Tech Law Journal Daily E-Mail Alert
September 19, 2002, 9:00 AM ET, Alert No. 512.
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FCC Commissioner Addresses Government Role in Broadband Deployment
9/18. Federal Communications Commission (FCC) Commissioner Kevin Martin gave the opening address at a half day conference hosted by the Alliance for Public Technology (APT) and the High Tech Broadband Coalition (HTBC) titled "From Debate to Deployment: Making Broadband Competition Work for All Americans".
Martin stated that broadband deployment will spur economic growth and provide the benefits of distance learning, public safety and emergency response, telemedicine, and rural medicine. He advocated moving quickly on pending broadband related proceedings, promoting facilities based competition, and removing financial and regulatory obstacles to broadband deployment.
Martin outlined four principles. (Martin also discussed these principles in a speech on October 26, 2001, titled "Framework for Broadband Deployment".) First, the government should establish a "stable, reliable and fast regulatory environment".
He stated that "Broad proceedings that remain pending for extended periods will contribute to uncertainty. More protracted uncertainty can prolong financial difficulty. Regulatory uncertainty and delay can function as entry barriers" and limit investment, thereby "impeding deployment of new services".
He said that "I believe that it is time for the Commission to take action on these various proceeding involving broadband competition, including the UNE triennial, performance measures, and the broadband proceedings that are currently before us." He elaborated that the FCC should act first on the UNE triennial, and that it should act this year.
Martin's second principle is that "the Commission needs to focus more on facilities based competition."
"In the past, the Commission has adopted a framework that may have discouraged facilities based competition by allowing competitors to use every piece of an incumbent's network at super efficient prices," said Martin. "Under such a regime, new entrants have little incentive to build out facilities, since they can use the incumbent's cheaper and more quickly. And incumbents have less incentives to build new facilities, since they must share them with their competitors at regulated prices."
Martin's third principle is that governments should reduce the financial burden they impose on broadband. He state that "Currently, at every level of government, we often, we too often see broadband deployment and telecommunications as a potential revenue stream."
Martin (at right) continued that "from federal and state excise taxes, the kind of taxes that have traditionally been reserved for decreasing demand for certain products, such as alcohol and tobacco, to local franchise fees, which are sometimes designed to recoup more than the cost that the government bears for allowing services to be deployed, such as repairing streets, governments impose taxes that actually discourage demand, and therefore discourage the deployment of broadband telecommunications services."
He also stated that "I do not support the FCC's proposal to extend universal service contribution obligations to the providers of broadband Internet access. In my view, the contribution requirement ... would be essentially an Internet access tax that represents an unnecessary financial burden on such Internet service providers and actually creates a barrier to broadband deployment."
Martin's fourth principle is that governments should remove regulatory barriers to broadband deployment. He stated that "For competitive carriers, many of these regulatory hurdles occur at the state and local level. These include local rights of ways, permits for zoning and tower citing".
Martin also briefly touched on various proposals for Congressional legislation. He said that "There are several different legislative proposals for providing direct and indirect financial incentives for broadband deployment." He said that "more targeted relief" such as "reform and modernization of depreciation schedules can actually help spur deployment." However, he concluded that "even more important than providing direct relief right now, I believe the government should first commit itself to exercising self restraint by placing additional financial burdens on broadband."
In responses to questions from the audience, he further elaborated the FCC's UNE remand proceeding. He does not know if the FCC will file a petition for writ of certiorari from the U.S. Court of Appeals (DCCir). He hopes that the FCC will act this year. He also addressed universal service.
Afterwards Martin spoke with reporters outside the conference room. He discussed primary video, must carry, the FCC's likely timing in the UNE remand and broadband related proceedings, and E-911.
Editor's Note: TLJ transcribed extended excerpts from Martin's speech, responses to questions from the audience, and responses to questions from reporters outside the event. The transcription was made from TLJ's audio recording of the event. The quality of the audio recording was poor, and Commissioner Martin spoke over a noisy breakfast audience. Hence, this transcript includes many omissions, and is certain to contain errors. For whatever it may be worth, the transcript is in the TLJ web site.
More News
9/18. The Treasury Department released its notice [39 pages in PDF] to be published in the Federal Register which contains and explains its final rule regarding information sharing among financial institutions and federal government law enforcement agencies. The USA PATRIOT Act, at Section 314, required the Treasury Department to promulgate regulations "to encourage further cooperation among financial institutions, their regulatory authorities, and law enforcement authorities, with the specific purpose of encouraging regulatory authorities and law enforcement authorities to share with financial institutions information regarding individuals, entities, and organizations engaged in or reasonably suspected based on credible evidence of engaging in terrorist acts or money laundering activities."
9/18. The Federal Communications Commission (FCC) released its Notice of Proposed Rulemaking and Memorandum Opinion and Order [50 pages in PDF] pertaining to telemarketing rules. The FCC announced, but did not release, this NPRM and MOO at its September 12 meeting.
9/18. Brown University's Taubman Center for Public Policy released a study [27 pages in PDF] of 1,265 state and federal websites. It ranked a select group of 59 federal web sites. The Federal Communications Commission's (FCC) web site was ranked first. The Commerce Department web site was rated eleventh. The White House was rated thirteenth. The Federal Trade Commission (FTC) was  nineteenth, and the Department of Justice (DOJ) was twentieth. The thirteen judicial branch web sites rated by the study received the thirteen lowest rankings. See, FCC release [PDF].
FCC Approves BellSouth Long Distance Application
9/18. The FCC approved BellSouth's application under Section 271 to provide in region interLATA services in the states of Alabama, Kentucky, Mississippi, North Carolina, and South Carolina.
BellSouth Ch/CEO Duane Ackerman stated in a release that "The approval of this application by the FCC, the first approval of five states at one time, proves that BellSouth is in compliance with the Telecom Act of 1996, that our markets are open to local competition, and that millions of additional customers in our operating region will now experience the benefits of increased competition for long-distance services". He added that "We will be in the marketplace in these five states on September 27 with the competitive long distance offers and packages our customers want." Ackerman is also scheduled to speak at a Federal Communications Bar Association (FCBA) luncheon in Washington DC on Thursday, September 26.
The FCC approved BellSouth's Section 271 application for Georgia and Louisiana in May of this year. The FCC's docket number for this five state application is WC 02-150. For more information, contact Aaron Goldberger of the FCC's Wireline Competition Bureau at 202 418-1591.
FCC Releases Order With Competition Analysis of Radio Ownership
9/18. The Federal Communications Commission (FCC) released a Hearing Designation Order [18 pages in PDF] in its proceeding on the application to assign the license of radio station WAAM(AM), in Ann Arbor, Michigan, from Whitehall Enterprises to Clear Channel.
While the license involved in this proceeding (MB Docket No. 02-284) is not significant, the order includes the FCC's interim public interest analysis, and competition analysis, in a subject that is currently the subject of several pending Notice of Proposed Rulemaking (NPRM) proceedings.
The FCC order states that "we are unable to make the required finding that the public interest, convenience and necessity will be served by granting the subject application in light of the questions raised in the context of our competition analysis." Accordingly, the FCC assigned this matter for a hearing.
SEC Official Addresses Smart Routing Technologies
9/17. Lori Richards, Director of the Securities and Exchange Commission's (SEC) Office of Compliance Inspections and Examinations gave a speech titled "Key Issues in SEC Examinations of Broker Dealers". She discussed a wide range of issues, including sales practices, supervision, internal controls, money laundering, the IPO process, and analysts' conflicts of interest. She also touched on smart routing technologies, and identity theft.
She stated that "We are continuing to focus on execution practices of broker dealers and advisers. ... Now retail order routing firms have a new tool to measure and monitor execution quality -- all firms should be using the new market quality data required to be provided by market centers under Rule 11Ac1-5."
"Order routing decisions must be made based on the ability to get the best possible execution, not on order routing inducements," said Richards.
She continued that "Many firms are using ``smart routing technology““ that allows them to instantaneously route individual customer orders to the market posting the best price or best size (or both), with algorithyms that also factor in past fill rates and price improvement rates. Certainly, ``smart routers““ go a long way to ensuring that customers are getting the best possible price at any given moment during the trading day." (Parentheses in original.)
She also addressed identity theft. "Regulation S-P requires that firms have adequate safeguards to protect customer information from unauthorized access or use. As such, we are currently conducting a sweep of broker-dealers and investment company complexes to evaluate their policies and procedures for protecting customer records and information from people seeking to commit identity theft frauds."
Richards spoke to the Legal and Compliance Division of the Securities Industry Association at the Union League Club in New York, NY.
People and Appointments
9/18. Scott Taub was named Deputy Chief Accountant of the Securities and Exchange Commission (SEC). He previously worked in Andersen's Professional Standards Group in Chicago, Illinois. See, SEC release.
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Notices & Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All rights reserved.
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. 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). 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.
9:00 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, Commission Meeting Room.
9:15 AM. The House Commerce Committee's Subcommittee on Oversight and Investigations will hold a business meeting to consider a resolution authorizing the Chairman of the full Committee to issue subpoenas in connection with the Committee's investigation into Global Crossing, Qwest and related entities. Rep. James Greenwood (R-PA) will preside. See, notice. Location: Room 2322, Rayburn Building.
10:00 AM. The Senate Judiciary Committee will hold a business meeting. The agenda includes votes on confirmation of three judicial nominees: Dennis Shedd (to be a judge of the U.S. Court of Appeals for the 4th Circuit), Ronald Clark (U.S.D.C., E.D. Texas), and Lawrence Block (U.S. Court of Federal Claims). See, notice. Press contact: Mimi Devlin at 202 224-9437. Location: Room 226, Dirksen Building.
10:00 AM. The Senate Commerce Committee will meet in executive session to mark up pending legislation. The agenda includes the Wyden Allen Lieberman nanotechnology bill. Location: Room 253, Russell Building.
10:00 AM. The Senate Banking Committee will hold a hearing on financial privacy and consumer protection. The scheduled witnesses are 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.
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.
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, 1000 Massachusetts Ave., 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.
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 Senate Judiciary Committee's Antitrust Subcommittee will hold a hearing on enforcement of antitrust laws. Charles James (Asst. Atty. Gen., Antitrust Div.) and Timothy Muris (FTC Chairman) will testify. 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 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.
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
9:00 AM. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection will hold a hearing on HR 4678, the Consumer Privacy Protection Act of 2002, sponsored by Rep. Cliff Stearns (R-FL). Web cast. Location: Room 2322, Rayburn Building.
10:00 AM. The House Commerce Committee's Subcommittee on Oversight and Investigations will hold a hearing titled "Capacity Swaps by Global Crossing and Qwest: Sham Transactions Designed to Boost Revenues?" See, notice. Web cast. Press contact: Ken Johnson or Arturo Silva at 202 225-5735. Location: Room 2123, Rayburn Building.
10:00 AM. The Senate Judiciary Committee's Subcommittee on Judiciary Administrative Oversight and the Courts will hold a hearing on "the Washington, D.C. judicial circuit". Location: Room 226, Dirksen Building.
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. 
Wednesday, September 25
10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing on the transition to digital television. Web cast. Location: Room 2123, Rayburn Building.