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May 13, 2003, 9:00 AM ET, Alert No. 660.
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Court Upholds FCC Order Allowing Noncommercial Public TV to Offer Subscription Services on Excess Digital Capacity

5/9. The U.S. Court of Appeals (DCCir) issued its opinion [14 pages in PDF] in United Church of Christ v. FCC, upholding the Federal Communications Commission's (FCC) order allowing some advertiser supported public television.

The FCC adopted a Report and Order on October 11, 2001, that provides that noncommercial public television stations may offer subscription services, including advertiser supported subscription services, on their excess digital capacity. This order was adopted in the FCC proceeding titled "In re Ancillary or Supplementary Use of Digital Television Capacity by Noncommercial Licensees" and numbered MM Docket No. 98-203. See also, notice of the order in the Federal Register, November 26, 2001, Vol. 66, at Pages 58973 - 58982. And see, order, at 16 FCC Rcd 19042.

The United Church of Christ, Alliance for Community Media, and Center for Digital Democracy filed a petition for review of the FCC's order with the Court of Appeals. The petitioners argued in their brief [50 pages in PDF] that the order was contrary to 47 U.S.C. § 399b.

They also argued that the FCC inadequately explained its departure from agency precedent that prohibited broadcasting of advertisements by noncommercial public television stations and restricted the transmission of subscription television by those stations.

The Court of Appeals denied the petition for review.

399b(a) provides that the term "advertisement" means "any message or other programming material which is broadcast or otherwise transmitted in exchange for any remuneration". Meanwhile, 399b(b) provides that "No public broadcast station may make its facilities available to any person for the broadcasting of any advertisement". That is, the definition of advertisement references "broadcast or other transmitted", while the prohibition only references "advertisement".

The Court found that the intent of Congress is not clear on the issue before the Court. It further held that the FCC reasonably interpreted § 399b to prohibit only "broadcast" and not other transmissions of advertisements by these stations.

The Court also held that the FCC "adequately addressed its precedent by explaining that the high costs of digital technology required greater flexibility, that digital technology offers enough capacity that public stations can offer subscription services while still preserving their primary use for public educational broadcasts, and that some prior Commission decisions had authorized such stations to operate their facilities for commercial purposes on a limited basis."

Harold Feld of the Media Access Project argued the case for the petitioners. He stated in a release [PDF] that "We are disappointed with the court's ruling. The FCC sets aside special licenses solely for the use of non-commercial educational programming. For programmers to use these noncommercial licenses to offer commercial programming undermines the very purpose of public television. Every party to this challenge supports the mission of public television and believes that it needs more money to continue to produce high-quality programming for the digital age. But this is not the way. As FCC Commissioner Copps said when he dissented from the FCC Order below, this compromises the very soul of public television."

Rep. Rush Introduces Telecom Diversity Bill in House

5/9. Rep. Bobby Rush (D-IL) and others introduced HR 2044, the Telecommunications Ownership Diversification Act, a bill to 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 telecommunications businesses.

This is the companion bill in the House to S 267, sponsored by Sen. John McCain (R-AZ). See, story titled "Sen. McCain Introduces Telecom Diversity Bill" in TLJ Daily E-Mail Alert No. 595, January 31, 2003.

The bill recites that "It is consistent with the public interest and with the pro-competition policies of the Telecommunications Act of 1996 to provide incentives that will facilitate investments in, and acquisition of, telecommunications facilities by economically and socially disadvantaged businesses, thereby diversifying the ownership of telecommunications facilities."

Rep. Bobby RushRep. Rush (at right) stated in a release that "This bill would level the playing field ... so that economically disadvantaged businesses owners could enter the communications field. Minority and economically disadvantaged business owners have been absent from the telecommunications revolution. There are many factors attributed to this lack of participation, ... but chief among them is the lack of capital. My bill would remedy this problem by making minor changes to the existing tax code, so that individuals who are currently under-represented in the ownership of telecommunications companies are able to compete on an equal footing with large companies."

The bill was referred to the House Ways and Means Committee.

The original cosponsors of the bill include Rep. John Dingell (D-MI), the ranking Democrat on the House Commerce Committee, and Rep. Fred Upton (R-MI), the Chairman of the House Telecommunications and Internet Subcommittee. However, while the bill is cosponsored by these, and other members of the House Commerce Committee, it lacks original co-sponsors who are members of the Ways and Means Committee.

More Bills Introduced

5/7. Rep. Anthony Weiner (D-NY) introduced HR 2025, the "Subway Cell Access Act". The bill would amend the Communications Act to provide that the Federal Communications Commission (FCC) "shall, by regulation, require that each commercial mobile service provide service for the universal emergency telephone number designated under section 251(e)(3) within each subterranean boarding station that is located within any geographic area in which such commercial mobile service provides service at ground level." The bill was referred to the House Commerce Committee.

5/6. Rep. Maurice Hinchey (NY) introduced HRes 218, a resolution to express the sense of the House that the Federal Communications Commission (FCC) should not revise its media ownership rules without more extensive review and comment by the public. It was referred to the House Commerce Committee. See, Hinchey release.

More News

5/9. The Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) sent letters to four web site operators regarding their marketing claims pertaining to their products. The products relate to Severe Acute Respiratory Syndrome (SARS) and other health and safety products. The letter regarding claims pertaining to SARS states that "The FTC staff strongly urges you to review all claims you are making for your products, particularly claims that your products can prevent, mitigate, treat or cure SARS. If your claims are not supported by competent and reliable scientific evidence they should be deleted or revised immediately." The FTC possesses civil enforcement authority under the Federal Trade Commission Act. It can seek injunctive and monetary relief through judicial or administrative actions. See also, letter regarding claims pertaining to masks and clothing to protect individuals from bio-chemical or nuclear agents, letter regarding claims pertaining to treatments and cures for anthrax and other health hazards, and letter [PDF] regarding claims pertaining to potassium iodide products for protection against nuclear radiation.

5/12. The Securities and Exchange Commission (SEC) published a notice in the Federal Register containing the SEC's interpretation of its rule permitting broker-dealers to store required records in electronic form. The SEC stated that "Under the rule, electronic records must be preserved exclusively in a non-rewriteable and non-erasable format. This interpretation clarifies that broker-dealers may employ a storage system that prevents alteration or erasure of the records for their required retention period." See, Federal Register, May 12, 2003, Vol. 68, No. 91, at Pages 25281 - 25283.

5/6. Providian National Bank submitted a request for an advisory opinion [9 page PDF scan] to the Federal Election Commission (FEC). Providian has an affinity credit card program. It enters into agreements with companies or organizations to be affinity sponsors. Providian then provides credit cards that are co-branded by Providian and the affinity sponsors. Providian further states that while it uses the affinity sponsor's trademarks and membership lists, its only interest is increasing the number of its credit card customers. And now, Providian wants to enter into affinity agreements with national political party committees. Providian states that it would not contribute any money to party committees, but it would enable its customers to do so, such as by directing rebates or bonuses to party committees. Providian requests an advisory opinion confirming that these affinity agreements with party committees are permissible under the Federal Election Campaign Act (FECA).

5/8. The International Intellectual Property Alliance (IIPA) sent a letter [PDF] to the International Trade Commission (USITC) stating its support for the U.S. Chile free trade agreement (FTA).

5/12. The Federal Communications Commission (FCC) fined Western Wireless Corporation $200,000 for operating a cellular radio transmitting tower from an unauthorized location, in violation of 47 U.S.C. § 301. See, FCC release [PDF] and Notice of Apparent Liability [14 pages in PDF].

5/12. The Federal Communications Commission (FCC) announced that an individual named Rayon "Junior" Payne was sentenced by the U.S. District Court (MDFl) to 9 months in prison for operating an unlicensed FM radio facility, in violation of 47 U.S.C. § 301. See, FCC release.

FCC Receives Few Comments on AOL Time Warner Petition

5/13. Monday, May 5, was the deadline to submit original comments to the Federal Communications Commission (FCC) regarding AOL Time Warner's petition [58 pages in PDF] requesting relief from the FCC's January 22, 2001 Memorandum Opinion and Order (MOO) approving the merger of AOL and Time Warner, and imposing conditions upon AOL Time Warner regarding instant messaging services. Specifically, AOL Time Warner seeks relief from the condition restricting its ability to offer internet users streaming video advanced Instant Messaging based high speed services (AIHS) via AOL Time Warner broadband facilities.

As of May 12, the FCC had published in its web site only one noteworthy comment. Gerald Faulhaber and David Farber submitted a comment [pages in PDF] on April 5 in which they stated that "We urge the FCC to proceed cautiously. While conditions have evolved since the Merger Order that suggest network effects and tipping are not as urgent today, other evidence suggests that it is perhaps even more urgent. The FCC needs to recall that AOL Time Warner has in its own hands the ability to offer advanced IM-based highspeed services without let or hindrance: it need only interoperate with its competitors, as it promised the world it would do two years ago, to the benefit of all customers."

Both are now professors at the University of Pennsylvania. However, both previously worked at the FCC on the AOL Time Warner merger.

They also pointed out that "there is one condition that is unchanged" -- "AOL Time Warner's failure to interoperate."

They added that "AOL Time Warner has a very easy way to demonstrate that it is no longer dominant in IM: offer to interoperate with their competitors. If they are truly not dominant, then this is their best strategy. But if they are dominant (as they claim they are not), then they would refuse to interoperate (which is what they are actually doing)." (Parentheses in original.)

May 20 is the deadline to submit reply comments. This is FCC Docket No. 00-30.

Tuesday, May 13

The House will meet at 12:30 PM for morning hour and at 2:00 PM for legislative business. It will consider several non tech related items under suspension of the rules. Votes will be postponed until 6:30 PM.

9:00 AM - 5:00 PM. Day two of a two day meeting titled "Wireless Innovations: New Technologies and Evolving Policies", hosted by the Federal Communications Commission (FCC), National Telecommunications and Information Administration (NTIA), and Department of State. The second day will be a panel discussion on policy. See, notice in the Federal Register, April 24, 2003, Vol. 68, No. 79, at Page 20117 - 20118. Location: Department of Commerce Lobby and Auditorium, 1401 Constitution Ave., NW.

9:30 AM. The Senate Commerce Committee will hold another hearing on media ownership. The scheduled witnesses are Mel Karmazin (P/COO of Viacom), Jim Goodmon (P/CEO of Capitol Broadcasting Company), Frank Blethen (Publisher of the Seattle Times), William Singleton (VCh/CEO of Media News Group and Publisher of the Denver Post and Salt Lake Tribune), Victor Miller (Bear Sterns), Gene Kimmelman (Consumers Union). See, notice. Press contact: Rebecca Hanks at 202 224-2670 or Andy Davis at 202 224-6654. Location: Room 253, Russell Building.

10:00 AM. The Senate Banking Committee will hold a hearing on several pending nominations, including that of Greg Mankiw to be a Member of the President's Council of Economic Advisors. Location: Room 538, Dirksen Building.

2:00 PM. The Senate Finance Committee's International Trade Subcommittee will hold a hearing to examine the status of the free trade area of the Americas, focusing on negotiations and preparations for the Miami Ministerial.

4:00 - 5:00 PM. The U.S. Chamber of Commerce will host an event titled "Homeland Security Business Forum: Science and Technology Under DHS". Charles McQueary, Under Secretary for Science and Technology, Department of Homeland Security, will speak. See, notice and online registration page. The price to attend is $35 (members) or $100 (others). For more information, contact ncfevents or 202 463-5500. Location: 1615 H Street, NW.

The Federal Communications Commission (FCC) will begin Auction 48 (upper and lower bands paging licenses).

Wednesday, May 14

The House will meet at 10:00 AM for legislative business. It will consider several non tech related items under suspension of the rules.

10:00 AM. The House Science Committee will hold a hearing on cybersecurity research and development. The witnesses will be Arden Bement, Director of the National Institute of Standards and Technology (NIST), Charles McQuery, Under Secretary for Science and Technology at the Department of Homeland Security, Rita Colwell, Director of the National Science Foundation (NSF), and Anthony Tether, Director of the Defense Advanced Research Projects Agency (DARPA). Press contact: Heidi Tringe at 202 225-4275. Location: Room 2318, Rayburn Building.

8:30 AM. The Federal Trade Commission (FTC) will hold a one day workshop on the role of technology in helping consumers protect the privacy of personal information, including the steps taken to keep their information secure. See, FTC release and notice in the Federal Register, February 26, 2003, Vol. 68, No. 38, at Pages 8904 - 8906. The FTC stated that "Reporters unable to attend the discussion may call in: Dial-in: 1-800-377-4872 Confirmation Number: 17001898". Location: FTC, 601 New Jersey Ave., NW.

EXTENDED TO MAY 21. Deadline to submit reply 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 also, FCC release and notice in the Federal Register, February 18, 2003, Vol. 68, No. 32, at Pages 7737-7747. See also, notice [PDF] extending deadlines.

Thursday, May 15

The House will meet at 9:00 AM. It will consider HR 1527, the National Transportation Safety Board Reauthorization.

9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. See, notice. Press contact: Margarita Tapia at 202 224-5225. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Banking Committee will hold a hearing to examine the Fair Credit Reporting Act (FCRA) and issues presented by the re-authorization of the expiring preemption provisions. Location: Room 538, Dirksen Building.

10:00 AM. The House Judiciary Committee will hold a hearing on HR 1115, the Class Action Fairness Act of 2003. The hearing will be webcast. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

12:00 NOON. Stratton Sclavos, Ch/CEO of VeriSign, will speak at a Congressional Internet Caucus luncheon. RSVP to or 202 638-4370. Lunch will be served. Location: Mansfield Room (S-207), Capitol Building.

Friday, May 16

12:00 NOON. The Federal Communications Bar Association's (FCBA) Diversity Committee will host a brown bag lunch. The speakers will be Bill Bailey and Toni Cook Bush. RSVP to Harry Wingo at 202 418-1783 or Location: Room 253, Russell Building.

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Inquiry (NOI) [MS Word] regarding "Additional Spectrum for Unlicensed Devices Below 900 MHz and in the 3 GHz Band". Unlicensed devices would include, among other things, 802.11. See, notice in Federal Register, January 21, 2003, Vol. 68, No. 13, at Pages 2730-2733. See also, story titled "FCC Announces Notice of Inquiry Re More Spectrum for Unlicensed Use" in TLJ Daily E-Mail Alert No. 566, December 12, 2002. For more information, contact Hugh Van Tuyl in the FCC's Office of Engineering & Technology at or 202 418-7506. This is OET Docket No. 02-380. See, notice of extension [PDF].

Saturday, May 17

2:00 PM. Richard Clarke will speak at the commencement ceremony at George Mason University School of Law. See, notice. Location: GMU Center for the Arts, Fairfax, Virginia campus.

Monday, May 19

The Supreme Court will return from a recess that it began on Monday, May. 5.

9:30 AM - 5:00 PM. The Federal Communications Commisssion's (FCC) Office of Engineering and Technology (OET) will host a public workshop on cognitive radio technologies. See, notice and agenda [PDF]. This event will be webcast. For more information, contact Michael Marcus at 202 418-2418 or mike.marcus or Jim Schlichting at 202 418-1547 or jim.schlichting Location: FCC, Commission Meeting Room, 445 12th Street, SW.

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