|Rep. Sensenbrenner Introduces
Bill to Delay Webcasting Royalty Rule
Rep. James Sensenbrenner (R-WI) introduced HR 5469, the Relief
for Small Business Webcasters Act, a bill that would delay for six
month the October royalty payment deadline pertaining to the
webcasting of radio broadcasts. The Librarian of Congress released
his webcasting rule in June. It is currently under review by the
U.S. Court of Appeals (DCCir).
On June 20, 2002, the Librarian of Congress issued his
providing the terms for the statutory license for eligible
nonsubscription services to perform sound recordings publicly by
means of digital audio transmissions, also known as webcasting,
17 U.S.C. § 114, and to make ephemeral recordings of sound
recordings for use of sound recordings under the statutory license
set forth in
17 U.S.C. §
The Librarian followed the recommendations of the Register of
Copyrights, rather than the CARP. The Librarian also released a
summary stating that he "has accepted the recommendation of the
Register of Copyrights and rejected the rates and terms recommended
by a Copyright
Arbitration Royalty Panel (CARP) ... The most significant
difference between the CARP's determination and the Librarian’s
decision is that the Librarian has abandoned the CARP's two tiered
rate structure of 0.14¢ per performance for ``Internet only´´
transmissions and 0.07¢ for each retransmission of a performance in
an AM/FM radio broadcast, and has decided that the rate of 0.07¢
will apply to both types of transmission."
Webcasters have complained that the rates set in June are too
burdensome. Broadcasters have argued that the royalty rates should
be even higher.
Rep. Rick Boucher
(D-VA) praised Rep. Sensenbrenner. He stated that "I want to commend
the Chairman for taking this important step in averting the
detrimental effects of the October 20th payment deadline. For
thousands of Internet radio providers who are providing diverse
musical programming to consumers via the Internet, the tortured
webcasting CARP proceeding made real many of the obstacles in
copyright law I have been actively trying to remedy. This is a
necessary measure at this time for saving from certain shutdown
thousands of small businesses and Internet radio webcasters who
legally offer music listening services. I applaud the Chairman's
introduction of this measure and urge my colleagues in the House and
the Senate to act quickly and support this measure -- before
Internet radio providers must pay a highly disputed retroactive
|More New Bills
|9/25. Rep. Judy Biggert
(R-IL), Rep. Carolyn Maloney
(D-NY), and others, introduced HR 5457, a bill to amend the Gramm
Leach Bliley Act to exempt attorneys from the privacy provisions of
that Act. The bill was referred to the House Committee on Financial
9/25. Sen. Tim Johnson (D-SD) introduced S 3006, a bill
pertaining to Internet gambling. It was referred to the
|People and Appointments
|9/24. Verizon named
Kathryn Brown SVP for Public Policy Development and
International Government Relations. She is currently a partner in
the law firm of Wilmer Cutler &
Pickering. She was previously Chief of Staff of the
Federal Communications Commission
(FCC) and Chief of the FCC's Common Carrier Bureau during the
chairmanship of William Kennard. She will start at Verizon on
|9/26. Duane Ackerman, CEO of
BellSouth, gave a luncheon speech to the
Federal Communications Bar
Association (FCBA). See,
9/26. The General Accounting Office
(GAO) released a
report [147 pages in PDF] titled "Federal Trade Commission:
Study Needed to Assess the Effects of Recent Divestitures on
Competition in Retail Markets".
9/26. Securities and Exchange
Commission (SEC) Chairman
gave a speech
at a Department of Justice (DOJ) Corporate Fraud Conference in which
he discussed SEC enforcement actions and DOJ criminal prosecutions.
He referenced matters pertaining to WorldCom, Xerox, and
9/24. Kevin Clark, a former VP of Sales at Critical Path, plead
guilty in U.S. District
Court (NDCal) to insider trading in violation of 15 U.S.C. §
78j(b), 15 U.S.C. § 78ff(a), and 17 CFR 240.10b-5. See,
9/26. The Securities and Exchange
Commission (SEC) filed a civil
U.S. District Court (SDNY) against David Myers, a former
Controller and SVP of WorldCom,
alleging that he participated in a fraud that inflated the company's
earnings at the direction and with the knowledge of WorldCom's
senior management. The complaint alleges 10(b) fraud, 17(a) fraud,
13(b) books and records and internal controls violations, and 13(a)
reporting violations. See also,
release. The SEC also announced that Myers plead guilty to the
criminal charges filed by the U.S. Attorney's Office for the
Southern District of New York.
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|House Subcommittee Holds
Hearing on State Impediments to E-Commerce
|9/26. The House
Commerce Committee's Subcommittee on Commerce, Trade and
Consumer Protection held a hearing titled "State Impediments to
E-Commerce: Consumer Protection or Veiled Protectionism?" The
Subcommittee focused on three specific areas of e-commerce
regulation: contact lenses, wine sales, and auctions.
Rep. Cliff Stearns
(R-FL), the Chairman of the Subcommittee, presided. He stated that
"It is essential that the growth of e-commerce is not stymied by
laws and or regulation that were enacted or promulgated before the
full scope of e-commerce was understood. Many of those state laws
and regulations did and may still have important consumer protection
objectives. However, it is imperative for the states to examine
their laws and regulations that were intended to provide consumer
protection but now hinder e-commerce."
hearing from the panel of witnesses, Rep. Stearns (at right) stated
that Congress should consider "preemption of state laws". Rep.
Stearns is the sponsor of
HR 2421, the Jurisdictional Certainty Over Digital Commerce Act.
It would provide that "No State or political subdivision thereof may
enact or enforce any law, rule, regulation, standard, or other
provision having the force or effect of law that regulates, or has
the effect of regulating, digital commercial transactions."
Rep. Charles Bass (R-NH)
suggested that the Internet is inherently interstate, and hence,
Congress is the only entity capable of regulating it.
Rep. Billy Tauzin
(R-LA), the Chairman of the full Committee, did not participate in
the hearing. However, he submitted a
statement for the record in which he said that "We certainly
must determine what kind of new consumer protections are needed for
this digital economy. An example of this is the debate occurring in
this Subcommittee over the issue of information privacy. We also
must recognize that some consumer protections enacted long ago are
not applicable for this new medium. Many laws on the books were
designed under different circumstances for vastly different
purposes, and can now threaten the development of e-commerce, with
minimal or no offsetting benefit to consumers."
Rep. Edolphus Towns
(D-NY), the ranking Democrat on the Subcommittee, spoke in support
of state regulators. He first questioned why there were no
representatives of states on the witness panel. (Rep. Stearns
responded that many had been invited, but all refused to come.) Rep.
Towns also questioned whether it is appropriate to sell contact
lenses over the Internet.
Rep. Towns also spoke generally about Internet access and
e-commerce. He said that "the digital divide is real", and that
therefore "many people do not have the opportunity to participate in
e-commerce". Rep. Towns was the only Democrat on the Subcommittee to
participate in the hearing.
Tod Cohen of the auction website eBay said in his
prepared statement that "sellers on eBay must charge prices that
are competitive not just with other eBay sellers, but also with
other on and offline retailers. Similarly, retailers in the
traditional ``brick and mortar´´ world can no longer base their
prices merely on what their local market dictates -- they must now
consider the price that consumers will pay on eBay and at other
Cohen said that "Such price competition is great for consumers,
but troubling to the entrenched monopolists and oligopolists that
have been able to set prices unfairly for years without
repercussion. E-commerce forces them to face an unpleasant prospect:
competition. In order to prevent or ``manage´´ competition,
these ``middlemen´´ have used their allies in state and local
government to apply existing laws and regulations to Internet
companies in a discriminatory manner and to enact laws and
regulations that treat interstate e-commerce companies differently
from offline intrastate companies. They justify these new,
discriminatory barriers with spurious claims that e-commerce may
harm consumers. Far too often, though, these claims simply seek to
mask the fact that the middlemen are just trying to protect their
Rob Atkinson of the
Progressive Policy Institute (PPI) presented the findings of a
PPI study titled "Revenge
of the Disintermediated: How the Middleman is Fighting E-Commerce
and Hurting American Consumers". He stated in his
prepared statement that "incumbent producers in a wide range of
industries, including wine and beer wholesalers, auto dealers,
travel agents, pharmacies, mortgage brokers, and others, are
fighting against robust e-commerce competitors. The growth of laws
and regulations many at the state level, that protect incumbent
``bricks and mortar´´ companies from e-commerce competitors is a
major threat to the growth of e-commerce."
David Sloane of the American Vintners Association presented the
case that many states' liquor laws constitute economic protectionism
which is harming small wineries and consumers. See,
Rep. George Radanovich
(R-CA) is both a member of the Subcommittee, and the owner of a
small winery in California. He said that within California, where
wine may be sold over the Internet, "there is no sign of abuse" by
Joe Zeidner of 1-800- CONTACTS argued the case against state
regulation of the sale of contact lenses over the Internet. See,
Ed Cruz, Director of the Federal
Trade Commission's (FTC) Office of Policy Planning, also
testified. He presented the
prepared statement of the FTC.
Cruz addressed, among other things, the FTC's prior action with
respect to contact lenses. On March 27, 2002, the FTC filed a
comment with the
State of Connecticut regarding the sale of disposable replacement
contact lenses over the Internet. The FTC wrote that "requiring
stand alone sellers of replacement contact lenses to obtain
Connecticut optician and optical establishment licenses would likely
increase consumer costs while producing no offsetting health
benefits" and "serve as a barrier to the expansion of Internet
commerce". See also, story titled "FTC Backs Internet Sales of
Contact Lenses" in
Daily E-Mail Alert No. 399, March 29, 2002.
The FTC will conduct its own three day workshop on October 8-10
on certain types of regulatory barriers to e-commerce. See,
|Greenspan Addresses Computing,
Communications, and Financial Services
|9/26. Federal Reserve
Greenspan traveled to London to receive an honorary knighthood
from the Queen. He gave several speeches on September 25 in which he
reflected upon, among other things, the impact of new computing and
communications technologies on financial services, institutions,
globalization, and regulation.
Greenspan stated in a
speech titled "Regulation, Innovation, and Wealth Creation" to
the Society of Business Economists (SBE) in London that "we can see
on the horizon vast new means of communicating and computing,
practical applications of advances in biotechnology, and doubtless
many other innovations."
added, "a half century from now, the goods and services that we
produce and consume will, to a significant extent, reflect
applications of insights not yet formed or even imagined. Could the
residents of sophisticated eighteenth century London, prior to Sir
William Herschel's demonstration of invisible radiation, even
contemplate the existence of radio waves that would reach around the
world? I still have trouble grasping how the shortwave transmissions
of the BBC travel thousands of miles to find their way to my bedroom
at night to be picked up by my transistor shortwave radio."
Greenspan stated in a
speech titled "World Finance and Risk Management" at Lancaster
House in London that "Financial derivatives, more generally, have
grown at a phenomenal pace over the past fifteen years. Conceptual
advances in pricing options and other complex financial products,
along with improvements in computer and telecommunications
technologies, have significantly lowered the costs of, and expanded
the opportunities for, hedging risks that were not readily deflected
in earlier decades."
Greenspan also said in his SBE speech that "Owing to persistent
advances in information and computing technologies, the structure of
our financial institutions is continuously changing, I trust for the
better. But that evolution in financial structure has also meant
that supervision and regulation must be continually changing in
order to respond adequately to these developments. In today's
markets, for example, there is an increased reliance on private
counterparty surveillance as the primary means of financial control.
Governments supplement private surveillance when they judge that
market imperfections could lead to sub-optimal economic
Greenspan also discussed the impact of telecommunications on the
fixed location of financial centers. He said in a
speech titled "Policy Coordination" at the opening of the new HM
Treasury Building in London that the "telecommunications revolution,
which presumably should diminish the need for physical proximity to
conduct financial transactions", presents a challenge to cities like
London. He added that "If traders can congregate almost anywhere
electronically, we might expect traditional patterns of exchange to
be dispersed. However, history, together with London's long, should
I say sterling, reputation as a place to do business, seems to have
spurred market participants to continue to trade through London."
Greenspan also discussed the close relationship between the U.S.
and Britain. For example, he stated that we "share a more enduring
bond between our peoples", even though "We had a few differences
with George III". He was awarded the title of
Knight of the
British Empire at a ceremony on September 26 in
Balmoral Castle. See
also, Ask Yahoo on "How
exactly does one get knighted?"
|Friday, September 27
|The House will not meet.
7:30 - 9:30 AM. The U.S.
Chamber of Commerce will host a breakfast and panel discussion
for technology professionals titled "Partnering Insights for
Challenging Times". The scheduled speakers are Patrick Sweeney (ServerVault),
Shane Oleson (Keymind division of
Resources Management), Tim Grimes (Siemens
Enterprise Networks), and Val Sriban (META
registration page. The price to attend is $35 for the general
public, and $25 for members of Partnerpoint, the U.S. Chamber, and
co-sponsoring organizations. Location: U.S. Chamber of Commerce,
1615 H Street, NW.
9:00 - 11:00 AM. The
Research Council will host a panel discussion titled "A WorldCom
Phoenix: Is Bankruptcy a Tool for Competitive Advantage?" See,
release. Location: National
Press Club, Zenger Room, 529 14th St. NW, 13th Floor.
1:30 - 4:00 PM. The Federal
Accounting Standards Advisory Board's (FASAB) Accounting and
Auditing Policy Committee will meet to discuss issues related
inter-entity costs, the Credit Reform Task Force, and other matters.
notice in Federal Register. Location: Room 2N30, GAO Building,
441 G. Street, NW.
3:00 PM. Phil Bond (Under Secretary of Commerce for Technology
and Chief of Staff to Secretary Don Evans) will host a media
availability regarding the Summit on the Use of Advanced
Technologies in Education and Training at the Department of Commerce
release. Location: Room 4813, DOC, 14th and Constitution Ave.,
Deadline to submit reply comments to the
FCC regarding WorldCom's
August 8, 2002, petition for declaratory ruling pursuant to 47 C.F.R.
§ 1.2, that requesting carriers are entitled to access ILEC Line
Information Database data at cost based rates when they use such
data to provide interexchange and exchange access service. This is
CC Docket No. 01-338. See,
FCC notice [PDF].
Deadline to submit reply 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. §
notice in the Federal Register.
|Monday, September 30
|9:00 AM - 4:30 PM. The
of Advisors on Science and Technology (PCAST) will hold an open
meeting. The agenda includes: the science and technology of
combating terrorism, federal investment in science and technology
research and development, and "demand issues that can speed the
deployment of a 21st Century broadband infrastructure". See,
notice in the Federal Register for pre-clearance requirements
and other information. Location: Loy Henderson Conference Room,
Department of State, 2201 C St., NW. Guests must use the 23rd Street
Third of three deadlines to submit proposals to the
NIST for FY 2002 Advanced
Technology Program (ATP) funds. See,
notice in Federal Register.
Deadline to submit comments to the
FCC in response to it
Public Notice [7 pages in PDF] regarding relief for the Auction
No. 35 winners. The FCC asks for public comments regarding two
possible scenarios for providing relief to the winning bidders in
the January 2001 re-auction of spectrum previously auctioned to
NextWave: full refund and option to dismiss all pending
applications, and selective opt out for pending applications.
Deadline to submit comments and Notices of Intention to
Participate to the Copyright
Office "royalty fees collected for calendar year 2000 under the
section 111 cable statutory license". The CO seeks comments "as to
whether a Phase I or Phase II controversy exists as to the
distribution of those fees, and a Notice of Intention to Participate
in a royalty distribution proceeding." See,
notice in the Federal Register.
Deadline to submit comments and proposals to the
Copyright Office (CO)
regarding data format and delivery for record keeping requirements
to be established by the CO for the Section
statutory licenses. See,
notice [8 pages in PDF].
|Tuesday, October 1
|9:30 AM. The Senate
Commerce Committee will hold a hearings to examine the
government's role in promoting the future of the telecommunications
industry and broadband deployment. Location: Room 253,
10:00 AM. The House
Commerce Committee's Subcommittee on Telecommunications and the
Internet will hold a hearing titled "Recording Industry Marketing
Practices: A Check-Up". Location: Room 2123, Rayburn Building.
10:00 AM. The Senate
Judiciary Committee will hold a hearing to examine "recent
Supreme Court jurisprudence on federalism issues". The Committee has
not yet released an agenda or witness list. Nevertheless, the scope
of the hearing could include the 1996 ruling in
Seminole Tribe v. Florida that the Congress lacks authority
under Article I of the Constitution to abrogate the States' 11th
Amendment immunity from suit in federal courts. The Supreme Court
extended this to the context of intellectual property in the 1999
Florida Prepaid v. College Savings Bank (invalidating the Patent
and Plant Variety Protection Remedy Clarification Act) and
College Savings Bank v. Florida Prepaid (invalidating the
Trademark Remedy Clarification Act).
Sen. Patrick Leahy (D-VT) and
others have introduced
S 2031, the Intellectual Property Protection Restoration Act of
2002, to stop states from evading liability for infringing
intellectual property rights by asserting 11th Amendment immunity.
Location: Room 226, Dirksen Building.
12:30 PM. U.S. Trade
Representative (USTR) Robert Zoellick will give a luncheon
address. Location: National Press
Club, Ballroom, 529 14th St. NW, 13th Floor.
|Wednesday, October 2
|10:00 AM. The Senate
Judiciary Committee will hold a hearing regarding "protecting
children from child pormography". Location: Room 226, Dirksen
1:30 - 3:30 PM. The
FCC's WRC-03 Advisory Committee Informal Working Group 7:
Regulatory Issues and Future Agendas will meet. Location: Boeing
Company, Arlington, VA.
|Thursday, October 3
|10:00 AM - 12:00 NOON. The AEI Brookings Joint Center will host
an event titled "High Stakes Antitrust: The Clinton Legacy".
Location: Stein Room,
Brookings Institution, 1775 Massachusetts Ave., NW.
1:00 - 3:00 PM. The FCC's
Office of Engineering and Technology will host a tutorial titled
"Free Space Optical Communications". FSO is the practice of
transmitting information, or data by means of modulated beams of
light through the atmosphere, rather than through fiber optical
cables. John Schuster, CTO of
Terabeam Corporation, will speak. See,
notice [PDF]. Location: FCC, Commission Meeting Room, 445 12th
The George Mason University (GMU) Tech Center and the Federalist
Society will host a one day conference on cyber crime.
Registration is free, except for persons seeking CLE credit, who
must pay $50. A continental breakfast and buffet lunch will be
Location: GMU School of Law, 3301 Fairfax Drive, Arlington, VA.
|Friday, October 4
|Target adjournment date for the House and the Senate.
9:30 AM. The U.S. Court
of Appeals (DCCir) will hear oral argument in Seven Company
Services, Inc. v. FCC, No. 01-1326. This is a petition for
review of a final order of the
47 U.S.C. §
224 (Section 703 of the 1996 Act) and rates, terms and
conditions of access for attachments by cable operators and
telecommunications carriers to utility poles, ducts, conduits and
rights of way. See, FCC order [78 pages in PDF in three parts:
3] titled "Consolidated Partial Order on Reconsideration",
released on May 25, 2001. This in the proceedings titled "In the
Matter of the Commission's Rules and Policies Concerning Pole
Attachments" (CS Docket No. 97-98), and "In the Matter of the
Implementation of Section 703(e) of the Telecommunications Act of
1996" (CS Docket No. 97-151). Judges Edwards, Rogers and Garland
will preside. Location: 333 Constitution Ave., NW.
12:15 PM. The
FCBA's Wireless Committee will host a luncheon titled "Wireless
Industry Consolidation: Is It Needed? Will It Happen?" The
scheduled speakers are Chris Murphy (Consumers
Union), Rudy Baca (Precursor
Group), and Lauren Patrich (FCC Commercial Wireless Division).
The price to attend is $15. RSVP to
firstname.lastname@example.org. Registrations and cancellations due by 5:00 PM
on October 1. Location:
Sidley Austin, 1501 K Street, NW, Conference Room 6E.