Tech Law Journal Daily E-Mail Alert
March 25, 2002, 9:00 AM ET, Alert No. 395.
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DC Circuit Rules on FCC Fees in COMSAT v. FCC
3/22. The U.S. Court of Appeals (DCCir) issued its opinion in COMSAT v. FCC, a case regarding fees paid to the Federal Communications Commission (FCC) by regulated entities.
47 U.S.C. § 159(a)(1) provides that "The Commission, in accordance with this section, shall assess and collect regulatory fees to recover the costs of the following regulatory activities of the Commission: enforcement activities, policy and rulemaking activities, user information services, and international activities."
Until 1995, the FCC exempted Comsat from the payment of fees. In 1996, the FCC instituted a special "signatory fee" for COMSAT. The Court of Appeals held that it was invalid because it was not instituted pursuant to a rule making proceeding or change in law. See, COMSAT v. FCC, 114 F.3d 223 (D.C. Cir. 1997), also known as COMSAT I.
In 1998, PanAmSat, a competitor of COMSAT, sought review of the FCC's fee exemption for COMSAT. The Appeals Court then wrote that the statute makes "no suggestion that Comsat should be exempt," and remanded to the FCC for reconsideration of the exemption. See, PanAmSat Corp. v. FCC, 198 F.3d 890 (D.C. Cir. 1999).
In 2000, the FCC adopted a Report and Order that assessed COMSAT's space station fee at $1,609,050 -- calculated as $94,650 for each of its 17 geosynchronous space stations.
COMSAT then brought this petition for review, challenging both the FCC assertion that it can collect fees from COMSAT, and the amount of the fees. The Appeals Court, relying on its PanAmSat opinion, denied the petition.
The Court continued that "the $1.6 million in fees assessed to COMSAT seem to bear no relation to the signatory related costs that the Commission identified COMSAT as having created and that it has said it wishes to recover. Signatory related costs apparently amounted to only $233,425 in 1996, and although the record lacks reported figures for 2000, an extrapolation on the basis of the change in the regular fee per satellite would yield an estimate for Intelsat signatory related costs in 2000 of about $442,000, only about a quarter of the fees actually assessed" However, the Court did not overturn the fee amount.
COMSAT did not raise, and the Court did not address, whether fees that "bear no relation to the signatory related costs" are fees, as opposed to taxes. The administration's FCC FY 2003 budget proposal requests that the FCC be funded at the level of $278,092,000. Of this, $248,149,000, or 89 percent, would come from "regulatory fees".
Sen. Dorgan Addresses Trade Promotion Authority
3/22. Sen. Byron Dorgan (D-ND) spoke at length in the Senate in opposition to HR 3005, which would extend trade promotion authority (TPA) to the President. TPA would permit the President to negotiate trade agreements that the Congress could accept or reject, but not amend. It is also known as "fast track authority".
He stated that "I do not believe Congress should grant fast track authority. I think it is undemocratic. I do not believe it is necessary for us to have fast track authority in order to negotiate trade agreements. We negotiate the most sophisticated agreements without fast track authority. Nuclear arms treaties are negotiated and brought to the Congress without fast track authority. Only trade agreements, we are told, must have this handcuff put around Members of Congress, so they cannot offer any amendments."
Sen. Dorgan added that "Our government is not ensuring a level playing field. We have stacked the deck with bad international trade agreements, ineffective trade negotiators and bad agreements, one after the other."
The House approved HR 3005 on December 6, 2001. The Senate Finance Committee approved its version of the bill later in December by a vote of 18 to 3. Senate Majority Leader Tom Daschle (D-SD) has not yet scheduled a date for consideration of the bill.
People and Appointments
3/22. William Hooton was appointed Assistant Director of the Federal Bureau of Investigation (FBI) for the Records Management Division. Hooton previously worked for Tower Software, a records management software company, and for Science Applications International Corporation. Before that he worked in digital images management at the National Archives. Before that, he worked for the IRS. See, FBI release.
3/22. The Senate confirmed Randal Quarles to be a Deputy Under Secretary of the Treasury. See, Cong. Rec., March 22, 2002, at S2343.
3/22. The Senate confirmed Kenneth Lawson to be an Assistant Secretary of the Treasury. See, Cong. Rec., March 22, 2002, at S2343.
IT Groups Oppose Hollings Bill
3/22. Several information technology groups announced their opposition to S 2048, the "Consumer Broadband and Digital Television Promotion Act". Sen. Ernest Hollings (D-SC) and other Senators introduced this copy protection bill on March 21. The bill would direct the Federal Communications Commission (FCC) to adopt rules for hardware and software makers mandating security system standards and encoding rules to protect copyrighted digital content.
Harris Miller, President of the Information Technology Association of America (ITAA), stated that "This is an anti consumer, anti progress bill pure and simple. As we move into the 21st Century, movie chieftains want to gallop back toward the 19th. On the eve of the Academy Awards ceremony, where Hollywood honors itself in a lavish show, the entertainment lobby in Washington has crafted this misdirected legislation that would introduce new, onerous government mandates on the IT sector and consumers requiring a single one size fits all solution to the problem of digital piracy. Instead of realizing that the movie industry and the IT industry have common goals -- to offer consumers exciting content in as many different formats and delivery vehicles as they wish, while preventing illegal use of that content -- Hollywood has decided that the interests of consumers are outweighed by its desire to stop a few bad actors from content pirating." See ITAA release.
Jonathan Zuck, President of the Association for Competitive Technology (ACT), stated that the bill provides "for government interference in a process best handled by the market." He added that "the federal government has difficulties creating standards for cutting edge technology."
Robert Holleyman, P/CEO of the Business Software Alliance (BSA), stated that "A broad government technology mandate is not a solution to the piracy problem. Unfortunately, no one solution will solve all piracy threats in all circumstances. The technology industry loses more than $11 billion each year to software piracy, so we share the movie industry’s passion for resolving this issue. The voluntary multi industry efforts currently underway should be permitted to continue in order to identify effective, workable market solutions." See, BSA release.
Ken Kay, Executive Director of the Computer Systems Policy Project (CSPP), stated that "Government mandates on technology products, as proposed in the Hollings bill, will decrease consumer choice, degrade product performance, stifle innovation, and reduce global competitiveness for US IT products. The best solution to protecting digital content is a marketplace driven solution."
House Commerce Committee Appointments
 3/22. Rep. Ernie Fletcher (R-KY) was appointed to the House Commerce Committee. He replaces former Rep. Steve Largent (R-OK), who resigned from Congress last month to run for Governor of Oklahoma. Fletcher was also appointed to the Subcommittee on Environment and Hazardous Materials, and to the Subcommittee on Oversight and Investigations. Rep. Charles Bass (R-NH), who is already a member of the Commerce Committee, will take Largent's place on the Subcommittee on Telecommunications and the Internet. Both Fletcher and Bass voted for passage of HR 1542, the Tauzin Dingell bill; Largent had been one of its leading opponents. See, Committee release.
More News
3/22. The Bivings Group released a report [PDF] titled "The Internet's Role in Political Campaigns: Utilization by Incumbent United States Senators and Representatives in 2002". The report concludes that "Less than 30 percent of the campaign committees for incumbent U.S. Senators and Representatives have a functional website specifically for the 2002 election." The Bivings Group is a Washington DC based public relations firm.
3/21. Billy Joe Acosta plead guilty in U.S. District Court (NDCal) to one count of criminal copyright infringement in violation of 18 U.S.C. § 2319(c)(1) and 17 U.S.C. § 506(a)(2). He stated in his plea agreement [PDF] that in 2000, he "offered for sale over the Internet on eBay and Yahoo! auctions at least 10 copies of recordings of a live musical performance by Thirty Odd Foot of Grunts (a rock band that features Russell Crowe) on August 4, 2000 in Austin, Texas, that contained copyrighted songs." (Parentheses in original.) Joseph Sullivan is handling the case. He works in the Computer Hacking and Intellectual Property Unit in the U.S. Attorney's Office (USAO) for the Northern District of California. See also, USAO release and information [PDF].
3/22. Six groups wrote a letter [PDF] to Members of Congress expressing their opposition to the pending EchoStar DirecTV merger. They asked that legislators "oppose the merger and make your voice heard by writing the Department of Justice and the Federal Communications Commission." The groups are the American Antitrust Institute (AAI), National Association of Broadcasters (NAB), USAction, National Rural Telecommunications Cooperative (NRTC), National Rural Electric Cooperative Association, and the American Cable Association. The AAI asserts the merger "violates antitrust laws".
Monday, March 25
The House and Senate will be in recess for the Spring District Work Period. Both bodies will return on Monday, April 8.
9:15 AM - 12:25 PM. The Department of Commerce will host a roundtable titled "Understanding Broadband Demand: Broadband & Business Productivity". The event will be chaired by Phil Bond (Under Secretary for Technology), Kathleen Cooper (Under Secretary for Economic Affairs), and Bruce Mehlman (Assistant Secretary for Technology Policy). See, agenda. Location: Room 4830, U.S. Department of Commerce, 14th & Constitution Avenue, NW.
Tuesday, March 26
8:00 AM - 5:15 PM. The Michigan State University Quello Communications Law and Policy Symposium will host its Third Annual Rethinking Access conference. See, schedule of speakers. Location: Willard Intercontinental Hotel.
Wednesday, March 27

10:00 AM. The Progress and Freedom Foundation will hold a press conference to release a survey based report titled "Privacy Online: A Report on the Internet Practices and Policies of Commercial Websites". Location: National Press Club, Holeman Lounge, 529 14th St. NW, 13th Floor.

11:00 AM. The Cato Institute will host a panel discussion on spam. The speakers will be Howard Beales (FTC), Rebecca Richards (TRUSTe), Chris Hoofnagle (EPIC), and Jerry Cerasale (Direct Marketing Assoc.). See, online registration page. Lunch will follow the program. Location: Cato, 1000 Massachusetts Ave., NW.
12:15 PM. The FCBA's Telecom Competition Committee will host a brown bag lunch. The speakers will be Jim Bird, head of the FCC's transactions team, and other FCC representatives. RSVP to Wendy Parish at wendy Location: FCC, 445 12th Street, SW, Eighth Floor, Conference Room 1.
12:30 PM. Larry Thompson, Deputy Attorney General of the U.S., will speak at the Heritage Foundation. See, notice. Location: 214 Massachusetts Ave NE.
Thursday, March 28
Passover begins.
12:15 PM. The FCBA's Young Lawyers Committee will host a brown bag luncheon. The topic will be "Putting the ``Mass´´ Back in Media -- A First Amendment Right to Bulk Up." The speaker will be Paul Gallant, Special Advisor to Kenneth Ferree, Bureau Chief of the Cable Services Bureau, and a member of the Media Ownership Working Group. RSVP to rwallach Location: Willkie Farr & Gallagher, 1155 21st Street, NW (between L & M), 6th Floor.
4:00 PM. John Duffy (Marshall Wythe School of Law) will give a lecture titled "The Puzzling Persistence of the Ideal of Marginal Cost Pricing in the Economic Analysis of Patents". For more information, contact Robert Brauneis at rbraun or 202 994-6138. Location: George Washington University Law School, 2000 H Street, NW.
Deadline to submit comments to the FCC regarding ways to improve its electronic licensing systems. See, FCC notice [PDF].
Friday, March 29
Good Friday.
Extended 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 (HSR) Premerger Notification Act, FTC Act, and Clayton Act. See, original FTC release and Federal Register notice, and FTC release and Federal Register notice extending deadline from March 1 to March 29.
Deadline to submit comments to the FTC regarding proposed new Privacy Act system of records. This system, if adopted, would include telephone numbers and other information pertaining to individuals who have informed the Commission that they do not wish to receive telemarketing calls. See, notice to be published in the Federal Register.
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