Tech Law Journal Daily E-Mail Alert
May 8, 2002, 9:00 AM ET, Alert No. 427.
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House Passes Bill to Delay Spectrum Auctions
5/7. The House passed HR 4560, the Auction Reform Act of 2002, by a voice vote. The bill states that the FCC "shall not commence or conduct auctions 31 and 44 on June 19, 2002, as specified in the public notices of March 19, 2002, and March 20, 2002 (DA 02-659 and DA 02-563)."
The bill was introduced on April 24 by Rep. Billy Tauzin (R-LA) and Rep. John Dingell (D-MI), the Chairman and ranking Democrat on the House Commerce Committee, and by most of the membership of the Committee. It was approved by the Committee on May 2.
Rep. Tauzin explained the bill on the House floor. He stated that "There are clearly two conflicting mandates in statute. The Balanced Budget Act of 1997 and the Consolidated Appropriations Act for FY 2000 mandate that the 700 MHz band, both the upper and lower parts of that band, must be auctioned by dates certain."
"However, Section 309(j)(3)(E)(ii) of the Communications Act requires the Commission to include safeguards in auctions that, among other things, 'ensure that, in scheduling of any competitive bidding under this subsection, an adequate period is allowed ... to ensure that interested parties have a sufficient time to develop business plans, assess market conditions, and evaluate the availability of equipment for the relevant services.'"
Tauzin continued that "When there is such a clear conflict in statute, the Commission has considerable discretion to determine whether to move forward with the auction. In 2000, when the Commission originally delayed the 700 MHz auction, the agency concluded that '[i]n complying with conflicting statutes, and resolving those directives as we proceed toward an auction, we believe the Commission's primary goal should be to conduct an auction that is fair, efficient, puts the spectrum to the best use, and thereby best serves the public interest.' The Commission also concluded that a delay was appropriate so that bidders would have an adequate time to develop business plans and assess market conditions."
"The reasons that existed in 2000 for the Commission's delay of the auction still exist today. Potential bidders cannot develop business plans when there is no certainty concerning when the 700 MHz band will be vacated by broadcasters occupying Channels 52-69. It is also impossible to assess market conditions before it is clear when the band will be available for new services and whether other spectrum will be made available for third-generation services. And it is impossible to evaluate if and when mobile communications equipment will be available for use in the 700 MHz band when manufacturers have no idea when the band will be vacated by the broadcasters," said Rep. Tauzin.
Sen. John Ensign (R-NV) introduced S 2454, the companion bill in the Senate, on May 2. No action has yet been taken on that bill. Secretary of Commerce Donald Evans has announced his support for a postponement of the auctions.
Sen. Hollings Introduces Broadband Loans and Grants Bill
5/2. Sen. Ernest Hollings (D-SC) and others introduced S 2448, the Broadband Telecommunications Deployment Act of 2002, a bill pertaining to the taxation of communications services, and the funding of loan and grant programs intended to promote the deployment of broadband services in rural and under served areas.
The bill would provide that one half of the taxes collected pursuant to the excise tax on phones, codified at 26 U.S.C. § 4251, would go into a trust fund to support various loan and grant programs created by the bill. The bill would create an entity named the Broadband Deployment and Demand Trust Fund, to be located at the Treasury Department. However, the Commerce Department would write implementing regulations, and administer the programs created by the bill.
Sen. Hollings stated that this bill "represents a step towards fostering the deployment and adoption of broadband services. It uses monies from the telephone excise tax to fund a number of loan and grant programs. It stimulates broadband deployment in rural and underserved areas by providing low interest loans to upgrade facilities including remote terminals and fiber between a remote terminal and central office. It authorizes NIST to study how we can facilitate broadband deployment in rural and under served areas. It promotes competition by establishing pilot projects for wireless and other non-wireline broadband technologies in rural and underserved areas."
Sen. Hollings continued that "The bill begins to help us understand what is necessary to accomplish broadband with speeds of 50 to 100 megabits per second by providing grants to NTIA's Lab, NIST Labs, National Science Board and to universities for research. In order to address the demand issue, we provide grants to digitize library and museum collections as well as grants to Universities to conduct technical research to develop Internet applications useful to consumers. The bill also provides grants to connect under represented colleges and communities to the Internet." See, Cong. Rec., May 2, 2002, at page S3872.
The bill's original cosponsors are Sen. Hilary Clinton (D-NY), Sen. Ted Stevens (R-AK), Sen. Daniel Inouye (D-HI), Sen. Jay Rockefeller (D-WV), and Sen. Byron Dorgan (D-ND). It has been referred to the Senate Commerce Committee, of which Sen. Hollings is the Chairman.
Rep. Levin Addresses TPA
5/7. Rep. Sander Levin (D-MI), the ranking Democrat on the House Ways and Means Committee's Subcommittee on Trade, gave a speech regarding trade promotion authority (TPA) at the Center for Strategic and International Studies (CSIS). He stated that "U.S. trade policy is following no coherent course at all." He also criticized the administration and Republicans for adopting a "whatever its takes" approach to passing TPA legislation that "results in a minimization of the substantive issues of trade policy and does not offer sound guiding principles for the future."
Levin also addressed the current nature of trade negotiations. "We have now moved beyond even the challenges of many basic non-tariff barriers and have entered an era in which ``trade policy´´ includes the full range of policy, laws and regulations that used to be considered exclusively or primarily ``domestic policy´´ -- including domestic agriculture programs, antitrust law, food safety, telecommunications, natural resources conservation, labor standards, insurance regulation, and the intersection of effective protection of intellectual property rights with health policy. Trade policy has become domestic policy and vice versa in ways that have far reaching implications for how we negotiate trade agreements and legislate domestic rules."
The House passed its TPA bill, HR 3005, in December of 2001. The Senate Finance Committee passed its version of the bill later in December. The full Senate has yet to vote on the bill.
NSF Authorization Bill Introduced
5/7. Rep. Sherwood Boehlert (R-NY) and others introduced HR 4664, the National Science Foundation  Authorization Act of 2002. The bill would authorize 15% increases in appropriations for each of fiscal years 2003, 2004 and 2005 for the National Science Foundation (NSF). The bill includes increases in funding for networking and information technology research, nanoscale science and engineering, mathematical sciences, and major research instrumentation.
Rep. Boehlert, the Chairman of the House Science Committee, stated that "NSF funds research that is of critical importance to the future of the nation's economy -- including such areas as Information Technology and Nanotechnology, which the Administration has emphasized in its budget proposal. NSF funds research that is of critical importance to the nation's security -- including work on such vital areas as cybersecurity. NSF funds research that is of critical importance to the nation's health and well-being -- including genomics research and climate change research. And last, but far from least, NSF funds research and educational activities that are of critical importance to the nation's students; from the kindergarten classroom to the post doctoral laboratory, NSF is the agency that ensures that we are improving math, science and engineering education."
The House Science Committee has scheduled a hearing on this bill for Thursday, May 9.
FCC Files Brief with Supreme Court in Nextwave Case
5/7. The Federal Communications Commission (FCC) filed its brief [71 pages in PDF] with the Supreme Court of the U.S. in FCC v. NextWave.
NextWave obtained spectrum licenses at FCC auctions in 1996. The FCC permitted NextWave to obtain the licenses, and make payments under an installment plan, thus creating a debtor creditor relationship between NextWave and the FCC. NextWave did not make payments required by the plan, and filed a Chapter 11 bankruptcy petition. The FCC cancelled the licenses. It then proceeding to re-auction the disputed spectrum. The U.S. Court of Appeals (DCCir) ruled in its June 22, 2001, opinion that the FCC is prevented from canceling the spectrum licenses by § 525 of the Bankruptcy Code. The FCC petitioned the Supreme Court for writ of certiorari. The Court granted certiorari.
The FCC argues in its brief that § 525 of the Bankruptcy Code "does not displace the FCC's exclusive regulatory authority over spectrum licensing and the license allocation mechanism established in 47 U.S.C. § 309(j)." The FCC's brief relies on cases dating back to the first half of the 20th Century.
The FCC's brief quotes the Communications Act of 1934, at 47 U.S.C. § 301, which provides "for the use of such channels, but not the ownership thereof, by persons for limited periods of time, under licenses granted by Federal authority". It also quotes 47 U.S.C. § 309(a), which gives the FCC authority to issue licenses in the "public interest, convenience, and necessity." The FCC brief then argues that "Because of that delegation of authority, ``it is the Commission, not the courts, which must be satisfied that the public interest will be served´´ by authorizing an applicant to use scarce radio spectrum. FCC v. WOKO, Inc., 329 U.S. 223, 229 (1946). Consequently, ``no court can grant an applicant an authorization which the Commission has refused,´´ Scripps- Howard Radio, Inc. v. FCC, 316 U.S. 4, 14 (1942) ..."
FCC Reports on Consumer Complaints
5/7. The Federal Communications Commission's (FCC) Consumer and Governmental Affairs Bureau (CGB) released a report [PDF] titled "Quarterly Report on Informal Consumer Complaints and Inquiries Received." The report covers the first quarter of 2002. The vast majority of the complaints were about wireline telecommunications services.
167 complaints pertained to cable services. And of these 167 complaints, only 11 were broadband related.
270 complaints pertained to radio and television broadcasting. Most of these complaints -- 242 -- pertained to indecent or obscene programming.
2,978 complaints pertained to wireless telecommunications, with 1,850 of these pertaining to billing and rates.
7,204 complaints pertained to wireline telecommunications. 3,350 of these pertained to billing and rates. The FCC did not report statistics on the number of complaints that pertained to DSL service. See also, FCC release.
People and Appointments
5/7. Rep. Tom Sawyer (D-OH) was defeated in the Democratic primary election in his newly drawn Ohio congressional district. He is a member of the House Commerce Committee and its Telecom and Internet Subcommittee and Trade and Consumer Protection Subcommittee. These committees handle much of the technology related issues in the House.
5/7. Rep. Steve Buyer (R-IN) won his Republican primary election in his newly drawn Indiana congressional district. He is a member of the House Commerce Committee
More News
5/7. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register regarding a proposed rule that would adjust fees. See, Federal Register, May 7, 2002, Vol. 67, No. 88, at Pages 30634 - 30637.
5/7. The Department of Justice filed a brief in EPIC v. Office of Homeland Security, a Freedom of Information Act (FOIA) suit, in which it argues that the Office of Homeland Security is not an agency within the meaning of the FOIA, 5 U.S.C. § 552, and therefore, not subject to its requirements. The Electronic Privacy Information Center (EPIC) filed its complaint [PDF] on April 2, 2002.
5/7. The Electronic Privacy Information Center (EPIC) and Junkbusters filed an objection [PDF] to the proposed settlement in the case In re Doubleclick Privacy Litigation. They argue that "The proposed settlement does not provide any significant benefit to class members that was not previously agreed to by Doubleclick as part of its earlier agreement with the Federal Trade Commission under the terms of the Network Advertising Initiative". Moreover, they argue that "the monetary reward will be provided only to the attorneys for the private litigants; no funds from the settlement will be distributed to any members of the class ..." This is D.C. No. 00-CIV-0641 (NRB) pending in the U.S. District Court (SNDY).
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Wednesday, May 8
The House will meet at 10:00 AM for legislative business.
The Supreme Court is on recess until May 13.
9:00 AM - 12:00 NOON. The Telecommunications Service Priority System Oversight Committee will meet. See, notice in Federal Register. Location: NCS conference room, 2nd floor, 701 South Court House Road, Arlington, VA.
9:30 AM. The Senate Governmental Affairs Committee will hold a hearing on S 1456, the Critical Infrastructure Information Security Act of 2001, sponsored by Sen. Bob Bennett (R-UT). The bill contains a Freedom of Information Act exemption to encourage the sharing of information with the federal government, and an antitrust exemption to encourage cooperative efforts. Location: Room 342, Dirksen Building.
10:00 AM. The House Judiciary Committee will hold a meeting to mark up several bills, including HR 3482, the Cyber Security Enhancement Act of 2001 and HR 3215, the Combatting Illegal Gambling Reform and Modernization Act, also known the Goodlatte Internet gambling bill. Location: Room 2141, Rayburn Building.
10:00 AM - 12:00 NOON. The Federal Communications Bar Association's International Practice Committee will host a roundtable discussion with David Gross, Deputy Assistant Secretary for International Communications and Information Policy, U.S. Department of State. RSVP to Maggie McBride at 202 719-7101. Location: Wiley Rein & Fielding, 1750 K Street, NW.
10:00 AM. The Senate Judiciary Committee will hold a hearing regarding reform of the Federal Bureau of Investigation and Department of Justice. See, notice. Press contact: Mimi Devlin at 202 224-9437. Location: Room 226, Dirksen Building.
12:00 NOON - 1:30 PM. Marybeth Peters, Register of Copyrights, will speak at the Center for Strategic and International Studies (CSIS). For more information, contact Joelle Laszlo at 202 775-3175 or jlaszlo Location: 4th Floor Conference Room, CSIS, 1800 K St NW.
1:00 PM. Rep. Cliff Stearns (R-FL), Chairman of the House Commerce Committee's Subcommittee on Commerce, Trade & Consumer Protection, and others, will hold a press conference to announce the introduction of information privacy legislation. Location: H-321 (House Radio and TV Gallery), Capitol Building.
Extended deadline to submit comments to the FCC in its proceeding titled "In the Matter of Rules and Policies Concerning Multiple Ownership of Radio Broadcast Stations in Local Markets Definition of Radio Markets". See, FCC release [PDF].
Thursday, May 9
The House will meet at 10:00 AM for legislative business.
10:00 AM. The House Judiciary Committee's Subcommittee on Crime will meeting to conduct a hearing on, and to mark up, HR 4623, the Child Obscenity and Pormography Prevention Act of 2002. Webcast. Location: Room 2141, Rayburn Building.
10:00 AM - 12:00 NOON. The House Science Committee's Subcommittee on Research will hold a hearing on HR 4664, the National Science Foundation Reauthorization Act of 2002. Press contact: Heidi Tringe Heidi.Tringe or 202 225-4275. Webcast. Location: Room 2318, Rayburn Building.
10:00 AM - 12:00 NOON. The House Science Committee's Subcommittee on Research will meet to mark up HR 3130, the Technology Talent Act of 2001 (immediately following the hearing on the NSF reauthorization bill). This bill would authorized grants to be awarded on a competitive basis to institutions of higher education to increase the number of students studying and receiving associates or bachelor's degrees in science, mathematics, engineering, and technology. Press contact: Heidi Tringe Heidi.Tringe or 202 225-4275. Webcast. Location: Room 2318, Rayburn Building.
2:00 PM. The Senate Judiciary Committee will hold a hearing on pending judicial nominations, including  Richard Clifton (U.S. Court of Appeals for the Ninth Circuit), Christopher Conner (U.S. District Court for the Middle District of Pennsylvania), Joy Conti (U.S. District Court for the Western District of Pennsylvania), and John Jones (U.S. District Court for the  Middle District of Pennsylvania). Location: Room 226, Dirksen Building.
2:00 PM. The House Ways and Means Committee's Subcommittee on Select Revenue Measures will hold another hearing on the Extraterritorial Income Regime. Location: Room 1100, Longworth Building.
Deadline to pre-register to attend the NIST's Advanced Technology Program (ATP) Advisory Committee meeting on May 14. The agenda includes a discussion on universities and R&D technology issues, a presentation on In-Q-Tel (the CIA's Silicon Valley venture capital group), an update on the ATP competition, and a presentation on the ATP Computer Based Software Focus Program. Submit your name, time of arrival, e-mail address and phone number to Carolyn Stull at carolyn.stull or 301 975-5607. See, notice in Federal Register. 
Friday, May 10
The House will meet at 9:00 AM for legislative business. No votes are expected after 2:00 PM.
8:30 AM - 4:30 PM. The New America Foundation and Public Knowledge will co-host a conference titled "Protecting the Information Commons: Asserting the Public Interest In Copyright Law and Digital Infrastructure". The scheduled speakers include Rep. Rick Boucher (D-VA). RSVP to Tina Sherman at 202 986-2700 or sherman Location: National Guard Assoc.
9:00 AM - 5:00 PM. The Copyright Office will hold "a public roundtable discussion concerning issues raised in the course of an ongoing rulemaking proceeding to adopt requirements for giving copyright owners reasonable notice of the use of their works for sound recordings under the section 114 and 112 statutory licenses and for how records of such use shall be kept and made available to copyright owners." See, notice in Federal Register. Requests to attend or participate must be submitted by close of business on Monday, May 6, 2002. Location: Room LM620 (Dining Room A), James Madison Memorial Building, First and Independence Avenue, SE.
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in AT&T v. FCC, No. 01-1467, and Verizon v. FCC, No. 01-1371. Judges Ginsburg, Randolph and Tatel will preside. Location: 333 Constitution Ave. NW.
9:30 AM - 1:00 PM. The SEC will hold an event titled "Investor Summit" which will also be webcast. See, SEC release. Location: WOD Room, basement, SEC, 450 5th Street NW.
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in ULead Systems v. Lex Computer, No. 01-1320, an appeal from the U.S. District Court (CDCal). The lower court held that U.S. Patent No. 4,538,188 is unenforceable due to the owner's inequitable conduct in fraudulently paying reduced small entity maintenance fees to the USPTO when it was not a small entity. Location: LaFayette Square, at 717 Madison Place, NW.
11:30 AM. The American Electronics Association (AEA) will hold a press briefing regarding the IRS's proposal to impose payroll taxes on certain broad based stock options beginning January 1, 2003. To participate by telephone, call 703 871-3016. See, AEA notice. RSVP to Deanna Keim at 202 289-6700 or djkeim Location: AEA, 601 Pennsylvania Ave. NW, 6th Floor. (The entrance is on Indiana Ave. between 6th and 7th Streets.)
12:15 PM. The The FCBA's Wireless Committee will host a luncheon.
1:00 PM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a field hearing titled "Chatting On Line: A Dangerous Proposition for Children." Rep. Fred Upton (R-MI) will preside. Press contact: Ken Johnson or Jon Tripp at 202-225-5735. Location: Kalamazoo Valley Community College M-Tec Facility, Oshtemo, Michigan.
Monday, May 13
The Supreme Court of the U.S. returns from recess.
Tuesday, May 14
8:45 AM - 3:45 PM. The NIST's Advanced Technology Program (ATP) Advisory Committee will hold a meeting that will be open in part, and closed in part. The agenda includes a discussion on universities and R&D technology issues, a presentation on In-Q-Tel (the CIA's Silicon Valley venture capital group), an update on the ATP competition, and a presentation on a study on the ATP Computer Based Software Focus Program. Pre-registration by May 9 is required for attendance; submit your name, time of arrival, e-mail address and phone number to Carolyn Stull at carolyn.stull or 301 975-5607. See, notice in Federal Register. Location: NIST, Administration Building, Lecture Room A, Gaithersburg, MD.
9:00 - 11:00 AM. The U.S. Chamber of Commerce (USCC), Ernst & Young, and the Internet Education Foundation (IEF) will co-host forum on online privacy and the Platform for Privacy Preferences (P3P) created by the World Wide Web Consortium (W3C). Rep. Adam Smith (D-WA) will make opening remarks. There will be two panels. The first panel will address online privacy issues; the speakers will be Joe Rubin (USCC), Shane Ham (Progressive Policy Institute), and Ari Schwartz (Center for Democracy and Technology). The second panel will address P3P; the speakers will be Martin Marshall (IBM), Marc Berejka (Microsoft), Brian Tretick (Ernst & Young), and Brian Zwit (AOL). RSVP by e-mail to rsvp, or call Joshua Freed (IEF) at 202 638-4370. Coffee and snacks will be provided. Location: Herman Lay Room, USCC, 1615 H Street, NW.
TIME CHANGE. 9:00 AM. The IRS will hold a hearing on proposed regulations relating to tax treatment of incentive stock options and options granted under employee stock purchase plan. See, original notice in the Federal Register. See also, supplemental notice rescheduling hearing time, Federal Register. Location: Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW.
9:30 AM - 4:00 PM. The Antitrust Division of the DOJ and the FTC will hold another in their series of hearings on antitrust and intellectual property. This event is titled "Antitrust Analysis of Licensing Practices". At 9:00 AM there will be a panel titled "Antitrust Analysis of Specific Intellectual Property Licensing Practices". At 1:30 PM there will be a panel titled "Practical Issues Encountered in Antitrust Analysis of Licensing Practices". The DOJ requires that attendees provide their name and date of birth 24 hours in advance to Kathleen Leicht at kathleen.leicht or 202 514-7018. For more information, contact Gina Talamona in the Office of Public Affairs at 202 514-2007, or Frances Marshall in the Antitrust Division at 202 305-2520. Location: Great Hall, DOJ, Main Building, 950 Pennsylvania Ave., NW.
10:00 AM. The Senate Indian Affairs Committee and the Senate Commerce Committee will hold a joint hearings on communications issues in Indian country.
Deadline to submit oppositions and responses to the FCC in its AT&T Comcast merger review proceeding. This proceeding is titled "In the Matter of Applications for Consent to the Transfer of Control of Licenses, Comcast Corporation and AT&T Corp., Transferors, To AT&T Comcast Corporation, Transferee". See, FCC notice.