|FCC to Hold Hearing and Issue NPRM on
Regulation of VOIP
11/6. The Federal Communications
Commission (FCC) announced that it will hold a forum on Voice over Internet
Protocol (VOIP) issues on December 1, 2003, and that it will then issue a Notice
of Public Rule Making (NPRM) "to inquire about the migration of voice services
to IP-based networks and gather public comment on the appropriate regulatory
environment for these services". See, FCC
The FCC Chairman Michael Powell wrote a
letter [2 pages in PDF] to Sen. Ron Wyden
(D-OR) regarding this issue. He wrote that the hearing "will have a wide range
of witnesses from the industry and government to focus on a variety of VoIP
issues. We will look at how the digital technologies are being used to provide a
variety of voice services in the marketplace. We will also explore emerging
regulatory issues, such as FCC precedent and the classification issues raised in
the recent Minnesota District Court ruling on VoIP services. Finally, we will
begin a conversation on how best to achieve important health, safety and welfare
policy objectives, such as E911, universal service and securing our homeland."
October 16, 2003, the
U.S. District Court (DMinn) issued its
and Order [PDF] in Vonage v. Minnesota Public Utilities Commission, holding
that Vonage is an information service provider,
and that the MPUC cannot apply state laws that regulate telecommunications carriers
to Vonage. The Court wrote that "State regulation would effectively decimate
Congress's mandate that the Internet remain unfettered by regulation." See,
"District Court Holds that Vonage's VOIP is an Information Service", also
published in TLJ Daily E-Mail Alert No. 760, October 17, 2003.
Powell continued that "This NPRM will, in part, inquire about the migration
of voice services to IP-based networks and gather public comment on the
appropriate regulatory environment for VoIP services. Over the course of the
next year, after full public comment and thoughtful consideration of the record,
the FCC plans to follow up the NPRM with a Report and Order on the VoIP issues
raised in the proceeding."
He also stated that "As new digital technologies and Internet
applications, such as VOIP, challenge the established technological, market and
regulatory structures of our analog past, the FCC will continue to stay at the
forefront of change. The FCC has been studying VoIP issues for several years,
but things have greatly accelerated over the past year and, thus, so have the
FCC's actions to address the complex issues that arise. The FCC is currently
considering several petitions involving different flavors of VoIP. Last month,
the FCC's Technical Advisory Council held a meeting devoted solely to VoIP
|1st Circuit Upholds Constitutionality of
Electronic Highway Toll Collection System
11/6. The U.S. Court of
Appeals (1stCir) issued its
opinion in Doran v. Massachusetts Turnpike Authority upholding
the constitutionality of Massachusetts' automatic electronic toll road payment
The dormant Commerce Clause is frequently asserted to challenge
state protectionists laws on the basis that these laws discriminate against
interstate commerce. Recently, the dormant Commerce Clause has been raised in
many cases where state laws discriminate against electronic commerce, and in favor
of face to face transactions.
For example, small wineries in California and elsewhere suffer
from protectionists legislation in many states that effectively bars internet
wine sales. Some of these wineries have challenged these statutes under the
dormant Commerce Clause.
However, in this case, the plaintiffs attempted to turn the
Commerce Clause on its head. They asserted that a state law that allows for
electronic transactions discriminates against interstate commerce. The District
Court rejected the plaintiffs' argument, and the Court of Appeals affirmed.
Electronic commerce remains constitutional in the First Circuit.
The Massachusetts Turnpike
Authority (MTA) builds roads. It also collects tolls from drivers who use
roads to fund the construction of more roads.
Pursuant to state statutory authority, the MTA established
program titled "FAST LANE
Discount Program" or "FLDP". The Appeals Court described this program as
follows: it "allows vehicles equipped with a transponder to pass through toll
plazas without having to stop and pay. Participants must purchase a transponder
from MTA for $27.50. The transponder is a small plastic device attached to the
windshield. It signals the car's identity to an MTA facility which automatically
charges the toll to the driver's account. Drivers generally assign their account
to their credit card which is billed $20 at the outset; thereafter, tolls are
deducted until $10 remains, at which point an additional $10 is billed to
replenish the account. Cars equipped with transponders used in other cities that
-- like the E-Z Pass system -- are
interoperable, may drive through FAST LANE toll gates without stopping, but do
not receive discounts."
Anyone is allowed to participate in the program, regardless of their state of
Peter Doran and Wendy Saunders are two out of state drivers who
paid the full toll to the MTA in face to face cash transactions.
Doran and Saunders filed a complaint in
U.S. District Court (DMass) against
the MTA under 42
U.S.C. § 1983 alleging that their rights under the dormant Commerce Clause
were violation by the MTA's FLDP program.
The plaintiffs' argument was that out of state drivers tend to
use MTA roads less than Massachusetts drivers, and are therefore less likely to
find it advantageous to purchase the transponder, and take advantage of the
discounts. District Court dismissed for failure to state a claim. The
The Appeals Court affirmed. It first reviewed the appropriate
Commerce Clause analysis. It wrote that "The Commerce Clause of the United
States Constitution grants Congress the power to ``regulate Commerce ... among
the several States.´´ U.S. Const. art. I, § 8, cl. 3. The Commerce Clause ``not
only grants Congress the authority to regulate commerce among the States, but
also directly limits the power of the States to discriminate against interstate
New Energy Co. v. Limbach, 486 U.S. 269, 273 (1988). This ``dormant´´
Commerce Clause ``prohibits economic protectionism -- that is, regulatory
measures designed to benefit in-state economic interests by burdening
The Appeals Court wrote that "The FLDP is available on identical
terms to drivers without regard to their residence; the program incorporates no
distinctions or classifications based on residence and participation is open to
anyone. The benefits of the discount program accrue simply on account of a
driver's frequency of use. The frequent driver will receive a greater amount of
discounts than the infrequent driver, but he or she will, of course, also pay a
correspondingly greater amount in tolls."
The Court added that "It is true that to participate in the FLDP,
a driver must purchase a transponder for $27.50. The right to purchase is not
restricted to residents, but is open to all. The decision whether to do so turns
on one's anticipated frequency of use. The distance a driver lives from Boston
will be a factor, but not the only factor, affecting the frequency with which he
or she is likely to drive through the toll plazas or the tunnels. But the
frequency calculus creates no resident versus nonresident classification."
Notably, the opinion was written, not by a First Circuit Judge,
but rather by Senior Judge
Schwarzer of the U.S. District Court
for the Northern District of California. He sat by designation. First
Circuit Judges Torruella and Howard joined.
This case is Peter Doran and Wendy Saunders v. Massachusetts
Turnpike Authority, et al., U.S. Court of Appeals for the 1st Circuit, No.
03-1312, an appeal from the U.S. District Court for the District of
Massachusetts, Judge Nancy Gertner presiding.
|FTC Files Complaint Against Company
Exploiting Microsoft Messenger to Display Pop Up Ads
11/6. The Federal Trade Commission (FTC) filed a
complaint [11 pages
in PDF] in U.S. District Court (DMd)
against D Squared Solutions LLC and others alleging unfair trade
practices in violation of the Federal Trade Commission Act (FTCA) in connection
with the exploitation of the Microsoft Windows Messenger Service to send to
computers frequent and unwarranted pop up ads that offered for sale software that
stops the ads.
See also, FTC release.
The complaint, which was filed on October 30, alleges
that "Since at least May 2003, defendants, utilizing a network administration
feature of Microsoft Windows known as ``Messenger Service´´ have caused a stream
of repeated, unwanted ``pop up´´ advertisements to pop up and appear on the
computer screens of consumers throughout the United States, including consumers
in this District. In numerous instances, defendants have caused a series of
their pop ups (also known as ``Messenger Service spam´´ and ``pop up spam´´) to
appear on computer screens, popping up at 10-minute to 30-miute intervals during
a given computer session. In numerous instances, defendants have caused their
repeated, unwanted Messenger Service spam to appear on a consumer's computer'
screen for several weeks and/or several months on end. These pop up
advertisements appear on consumers' computer screens even when the consumers are
not using their Internet browsers (for instance, when consumers are using word
processing software), so long as the consumers are logged onto the Internet."
The complaint further states that "Most of the pop up messages instruct
consumers to visit one of the defendants' web sites where they can purchase software
that will cause the pop ups to stop."
It also alleges that "The Messenger Service is designed to provide computer network
administrators with the ability to provide instant information to network users,
such as the need to log off of the network due to a system malfunction. Because
of its intended purpose, Messenger Service pop up windows appear on a consumer's
computer screen so long as the consumer is logged onto the network, no matter
what application (e.g., word processing, spreadsheet, financial management) the
consumer is using." (Parentheses in original.)
"In essence, defendants bombard an individual consumer with a
stream of repeated, unwanted pop up spam in an attempt to induce the consumer to
pay defendants to stop the bombardment", the FTC complaint alleges.
The FTC also alleges that "Consumers have suffered and continue to suffer
injures from defendants' pop
up spam including but not limited to, losing data, losing work productivity,
having their computer screens freeze suffering an increasing level of
frustration, annoyance, and harassment at receiving the pop ups, and expending
money to purchase pop up-blocking or ``firewall´´ software."
The complaint alleges two violations of Section 5(a) of the FTCA, which is codified at
15 U.S.C. § 45(a).
First, the FTC alleges that "defendants interfere with consumers' use of
their computers by causing a stream of multiple, unwanted Windows Messenger
Service pop ups to appear on consumers' computer screens even when consumers are
not using their Internet browsers."
Second, the FTC alleges coercion. It alleges that "by causing a stream of
multiple, unwanted Windows Messenger Service pop ups to appear on consumers'
computer screens , advertising software that will stop the delivery of the pop
ups, defendants attempt to coerce consumers into purchasing or licensing their
The FTC seeks preliminary and permanent injunctive relief, as well as
rescission of contracts, restitution, refunds, and disgorgement of profits.
The District Court issued a
Order and Order to Show Cause [12 pages in PDF] on October 30 in which it
ordered that the defendants "are temporarily restrained and enjoined from
directly or indirectly causing a Windows Messenger Service message, which
advertises, promotes, markets, offers for sale or license, or sells or licenses
any product or service, to appear on a computer user's computer screen."
The defendants are also restraining from selling or licensing any product
that exploits Messenger Service.
The District Court also set a hearing for 9:30 AM on November 10, 2003.
It will be held at the Garmatz Federal Courthouse, 101 W. Lombard Street,
The Windows Messenger is only present in Windows 2000, Windows XP and related
and subsequent operating systems.
Disbabling Windows Messenger, and hence,
stopping the pop ups can be accomplished quickly and easily as follows: Start - Control Panel -
Administrative Tools - Services - scroll down to Messenger and disable it.
A properly configured firewall can prevent the pop ups also. The FTC has a
with more detailed instructions.
|FTC Action Creates Uncertainty Regarding
Application of FTCA to Internet Communications and Advertising
11/6. The Federal Trade Commission's (FTC)
complaint [11 pages in PDF]
against D Squared Solutions alleging unfair trade practices in violation of the Federal
Trade Commission Act (FTCA) in connection with the exploitation of the Microsoft Windows
Messenger Service to send to computers pop up ads. This complaint does not provide clear
guidance regarding what other non-fraudulent, but "unfair", internet
communications and advertising practices may subject businesses to FTC enforcement actions.
The FTC brought the action against D Squared under Section 5 of the FTCA, which is
codified at 5 U.S.C. § 45(a).
This is broad and vague statute. The operative language provides only that "Unfair methods of
competition in or affecting commerce, and unfair or deceptive acts or practices
in or affecting commerce, are hereby declared unlawful."
The statute does not address spam, messaging, or pop up ads. Nor has the FTC
promulgated implementing regulations that address spam, messaging or pop up ads.
The FTC has brought many actions under Section 5 for internet related
practices. However, while the language is vague, the FTC heretofore has usually,
but not always, applied it against
internet based activity only in conjunction with precise statements of policy
that make it clear to businesses whether their conduct may subject them to an
FTC enforcement action.
For example, the FTC has used Section 5 of the FTCA against web site
operators in the context of online privacy. However, rather than enforcing some
collection of vague and unenumerated privacy practices, the FTC has stated
(through speeches, Congressional testimony, and elsewhere) that it will
site operators can know if they are risking action by the FTC simply
by reading their own privacy policies.
As another example, the FTC has brought many actions against e-mail spammers
under the Section 5 of the FTCA. But these cases have generally involved
fraudulent conduct, such as non-delivery of goods paid for by consumers, or
goods that do not perform as promised. Businesses know whether or not they are
lying to their customers.
The FTC has not been bringing actions against businesses based on the
notion, for example, that they are sending bulk unsolicited e-mail. This would
entail application of undefined concepts of what constitutes "bulk" e-mail, and
what constitutes "unsolicited".
In the D Squared action, the FTC is not operating under any precise
statement of policy that makes it clear to businesses whether or not they too
risk an enforcement action by the FTC.
In the D Squared case, fraud is not alleged. D Squared offered for sale a
software product. There is no allegation in the complaint that it failed to
deliver the product, that it overcharged for the product, or that the product
failed to work as promised.
Of course, the FTC can argue, with solid basis, that the conduct of D Squared
is unfair, but the notion of what is unfair is fair less clear than the notion
of what is fraudulent or deceptive.
On November 6 Howard Beales, Director of the FTC's Bureau of Consumer Protection,
and others, held a press conference to announce and discuss the D Squared litigation.
Beales explained that the defendants have "a fundamentally unfair business
model". However, Beales said little to provide clear guidance as to what is
an unfair business model in the context of internet ads and communications.
Although, he took several stabs at it.
First, Beales described the conduct of the defendants as "extortion".
For example, he said, "'I'll beat you, and I'll stop beating you if you pay. We
call that extortion; and it is not any different in the high tech world".
This explanation only confuses the matter. Extortion is a term that has
specific legal meaning within the context of criminal law. For example, Title 18,
Chapter 41 of the federal criminal code, addresses extortion and threats.
However, it uses the term extortion in the context of threats of kidnapping,
injury or death of persons. At minimum, extortion entails a threat to commit an
illegal act. D Squared did not threaten any person. At most it
threatened computers -- that is, until the users turned off Messenger Service.
In addition, the FTC has alleged no underlying illegal act in the complaint.
Moreover, the FTC has no authority to bring criminal actions.
Hence, Beales use of the term "extortion" is at best a metaphor. And,
metaphorically speaking, there is much extortion online. For example, spammers
send unsolicited e-mail advertising anti-spam software.
Second, Beales offered the explanation that there is a distinction between the exploitation
of e-mail and the exploitation of Messenger Service. He said that "e-mail is a
legitimate and widely used method of communication". But, Beales did not go so
far as to say either that the FTC considers that all use of Messenger Service
for ads is an unfair practice, or that the FTC considers that no use of e-mail
for ads is an unfair practice.
Beales was asked, "would they have been on safer ground if they had
advertised pormography?" He suggested that it would not, but he did not give a clear cut answer. He added that "we
would review the frequency and the nature". So, here again, the explanation
offers little guidance to other businesses.
Third, Beales offered the explanation that "they are creating a problem and then
trying to charge consumers for the solution". What then, would be the legal
meaning of "creating a problem". Does a software company that sells products
with defects or vulnerabilities "create a problem"? If these companies then
charge for upgrades that eliminate the defect or vulnerability, or charge for
telephone help in dealing with the defect or vulnerability, is this "unfair".
Whatever the Court ultimately orders D Squared and its owners to do will be
just and deserved. But, until the FTC provides more information as to what sort
of internet communications and advertising might constitute "unfair" practices,
this cases creates uncertainty for some businesses that make use of the
This case is FTC v. D Squared Solutions LLC, Dinesh Dhingra and Jeffrey
Davis, U.S. District Court for the District of Maryland, Baltimore Division,
D.C. No. AMD 03 CV 3108.
|Washington Tech Calendar
New items are highlighted in red.
|Friday, November 7
12:00 NOON - 2:00 PM. The
Progress & Freedom Foundation (PFF) will
host a Congressional seminar on the Federal Trade
Commission (FTC) report titled
"To Promote Innovation:
The Proper Balance of Competition and Patent Law and Policy". See, story
titled "FTC Releases Report on Competition and Patent Law" in TLJ Daily E-Mail
Alert No. 768, October 29, 2003. The speakers will be Susan Desanti (FTC), Michael Kirk
(American Intellectual Property Law Association),
Steven Merrill (National Academies' Board of Science, Technology and Economic Policy),
and Gerald Mossinghoff
(Oblon Spivak), and William
Adkinson (PFF). RSVP to Stefannie Bernstein at 202 289-8928 or
email@example.com. Lunch will be
served. See, PFF
notice. Location: Room 1539, Longworth Building.
12:15 - 1:30 PM. The
Federal Communications Bar Association's (FCBA)
Wireless Committee will host a luncheon panel discussion titled "Debate on
Licensed vs. Unlicensed Models for Spectrum Management". The speakers will
be Thomas Hazlett
(Manhattan Institute), and
Michael Calabrese (New America Foundation). The price to attend is $15. For more
information, contact firstname.lastname@example.org.
RSVP to email@example.com. Location: Sidley
Austin, 1501 K Street, NW, 6th Floor.
|Monday, November 10
The Intellectual Property Owners Association
(IPO) will host a one-day conference on corporate IP management. Location:
Oral argument before the U.S.
Court of Appeals (10thCir) in FTC v. Mainstream Marketing Service,
No. 03-1429. This is the telemarketers' constitutional challenge to the FTC's
do not call registry. See, October 8, 2003
order [24 pages in
PDF] staying the District Court's opinion, and setting an expedited schedule.
Location: Tulsa, Oklahoma.
|Tuesday, November 11
Veterans Day. The FCC will be closed.
|Wednesday, November 12
10:00 AM. The
Senate Judiciary Committee
will hold a hearing to examine judicial and executive nominations. Press contact:
Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242.
Location: Room 226, Dirksen Building.
11:00 AM. The Cato Institute
will host a book forum on Black Ice: The Invisible Threat of Cyberterrorism.
Author Dan Verton will speak. See,
Amazon page and Cato
notice. Lunch will follow the program. Location: 1000 Massachusetts Ave.,
Deadline to submit comments to the U.S.
Patent and Trademark Office (USPTO) regarding proposed changes to its
rules of practice to support the implementation of the 21st Century Strategic
Plan. The proposed changes include permitting electronic signatures on a
number of submissions, streamlining the requirements for incorporation by reference
of prior filed applications, and clarifying the qualifications for claiming
small entity status for purposes of paying reduced patent fees. See,
notice in the Federal Register, September 12, 2003, Vol. 68, No. 177, at
Pages 53815 - 53859.
Deadline to submit comments to the
Federal Communications Commission (FCC) in
response to its Notice of Inquiry (NOI) regarding the impact that communications
towers may have on migratory birds. See,
notice in the Federal Register, September 12, 2003, Vol. 68, No. 177, at
Pages 53696 - 53702. This is Docket No. WT 03-187, and FCC 03-205. The FCC
adopted this NOI on August 8, 2003, and released it on August 20, 2003. See
also, story titled "FCC Release NOI On Communications Towers and Migratory
Birds" in TLJ Daily E-Mail Alert No. 723, August 21, 2003.
|Thursday, November 13
9:00 AM - 12:00 NOON. The Telecommunications Service Priority (TSP) System
Oversight Committee will meet. See,
notice in the Federal Register, October
10, 2003, Vol. 68, No. 197, at Page 58725. Location: 2nd floor conference
room, National Communications System (NCS), 701 South Courthouse Road,
9:00 AM - 3:45 PM. The National
Institute of Standards and Technology's (NIST) Advanced Technology Program Advisory
Committee hold a partially closed meeting. See,
notice in the Federal Register, October 27, 2003, Vol. 68, No. 207, at
Page 61189. Location: NIST, Administration Building, Employees' Lounge,
9:30 AM. The
Senate Commerce Committee will
hold a hearing to examine the General Accounting
Office's (GAO) study
[94 pages in PDF] titled "Telecommunications: Issues Related to Competition
and Subscriber Rates in the Cable Television Industry". See, story titled "GAO
Releases Study on Cable Industry", in TLJ Daily E-Mail Alert No. 766, October
27, 2003. Press contact: Rebecca Hanks (McCain) at 202 224-2670 or Andy Davis
(Hollings) at 202 224-6654. Location: Room 253,
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 U.S. Court of Appeals (DCCir)
will hear oral argument in Adams Comm Corp v. FCC, No. 02-1232. Judges
Randolph, Roberts and Williams will preside. Location: Courtroom 20, 333 Constitution Ave.
10:00 AM. The Internal Revenue Service
(IRS) will hold a hearing regarding its notice of proposed rulemaking (NPRM)
regarding computation and allocation of the credit for increasing research
activities for members of a controlled group of corporations or a group of
trades or businesses under common control. The rules implement the research
and development tax credit codified at
26 U.S.C. § 41.
Location: IRS Auditorium, 7th Floor, 1111 Constitution Ave., NW. See,
notice in the Federal Register, July 29, 2003, Vol. 68, No. 145, at Pages
44499 - 44506.
2:00 - 3:00 PM. The
will host an event titled "Beyond Do-Not-Call: The FTC Agenda". The speakers
will be Timothy Muris, Chairman of the
Federal Trade Commission (FTC), and James Gattuso of the Heritage
notice. Location: Heritage Foundation, Lehrman Auditorium, 214
Massachusetts Ave., NE.
6:00 - 9:15 PM. The D.C. Bar Association will host a CLE course titled "How
to Litigate an Intellectual Property Case Series: Part 1 How to Litigate a
Trademark Case". Prices vary. For more information, call 202 626-3488.
Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 level.
|Friday, November 14
RESCHEDULED FOR NOVEMBER 20.
9:30 AM. The
U.S. Court of Appeals (DCCir)
will hear oral argument in CA Metro Mobile Comm v. FCC, No. 02-1370. Judges
Sentelle, Henderson and Garland will preside. Location: 333 Constitution Ave.
12:30 PM. The
Federal Communications Bar Association's (FCBA)
Legislation Committee will host a brown bag lunch. The topic will be
the "The Northpoint Issue: Will Congress Provide Spectrum Without an Auction?
The View From the Hill". For more information, contact Lee Carosi at 202
Lee_Carosi@commerce.senate.gov. Location: Wiley
Rein & Fielding, 1750 K Street Building, 5th Floor Conference Room.
|FRB Governor Says Info Tech Is One Reason
for Jobless Recovery
11/6. Federal Reserve
Board (FRB) Governor Ben
Bernanke gave a
speech at Carnegie Mellon University in Pittsburgh, Pennsylvania, titled
"The Jobless Recovery". He offered several explanations for why the economy is
growing so fast, but the recovery in the labor market is so slow. One of his
explanations is that corporate
managers are finally figuring out how to put to good use the high tech equipment
that they bought in the late 1990s.
Bernanke (at right) stated that "the economic slowdown that began in the
United States in late 2000 has been relatively mild" and "lasted only eight
months, from March to November of 2001."
"Nevertheless, in one key aspect, namely, the performance of the labor market,
the downturn was severe and the recovery has been exceptionally slow", said
He offered several explanations for why this is the case. One explanation is
"the remarkable increase in labor productivity we have
seen in recent years, not only in manufacturing but in the economy as a whole.
Since the trough of the recession in the fourth quarter of 2001, productivity in
the nonfarm business sector has risen at an annual average rate of 4-1/2
percent, compared with average annual increases of 2-1/2 percent in the late
1990s, itself a period of strong productivity growth."
He continued that "This surprising
productivity performance probably reflects both some increase in the long-run
rate of productivity growth as well as unmeasured increases in the work effort
of employees. However, in my view, neither of these factors can fully account
for the increase in productivity growth, particularly some of the recent
He said that "I suspect that some of the recent expansion in productivity
is instead the delayed result of firms' heavy investment in high-technology
equipment in the latter part of the 1990s. Only over time have managers learned
how to reorganize their production and distribution so as to take full advantage
of these new technologies and thus enhance the productivity of capital and
He concluded that "Strong productivity growth provides major benefits to the economy in the
longer term, including higher real incomes and more efficient and competitive
industries. But in the past couple of years, given erratic growth in final
demand, it has also enabled firms to meet the demand for their output without
hiring new workers."
|Commissioner Adelstein and
Sen. McCain Address Payola and Pay for Play
11/6. Federal Communications Commission
Jonathan Adelstein gave a
speech at a Federal Communications Bar Association (FCBA) luncheon. He spoke
almost entirely about broadcast radio and television.
He addressed media consolidation, the radio
industry's music promotion practices, allegations of payola, and the
consequences for artists, musicians, consumers and others. He also addressed
"broadcast news programs that
sell segments which appear to be part of their regular news coverage".
Adelstein (at right)
also quipped about the FCC's out of Washington
hearings on localism: "It’s always refreshing to get away from DC lobbyists -- and
instead hear directly from people organized by DC lobbyists."
He advocated FCC action to deal with payola. He stated that "It's been 40
years since enactment of the payola statutes. It's
time for the FCC to probe whether our rules adequately deter potentially new
forms of payola. If the practices are still occurring, we have direct statutory
authority, as well as an overall charge to regulate radio communications. So
there is a real need for the FCC to review its sponsorship identification rules
to make sure we are addressing modern day pay-for-play practices in the most
effective way possible given our clear responsibility under the law."
He also said that "That's what Senator Feingold suggested last year."
Sen. Russ Feingold (D-WI) introduced
S 221, the
"Competition in Radio and Concert Industries Act of 2003", on January 28, 2003.
He sponsored an earlier version in the 107th Congress,
Adelstein also stated that "An FCC review
has also been urged by a broad coalition of artists and music industry groups in
a joint statement last month. And just this week, Senate Commerce Committee
Chairman McCain is questioning payola and paid-for-journalism as a sham on the
Sen. John McCain (R-AZ) wrote a
letter to FCC
Chairman Michael Powell on November 3, 2003, regarding "alleged
``pay for play´´ on both television and radio broadcasts, which call into
question the adequacy of the Federal Communications Commission's
(``Commission´´) regulations on broadcast sponsorship and identification."
McCain (at left) continued that "Last month, The Washington Post detailed the
practices of WFLA-TV in Tampa,
Florida. The station airs a local morning show, ``Daytime,´´ with NBC's peacock
logo and WFLA-TV's ``News Channel 8´´ insignia at the bottom of the screen.
Segments of the program, however, are actually paid advertisements. The
program's anchors interview guests who pay $2,500 to appear on the program.
According to the article, the only mention of payment is at the end of the
program when the words ``the following segments were paid advertisements´´
appear in small type on the screen for about four seconds."
Sen. McCain also asked "whether you believe the Commission's rules on
sponsorship identification and ``payola´´ are adequate" and "whether you believe
Congressional action is necessary to ensure broadcasters do not continue to
deceive viewers through such ``sham´´ television programs as ``Daytime,´´ or to
preclude radio stations from demanding performances from musicians as
compensation for air time."
|People and Appointments
11/6. The Senate Judiciary
Committee approved the nomination of California Supreme Court Justice Janice Brown
to be a Judge of the U.S. Court of Appeals for the Ninth Circuit. Democrats will
oppose confirmation in the full Senate.
11/5. The Senate confirmed Roger Titus to be a Judge of the U.S.
District Court for the District of Maryland by a vote of 97-0. See,
Roll Call No. 438.
11/6. President Bush nominated Lawrence Stengel to be a Judge of the
U.S. District Court for the Eastern
District of Pennsylvania. See, White House
11/6. The Federal Communications Commission
(FCC) announced several appointments, effective November 3, 2003. Jacqueline
Ponti was named Associate Bureau Chief for Licensing and Operations in the
FCC's International Bureau (IB). The FCC
stated in a
release that she will "oversee long-term International Bureau licensing and
operations activities, and focus on information technology initiatives." She has
worked for the IB since 1994.
The FCC announced that Jacquelynn Ruff was named Chief of Staff and
Associate Bureau Chief of the IB. She will "oversee short and medium-term
strategic planning and development for the Bureau as well as agency-wide
coordination of Bureau items and initiatives. She also will continue to oversee
Bureau work on international trade issues". She has worked for the IB since
The FCC announced that John Giusti was named an Assistant Bureau Chief
of the IB. He will "oversee Bureau policy and activity regarding international
outreach, including International
Telecommunication Union matters, regulator-to-regulator dialogues and
cross-border issues". He has worked for the IB since 1996.
The FCC announced that Linda Dubroof and Julie Barrie were named Deputy
Division Chiefs of the IB's Strategic
Analysis & Negotiations Division (SAND).
The FCC announced that Christopher Murphy was named Chief
of the SAND's International
Telecommunications & Development Branch. He will "oversee the Division's
work with the ITU Telecommunications Standardization Sector and the ITU
Development Sector, as well as participation in major ITU conferences and
meetings. He has worked for the IB since 1996.
11/6. Microsoft announced that
it has reached a settlement of the class
action lawsuit against Microsoft alleging violation of the state of North
Carolina's antitrust and unfair competition laws. See, Microsoft
11/6. Counsel for both the government and defendants submitted to the
U.S. District Court (DC) a
Protective Order [15 pages in PDF] in USA v. First Data & Concord EFS, Inc.,
D.C. No. 03-2169 (RMC). See also,
titled "DOJ Sues to Stop Merger of PIN Debit Networks", also published in TLJ
Daily E-Mail Alert No. 765, October 24, 2003.
11/6. The Federal Communications
Commission's (FCC) Media Security
and Reliability Council (MRSC) held a meeting. See, FCC
11/6. The Federal Election Commission (FEC)
assessed a civil money penalty of $1,800 against the Political Action Committee
of Focal Communications Corporation for the non filing of a year end 2002
report. Focal Communications Corp. is
a voice and data services provider. See, FEC
11/6. The Department of the Treasury announced
that Treasury Secretary John Snow will tour the Intel
Corporation facility in Rio Rancho, New Mexico.
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