Tech Law Journal Daily E-Mail Alert
September 18, 2002, 9:00 AM ET, Alert No. 511.
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Representatives Write Powell Re UNE Pricing
9/16. Rep. Billy Tauzin (R-LA), Rep. John Dingell (D-MI), and 102 other member of the House of Representatives signed a letter [8 pages in PDF] to Federal Communications Commission (FCC) Chairman Michael Powell regarding unbundled network element (UNE) pricing.
The letter states that "The current system of federal pricing and unbundling rules and state regulatory orders is eroding investment in telecommunications networks, threatening the development of innovative new services and retarding the development of full scale facilities based competition envisioned by the Act. At the heart of this regulatory regime is the requirement that Regional Bell Operating Companies provide elements of their network, particularly combinations of elements, to other telecommunications companies at prices far below their actual cost."
The letter argues that "While Congress prescribed the unbundled network element form of competition, in no way did it intend to establish, nor even foresee the possibility of establishing, a system that forces companies to provide network elements at prices far below their cost. Such a regime undermines the Act's goal of promoting facilities based competition by discouraging telecommunications companies competing with the Bells from investing in their own new networks. It simply makes no economic sense for these companies to spend the billions of dollars necessary to invest in their own networks if they can instead rent access to Bell company networks and resell their service at an enormous profit."
Moreover, "The current regulatory system has also caused dramatic reductions in capital spending by the Bell companies, who have neither the incentive nor the financial ability to make investments in their networks that end up subsidizing their direct competitors."
The letter concludes that "It is important for the FCC to address the wholesale pricing issue in a manner that restores the proper incentives for investment in the telecommunications sector."
Rep. Tauzin and Rep. Dingell are the Chairman and ranking Democrat on the House Commerce Committee, which oversees the FCC. The bipartisan list of signatories includes many other members of the Committee.
Senators Introduce Nanotechnology R&D Bill
9/17. Sen. Ron Wyden (D-OR), Sen. Joe Lieberman (D-CT) and Sen. George Allen (R-VA) introduced the 21st Century Nanotechnology Research and Development Act. See, joint release and Lieberman statement.
In addition, the Senate Commerce Committee's Subcommittee on Science, Technology, and Space held a hearing on nanotechnology. See, prepared testimony of witnesses in PDF: Richard Russell (Office of Science and Technology Policy), Mark Modzelewski (NanoBusiness Alliance), Stan Williams (Hewlett Packard), and Nathan Swami (Initiative for Nanotechnology, Commonwealth of Virginia).
The Commerce Committee is scheduled to mark up the bill on Thursday, September 19.
Grassley and Baucus Organize Meeting on FSC/ETI Issue
9/16. Sen. Max Baucus (D-MT) and Sen. Charles Grassley (R-IA) wrote a letter [PDF] to Rep. Bill Thomas (R-CA), Rep. Charles Rangel (D-NY), USTR Robert Zoellick, and Assistant Treasury Secretary Kenneth Dam inviting them to a legislative executive working group meeting on September 24 on the Foreign Sales Corporation (FSC) and Extraterritorial Income Exclusion Act (ETI) issue.
Baucus and Grassley are the Chairman and ranking Republican on the Senate Finance Committee, which has jurisdiction of tax and certain trade matters. They wrote that "We firmly believe that resolution of this issue will require a long term collaborative effort, involving tax and trade policy makers in Congress and the Administration. At the September 24 meeting, we expect to give directions to our respective staffs to meet on a regular basis, with the goal of developing specific recommendations that can win support from the Congress and the Administration."
Rep. Thomas and Rep. Rangel are the Chairman and ranking Democrat on the House Ways and Means Committee, which has jurisdiction in the House on this issue.
The proposed meeting will be at 5:30 PM on September 24 in Room 211 of the Dirksen Building, but will be closed to the public.
The World Trade Organization (WTO) held that the FSC tax regime constitutes an illegal export subsidy. So, Congress passed replacement legislation, the ETI, which the WTO also held to constitute an illegal export subsidy. On August 30, the WTO issued a Decision of the Arbitrator [46 pages in PDF] which authorizes the EU to impose $4 Billion in countermeasures, or retaliatory tariffs.
Last Friday, September 13, the European Union published a document [14 pages in PDF] titled "Notice relating to the WTO Dispute Settlement proceeding concerning the United States tax treatment of Foreign Sales Corporations (FSC) -- Invitation for comments on the list of products that could be subject to countermeasures", which identified a list of products which could be subject to retaliatory tariffs. The list includes many electronics products.
The U.S. can avoid the imposition of EU retaliatory tariffs by repealing the ETI. Rep. Thomas introduced HR 5095, the American Competitiveness and Corporate Accountability Act of 2002, on July 11, 2002, to address the WTO's rulings regarding the FSC and ETI. See also, Rep. Thomas' summary of HR 5095. However, no action has been taken on the bill. There is no replacement legislation pending in the Senate.
Bush Campaigns on Judicial Appointments
9/17. President Bush gave a speech in Nashville, Tennessee, at a Lamar Alexander for Senate event. He repeated his argument that voters should elect Republican Senators so that his judicial nominees will get confirmed.
He stated that "I appreciate the fact that I'll be able to work with Lamar on making sure the good people who I nominate to our federal benches will not only get a fair hearing, but a speedy hearing, and will get approved. The country got to see what happens when the Senate gets so politicized that they won't give people a fair hearing when it comes to judicial nominees."
Bush continued: "I named a fabulous woman out of Texas, named Priscilla Owen to the 5th Court. And they distorted her record. She had the highest ranking from the ABA, and yet having listened to the rhetoric coming out of a highly politicized and polarized committee, you never would have realized how qualified she is. She was turned down for purely political purposes. For the sake of a federal judiciary that is strong and solid, we need United States senators like Lamar Alexander who will be fair and reasonable and realistic, and will not play politics with the President's judicial nominees."
People and Appointments
9/17. Hank Brown resigned as a Director of Qwest Communications. He had been a director of Qwest and its predecessor, U S WEST since 1998. He is also a former U.S. Senator and Representative from Colorado. See Qwest release.
CEA CEO Criticizes Record and Movie Companies on Copyright
9/17. Consumer Electronics Association (CEA) P/CEO Gary Shapiro gave a speech titled "The Campaign to Have Copyright Interests Trump Technology and Consumer Rights" at the Optical Storage Symposium, in San Francisco, California. He bluntly criticized the copyright related actions and arguments of the movie and record companies, and their supporters in the Congress and Justice Department.
He stated that "We are at a critical juncture in history when the inevitable growth of technology is conflicting with the rising power and strength of copyright owners. How we resolve this tension between copyright and technology will define our future ability to communicate, create and share information, education and entertainment."
Shapiro reviewed recent development in technologies for the reproduction, storage, and transmission of all types of media. He stated that "Based on these and similar threats the content community has gone on a scorched earth campaign -- attacking and burning several new recording and peer to peer technologies. They have used the Congress, media and courts to challenge the legality of technology and morality and legality of recording."
He asserted that the "consumer electronics companies have been working with both the recording and motion picture industries on developing technological measures that meet the needs of both industries", but the "copyright community has declared war on technology and is using lawsuits, legislatures and clever public relations to restrict the ability to sell and use new technologies."
He reviewed and criticized recent legal actions by record and movie companies (which he refers to as "the copyright community'), bills recently filed in Congress with the support of record and movie companies, and a recent speech by a Department of Justice official regarding possible criminal prosecution of peer to peer networks.
He also discussed the debate and media campaigns regarding the characterization of downloading copyrighted content on the Internet. He stated that "The entire theme of the copyright community is that downloading off the Web is both illegal and immoral. But is it either? I submit it is neither. Despite the assertions of the Justice Department, downloading is not illegal."
He singled out for criticism John Malcolm's speech to the Progress and Freedom Foundation in August. Malcolm is the Deputy Assistant Attorney General in charge of the Computer Crimes and Intellectual Property Section (CCIPS).
Shapiro elaborated that "fair use rights are guaranteed to consumers by statute, and applied judicially on a case by case basis. This means that, while some consumer practices ultimately could be adjudicated as either fair use or infringement, there is scant basis for challenging them as criminal."
He also argued that downloading copyrighted content is not immoral, or comparable to stealing tangible property. "To make downloading immoral, you have to accept that copyrighted products are governed by the same moral and legal principles as real property, thus the recent and continuous reference by the copyright community to label downloading as stealing.  But the fact is that real and intellectual property are different and are governed by different principles. Downloading a copyrighted product does not diminish the product," said Shapiro.
He said that the "recording industry and motion picture industry should stop complaining so much and look for technological solutions to its own problems."
He also offered his advice for policy makers, including: "advances in technology should not be restricted", "claims of harm should be greeted with great skepticism", "copyright owners have a high burden of proof before any technology should be restricted", "copyright owners should continue developing ways to protect their content at the source, rather than insisting that the burden should be on the device that plays it", and "any restrictions on technology should be narrowly crafted, define limitations on abuse by copyright owners and define legitimate consumer recording rights and expectations".
He concluded that "If the play button becomes the pay button, our very ability to raise the world's standard of living and education will be jeopardized."
More News
9/17. A grand jury of the U.S. District Court (NDCal) returned an indictment against Dennis Baker charging one count of criminal copyright infringement in violation of 17 U.S.C. 506(a)(1) and 18 U.S.C. 2319(b)(1). The U.S. Attorneys Office (USAO) for the Northern District of California stated in a release that Baker "operated a website in 1996 through which he made pirated copies of business and game software available for sale ... that had a retail value of approximately $2.4 million." The USAO further stated that Baker fled to Malaysia after he learned of earlier charges against him. However, the FBI tracked him, the State Department revoked his passport, and Malaysia revoked his authorization to remain and put him on a plane back to the U.S. He is being held without bail.
9/17. California Gov. Gray Davis signed AB 2238, sponsored by Assemblymember Dick Dickerson (R-Redding). The provides, in part, that "No person shall knowingly post the home address or telephone number of any elected or appointed official, or of the official's residing spouse or child on the Internet knowing that person is an elected or appointed official and intending to cause imminent great bodily harm that is likely to occur or threatening to cause imminent great bodily harm to that individual."
9/17. AT&T stated in a release that "The waiting period under the Hart Scott Rodino Antitrust Improvements Act (the HSR Act) applicable to the combination of Comcast Corporation and AT&T Broadband has expired. At this time, the HSR Act no longer prohibits the parties from closing the proposed transaction." AT&T added that "The parties are still awaiting certain other regulatory approvals and consents and continue to expect that the transaction will close in the fourth quarter of 2002."
9/17. The U.S. Court of Appeals (DCCir) held an en banc hearing in Ruggiero v. FCC, No. 00-1100. On February 8, a three judge panel issued its split opinion holding unconstitutional the ban on issuance of low power FM radio broadcast licenses to anyone who has previously engaged in an unlicensed operation.
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Wednesday, September 18
The House will meet at 10:00 AM for legislative business.
7:30 - 9:00 AM. The National Association of Manufacturers will host a breakfast. Rep. Tom Davis (R-VA) will speak on the upcoming elections. See, notice. Location: Grand Hyatt Hotel, 1000 H Street, NW.
LOCATION CHANGE. 8:30 - 11:00 AM. The Alliance for Public Technology (APT) and the High Tech Broadband Coalition (HTBC) will host a half day conference titled "From Debate to Deployment: Making Broadband Competition Work for All Americans". The scheduled speakers include Kevin Martin (FCC Commissioner), Rhett Dawson (ITIC), Henry Geller (APT), John Haring (Strategic Policy Research), Yardly Pollas (LA for Rep. Bobby Rush (D-IL)), Paul Schroeder (APT), and Kathy Wallman (Wallman Consulting). Breakfast will be served. Press contact: Matt Bennett (APT), 202 263-2972 or mbennett Location: Hyatt Regency on Capitol Hill, 400 New Jersey Ave., NW.
9:00 AM - 5:00 PM. Day two of a three day meeting of the Computer System Security and Privacy Advisory Board (CSSPAB). The agenda includes (1) discussion of a CSSPAB privacy report, (2) discussion of a CSSPAB baseline standards report, (3) updates on computer security legislation, (4) an update by the OMB on privacy and security issues, (5) an agency briefing on compliance with the Government Paperwork Elimination Act (GPEA), (6) and a discussion of DMCA issues. Location: GSA, 7th and D Streets, SW, 5700.
9:30 AM - 1:00 PM. The FCC will hold an auction seminar for Auction No. 46 applicants. This is for the 1670-1675 MHz band auction, scheduled for October 30, 2002. See, notice with registration form [PDF]. Registration starts at 9:30 AM. The seminar begins at 10:00 AM. Location: FCC, 445 12th Street, SW, Room 8-C245.
10:00 AM - 3:00 PM. The FCC's Technological Advisory Council will hold a meeting. See, notice in Federal Register. Location: FCC, 445 12th St., SW, Room TW-C305.
10:00 AM. The Senate Judiciary Committee will hold a hearings to examine pending judicial nominations. See, notice. Location: Room 226, Dirksen Building.
10:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold a hearing on HR 5119, the Plant Breeders Equity Act of 2002. Audio web cast. Location: Room 2141, Rayburn Building.
10:30 AM. The House Ways and Means Committee will meet to mark up two bills, one of which is HR __, the "Miscellaneous Trade and Technical Corrections Act of 2002." Location: Room 1100, Longworth Building.
12:15 PM. The FCBA's Transactional Practice Committee will host a brown bag lunch. The topic will be FBI and CFIUS issues that arise in telecommunications transactions. The scheduled speakers are Richard Salgado (FBI) and Gay Sills and Jack Dempsey (CFIUS). RSVP to wendy Location: FCC, 445 12th Street, SW, Room 8-B411.
1:00 PM. The House Judiciary Committee's Subcommittee on Immigration, Border Security, and Claims, and the House Ways and Means Committee's Subcommittee on Social Security will hold a joint oversight hearing titled "Preserving the Integrity of Social Security Numbers and Preventing Their Misuse by Terrorists and Identity Thieves". Location: Room 1100, Longworth Building.
2:00 PM. The House Government Reform Committee's Subcommittee on Technology and Procurement Policy will hold a hearing on S 803 and HR 2458, the E-Government Act of 2002. These are companion bills sponsored by Sen. Joe Lieberman (D-CT) and Rep. Jim Turner (D-TX). The Senate passed S 803 on June 27, 2002. The scheduled witnesses include Linda Koontz (GAO), Mark Forman (OMB), Pat McGinnis (Council for Excellence in Government), and Roger Baker (CACI). Press contact: David Marin, 225-1492.
6:00 - 8:00 PM. The FCBA will host a CLE seminar titled "The Wake-Up Call -- Telecommunications Policies One September Later". The scheduled speakers include Marsha MacBride (FCC Chief of Staff and Director of the FCC's Homeland Security Policy Council), Howard Waltzman (Counsel to House Commerce Committee), Owen Wormser (DOD Principal Director for Spectrum, Space, Sensors & C3), Mike Gallagher (NTIA), Jeffery Goldthorp (FCC Designated Federal Officer, Network Reliability and Interoperability Council). For more information contact Laura Phillips at 202 842-8891 or Lauren Van Wazer at 202 418-0030. RSVP to wendy Registrations and cancellations are due by 5:00 PM on September 16. Location: Sidley Austin, Conference Room 6-E, 1501 K Street NW.
TIME? The Trade Policy Staff Committee (TPSC) will hold a hearing on China's compliance with the commitments it made in connection with its accession to the World Trade Organization (WTO). See, U.S. Trade Representative (USTR) notice in the Federal Register.
Day one of a two day Homeland Security Technology Expo hosted by the Department of Commerce's Technology Administration and Bureau of Industry and Security. See, BIS notice. For more information contact Cheryl Mendonsa (202 482-8321). Location: DC Armory.
Deadline for the FCC to act on BellSouth's application to provide in region interLATA services in the states of Alabama, Kentucky, Mississippi, North Carolina, and South Carolina.
Thursday, September 19
The House will meet at 10:00 AM for legislative business.
8:00 AM. The U.S. Chamber of Commerce's National Chamber Litigation Center will host a press briefing on the upcoming term of the Supreme Court. Charles Cooper (Cooper & Kirk) and Carter Phillips (Sidley & Austin. A continental breakfast will be served. RSVP to 202 463-5337 or nclc Location: 1615 H Street, NW.
8:00 AM. Treasury Secretary Paul O'Neill will speak at the American Business Conference CEO's Fall Meeting. Location: Jefferson Hotel, 1200 16th Street, NW.
9:00 AM - 3:00 PM. Day three of a three day meeting of the Computer System Security and Privacy Advisory Board (CSSPAB).
9:00 AM - 5:30 PM. Subcommittees of the FCC's Public Safety National Coordination Committee will hold meetings. The Interoperability Subcommittee will meet at 9:00 - 11:30 AM. The Technology Subcommittee will meet at 12:30 - 3:00 PM. The will meet at 3:00 - 5:30 PM. Location: FCC, 445 12th Street, SW, Room TW-C305 (Commission Meeting Room).
10:00 AM. The Senate Judiciary Committee will hold a business meeting. See, notice. Location: Room 226, Dirksen Building.
10:00 AM. The Senate Commerce Committee will meet in executive session to mark up pending legislation. Location: Room 253, Russell Building.
10:00 AM. The Senate Banking Committee will hold a hearing on financial privacy and consumer protection. Mike Hatch (Atty. Gen. of Minnesota), William Sorrell (Atty. Gen. of Vermont), Jim Kasper (North Dakota House of Representatives), Phyllis Schlafly (Eagle Forum), Edmund Mierzwinski (USPIRG), Fred Cate (Indiana Univ. School of Law), and John Dugan (FSCC). Location: Room 538, Dirksen Building.
11:00 AM. The Cato Institute will host a panel discussion titled "Copy Fights: Can Politicians or Entrepreneurs Best Protect Intellectual Property?" The scheduled speakers are Rep. Howard Berman (D-CA), Gigi Sohn (Public Knowledge), Phil Corwin (Butera & Andrews), Troy Dow (MPAA), Ed Black (CCIA), and James Miller (Smith College). Lunch will follow the program. See, notice. Location: Cato Institute, 1000 Massachusetts Avenue, NW.
12:00 NOON. The Progress and Freedom Foundation (PFF) will host a luncheon panel discussion titled "The Future of Telecom". The participants will be Ivan Seidenberg (Verizon), Randolph May (PFF), Scott Cleland (Precursor Group), Blair Levin (Legg Mason), and Brett Swanson (Gilder Technology Report). To register, contact Rebecca Fuller at rfuller or 202 289-8928. Location: Ronald Reagan Building, Pavilion Room, 1300 Pennsylvania Ave., NW.
2:00 PM. The Senate Judiciary Committee's Antitrust Subcommittee will hold an oversight hearing on enforcement of the antitrust laws. Sen. Herb Kohl (D-WI) will preside. See, notice. Location: Room 226, Dirksen Building.
4:00 PM. Michael Birnhack (Professor at the University of Haifa Faculty of Law) will give a lecture titled "The Denial of the Copyright Law / First Amendment Conflict" as a part of the George Washington University Law School Intellectual Property Workshop Series. For more information, contact Prof. Robert Brauneis at 202 994-6138. Location: Faculty Conference Center, 5th Floor Burns, 716 20th Street, NW.
6:00 - 8:00 PM. The FCBA's Young Lawyers Committee will host a Career Night for law students and new attorneys. FCC Commissioner Kevin Martin will participate. For more information, contact Yaron Dori at 202 637-5600 or ydori or Ryan Wallach at 202 429-4759 or rwallach RSVP to Wendy Location: Hogan & Hartson, 555 13th Street, NW.
Day two of a two day Homeland Security Technology Expo hosted by the Department of Commerce's (DOC) Technology Administration and Bureau of Industry and Security (BIS). See, BIS notice. For more information contact Cheryl Mendonsa (202 482-8321). Location: D.C. Armory.
President Bush is scheduled to release a document that states a national strategy for cyber security.
Friday, September 20
The House will not be in session.
8:30 - 10:00 AM. Harold Furchtgott Roth and Gregory Sidak of the American Enterprise Institute (AEI) will host a press breakfast titled "Is the FCC Moving Too Slowly?". The AEI states that this is a "media only" event. RSVP Veronique Rodman at vrodman or call Heather Dresser at 202 862-5884. Location: AEI, 11th Floor Conference Room, 1150 17th Street, NW.
9:30 AM - 12:30 PM. The FCC's Public Safety National Coordination Committee will meet. See, notice in Federal Register. Location: FCC, 445 12th Street, SW.
Tuesday, September 24
11:00 AM. The Cato Institute will host a policy forum titled "Digital Pearl Harbor: How Real Is the Cybersecurity Threat, and Who's Responsible Anyway?" The scheduled speakers include Howard Schmidt (Federal Office of Cybersecurity), Ken Silva (Verisign), Ira Parker (Genuity), and Scott Charney (Microsoft). See, notice and online registration page. Lunch will follow the program. Location: Cato, 1000 Massachusetts Ave., NW.
12:15 PM. The FCBA's Young Lawyers Committee will host a brown bag lunch to "discuss FCC's recent order mandating that consumer electronics manufacturers install digital television tuners in almost all new TVs, as well as TV interface devices such as VCRs". The scheduled speakers are Lynn Claudy (NAB), Michael Petricone (CEA), and Valerie Schulte (NAB). RSVP to Ryan Wallach at rwallach Location: Willkie Farr & Gallagher, 1875 K Street, NW.
CLOSED TO THE PUBLIC. 5:30 PM. Meeting of a legislative executive working group on the Foreign Sales Corporation (FSC) and Extraterritorial Income Exclusion Act (ETI) issue. Location: Room 211, Dirksen Building.
Deadline to submit opposition comments to the Copyright Office (CO) regarding the motion for stay filed by various broadcasters of the CO's final rule that provides that transmissions of a broadcast signal over a digital communications network are not exempt from copyright liability under 17 U.S.C. 114(d)(1)(A). See, notice in the Federal Register.