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October 31, 2002, 9:00 AM ET, Alert No. 539.
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Powell Address Spectrum Policy
10/30. Federal Communications Commission (FCC) Chairman Michael Powell gave a speech titled "Broadband Migration III: New Directions in Wireless Policy". He spoke to the Silicon Flatirons Telecommunications Program at the University of Colorado at Boulder. Powell described the speech as "my thoughts about the next generation of spectrum policy".

Powell (at right) stated that consumers "deserve a new spectrum policy paradigm that is rooted in modern day technologies and markets. We are living in a world where demand for spectrum is driven by an explosion of wireless technology and the ever increasing popularity of wireless services."

"Nevertheless," he continued, "we are still living under a spectrum ``management创 regime that is 90 years old. It needs a hard look, and in my opinion, a new direction. Historically, I believe there have been four core assumptions underlying spectrum policy: (1) unregulated radio interference will lead to chaos; (2) spectrum is scarce; (3) government command and control of the scarce spectrum resource is the only way chaos can be avoided; and (4) the public interest centers on government choosing the highest and best use of the spectrum."

"Today抯 environment has strained these assumptions to the breaking point. Modern technology has fundamentally changed the nature and extent of spectrum use. So the real question is, how do we fundamentally alter our spectrum policy to adapt to this reality? The good news is that while the proliferation of technology strains the old paradigm, it is also technology that will ultimately free spectrum from its former shackles", said Powell.

Interference. Powell stated that "I believe the Commission should continuously examine whether there are market or technological solutions that can -- in the long run -- replace or supplement pure regulatory solutions to interference."

"Due to the complexity of interference issues and the RF environment, interference protection solutions may be largely technology driven." For example, he stated that "interference is not solely ``caused创 by transmitters, which many seem to assume -- and on which our regulations are almost exclusively based. Instead, interference is often more a product of receivers; that is receivers are too dumb or too sensitive or too cheap to filter out unwanted signals. Yet, our decades old rules have generally ignored receivers."

He recommended that "The time has come to consider an entirely new paradigm for interference protection. A more forward looking approach requires that there be a clear quantitative application of what is acceptable interference for both license holders and the devices that can cause interference. Transmitters would be required to ensure that the interference level -- or ``interference temperature创 -- is not exceeded. Receivers would be required to tolerate an interference level."

Scarcity. Powell stated that "Much of the Commission's spectrum policy was driven by the assumption of acute spectral scarcity -- the assumption that there is never enough for those who want it. Under this view, spectrum is so scarce that government rather than market forces must determine who gets to use the spectrum and for what. The spectrum scarcity argument shaped the Supreme Court's Red Lion decision, which gave the Commission broad discretion to regulate broadcast media on the premise that spectrum is a unique and scarce resource." See, Red Lion v. FCC, 395 U.S. 367 (1969).

Powell said that "the presumptions of Red Lion and similar broadcasting regulation based on scarcity have been called into doubt by the proliferation of media sources", and that "we question the continued utility of the pervasive scarcity assumption for spectrum based services". He added that recent studies by the FCC's Enforcement Bureau have shown that " most of spectrum is not in use most of the time".

He added that "innovative technologies like software defined radio and adaptive transmitters can bring additional spectrum into the pool of spectrum available for use. Scarcity will not be replaced by abundance; there will still be places and times when services are spectrum constrained. However, scarcity need no longer be the lodestar by which we guide the spectrum ship of state."

Powell offered this recommendation. There "is a substantial amount of ``white space创 out there that is not being used by anybody. ... One way the Commission can take advantage of this white space is by facilitating access in the time dimension."

Government Command and Control. Powell said that "government spectrum policy continues to be constrained by allocation and licensing systems from a bygone era".

He explained that "In the last twenty years, two alternative models to command and control have developed, and both have flexibility at their core. First, the ``exclusive use创 or quasi property rights model, which provides exclusive, licensed rights to flexible use frequencies, subject only to limitations on harmful interference. These rights are freely transferable. Second, the ``commons创 or ``open access创 model, which allows users to share frequencies on an unlicensed basis, with usage rights that are governed by technical standards but with no right to protection from interference. The Commission has employed both models with significant success."

Powell concluded that "we will undoubtedly use both models as we move forward".

He also recommended that "license holders should be granted the maximum flexibility to use -- or allow others to use -- the spectrum, within technical constraints, to provide any services demanded by the public. With this flexibility, service providers can be expected to move spectrum quickly to its highest and best use." However, he added the caveat, "Such flexibility should not come at the cost of clearly defined rules."

Public Interest Standard. Powell also discussed the meaning of the phrase "public interest, convenience or necessity". He said that "the public interest must reflect the realities of the marketplace and current spectrum use. Today, I would suggest that full and complete consumer choice of wireless devices and services is the very meaning of the public interest. Certainly government telling consumers what types of services and devices they should have or own is not my view of the public's interest." He also said that public interest goals include "national defense, public safety, and critical infrastructure".

FCC Approves Verizon's Virginia Long Distance Application
10/30. The Federal Communications Commission (FCC) adopted a Memorandum Opinion and Order [192 pages in PDF] granting Verizon's Section 271 application to provide in region interLATA service in the state of Virginia. The FCC found that "Verizon has taken the statutorily required steps to open its local exchange markets in Virginia to competition."

FCC Commissioner Kevin Martin wrote in a concurring statement that "the statute does not require it to evaluate individually the checklist compliance of UNE TELRIC rates on an element by element basis. The Commission concludes that because the statute uses the plural term ``elements,创 it has the discretion to ignore subsequent reference to prices for a particular ``element创 in the singular. As I have stated in the past, I disagree."

FCC Commissioner Michael Copps wrote in a concurring statement that "the majority concludes that the statute permits Bell companies in all instances to demonstrate compliance with the checklist by aggregating the rates for non-loop elements. I disagree with the majority抯 analysis. I believe the better reading of the statute is that the rate for each network element must comport with Congress' pricing directive."

Copps also wrote that the FCC needs "to institute better follow-up on what happens in a state following a successful application." He continued that "our data on whether competition is taking hold is sketchy and non-integrated. In the next few months, we will be evaluating a number of applications and completing decisions on network elements and on whether to allow the sunset of the separate affiliate requirements for Verizon. These data are important for judging the 271 process and evaluating the options in these other proceedings."

See, FCC release and Verizon release. This is WC Docket No. 02-214.

CDT Releases Paper on ICANN Reform
10/30. The Center for Democracy and Technology (CDT) released a paper titled "Clarifying the Mission and Powers of ICANN: Analysis and Proposed Solutions".

The paper states that "While the current reform documents make significant progress towards establishing a definition of ICANN's powers, they do not yet provide adequate security against the possibility that a future Board, if pressured to do so, could leverage ICANN's authority into new areas of activity for which it was not intended ..."

The CDT argues that "Improving ICANN's mission statement requires attention at two complementary levels. First, effective substantive limits on ICANN's activities are necessary. Second, procedural safeguards for the promotion and enforcement of those limits should be established."

The CDT proposes three types of substantive limits. First, "As security against ICANN engaging ... in some premature or privately motivated policy making, the Board should strengthen its commitment to acting only when necessary."

Second, there "must be a concise definition of what activities ICANN should engage in." The CDT elaborates that "its mission statement should enumerate specific technical goals such as: Stable interoperability of the domain name system; Safety and integrity of registration data; Availability of accurate Whois data; and Resolution of disputes regarding the registration (as opposed to use) of domain names by particular parties." (Parentheses in original.)

Third, the CDT argues for "Explicit prohibition of certain activities." It suggests prohibiting the following: "Activities that impose content regulations on Internet activity; Activities that deprive registrants, operators, or Internet users of their property without adequate due process; Activities that establish new monitoring or surveillance of Internet users; [and] Activities that unreasonably privilege certain Internet users over others on the basis of race, religion, or nationality." (Brackets added.)

The CDT argues that the procedural safeguards should include "Limits on amendment power" and "Enforcement of limitations and rights". The later means that "The decisions of ICANN's Independent Review Panel must be binding on ICANN; The Reconsideration Committee should not be composed only of sitting ICANN Board members; [and] Controls need to be established on the Reconsideration Committee's authority to determine the standing of parties requesting consideration, or to recover costs from requesting parties." (Brackets added.)

US and EU Release Best Practices for Merger Reviews
10/30. Two U.S. antitrust regulatory agencies, the Department of Justice's Antitrust Division and the Federal Trade Commission (FTC), and the Commission of the European Union, released a document titled "US-EU Merger Working Group: Best Practices on Cooperation in Merger Investigations".

Charles James, Assistant Attorney General in charge of the Antitrust Division, stated in a release that "The 'best practices' we released today institutionalize important forms of cooperation between the U.S. and EU antitrust authorities on merger reviews and publicly confirm our commitment to cooperate closely with our friends across the Atlantic ... They complement the reforms we made to our own merger processes last fall and are in the interests of both consumers and the business community."

Timothy Muris, Chairman of the FTC, stated in a release that "These best practices demonstrate the commitment of the Federal Trade Commission, the Department of Justice, and the European Commission to make the cross border merger review process work as efficiently and effectively as possible, fostering deeper cooperation and convergence ... Today's action complements bilateral and multilateral measures we have been pursuing in other fora, as well as the workshops the FTC has held to improve our own merger review procedures."

This document addresses procedural matters, but not substantive competition law. It addresses collection and evaluation of evidence, sharing of information, waivers of confidentiality, communication between the reviewing agencies, and remedies and settlements.

This document is not an agreement between the U.S. and the EU. It is merely a statement of "best practices" that may be followed "to the extent consistent with their respective laws and enforcement responsibilities". Furthermore, it states that "nothing in this document is intended to create any enforceable rights". See also, EU release.

IRS Enters Into Agreement with Electronic Tax Preparation Consortium
10/30. The Internal Revenue Service (IRS) and Free File Alliance (FFA) signed a document [7 pages in PDF] titled "Free On-Line Electronic Tax Filing Agreement". The FFA is a consortium of companies in the electronic tax preparation and filing industry, organized as a non-profit corporation to facilitate participation in this agreement.

"We are one step closer to allowing millions of taxpayers free electronic filing of their tax returns," said Treasury Secretary Paul O'Neill in a release. "I look forward to the public launch of the website in January."

The agreement states that "the IRS and the Consortium ... will work together to offer free, on-line tax return preparation and filing services to taxpayers ... . The Consortium will offer Free Services to taxpayers. The IRS will provide taxpayers with links to the Free Services offered by the Consortium. ... During the term of this Agreement, the IRS will not compete with the Consortium in providing free, online tax return preparation and filing services to taxpayers."

However, the agreement also states that "Should the IRS decide to offer Free Services to taxpayers the IRS shall notify the Consortium immediately."

Last April, the Progress and Freedom Foundation (PFF) released a report [13 pages in PDF] titled "Online Tax Preparation: Beyond the Bounds of E-Government". It stated that "While the application of new technologies to the provision of government services is clearly a good thing, it should not be a mechanism for expanding the role of government into new areas better left to the private sector. One area where governments may well be moving beyond their proper role is the provision of online tax preparation services for their residents." The report was written by Thomas Lenard and James Harper.

US Ambassador Addresses IT in India
10/29. U.S. Ambassador to India Robert Blackwill gave a speech to the Federation of Indian Chambers of Commerce and Industry in New Delhi. He stated that "India's large and talented labor pool makes it possible for it to become yet another ``Asian miracle.创 Indeed, it already has shown its mettle through the information technology and software accomplishments."

"Virtually every major American IT firm has a presence in southern India", said Blackwill. But, they tend not to sell in the domestic market. Also, there could be much more foreign investment. However, "Americans hesitate to invest in India because of the uncertainty over India's economic reforms." He cited several problems, including that "taxes and tariffs here are still too high, and there remains too much government interference over business decisions". He also stated that "within the US business community there is an erosion of confidence about whether the sanctity of contracts will be honored in India".

"The economic strides India has made in the last decade are notably impressive, and, in the IT industry, India is in the front rank of global competition. But the problem with this argument is that it is entirely retrospective. Alas, foreign investors are not economic historians. They do not care a whit about how far a country's economic policy has come. Instead, they make their investment decisions on the prospects of the present and likely future policy environment in a given country. For India, that present calculus on the part of international investors is obviously not heartening," said Blackwill.

GAO Reports on Government Use of Personal Information
10/30. The General Accounting Office (GAO) released a report [72 pages in PDF] titled "Information Management: Selected Agencies Handling of Personal Information". The GAO examined the collection of personally identifiable information at four federal agencies: the Departments of Agriculture, Education, Labor and State.

It found that "Agencies collected a substantial amount of personal information of a wide variety of types, including personal identifying information (names and Social Security numbers) and demographic, financial, and legal data" and that "The personal information collected was shared extensively with other federal agencies, other government entities (state, local, tribal, and foreign), and private individuals and organizations." (Parentheses in original.)

The report also "identified isolated instances of forms that were not accurate or current, and other forms that did not contain the proper privacy notices." The report addresses in detail information that is collected and how it is shared among agencies.

The report was prepared at the request of Sen. Joe Lieberman (D-CT), Chairman of the Senate Committee on Governmental Affairs.

More News
10/30. The National Telecommunications and Information Administration (NTIA) announced that it extended "the term of the contract with ICANN for IANA functions for Option Period Two (Item No. 0003) for the six-month period of 10/01/2002 through 03/31/2002". See, document titled "Amendment of Solicitation / Modification of Contract".

10/30. President Bush signed HR 5647, a bill to authorize the duration of the base contract of the Navy Marine Corps Intranet contract to be more than five years but not more than seven years. See, White House release.

10/30. The Securities and Exchange Commission (SEC) voted to propose rules and amendments to implement the Sarbanes Oxley Act and to amend definitions of the term "dealer" in the Securities Exchange Act of 1934. See, SEC release.

10/30. The Copyright Office (CO) published a notice in the Federal Register regarding its proposed rate adjustments, pursuant to 17 U.S.C. 118, for the noncommercial educational broadcasting compulsory license for the
period 2003 - 2007. The CO notice states that the "proposed rate adjustments shall become final unless one or more parties with a significant interest in the rates notifies the Office that it will litigate the rate adjustment before a Copyright Arbitration Royalty Panel (``CARP创)." Also, it states that Notices of Intent to Participate in a CARP proceeding are due by December 2, 2002. See, Federal Register, October 30, 2002, Vol. 67, No. 210, at Pages 66090 - 66094.

10/30. The NIST announced on October 30 the postponement of the October 29 meeting of the NIST Advanced Technology Program (ATP) Advisory Committee. See, notice in the Federal Register, October 30, 2002, Vol. 67, No. 210, at Page 66125. The NIST further announced that the meeting "will be rescheduled at a later date". The NIST did not state whether this notice will precede the event.

Thursday, October 31
The Senate will meet at 10:30 AM in pro forma session only.

8:30 AM - 3:30 PM. The ITAA will host a one day conference titled "National Forum on Combating e-Crime and Cyberterrorism". FBI Director Robert Mueller will give the opening keynote address at 10:00 AM. Other speakers include Marty Gamm (DOJ's Computer Crime and Intellectual Property Section) and Howard Schmidt (Vice Chairman of the President抯 Critical Infrastructure Protection Board). The event is closed. See, ITAA notice. Location: Computer Sciences Corporation, 3170 Fairview Park Drive, Falls Church, VA.

8:30 AM- 4:15 PM. Day one of a two day CLE seminar hosted by the FCBA titled "Communications Law 101: A Practitioner's Primer". The price to attend is $250 for lawyers and paralegals in private practice or corporate positions, and $125 for those in government service, non-profit positions or in law school. Location: Georgetown University Law Center, 600 New Jersey Ave., NW.

11:00 AM. The Consumer Federation of America (CFA), Consumers' Union, Center for Digital Democracy, and other groups will hold a press briefing on the FCC's review of its media ownership rules. Telephone call-in: 877 282-2315; passcode: 6291596. Location: CFA, 1424 16th Street, NW Suite 604.

12:00 NOON - 1:00 PM. The NTCA will host a luncheon to release the results of its 2002 Wireless Survey. RSVP to Donna Taylor at 703 351-2086 or dtaylor@ntca.org by October 28. Location: NTCA Headquarters, 4121 Wilson Blvd., 10th floor, Arlington, VA. If traveling by Metro, go to the Ballston/MU on the orange line.

2:30 - 4:30 PM. The FCC's WRC-03 Advisory Committee will meet. See, notice in the Federal Register. Location: FCC, 445 12th Street, SW, Room TW-C305 (Commission Meeting Room).

Friday, November 1
8:30 AM - 1:00 PM. Day two of a two day CLE seminar hosted by the FCBA titled "Communications Law 101: A Practitioner's Primer". The price to attend is $250 for lawyers and paralegals in private practice or corporate positions, and $125 for those in government service, non-profit positions or in law school. Location: Georgetown University Law Center, 600 New Jersey Ave., NW.

Deadline to submit reply comments to the FCC regarding BellSouth's Section 271 application with the FCC to provide in region interLATA service in the states of Florida and Tennessee. This is WC Docket No. 02-307. See, FCC notice [PDF].

Deadline to submit reply comments to the FCC regarding the petition for declaratory ruling in CC Docket No. 01-92 requesting that the FCC determine that wireless termination tariffs are not a proper mechanism for establishing reciprocal compensation arrangements between local exchange carriers (LECs) and commercial mobile radio service (CMRS) providers. See, FCC notice [PDF].

Monday, November 4
The Senate will meet at 10:30 AM in pro forma session only.

The Supreme Court will return from its recess, which it began on October 22.

8:30 - 11:00 AM. The Alliance for Public Technology (APT) & the High Tech Broadband Coalition (HTBC) will host an event titled "From Debate to Deployment: Demonstrating the Power of Broadband." FCC Commissioner Michael Copps will deliver the opening keynote address. For more information, contact Matt Bennett at 202 263-2972 or mbennett @apt.org. Location: The Hotel Washington, 515 15th Street NW.

Deadline to submit comments to the NTIA in response to its request for comments on two of the nine exceptions to the Electronic Signatures in Global and National Commerce (E-SIGN) Act. The E-SIGN Act provides for the acceptance of electronic signatures in interstate commerce, with certain enumerated exceptions. The two categories of exempt documents that are the subject of this request for comments are court records and hazardous materials notices. The Act tasks the NTIA with studying these exemptions, and providing reports to Congress. See also, NTIA release, notice in Federal Register, regarding court records, and notice in Federal Register, , regarding hazardous materials notices.

Deadline to submit reply comments to the FCC regarding SBC's Section 271 application with the FCC to provide in region interLATA service in the state of California. This is WC Docket No. 02-306. See, FCC notice [PDF].

Tuesday, November 5
Election Day.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in 21st Century Telesis v. FCC, No. 01-1435. Judges Randolph, Rogers and Williams will preside. Location: Courtroom 20, 333 Constitution Ave., NW.

Deadline to submit applications to the Agriculture Department's Rural Utilities Service for grants under its pilot program for the provision of broadband transmission service in rural America for fiscal year 2002. See, notice in the Federal Register.

Wednesday, November 6
9:30 - 11:30 AM and 2:00 - 4:00 PM. The FTC and the DOJ's Antitrust Division will hold the final workshops in their joint series titled "Competition and Intellectual Property Law and Policy in the Knowledge Based Economy" on October 25 and 30 and November 6. The November 6 event is titled "Antitrust Law and Patent Landscapes". The 9:30 AM program is titled "Standard Setting Organizations: Evaluating the Anticompetitive Risks Of Negotiating IP Licensing Terms and Conditions Before A Standard Is Set". The 2:00 PM program is titled "Relationships Among Competitors and Incentives to Compete: Cross Licensing of Patent Portfolios, Grantbacks, Reach Through Royalties, and Non- Assertion Clauses". Location: FTC Room 432, 600 Pennsylvania Ave., NW.

10:00 - 11:30 AM. Media Security and Reliability Council (MSRC) will hold a meeting. FCC's Chairman Michael Powell will participate. The MSRC is a federal advisory committee formed after the terrorist attacks of September 11, 2001, to study ways to secure and maintain broadcast and multichannel video programming distribution (MVPD) in the face of terrorist attacks, natural disasters and other threats. See, FCC release [PDF]. Location: FCC, Commission Meeting Room (TW-C305), 445 12th Street, SW.

12:15 PM. The FCBA's Global Telecommunications Development Committee and International Practice Committee will host an event titled "What Happened in Marrakesh? A Debriefing on the 2002 ITU Plenipot". The speakers will be David Gross, Coordinator of International Communications and Information Policy at the State Department. RSVP to jhindin @wrf.com. Location: Wiley Rein & Fielding, 1750 K St, 10th Floor.

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