Daily E-Mail Alert No. 300, Nov. 2, 2001.
|Friday, March 8
|The House will not be in session.
10:00 PM. Secretary of Commerce Donald
Evans will speak at the U.S.
Patent and Trademark Office (USPTO) regarding the hiring
of additional patent examiners. Press must arrive by 9:45 AM.
Location: USPTO, Patent and Trademark Theatre, 2121 Crystal
Drive, 2nd Floor, Arlington, VA.
12:15 PM. The Federal
Communications Bar Association's (FCBA) Transactional
Practice Committee will host a brown bag lunch on mass media
transactions. RSVP to Sue Fischer at (202) 776-2491. Location:
Dow Lohnes & Albertson,
1200 New Hampshire Ave.
12:30 - 2:00 PM. The New
American Foundation will host a panel discussion titled
"Unwired Security: Is a National Wireless Emergency
Network Necessary?" The speakers will be Reed Hundt (McKinsey
& Co.), Thomas Wheeler (P/CEO of the Cellular
Telecommunications & Internet Association), and Robert
Gurss (Shook Hardy & Bacon). RSVP to Laura Gillespie at gillespie @newamerica.net
or 202 986-4901. Location: 1630 Connecticut Ave., NW, 7th
Extended deadline for submitting comments to the FCC in response
to its Further Notice of Proposed Rulemaking regarding the
current state of the market for local and advanced
telecommunications services in multi tenant environments. See,
notice of extension of deadline [PDF]. This is WT Docket
|Monday, March 11
|The House will meet at 2:00 PM.
8:30 - 10:00 AM. The American
Enterprise Institute (AEI) will host a press breakfast on
the topic "Taxing Broadband". Harold Furchtgott-
Roth and other AEI scholars will speak. RSVP to Veronique
Rodman at (202) 862-4871 or vrodman
@aei.org. Location: AEI, 1150 17th Street, NW, 11th Floor
8:30 AM - 12:00 NOON. The ITAA
and the CSIS
will co-host a conference titled "Managing Identity and
Authentication on the Internet". For more information,
contact Shannon Kellogg at skellogg
@itaa.org. See, ITAA
notice. Location: CSIS, B1 Conference Center, 1800 K
11:00 AM. Howard Beales, Director of the FTC's
Bureau of Consumer Protection, will hold a press conference to
announce a law enforcement initiative targeting deceptive spam
that appealed to post 9-11 patriotism to sell worthless
products. See, FTC notice.
Location: FTC, Room 481, 600 Pennsylvania Avenue, NW.
Deadline to submit comments to the Copyright Office in
response to its Notice of Proposed Rulemaking on "the
requirements for giving copyright owners reasonable notice of
the use of their works for sound recordings under statutory
license and for how records of such use shall be kept and made
available to copyright owners." See, notice
in Federal Register.
|Tuesday, March 12
|9:30 AM. The U.S.
Court of Appeals (DCCir) will hear oral argument in USTA
v. FCC, No. 01-1085. Judges Ginsburg, Rogers and Garland
will preside. Location: 333 Constitution Ave. NW.
10:00 AM. The Senate
Appropriations Subcommittee's Subcommittee on Commerce,
Justice, State, and the Judiciary will hold a hearing on the
administration's proposed budget estimates for FY 2003 for the
Department of State.
Location: Room 138, Dirksen Building.
1:30 PM. The U.S. International Telecommunication Advisory
Committee (ITAC) will hold a meeting. See, notice
in Federal Register. Location: State Department.
|Thursday, March 14
|9:30 AM. The FCC will hold a
meeting. See, agenda.
Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission
10:00 AM. The Senate
Judiciary Committee will hold a hearing to examine
competition, innovation, and public policy concerning digital
creative works. Location: Room 226, Dirksen Building.
10:00 AM - 12:00 NOON. The House Science Committee's
Subcommittee on Environment, Technology, and Standards will
hold a hearing titled "Technology Administration: Review
and Reauthorization". Location: Room 2318, Rayburn
12:00 PM. The FCBA will
host a luncheon. The speaker will be Craig McCaw,
Ch/CEO of Teledesic.
Location: Capital Hilton Hotel, 16th and K Streets, NW,
Washington DC. A reception will begin at 12:00 NOON, followed
by lunch at 12:30 PM. RSVP to Wendy Parish at wendy @fcba.org by 12:00 NOON
on Tuesday, March 12.
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