|Sen. McCain Introduces Telecom Diversity
|1/20. Sen. John McCain (R-AZ), the
Chairman of the Senate Commerce
Telecommunications Ownership Diversification Act [25 pages in PDF], a
bill that would amend the Internal Revenue Code to provide for a deferral of tax
on gain from the sale of telecommunications businesses in specific circumstances
or a tax credit and other incentives to promote diversity of ownership in
McCain (at right) stated that "this bill would
encourage ownership by individuals who are currently underrepresented in the
ownership of telecommunications companies, including minorities and women, by
making carefully crafted changes in the tax code."
He elaborated that "It would provide sellers of
telecommunications assets a tax deferral when those assets are bought for cash
by certain small businesses. It would also provide investors an incentive to
consider certain small businesses by providing a reduction in the tax on gains
from investment in these companies." See,
Federal Communications Commission (FCC)
Powell stated in a
release [PDF] that "Senator John McCain today introduced legislation that
uses a tax-based incentive system, designed to encourage and facilitate new
entry, including entry by women and minorities, into the telecommunications
industry. This legislation is well crafted and much needed. I wholeheartedly
support this effort. I again thank Senator McCain for consistently showing leadership in this
important effort. Like him,
I believe it is essential that we promote greater inclusiveness in our media and
communications delivery sectors."
Robert Sachs, P/CEO of the National
Cable and Telecommunications Association (NCTA) stated in a
the cable industry supports Sen. McCain's bill. He stated that "we look forward
to working with Senator McCain and others to enact this much needed legislation.
As communications media converge, minority and economically disadvantaged
businesses should be able to fully participate in this vital sector of our
The bill would apply to "telecommunications businesses" which it defines as
"a business which, as its primary purpose, engages in electronic communications
and is regulated by the Federal Communications Commission pursuant to the
Communications Act of 1934, including a cable system ..., a radio station ..., a
broadcasting station providing television service ..., a provider of direct
broadcast satellite service ..., a provider of video programming ..., a provider
of commercial mobile services ..., a telecommunications carrier ..., a provider
of fixed satellite service, a reseller of the communications service or
commercial mobile service, or a provider of multichannel multipoint distribution
service." (Citations omitted.)
This enumeration of covered businesses does not expressly include internet
service providers, or other internet based businesses. The bill's statement of
findings and purposes, however, does reference internet businesses. It states
that "Current trends in the telecommunications industry show that there is
increasing convergence among various media, including broadcasting, cable
television, and Internet-based businesses, that provide news, information, and
|Senate Commerce Committee Holds Hearing on
|1/30. The Senate
held a hearing to examine media ownership, focusing on consolidation in the
radio industry. The Federal Communications
Commission (FCC) is currently reviewing its media ownership rules.
Sen. John McCain (R-AZ), the Chairman
of the Committee, said in his
statement [PDF] that "I continue to believe
that anachronistic government regulations that do not reflect today's multimedia
marketplace should be thoroughly reviewed by the FCC and repealed or modified
He added that "I believe that, wherever possible, we should look to
market-based approaches to ensure there is diversity in media ownership. Later
today, I will reintroduce the "The Telecommunications Ownership Diversification
Act." The bill provides a tax deferral and other market-based incentives
designed to ensure that our tax laws do not disadvantage small businesses that
may be owned by women and minorities who can help to further viewpoint diversity
Sen. Ernest Hollings (D-SC), the
ranking Democrat on the Committee, stated in his
opening statement that "the core values of competition, diversity, and
localism that have long served as fundamental pillars of our democracy, are
today under attack." He complained about "FCC Commissioners who seem
intent on relaxing or
eliminating many of the existing ownership rules without regard to the
tremendous consolidation that has already occurred."
He concluded that "while investors on Wall Street have profited
handsomely from these mergers,
consumers on Main Street have suffered. Radio consolidation has contributed to a
34% decline in the number of owners, a 90% rise in the cost of advertising
rates, a rise in indecent broadcasts, and the replacement of local news and
community programming with remote "voice tracking" and syndicated hollering that
ill-serves the public interest."
Sen. Russ Feingold (D-WI), who sponsored
the Competition in
Radio and Concert Industries Act of 2002, in the 107th Congress, stated in his
statement that "the rapid consolidation in ownership of the radio and
concert industry has made it difficult for individuals, artists, and
organizations to find outlets to express their creativity and promote
He wrote that "My legislation prohibits those who own radio stations and
concert promotion services or venues from leveraging their cross-ownership to
hinder competition in the industry. For example, if an owner of a radio station
and a promotion service hinders access to the airwaves of a rival promoter or
artist, then the owner would be subject to penalties."
Rep. Howard Berman (D-CA) wrote in
prepared testimony [14 pages in PDF] for the Committee that "I am deeply
concerned that radio industry consolidation and related
activities are hurting songwriters, musicians, recording artists, concert
promoters, radio listeners, and the music community as a whole. I believe the
negative effects of radio industry consolidation merit serious congressional
scrutiny, and should spur investigations by the Department of Justice (DOJ) and
Federal Communications Commission (FCC)." He represents a southern
California district that is home to many members of the music industry.
He said that while the DOJ has taken no action regarding
broadcasters, "The Bush DOJ has indicated, through its ongoing investigation of
the Pressplay and
MusicNet ventures, that it is interested neither
the DOJ or FCC have, to my knowledge, conducted investigations. in publicly pursuing a
lengthy investigation of speculative antitrust concerns that may be raised by
new entities in the as-yet infinitesimally small market for legal online music.
If it has such grave concerns about antitrust issues related to the music
industry, why isn’t it willing to pursue allegations of actual anticompetitive
behavior in the related radio and concert promotion industries?"
Edward Fritts of the National Association of Broadcasters
(NAB) stated that "As radio deregulation has moved forward, radio's critics have
tended to overstate the effects of industry trends. Compared to other
entertainment choices, radio is perhaps the LEAST consolidated sector. The
Hollywood movie studios, the record companies, Direct Broadcast Satellite, Cable
Systems, newspapers -- even the Internet -- all have more of their revenue share
concentrated among the top ten owners than does radio."
See also, prepared testimony of witnesses:
(Ch/CEO of Clear Channel Communications),
(P/CEO of the NAB),
Don Henley (singer and songwriter),
Robert Short (President of Short Broadcasting), and
Jenny Toomey (Executive Director of the
Future of Music Coalition).
|GAO Reports on Government Management Challenges and Program
|1/30. The General Accounting Office (GAO)
released a series of reports on major executive branch agencies titled "Major
Management Challenges and Program Risks". Among the many issues addressed are
the export controls pertaining to high performance computers and semiconductors,
the FBI's cyber security center, the FBI's antiquated information technology,
and threats to critical infrastructures.
The report [34 pages in
PDF] regarding the Department of Commerce, which
is titled "Major
Management Challenges and Program Risks: Department of Commerce", addresses,
among other things, the export control regime handled by the
Bureau of Industry
and Security (BIS).
This report reviews prior GAO reports which have "identified numerous
problems in the administration of this system". For example, it states that
"Our August 2002 report on high performance computers found that
the President’s justification for raising export control thresholds
did not fully meet the requirements of law and was based on inaccurate
information provided by the computer industry and an inadequate assessment
of national security issues. Thus, we concluded that the decision
to raise the export control threshold was analytically weak and premature,
given market conditions."
The report also states that "U.S.
agencies had not conducted the analyses necessary to create a sound basis
for its licensing decisions on exports of advanced semiconductor
manufacturing equipment to China." It elaborated that "U.S. policies
and practices to control the export of advanced semiconductor technology to China
are unclear and inconsistent, leading to uncertainty among U.S.
industries about the rationale for some licensing decisions. We concluded
that the current export control system needs to be reexamined because it
has not slowed China’s ability to obtain billions of dollars worth of
advanced semiconductor equipment. Consequently, we recommended that the Secretaries
of Commerce, Defense, and State reassess, document,
and update U.S. policy and practices on exporting semiconductor manufacturing
equipment and materials to China."
The GAO's report
[54 pages in PDF] regarding the Department of
Justice (DOJ) covers, among other things, the FBI's
National Infrastructure Protection Center (NIPC),
coordinates the federal government's response to computer based incidents.
This report reviews a prior GAO report, in which the GAO found
that "the development of NIPC’s
analysis and warning capabilities were limited by multiple factors, including
the lack of a comprehensive governmentwide or national framework for promptly
obtaining and analyzing information on imminent attacks, a shortage of skilled
staff, the need to ensure that NIPC does not raise undue alarm for insignificant
incidents, and the need to ensure that sensitive information is protected. We
recommended that NIPC develop a comprehensive written policy for establishing
analysis and warning capabilities."
This DOJ report also addresses the FBI's "antiquated computer hardware
and software and the lack of a fully
functional E-mail system" which "hamper the FBI’s ability to share time sensitive
information internally and with other intelligence and law enforcement
The GAO also released a
report [34 pages in
PDF] titled "High-Risk Series: Protecting Information Systems Supporting the
Federal Government and the Nation's Critical Infrastructures".
|1/30. President Bush formally notified the Congress of his intent to enter
into free trade agreements (FTA) with Chile and Singapore. He wrote in his
Chile that "This is an agreement for the economy of the 21st century. Inventors,
performers, authors, and creative enterprises in the United States and Chile
will benefit from enhanced copyright, patent, trademark, trade secret, and other
intellectual property rights protection. The Agreement also contains
state of the art protections for digital products and electronic commerce". See
notice regarding Singapore, the U.S. Trade
Representative's (USTR) December 2002
summary [PDF] of the Singapore FTA, and the USTR's December 2002
[PDF] of the Chile FTA.
1/30. The Cato Institute released a report
titled "Free Trade, Free Markets: Rating the 107th Congress" by Daniel Griswold.
summary and full
report [PDF]. The study is based on 12 roll call votes in the Senate, and 18
roll call votes in the House on trade barrier and trade subsidy issues. The
report also provides scores for Representatives and Senators. The report
classifies Representatives and Senators according to whether they are free
traders (oppose both trade barriers and trade subsidies), interventionists
(favor both barriers and subsidies), internationalists (oppose barriers and
support subsidies), or isolationists (support barriers and oppose subsidies).
The report concludes that "Despite all the hype about globalization and the supposed
universal triumph of free-market policies, governments around the world,
including that of the United States, continue to intervene in the flow of goods,
services, people, and capital across international borders."
1/30. The Copyright Office (CO)
notice in the Federal Register regarding a Notice of Proposed Rulemaking (NPRM)
relating to proposed regulations that set rates and terms for the use of sound
recordings by preexisting subscription services for the period January 1, 2002
through December 31, 2007. The deadline for comments is March 3, 2003. For more
information, contact David Carson (General Counsel) or Tanya Sandros (Senior
Attorney, Copyright Arbitration Royalty Panel) at 202 707-8380. See, Federal
Register, January 30, 2003, Vol. 68, No. 20, at Page 4744-4747.
1/30. The Department of Agriculture's Rural
Utilities Service (RUS) published a
notice in the Federal Register regarding its final rule establishing the
Rural Broadband Access Loan and Loan Guarantee Program as authorized by the Farm
Security and Rural Investment Act of 2002 (Public Law 101-171). Section 6103 of
the Act provides for loans and loan guarantees to fund the cost of construction,
improvement, or acquisition of facilities and equipment for the provision of
broadband service in eligible rural communities. This rule takes effect on
January 30. For more information, contact Roberta Purcell at 202 720-9554. See,
Federal Register, January 30, 2003, Vol. 68, No. 20, at Pages 4684-4692.
|Friday, January 31
|12:00 NOON. The Progress & Freedom
Foundation (PFF) will host a briefing titled "The FCC & Telecom
Recovery: A Scorecard for Evaluating the Rules". The speakers will be
Randolph May (PFF), Thomas Lenard (PFF), Solveig Singleton
Enterprise Institute), Adam Thierer (Cato
Institute), and Jeffrey Eisenach (PFF). RSVP to Rebecca Fuller at 202
289-8928 or firstname.lastname@example.org. Location:
Room B-340, Rayburn Building.
12:00 NOON. The Federalist Society
will host a lunch titled "Antitrust and IP". For more information,
contact Jessi King at 822-8138. Location: First Amendment Lounge,
National Press Club, 529 14th St. NW, 13th
Deadline to submit comments to the National Institute of
Standards and Technology (NIST) regarding its
[78 pages in PDF] titled "Guidelines for the Security Certification and
Accreditation of Federal Information Technology Systems". This is NIST
Special Publication 800-37. It was written by Ron
Ross and Marianne Swanson in the NIST's Information Technology Laboratory's
Computer Security Division, with input from others.
Send comments to email@example.com.
Extended deadline to submit reply comments to the
Federal Communications Commission (FCC) on
whether it should change its rules restricting telemarketing calls and
facsimile advertisements. This is CG Docket No. 02-278. See, original
in the Federal Register, earlier
of extension [PDF], and further
notice in Federal
Register of extension.
Deadline to submit applications to the
Federal Communications Commission (FCC) for membership on the FCC's
Consumer Advisory Committee. For more information, contact Scott Marshall at
202 418-2809 firstname.lastname@example.org.
|Monday, February 3
|10:00 AM. The U.S. Court of Appeals (FedCir)
will hear oral argument in Bell Communications v. Fore Systems, No.
02-1083. Location: Courtroom 201, 717 Madison Place, NW.
Deadline to submit comments to the
Federal Communications Commission (FCC)
in response to its
Notice of Inquiry (NOI) in the proceeding titled "In the matter of
Facilitating the Provision of Spectrum Based Services to Rural Areas and
Promoting Opportunities for Rural Telephone Companies To Provide Spectrum Based
Services". This is WT Docket No. 02-381. For more information, contact
Robert Krinsky at 202 418-0660. See also,
notice in the Federal Register, January 7, 2003, Vol. 68, No. 4, at Pages
723 - 730.
EXTENDED TO FEBRUARY 18.
Deadline to submit comments to the
Federal Communications Commission (FCC)
in response to its Further Notice of Proposed Rulemaking, (FNPRM), released
last month, regarding whether providers of various services and devices not
currently within the scope of the FCC's 911 rules should be required to
provide access to emergency services. This is CC Docket No. 94-102 and IB
Docket No. 99-67. See,
notice in the Federal Register, January 23, 2003, Vol. 68, No. 15, at
Pages 3214 - 3220. See also,
Deadline to submit comments to the Copyright
in response to its notice of proposed rulemaking (NPRM) regarding
the form, content, and manner of service of notices of termination under Section
203 of the Copyright Act.
17 U.S.C. § 203
pertains to the termination of transfers and licenses granted by the author.
in the Federal Register, December 20, 2002 Vol. 67, No. 245, at Pages 77951 -
77955. For more information, contact David Carson, CO General Counsel, at 202
Deadline to submit comments to the Federal
(FTC) regarding MSC.Software's
December 30, 2002,
petition [8 page
PDF scan] for approval of its proposed divestiture of Nastran software to EDS.
The petition is titled "Petition of MSC.Software Corporation for Approval of Proposed
Divestiture". It was filed in the FTC's administrative proceeding titled
"In the Matter of MSC.Software Corporation".
This is FTC Docket No. 9299. In August 2002, the FTC and MSC also
entered into an
Agreement Containing Consent Order [22 pages PDF] which provides that MSC
must divest at least one copy of its current advanced Nastran software,
including the source code. The divestiture will be through royalty free,
perpetual, non-exclusive licenses to one or two acquirers who must be approved
by the FTC. For more information, contact Daniel Ducore of the FTC's Bureau of
Competition at 202 326-2526.
|Tuesday, February 4
|9:00 AM - 12:00 NOON. Hearing at the
USPTO to assist it in writing a report to the Congress regarding
technological protection systems for digitized copyrighted works and to
prevent infringement. This report is required by the Technology, Education and
Copyright Harmonization Act of 2002 (TEACH Act). See,
notice in the Federal Register, December 9, 2002, Vol. 67, No. 236, at
Pages 72920 - 72921. For more information, contact Michael Shapiro at 703
305-9300 or email@example.com.
Location: 2121 Crystal Drive, Crystal Park 2, Room 200 (Patent Theatre),
|Wednesday, February 5
|8:30 - 10:00 AM.
Sidak of the American Enterprise Institute
(AEI) will host a press breakfast to discuss pending FCC reviews of
telecommunications regulations and media ownership rules. RSVP to Veronique
Rodman at firstname.lastname@example.org or call Heather
Dresser at 202 862-5884. Location: AEI, 1150 17th Street, NW.
10:00 AM. The U.S. Court of Appeals
(FedCir) will hear oral argument in Altima Communications v. USITC,
No. 02-1110. The U.S. International Trade
Commission barred the import by Altima
Communications, a Broadcom subsidiary, of certain ethernet networking
products found to infringe Intel patents.
Fish and Richardson represents Intel in this matter. Location: Courtroom 402,
717 Madison Place, NW.
10:00 AM. The U.S. Court of Appeals (FedCir)
will hear oral argument in Crossroads Systems v. Chaparral Network Storage,
No. 02-1158. This is an appeal from the
U.S. District Court (WDTex) in a
patent infringement case involving storage router technology. (D.C.
No. 00-CA-217-SS.) Location: Courtroom 203, 717 Madison Place, NW.
10:00 AM. The U.S. Court of Appeals (FedCir)
will hear oral argument in Digital Privacy v. RSA Security, No.
02-1440. This is an appeal from the
U.S. District Court (EDVa) in a patent infringement case involving the
pre-boot protection of unauthorized use of computer programs and data.
Location: Courtroom 201, 717 Madison Place, NW.
11:00 AM. The Cato Institute will host
a panel discussion titled "Battle over the Broadcast Flag: The IP Wars and
the HDTV Transition". The speakers will be Fritz Attaway
Picture Association of America), Jim Burger (Dow
Lohnes & Albertson), Mike Godwin (Public
Knowledge), and Andy Setos (Fox Entertainment Group). See,
notice and registration
page. Lunch will follow. Location: Cato, 1000 Massachusetts Ave., NW.
12:30 PM. The House Armed Services
Committee will hold its organizational meeting for the 108th Congress.
Location: Room 2118, Rayburn Building.
1:00 PM. The House Commerce
Committee's Subcommittee on Telecommunications and the Internet
will hold a hearing titled "Health of the Telecommunications Sector: A
Perspective from Investors and Economists". See,
notice. Location: Room 2123, Rayburn Building.
|Thursday, February 6
|3:30 PM. Madhavi Sunder (Professor of Law, University of California at
Davis Law School) will give a lecture titled "IP3: Intellectual Property,
Identity Politics, and the Internet Protocol". For more information,
contact Julie Cohen at
Georgetown University Law Center, Faculty Lounge, 600 New Jersey Ave., NW.
Deadline to submit comments to the Federal
Communications Commission (FCC) regarding
BellSouth's December 20, 2002
Petition for Forbearance [16 pages in PDF] from application of the separate subsidiary
provide international directory assistance service. BellSouth asked the FCC to
forbear from applying the structural separation requirements of
47 U.S.C. § 272
to allow BellSouth to provide international directory assistance service on an
integrated basis together with its local and nonlocal directory assistance
services. See, FCC
notice [2 pages in PDF]. This is CC Docket No. 97-172.
|Friday, February 7
|12:00 NOON. The Cato Institute will
host a panel discussion titled "Technology Policy in the 108th Congress". The
speakers will be Steve Delbianco (Association for Competitive Technology),
Clyde Crews (Cato), and Adam Thierer (Cato). See,
notice and registration
page. Location: Room B-369, Rayburn Building.
12:00 NOON - 1:30 PM. The Bureau of
Industry and Security's National Infrastructure Advisory Council (NIAC)
will meet. Richard Clarke (Special Advisor to the President for Cyberspace
Security) and Richard Davidson, (Chairman of NIAC) will speak. The agenda also
includes a discussion of Internet Protocol Version 6.0 and responsible
disclosure of cyber attacks or incidents. The public can attend only via
teleconference. Call 1-888-899-7785 (toll free) or 1-913-312-4169 (toll), and
when prompted, enter pass code 1468517. See,
notice in the Federal Register, January 28, 2003, Vol. 68, No.18, at Page
|Verizon Seeks Stay of Order Regarding RIAA Subpoena
|1/30. Verizon filed a motion with the
U.S. District Court (DC) in
RIAA v. Verizon requesting that the Court stay its order that Verizon comply with a
subpoena directing it to provide the Recording
Industry Association of America (RIAA) the identity of a subscriber to its
internet access service while its appeals to the
U.S. Court of Appeals (DCCir). See,
On January 21, the District Court issued its
Memorandum Opinion, ruling that copyright holders can obtain subpoenas
pursuant to 17 U.S.C. §
512(h) that require Internet Service Providers (ISPs) to reveal the
identities of their customers who infringe copyrights on peer to peer filing
sharing systems. Verizon had argued unsuccessfully that § 512(h) subpoenas
are only available with respect to infringers who store infringing content on the
servers of the ISP. See also,
titled "District Court Rules DMCA Subpoenas Available for P2P Infringers",
January 21, 2003.
Verizon stated in a release that "The recording industry brought this case as
a 'test case' of its aggressive legal theories. We are seeking a stay so that
the Court of Appeals can issue a final ruling on the critical legal issues
before we are required to turn over our subscriber's identity."
|People and Appointments
|1/30. The Senate Finance
Committee unanimously approved the nomination of John Snow to be
Secretary of the Treasury on Thursday morning, January 30. On Thursday evening the full
Senate approved the nomination. He replaces Paul O'Neill, who resigned last
1/30. Eva Wohn was named head of the Cellular
Telecommunications & Internet
Association's (CTIA) State Affairs Division, a new department within Government
Affairs that will handle state and local government issues. See,
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