4/7. The U.S. Court of Appeals (9thCir) issued its opinion [33 pages in PDF] in Pacific Bell v. Pac-West Telecomm, three consolidated appeals involving reciprocal compensation.

47 U.S.C. §§ 251 and 252 require incumbent local exchange carriers (ILECs), such as Pacific Bell, to allow competitive local exchange carriers (CLECs), such as Pac-West, to interconnect with their networks. Section 251(b)(5) further provides for "reciprocal compensation". That is, when a customer of one local exchange carrier calls a customer of a another local exchange carrier who is within the same local calling area, the first carrier pays the second carrier for completing the call.

The Appeals Court wrote that "When Congress drafted the Act, it did not foresee the dramatic increase in Internet usage and the subsequent increase in telecommunications traffic directed to Internet Service Providers ("ISPs") like America OnLine or Earthlink. Not long after Congress adopted the Act, newly formed CLECs began targeting ISPs to benefit from the reciprocal compensation provisions in interconnection agreements and the compensation they would receive from the one-way traffic that flows into ISP customers but does not flow in the opposite direction. ... Thus, CLECs with ISP customers receive far more compensation from the ILEC for completing its customers' calls than they pay to the ILEC because ISPs do not reciprocate with calls back to the originating ILEC."

This opinion addresses two rulemaking orders of the California Public Utilities Commission (CPUC) and one arbitration proceeding before the CPUC that dealt with disputes between ILECs and CLECs over reciprocal compensation.

CLECs petitioned the CPUC for an order declaring that calls to ISPs should be treated as local traffic subject to reciprocal compensation provisions in interconnection agreements. The CPUC issued two orders requiring that reciprocal compensation provisions in interconnection agreements in California apply to calls made to ISPs. The CPUC also approved an arbitrated interconnection agreement between Pacific Bell and Pac-West that required reciprocal compensation for calls to ISPs.

The U.S. District Court (NDCal) granted summary judgment in favor of the CLECs and CPUC on the two CPUC orders.

The Court of Appeals reversed the summary judgment upholding the two CPUC orders. It held that the orders are contrary to the Communications Act because they exceed the CPUC's statutory authority under § 252 over interconnection agreements. However, the Appeals Court affirmed the District Court's summary judgment upholding the Pacific Bell / Pac-West interconnection agreement.

The Appeals Court also rejected an argument that the Eleventh Amendment bars the ILECs' claims against the CPUC, citing the Supreme Court's May 20, 2002 opinion [22 pages PDF] in Verizon Maryland v. PSC of Maryland.

4/5. Federal Reserve Board (FRB) Vice Chairman Roger Ferguson gave a speech titled "Patent Policy in a Broader Context".

He spoke at a conference titled "2003 Financial Markets Conference -- Business Method Patents and Financial Services". See, conference agenda, with hyperlinks to some of the papers presented at the conference. The conference was hosted by the Federal Reserve Bank of Atlanta, the Center for Banking and Finance, and the University of North Carolina School of Law. The conference was held on April 3-5 in Sea Island, Georgia.

Ferguson (at right) stated that "I want to briefly discuss the importance of information technology and intellectual property in the ``new´´ economy. ... The economies of the United States and other countries have seen huge productivity gains from the development and rapid adoption of new information and communication technologies. The mechanisms for protecting intellectual property, and the degree to which they are used, vary from industry to industry and over time, but the incentives created by intellectual property protections have likely been important in fostering economic growth."

He the addressed the opinion of the U.S. Court of Appeals (FedCir) in State Street Bank & Trust v. Signature Financial Group, 149 F.3d 1368 (1998). He stated that "The State Street case was decided during a period of intense innovation and creativity in the U.S. economy that led to gains in productivity. As we are coming to understand, the sources of these productivity gains go way beyond the increased technological ability to gather, store, process, and disseminate information. Rather, much of the increase in productivity we have seen stems from the simultaneous invention of new forms of economic organization and of innovations in business practices, both within and across economic entities. ... The decreased search and transaction costs in new electronic marketplaces allow transactions to occur that were prohibitively expensive before."

Ferguson continued that "economists have argued that information technology is best thought of as general purpose technology (GPT). A key characteristic of GPT is that technical progress depends not only on invention but also on so-called co-invention, that is innovation in complementary technologies that increases the productivity of the GPT. New processes and new procedures that best use the technology."

He added that "These processes and procedures are precisely the focal point of business method patenting. Following State Street, inventors can now gain protection for their innovations in this area: Not only the hardware and software but also the embedded business method is patentable. Inventors of new ways of using these technologies can now gain protection for their work."

Moreover, said Ferguson, "Economic gains are likely to be found not just in the invention of new products but also in reorganizing the firms and markets themselves. Here, too, business method patents are likely to be important. In recent years, huge improvements have occurred in supply chain management linking manufacturers directly with their distributors. Several dot.com companies were founded on the notion of bringing industry participants together in new ways, using new technologies and business practices. Although some of these firms are no longer with us, the electronic sharing and processing of information that they introduced is unlikely to stop."

"The widespread adoption of technologies in these latter cases rests fundamentally on the adoption of standards, on the idea that all industry participants use compatible technologies. In the parlance of economics, such technologies exhibit network effects: The value of the innovation to a given user increases with the number of other users. In this case, the efficiency gains arise when a large number of users sign on to the standard. The key issue, therefore, is who owns this standard, that is, whether any market participant may have open access to a public standard or whether the property rights to that technology are owned by a given firm. Further, with business method patents, these property rights may attach not to a specific technological standard but more generally to a method of transacting or some other business process", said Ferguson.

He concluded that "The task for public policy in the post State Street world is to strike the right balance -- to encourage innovation and rapid adoption of new products and processes while limiting the damage from granting monopoly power. The United States has been in the forefront of the financial services industry, a position we want to maintain. But how do we structure the institutions of public policy to attain these goals? To make matters more complex, how do we achieve this balance when not only is the technology rapidly advancing but the realm of patentable material is expanding as well?"

4/3. Rep. Lee Terry (R-NE) and others introduced HR 1582, the "Universal Service Fairness Act of 2003", a bill to amend 47 U.S.C. § 254, by adding a new subsection pertaining to universal service support for high cost areas. The bill was referred to the House Commerce Committee.

4/3. Rep. Collin Peterson (D-MN) and others introduced HR 1626, the "Local Voices on TV Act of 2003", a bill to amend 47 U.S.C. § 534 regarding cable television carriage requirements regarding class A local television service. The bill was referred to the House Commerce Committee.

4/3. Rep. Adam Schiff (D-CA) and others introduced HR 1633, the "SCHIP Web-Based Enrollment Act of 2003", a bill to amend title XXI of the Social Security Act to encourage the use of web-based enrollment systems in the state children's health insurance program (SCHIP). The bill was referred to the House Commerce Committee.

4/3. Rep. Cliff Stearns (R-FL) and others introduced HR 1636, the Consumer Privacy Protection Act. The bill was referred to the House Commerce Committee and to the House International Relations Committee. See also, Stearns release.

4/3. Rep. Anthony Weiner (D-NY) introduced HR 1642, the "Cell Phone Service Disclosure Act of 2003", a bill to amend 47 U.S.C. § 332 to require the Federal Communications Commission (FCC) to monitor complaints regarding the quality of wireless telephone service. The bill was referred to the House Commerce Committee.

4/7. Jim Schlichting was named a Deputy Chief of the Federal Communications Commission's (FCC) Office of Engineering and Technology (OET). He has worked for the FCC since 1985. See, FCC release [PDF].

4/7. Catherine Seidel was named a Deputy Bureau Chief of the Federal Communications Commission's (FCC) Wireless Telecommunications Bureau (WTB). She will oversee matters before the WTB's Public Safety and Private Wireless Division, and the Policy Division. She joined the FCC in 1994. Before that, she worked for Bell Atlantic (now Verizon). See, FCC release [PDF].

4/7. Peter Tenhula (at right), who is the Director of the Federal Communications Commission's (FCC) Spectrum Policy Task Force, was named to the additional position of Acting Deputy Bureau Chief of the FCC's Wireless Telecommunications Bureau (WTB). He will oversee matters before the WTB's Commercial Wireless Division, and the Auctions and Industry Analysis Division. See, FCC release [PDF].

4/7. David Furth was named Associate Bureau Chief and Counsel to the Bureau Chief of the of the Federal Communications Commission's (FCC) Wireless Telecommunications Bureau (WTB). See, FCC release [PDF].

4/7. John Branscome was named Legal Advisor in the office of the Chief of the Federal Communications Commission's (FCC) Wireless Telecommunications Bureau (WTB). He will advise the Bureau Chief and Deputies on wireless regulatory issues, including matters before the WTB's Auctions and Industry Analysis Division. He joined the FCC in 1999. Before that, he worked for the law firm of Wilkinson Barker & Knauer. See, FCC release [PDF].

4/7. Jennifer Tomchin was named Legal Advisor in the office of the Chief of the Federal Communications Commission's (FCC) Wireless Telecommunications Bureau (WTB). He will advise the Bureau Chief and Deputies on wireless regulatory issues, including matters before the WTB's Policy Division. She joined the FCC in 2001. Before that, he worked for the law firm of Fleischman and Walsh. See, FCC release [PDF].

4/7. Zelda Bailey was named Director of the Boulder Laboratories of the Department of Commerce's National Institute of Standards and Technology (NIST), effective May 5, 2003. See, NIST release.

4/7. President Bush nominated Robert McCallum to be Associate Attorney General at the Department of Justice. Bush had previously announced his intent to make the nomination. See, White House release.

4/7. Peter Davidson was named SVP for Federal Government Relations, and Deputy General Counsel, at Verizon. Previously, he was General Counsel at the office of the U.S. Trade Representative (USTR). Before that, he was VP for Congressional Affairs at Qwest Communications. Before that, he was General Counsel and Policy Director for former Rep. Dick Armey (R-TX). See, Verizon release.

4/7. The Department of Commerce's (DOC) Technology Administration (TA) released an its third annual report that measures science and technology indicators in fifty states, the District of Columbia and Puerto Rico. This report, titled "The Dynamics of Technology Based Economic Development", is published in the TA web site in PDF in four files. See, Contents, Part 1, Part 2, and Part 3.

4/7. The Supreme Court issued its opinion [35 pages in PDF] in State Farm v. Campbell, holding that an award of $145 Million in punitive damages, based on an award of $1 Million in compensatory damages, is excessive and violates the due process and equal protection clauses.

4/7. The Supreme Court denied certiorari in FutureSource v. Reuters, a case involving the affect of a bankruptcy sale upon a contract involving intellectual property rights. See, Order List [10 pages in PDF] at page 3. See also, November 27, 2002 opinion [8 pages in PDF] of the U.S. Court of Appeals (7thCir), and story titled "7th Circuit Reverses in FutureSource v. Reuters" in TLJ Daily E-Mail Alert No. 562, December 6, 2002.

4/7. The Supreme Court denied certiorari in Ty v. Perryman, a trademark dilution case. See, Order List [10 pages in PDF], at page 8. See also, October 4, 2002 opinion [PDF] of the U.S. Court of Appeals (7thCir), and story titled "Posner Opinion Provides Economic Analysis of Trademark, Dilution & Cybersquatting" in TLJ Daily E-Mail Alert No. 524, October 7, 2002.

The House will meet at 10:30 AM for morning hour and at 12:00 NOON for legislative business. The House will consider several non technology related items under suspension of the rules.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Public Service Commission of Colorado v. FCC, No. 02-1163. Judges Rogers, Garland and Silberman will preside. Location: 333 Constitution Ave., NW.

9:30 AM. The House Government Reform Committee's Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census will hold an oversight hearing titled "Cyber Security: The Challenges Facing Our Nation In Critical Infrastructure Protection". The witnesses will be Richard Clarke (former Special Advisor to the President for Cyberspace Security), Michael Vatis (Dartmouth College), Robert Dacey (General Accounting Office), Mark Forman (Office of Management and Budget), Thomas Pyke (Department of Commerce), and Rhonda MacLean (Bank of America). Press contact: Bob Dix, 202 225-6751. Location: Room 2247, Rayburn Building.

9:30 AM. The Senate Rules and Administration Committee will hold an oversight hearing on the Library of Congress and the Congressional Research Service. Location: Room 301, Russell Building.

12:30 PM. Ted Turner will give a luncheon speech. Location: Ballroom, National Press Club, 529 14th St. NW, 13th Floor.

2:00 PM. House and Senate conferees will meet regarding S 151, the "Prosecutorial Remedies and Tools Against the Exploitation of Children Today Act of 2003", also known as the PROTECT Act. The House version of this bill includes a ban on misleading domain names, and provisions relating to computer generated images. Location: Room HC-8, Capitol Building.

4:00 PM. Ellen Goodman will present a draft paper titled "Spectrum Rights in the Telecosm to Come". For more information, contact Robert Brauneis at 202 994-6138 or rbraun@main.nlc.gwu.edu. Location: George Washington University Law School, Faculty Conference Center, Burns Building, 5th Floor, 720 20th Street, NW.

The House will meet at 10:00 AM.

10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will meet to mark up HR 1320, the Commercial Spectrum Enhancement Act. The event will be webcast. Location: Room 2123, Rayburn Building.

10:00 AM - 12:00 NOON. The House Science Committee will hold a hearing titled "The Societal Implications of Nanotechnology" and HR 766, the Nanotechnology Research and Development Act of 2003. The witnesses will be Ray Kurzweil (Kurzweil Technologies), Vicki Colvin (Rice University), Langdon Winner (Rensselaer Polytechnic Institute), and Christine Peterson (Foresight Institute). The event will be webcast. Location: Room 2318, Rayburn Building.

10:00 AM. The House Judiciary Committee's Task Force on Antitrust will hold a hearing on HR 1086, the "Standards Development Organization Advancement Act of 2003". The event will be webcast. Location: Room 2141, Rayburn Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hold oral argument in First Graphics v. M.E.P. CAD, No. 02-1469, an appeal from the U.S. District Court (NDIll). Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The House Appropriations Committee's Subcommittee on Commerce, Justice and the Judiciary (CJS) will hold a hearing on the budget for the Supreme Court. Location: Room H-309, Capitol Building.

10:00 AM. The House Appropriations Committee's Subcommittee on Commerce, Justice and the Judiciary (CJS) will hold a hearing on the budget for the Federal Trade Commission (FTC). Location: Room H-309, Capitol Building.

6:00 - 8:00 PM. The Federal Communications Bar Association (FCBA) will host a continuing legal education (CLE) seminar titled "The World Radio Conference 2003: How Does It Work? What Will It Mean?". The price is $60 for FCBA members, $50 for government, academic and law student members, and $80 for non-members. RSVP to Wendy Parish at wendy@fcba.org. Location: Capital Hilton Hotel, 16th & K Sts. NW, Senate Room.

The House will meet at 10:00 AM.

8:00 - 10:15 AM. The Arlington County Bar Association and the D.C. Bar Association's Intellectual Property Law Section will host a continuing legal education (CLE) seminar titled "Patent Damages -- Current Legal Issues and Strategies". The speakers will be Abram Hoffman and Edward Gold, both of the Economics and Statistics Practice of Price Waterhouse Coopers. The price to attend is $60. For more information, contact 703 228-3390 or acbahead@juno.com. Location: Washington Golf and Country Club, 3017 N. Glebe Road, Arlington VA.

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. See, notice. Location: Room 226, Dirksen Building.

10:00 AM. The House Appropriations Committee's Subcommittee on Homeland Security will hold a hearing on the budget for science and technology at the Department of Homeland Security. Location: Room 2359, Rayburn Building.

10:00 AM. The Senate Appropriations Committee's Commerce, Justice, State, and the Judiciary Subcommittee will hold a hearing on the proposed budget for fiscal year 2004 for the Federal Bureau of Investigation (FBI). Location: Room S-146, Capitol Building.

10:00 AM. The House Appropriations Committee's Subcommittee on the VA, HUD and Independent Agencies will hold a hearing on the budget for the National Science Foundation. Location: Room H-143, Capitol Building.

12:00 NOON - 1:45 PM. The Legislation Committee of the DC Bar Association's Intellectual Property Law Section will host a luncheon program titled "Trademark Legislative Agenda". The speakers will be Michael Heltzer (International Trademark Association), Amy Cotton (USPTO), and Paul Levy (Public Citizen Litigation Group). For more information, call 202 626-3463. The price to attend ranges from $25 to $35. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 level.

2:00 PM. The Senate Appropriations Committee's Homeland Security Subcommittee will hold a hearing on the proposed budget for fiscal year 2004 for science and technology. Location: Room 192, Dirksen Building.

The Progress & Freedom Foundation (PFF), a Washington based think tank that focuses on technology and communications issues, will hold its 10th anniversary celebration. Mitch Daniels, Director of the Office of Management and Budget (OMB), will be the after dinner speaker. FCC Chairman Michael Powell and FTC Chairman Timothy Muris will also be present. For more information, contact Jane Creel at 202 289-8928 or jcreel@pff.org. See, PFF notice. Location: Renaissance Mayflower Hotel.

Day one of a two day conference hosted by the American Association for the Advancement of Science (AAAS) titled "Colloquium on Science and Technology Policy". See, notice and agenda [PDF]. Location: Washington Plaza Hotel, 10 Thomas Circle, 14th and M Streets, NW.

The House will meet at 10:00 AM.

9:30 AM. The Copyright Office (CO) will hold the first of four hearings in Washington DC regarding the exemption of certain classes of works from the Digital Millennium Copyright Act's (DMCA) prohibition against circumvention of technological measures that control access to copyrighted works. See, notice in the Federal Register, March 20, 2003, Vol. 68, No. 54, at Pages 13652 - 13653. See also, CO web page on rulemakings on anticircumvention, the relevant statutory sections at 17 U.S.C. §§ 2101-2105, and story titled "Copyright Office to Hold Hearings on DMCA Anti Circumvention Exemptions", TLJ Daily E-Mail Alert No. 628, March 21, 2003. Location: Mumford Room, LM-649, James Madison Building, Library of Congress, 101 Independence Ave, SE

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Unity Broadcasting v. FCC, No. 02-1101. Judges Edwards, Randolph and Tatel will preside. Location: 333 Constitution Ave., NW.

Day long meeting of the Federal Communications Commission's (FCC) Consumer Advisory Committee.

Day two of a two day conference hosted by the American Association for the Advancement of Science (AAAS) titled "Colloquium on Science and Technology Policy". See, notice and agenda [PDF]. Location: Washington Plaza Hotel, 10 Thomas Circle, 14th and M Streets, NW.

The House will be in recess from April 14 through April 25 for the Spring District Work Period.

12:00 NOON. The Cato Institute will host a panel discussion titled "What's Up with the PATRIOT Act? Concerns about the Legislative Response to 9/11 and the Prospect of a PATRIOT II". The speakers will be Tim Lynch (Cato), and Jim Dempsey (Center for Democracy and Technology). See, notice and registration page. Lunch will be served. Location: Room B-338, Rayburn Building.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) [MS Word] titled "In the Matter of Second Periodic Review of the Commission's Rules and Policies Affecting the Conversion To Digital Television". This is MB Docket No. 03-15, RM 9832, and MM Docket Nos. 99-360, 00-167, and 00-168. See, FCC release and notice in the Federal Register, February 18, 2003, Vol. 68, No. 32, at Pages 7737-7747.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding on how to use the reallocated Mobile Satellite Service (MSS) spectrum as well as other bands previously proposed for Advanced Wireless Service (AWS) use, the relocation of the Multipoint Distribution Service (MDS), and additional flexibility for the Unlicensed Personal Communications Service (UPCS) band spectrum. This is ET Docket 00-258 and IB Docket No. 99-81. See, notice in the Federal Register, March 13, 2003, Vol. 68, No. 49, at Pages 12015 - 12020.