|Opponents of the Inducing Infringement of
Copyrights Act Submit Alternative Proposal
8/24. Opponents of
S 2560, the
"Inducing Infringement of Copyrights Act of 2004", sent a proposed
version of S 2560 to the Senate
Judiciary Committee. At the Committee's hearing on July 22, 2004,
Sen. Orrin Hatch (R-UT) and
Sen. Patrick Leahy (D-VT), pressured
opponents and critics of the bill to submit their recommendations for how
legislation should be written to deal with large scale copyright infringement
over peer to peer (P2P) networks.
The opponents' proposal would nominally create a new remedy for inducement of
infringement. However, it would set standards and create exceptions that would
make it all but impossible for any copyright holder to obtain any meaningful
relief in an action for inducement of infringement. The proposal may have been
submitted with the expectation that it would serve as a first negotiating
position, rather than with the expectation that it would be enacted as written.
Sen. Hatch and Sen. Leahy are the Chairman and ranking Democrat on the
Judiciary Committee. They are also two of the sponsors of S 2560.
These two Senators and others introduced S 2560 on June 22, 2004 in reaction to
infringement conducted on P2P systems, and the music industry copyright holders' failure to obtain
judicial relief under the Copyright Act, based upon theories of vicarious
infringement, in their cases against Grokster and Streamcast.
On April 25, 2003, the U.S. District
Court (CDCal) issued its
opinion in MGM v. Grokster holding that Grokster's and Streamcast's P2P
systems do not contributorily or vacariously infringe the copyrights of the holders
of music and movie copyrights. See also, story titled "District Court Holds No
Contributory or Vicarious Infringement by Grokster or Streamcast P2P Networks"
in TLJ Daily E-Mail
Alert No. 650, April 28, 2003.
The Committee held its hearing on S 2560 on July 22, 2004, just before
the beginning of the current recess. See, story titled "Senate Judiciary Committee
Holds Hearing on Inducement Bill" in TLJ Daily E-Mail Alert No. 963, August, 20,
Also, on August 19, 2004 the U.S. Court of Appeals
(9thCir) issued its
[26 pages in PDF] in MGM v. Grokster, affirming the District Court. See,
titled "9th Circuit Holds No Vicarious Infringement in Grokster Case" TLJ Daily
E-Mail Alert No. 963, August 20, 2004.
The entities that submitted the alternative language include incumbent local
exchange carriers (ILECs), and their trade group, interexchange carriers (IXCs) and
groups representing internet service providers, libraries, and consumer electronics
The entities that signed a letter of support for the proposal include, in alphabetical
order, the American Association of Law Libraries
(AALL), American Library Association (ALA),
Association of Research Libraries (ARL),
Computer & Communications Industry Association
(CCIA), Consumer Electronics Association (CEA),
Consumer Electronics Retailers Coalition
Digital Future Coalition (DFC),
Home Recording Rights Coalition (HRRC),
SBC, U.S. Internet
Industry Association, U.S. Internet Service Provider Association,
U.S. Telecom Association (USTA),
opponents' proposal would title the bill "Discouraging Online Networked Trafficking
Inducement Act of 2004". Although, except in the title, it does not use the word
inducement, or any variation.
The basic clause in the opponents' proposal would provide that "Whoever
actively distributes in commerce a computer program that is specifically designed for
use by individuals to engage in the indiscriminate, mass infringing distribution to the
public of copies or phonorecords of copyrighted works over digital networks, with the
specific and actual intent to reap financial gain by encouraging such individuals to engage
in such indiscriminate, mass infringing distribution, shall be liable as an
In contrast, the basic clause of S 2560 is simple, and without built in
exceptions and limitations. It would provide that "Whoever intentionally induces
any violation ... shall be liable as an infringer".
The opponents' proposal then provides further obstacles to copyright holders
by imposing several necessary conditions for a finding of "specific and actual
intent", and several exemptions. It would also limit the recovery of damages.
The group of entities that submitted this proposal do not support the notion of
creating a new cause of action for inducing infringement. They were pressured into
submitting an alternative proposal by the sponsors of S 2560. Hence, it is to be
expected that their proposal would merely create an illusory remedy for inducement.
These entities, to varying degrees support a weakening of copyright protections,
not an expansion of copyright protections. For example, on the same day that Sen. Hatch
and Sen. Leahy introduced S 2560, several Representatives and entities held a press
the "Digital Media Consumer Rights Act", a bill that would weaken
the anti-circumvention provisions of the Digital Millennium Copyright Act. See,
story titled "Chairman Barton Says Commerce Committee Will Mark Up Boucher
Doolittle Bill in July" in
TLJ Daily E-Mail
Alert No. 924, June 23, 2004.
These entities organized into the group named the
Personal Technology Freedom Coalition
(PTFC). The list of entities that announced their support for HR 107 overlaps
significantly with the entities that just submitted the alternative to S 2560. See,
list of members of the PTFC.
If the Senate Judiciary Committee does pass S 2560, it is possible that it
will not be in its current form. It may be amended to include definitions, limitations
and exemptions. While the Committee will not pass the just submitted alternative
proposal, this proposal informs the Committee of the concerns of these opponents
of S 2560. Some of the concepts embodied in the proposal may be incorporated
into S 2560 as it works its way through the legislative process.
|Comparison of Hatch Leahy Inducement
Bill and Opponents' Proposal
8/24. Numerous opponents of
S 2560, the
"Inducing Infringement of Copyrights Act of 2004", submitted a proposed
version of the bill, which they title the "Discouraging Online Networked
Trafficking Inducement Act of 2004".
U.S.C. § 501 defines infringement of copyrights. For example, subsection (a)
provides, in part, that "Anyone who violates any of the exclusive rights of the
copyright owner as provided by sections 106 through 121 or of the author as
provided in section 106A(a), or who imports copies or phonorecords into the
United States in violation of section 602, is an infringer of the copyright or
right of the author, as the case may be."
Hatch Leahy Bill. S 2560 is a short and simple bill. It would amend
§ 501 by adding a new subsection (g), that would provide, in full, as follows:
"(g)(1) In this subsection, the term `intentionally induces' means
intentionally aids, abets, induces, or procures, and intent may be shown by acts
from which a reasonable person would find intent to induce infringement based
upon all relevant information about such acts then reasonably available to the
actor, including whether the activity relies on infringement for its commercial
(2) Whoever intentionally induces any violation identified in subsection (a)
shall be liable as an infringer.
(3) Nothing in this subsection shall enlarge or diminish the doctrines of
vicarious and contributory liability for copyright infringement or require any
court to unjustly withhold or impose any secondary liability for copyright
Some opponents have argued that this short statement is vague and overbroad,
and hence, could result in lawsuits being filed against, not only distributors
of P2P software intended to induce copying of copyrighted music and movies, but
also product reviewers and makers of products such as iPods.
The opponents' proposal is a longer bill, with many provisions,
qualifications, and exceptions. It also includes undefined terms unknown to
copyright law, and hence, if enacted in its current form, would add uncertainty
to the law.
Opponents' Proposal. Like S 2560, the
opponents' proposal would add a new subsection (g) to
section 501. At the outset, it provides a new basic clause. It states, "Whoever
actively distributes in commerce a computer program that is specifically designed for
use by individuals to engage in the indiscriminate, mass infringing distribution to
the public of copies or phonorecords of copyrighted works over digital networks, with
the specific and actual intent to reap financial gain by encouraging such individuals
to engage in such indiscriminate, mass infringing distribution, shall be liable as an
S 2560 would provide a new remedy against "Whoever intentionally induces"
copyright infringement, while the opponents' proposal deletes the word "induces",
and all of its variations. The word "inducement" is used once in the
proposal -- in the title of the bill -- which has no legal effect. The
opponents' proposal would not create a remedy for inducement.
Exempted Entities. The opponents' proposal contains numerous
exemptions and exclusions. Some of these are contained within the basic clause.
Five are recited below. Some of these are contained in an enumeration of
exemptions in a separate subsection. These are recited below also.
S 2560 would apply to "whoever" induces infringement, while the opponents'
proposal would only affect "whoever actively distributes" software. Thus, an entity
might profit from inducing infringement via a P2P system, and yet escape any
judicial sanction, by spinning off the distribution function to a separate
entity, which could be a thinly capitalized corporation, with limited liability
and no assets, that merely distributes.
S 2560 would apply to inducing infringement by any means, while the
opponents' proposal would only affect infringement resulting from the distribution of
"computer software". Thus, under the opponents' proposal if, for
example, Grokster produced an electronic device, the only function of which was
to serve as a node on Grokster's P2P network, this would not be prohibited,
because it is not a "computer program".
S 2560 would apply to any inducement of infringement, while the opponents'
proposal would only affect distribution "in commerce". Thus, under the
opponents' proposal if a library, academic, religious, or non-profit entity sold
P2P software that induced infringement, it might derive substantial revenues,
and do substantial financial harm to the people and companies that hold
copyrights. However, these activities would not be prohibited, because they are
not "in commerce". Perhaps it is significant that several library and academic
groups support this proposal.
S 2560 would apply to any inducement of infringement, while the opponents'
proposal would only affect infringement by "distribution ... over digital
networks". Sen. Hatch and Sen. Leahy state that they are concerned about the
destructive effect of P2P systems on the music, movie and software industries.
P2P systems involve distribution over digital networks. However, S 2560 is not
limited to infringement that occurs over digital networks. Hypothetically, it
could apply to devices or software that are not used in association with a
digital network. The ancient Betamax, for example, did not induce infringement
over a digital network. First, the alleged infringers (TV watchers) did not
distribute copies over a network. Second, the network then primarily
involved over the air analog (not digital) signals.
S 2560 would apply to inducing infringement by whoever, while the opponents'
proposal would only affect software designed for use by "individuals". Thus,
under the opponents' proposal a P2P system that induces infringement, but is
designed to be distributed to a corporate market, would not be prohibited.
The opponents proposal also contains a subsection that enumerates additions
First, it provides that "A service provider as defined in 17 U.S.C. 512(k)(1)(B)
whose service is used by a third party to distribute or that facilitates a third
party's distribution of a computer program shall not be liable under paragraph
(1) for providing or operating such service."
Subsection 512(k)(1) provides two
definitions of the term "service provider" for the purposes of
Section 512, which
was added to the Copyright Act in 1998 by the Digital Millennium Copyright Act
(DMCA). Subsection 512(k)(1)(B) provides that "As used in this section, other
than subsection (a), the term ``service provider´´ means a provider of online
services or network access, or the operator of facilities therefor, and includes
an entity described in subparagraph (A)." Subsection 512(k)(1)(A), in turn
provides that "As used in subsection (a), the term ``service provider´´ means an
entity offering the transmission, routing, or providing of connections for
digital online communications, between or among points specified by a user, of
material of the user's choosing, without modification to the content of the
material as sent or received."
This is a broad definition contained in a provision designed to insulate ISPs
from liability for the activities of direct infringers (who are not service
providers) who subscribe to their services. However, in situations involving
entities that vicariously infringe, or that induce of infringement, the entities
may themselves be service providers. Thus, this exemption might erode the rule.
The opponents' proposal also includes a list of several other categories of
entities exempted from the basic prohibition. It provides that "A person who is
not a distributor of a computer program that is
specifically designed for use by individuals to engage in the indiscriminate,
mass infringing distribution to the public of copies or phonorecords of copyrighted
works over digital networks shall not be liable under paragraph (1) notwithstanding
any contribution to or benefit from such distribution. By way of example and not
limitation, providing (i) venture capital, financial assistance, payment services,
or financial services, (ii) advertising, advertising services, or product reviews,
or (iii) information or support to users, including via manuals
and user handbooks pertaining to a computer program, assistance or directions
for using such a program through a company's online help system or telephone
help services, and library services shall not be a basis for liability under
The opponents' proposal also includes a list of several service functions
exempted from the basic prohibition. It provides that "In or as part of a consumer
electronics or information technology product or service, providing navigation or access
functions, recording functions, storage capacity, electronic program search and indexing
functions, or an electronic program guide shall not separately or in combination
be a basis for liability under this paragraph."
Finally, perhaps it is notable that the opponents' proposal makes reference
to both "distribution" and "redistribution" of copyrighted works.
This is pregnant with potential consequences. For
example, sections of the proposal that pertain to "redistribution" may exclude
works not yet distributed by the copyright holder. This might include movies, music,
software, and books before their planned release dates. This might also include stolen
works, not intended for distribution, such as diaries, financial records, or correspondence.
Mass Indiscriminate Infringement. S 2560 would apply where someone
"induces", while the opponents' proposal would only affect someone who involved
"indiscriminate, mass infringing distribution". The words
"indiscriminate" and "mass" raise the bar for copyright holders.
Indiscriminate infringement is not defined by the opponents' proposal, or by the
Copyright Act. The concept of indiscriminate infringement does not exist in
copyright law. Since this term is given no meaning, courts would have to
interpret its meaning. If a court were to give it a meaning that is consistent
with the common usage of the word "indiscriminate", which is likely
how the court would proceed, then it would mean copying that is without discrimination,
or that is conducted at random. Users of P2P systems who make available copyrighted works
tend not to select copyrighted
works at random, or indiscriminately. They apply criteria, such as performers,
genres and works that they prefer, and that they already possess. Thus, the
individuals who copy and make available on a P2P system a copyrighted work are
not acting indiscriminately. Nor are the individuals who download copyrighted
works. They do not copy at random. They copy the works that they prefer, based
on their own criteria. Copyright
holders thus might be unable to prove mass indiscriminate infringement, as
required by the opponents' proposal.
Also, the word "mass" is not defined by the opponents' proposal, or by the
Copyright Act. The concept of mass infringement does not exist in copyright law.
Here again, copyright holders would be faced with seeking a remedy under a
statute with undefined restricting terms.
Mental State. Neither S 2560 nor the opponents' proposal would impose
strict liability. S 2560 contains a mental state requirement that would be
substantially easier for copyright holders to meet than the mental state
requirements in the opponents' proposal.
S 2560 provides that the mental state is "intentionally", and this is to be
interpreted under a "reasonable person" standard. S 2560 defines "intentionally
induces" as "intentionally aids, abets, induces, or procures, and intent may be
shown by acts from which a reasonable person would find intent to induce
infringement based upon all relevant information about such acts then reasonably
available to the actor, including whether the activity relies on infringement
for its commercial viability."
The opponents' proposal requires "specific and actual intent to reap financial gain by encouraging such
individuals to engage in such indiscriminate, mass infringing distribution".
This, of course, raises the question of just what is "specific and actual
intent". The opponents' proposal does not define this phrase. It does, however,
provides three minimum requirements for finding "specific and actual intent" --
predominant use, revenues predominantly derived from redistribution, and
conscious, recurring, persistent, and deliberate acts of encouragement. The way
it is worded, these are not elements of a definition or test. Rather, they are
necessary, but not sufficient, conditions for finding "specific and actual
In full, the opponents' proposal provides that "a person shall not be deemed
to have such specific and actual intent unless (A) the predominant use of the
computer program is the mass, indiscriminate infringing redistribution to the
public of copies or phonorecords
of copyrighted works; (B) the commercial viability of the computer program depends
on, and the predominant revenues derived by the distributor from the computer
program are derived from, its use for such mass, indiscriminate infringing
redistribution; and (C) the person has undertaken conscious, recurring,
persistent, and deliberate acts that encouraged another person to commit such
mass, indiscriminate infringing redistribution or absent a legitimate purpose
actively interfered with the ability of copyright owners to detect and prosecute
such mass, indiscriminate infringing redistribution."
Moreover, a later subsection of the bill provides that "Actual or
constructive knowledge of the use of a computer program is not sufficient to
demonstrate the requisite specific intent".
Collectively, all of these provisions set such a rigorous minimum standard for a finding of
"specific and actual intent" that it is hard to imagine any P2P systems
designed to profit by inducing infringement that would be found to satisfy this
Additional Obstacles. The opponents' proposal also contains two
additional procedural clauses that would diminish the likelihood of copyright
holders obtaining meaningful relief.
First, it would provide that in an action alleging inducement, "facts
supporting such allegation must
be pleaded with particularity." This may be significant because most of the
relevant facts would be held by the direct infringers, their
internet service providers, and the entities inducing infringement. Complaints
would be plead with general allegations. The copyright holders would then
conduct pretrial discovery to obtain more particular evidence. This clause would
provide defendants the opportunity to have complaints dismissed prior to such
Second, it would provide a subsection limiting remedies to "an injunction
against such intentional commercial
activity" and "actual damages for infringement of a work for which the defendant
had specific and actual knowledge the work would be infringed." Limiting the
injunctive relief to the commercial activity is significant because the
appropriate injunctive relief might otherwise include such things as rending a
financial accounting, or providing reporting to the court of parties. Limiting
damages to actual damages for infringement where "the defendant had specific and
actual knowledge the work would be infringed" would impose an impossible burden
upon copyright holders. The inducing defendant may know that its product is
being used to infringe, and that it will be used to infringe. But, the inducing
defendant does not have actual knowledge of what works will be infringed in the
Betamax Case. S 2560 is silent regarding the Betamax case. This is
of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). The
Sony Betamax case
was a contributory infringement case, not an inducement case. The Supreme Court
held, in a 5-4 opinion, that Sony did not contributorily infringe with its
Both Sen. Hatch and Sen. Leahy stated at the July 22, 2004 hearing that their
bill does not affect the Betamax decision.
Marybeth Peters, the Register of
Copyrights, who testified at the hearing, said the same. However, S 2560 does not
expressly state this.
Gary Shapiro, the P/CEO of the Consumer
Electronics Association (CEA), argued at the July 22 hearing that S 2560
would "reverse and rewind" the Betamax decision. He elaborated in his written
statement that "Because it is so doctrinally different, and relies on a
fundamentally different test -- intention vs. capability of product -- there is
no way that S. 2560, if applicable to staple hardware and software products, can
or will be read by potential plaintiffs, and by courts, as anything other than a
frontal attack on the holding of the Supreme Court in the Betamax case."
The CEA now supports the opponents' proposal. See, CEA
The opponents' proposal does contain language that is related to the Betamax
case. Section 4 of the proposal, which is titled "Codification of Supreme
Court Precedent", provides that "Except as provided under section 501(g)(1),
it shall not be a violation of the Copyright Act to manufacture or distribute a hardware or
software product that is capable of commercially significant noninfringing use."
This is not a codification of the Supreme Court's decision. Rather, it is the
codification of a six word phrase from that decision.
The majority in Sony wrote that "We recognize there are substantial differences
between the patent and copyright laws. But in both areas the contributory
infringement doctrine is grounded on the recognition that adequate protection of
a monopoly may require the courts to look beyond actual duplication of a device
or publication to the products or activities that make such duplication
possible. The staple article of commerce doctrine must strike a balance between
a copyright holder‘s legitimate demand for effective -- not merely symbolic --
protection of the statutory monopoly, and the rights of others freely to engage
in substantially unrelated areas of commerce. Accordingly, the sale of copying
equipment, like the sale of other articles of commerce, does not constitute
contributory infringement if the product is widely used for legitimate,
unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses. ... The question is thus whether the Betamax is capable of
commercially significant noninfringing uses."
The Court went on to find that the Betamax was capable of commercially
significant noninfringing uses because consumers used it for time shifting,
which is a fair use.
By codifying merely the six word phrase, "capable of commercially
significant noninfringing use", the opponents' proposal might preclude giving
effect to the entirety of the Sony opinion, and the application that other courts,
such as the 7th Circuit, have given to it in the context of P2P systems.
For example, on June 30, 2003, the
U.S. Court of Appeals (7thCir) issued its
opinion [23 pages in PDF] in In Re Aimster Copyright Litigation.
Judge Richard Posner discussed the Sony Betamax case at length. He wrote, for
example, that "We also do not buy Aimster's argument that since the
Supreme Court distinguished ... between actual and potential noninfringing uses,
all Aimster has to show in order to escape liability for contributory
infringement is that its file-sharing system could be used in noninfringing
ways, which obviously it could be. Were that the law, the seller of a product or
service used solely to facilitate copyright infringement, though it was capable
in principle of noninfringing uses, would be immune from liability for
contributory infringement. That would be an extreme result, and one not
envisaged by the Sony majority."
|FCC Releases Order and NPRM Re Unbundling
8/20. The Federal Communications Commission
(FCC) announced and released
Order and Notice of Proposed Rulemaking [47 pages in PDF] that requests
public comments on rules regarding the unbundling obligations of incumbent local
exchange carriers (ILECs) pursuant to
47 U.S.C. § 251(c)(3).
It also orders a six month freeze.
This item states that it requires ILECs "on an interim basis ... to continue
providing unbundled access to switching, enterprise market loops, and dedicated
transport under the same rates, terms and conditions that applied under their
interconnection agreements as of June 15, 2004."
It continues that "These rates, terms, and conditions shall remain in place
until the earlier of the effective date of final unbundling rules promulgated by
the Commission or six months after Federal Register publication of this Order,
except to the extent that they are or have been superseded by (1) voluntarily
negotiated agreements, (2) an intervening Commission order affecting specific
unbundling obligations (e.g., an order addressing a pending petition for
reconsideration), or (3) (with respect to rates only) a state public utility
commission order raising the rates for network elements."
It also states that "we set forth transitional measures for the next six
months thereafter. Under our plan, in the absence of a Commission holding that
particular network elements are subject to the unbundling regime, those elements
would still be made available to serve existing customers for a six-month
period, at rates that will be moderately higher than those in effect as of June
Section 251 contains the unbundling obligations of ILECs. Unbundled
network elements (UNEs) are those portions of telephone networks that the ILECs,
such as Verizon, must make available to
competing carriers, such as AT&T and MCI WorldCom,
seeking to provide telecommunications services. The Telecommunications Act of
1996 provides that ILECs must provide access to certain of their network
elements at regulated rates. Since passage of the
1996 Act the FCC has been writing unbundling rules, and the federal courts have
been overturning them.
The FCC issued its latest unbundling rules one
year ago. On August 21, 2003, the FCC released the order known as the
triennial review order [576 pages in PDF] on August 21, 2003. See, story titled
"Summary of FCC Triennial Review Order" in
TLJ Daily E-Mail Alert
No. 725, August 25, 2003. See also, stories titled "FCC Announces UNE Report
and Order", "FCC Order Offers Broadband Regulatory Relief", "FCC
Announces Decision on Switching", "Commentary: Republicans Split On FCC UNE
Order", and "Congressional Reaction To FCC UNE Order" in
TLJ Daily E-Mail
Alert No. 609, February 21, 2003.
On March 2, 2004 the U.S. Court of
Appeals (DCCir) issued its
opinion [62 pages in PDF] in USTA v. FCC overturning key parts of the
FCC's TRO. The opinion leaves largely untouched those portions of the TRO in
which the FCC refrained from unbundling next generation broadband facilities.
The opinion vacates those portions of the TRO in which the FCC delegated
decision making authority to the state to make impairment findings. See,
titled "Appeals Court Overturns Key Provisions of FCC Triennial Review Order",
also published in
TLJ Daily E-Mail Alert No. 848, March 3, 2004.
This item is FCC 04-179 in WC Docket No. 04-313 and CC Docket No. 01-338. It
states that the FCC adopted it on July 21, 2004. Comments will be due 21 days
after publication in the Federal Register, which has not yet occurred. Reply
comments will be due 36 days after publication.
Michael Powell (at right) wrote in a
statement [PDF] that "There is no need to fear that consumers will be left
with nothing to choose from as UNE-P begins to whither. Consumers are using wireless
telephones more than they are using wired telephones today -- many now use their mobile
as their primary phone. Cable companies are offering competitive telephone service to
residential consumers. VoIP is surging into the marketplace as broadband grows,
offering an exciting and new competitive alternative that offers cut-rate prices
and futuristic features."
Kathleen Abernathy wrote in a
statement [PDF] that
"In the wake of the D.C. Circuit’s decision invalidating many of the
Commission’s unbundling rules, we must expeditiously build a record and develop
a revised framework. For too long the Commission has given short shrift to the
direction provided by the courts in pursuit of a policy of maximum unbundling.
Now, we have an opportunity to craft judicially sustainable rules that promote
competition in a manner that more fully embraces free-market principles and is
less dependent on regulatory micromanagement."
FCC Commissioners Michael
Copps, Jonathan Adelstein,
and Kevin Martin formed the majority
that wrote the unbundling rules that were overturned by the Court of Appeals in March.
Copps and Adelstein dissented from the present item. Copps wrote in a
statement [PDF] that the FCC "is on track to butcher the pro-competitive vision
of the 1996 Act."
FCC Commissioner Jonathan
Adelstein wrote in a
statement [PDF] that "Through this Order, the Commission adopts an ambiguous
approach that is perhaps designed to give a little to everyone but that ultimately grants
stability to none. The Order leaves unclear which elements are available to competitors
and at what prices they will be available. It is difficult to imagine how either
competitors or incumbents will plan for the future, develop business plans, or seek
investor support with this foggy vision into the long-term framework. If savvy industry players
will be left wondering about the rules of the game, consumers surely will have little
guidance about how to choose among the ever-dwindling list of providers."
FCC Commissioner Kevin
Martin wrote no separate statement.
BellSouth, an ILEC, released a statement. "BellSouth is pleased that the
Commission has finally formally started the
process of preparing new rules consistent with the court's mandate. After 8-1/2
years of working under unlawful rules, BellSouth believes the quick adoption and
implementation of permanent rules is essential to economic recovery and job
creation in America’s technology sector." It added that "To provide a stable
environment while that work is finished, BellSouth months ago voluntarily agreed
to maintain existing arrangements with competitors through the end of 2004. We
are certainly troubled that, despite the court's refusal to stay its March 2004
order, the FCC granted itself the power to maintain the unlawful status quo well
Walter McCormick, the P/CEO of the U.S. Telecom Association (USTA), a group
that represents the interest of ILECs, released a
statement in which he wrote that "For nearly a decade, we have waited for
the FCC to put lawful rules in place for the telecom industry. Unfortunately,
after four attempts, missed deadlines, instability and delay, we are again
forced to ask the court to intervene to bring certainty and clarity to the
industry. The Commission must put lawful, permanent rules in place by the end of
this year so that all providers can move forward on a competitive basis."
In contrast, Russell Frisby, CEO of CompTel/ASCENT, stated in a
that "While the process that has led to this situation is regrettable, we are
gratified that the FCC has acknowledged the critical need to keep existing
arrangements in place while permanent rules are drafted. The six-month freeze
will provide some stability -- at least in the short-term -- and give carriers
additional time to evaluate their on-going business plans."
Frisby added that "the Bells have begun to manipulate rates in an effort to
squeeze competitors out of the market. Given these practices, it is imperative
that the FCC acts quickly to ensure that competitive providers are able to
access monopoly-controlled switching, loops and transport facilities at
cost-based rates. The data amassed across the nation provides clear evidence
that competition cannot thrive without access to those key portions of the
network that are economically and technically difficult to replicate."
|Washington Tech Calendar
New items are highlighted in red.
|Wednesday, August 25
The House and Senate are in recess through September 6.
10:00 AM. The
House Transportation Committee's
Subcommittee on Aviation will hold a hearing titled "9/11 Commission
Report: Review of Aviation Security Recommendations". Location: Room 2167,
RESCHEDULED FOR SEPTEMBER 9. 10:30
AM - 12:15 PM. The
Federal Communications Commission (FCC) will
hold an event titled "Discussion on the Debt Collection Improvement Act
Rules and Rules Governing Applications or Other Request for Benefits by
notice [PDF]. Location: FCC, Commission Meeting Room, 445 12th Street, SW.
12:15 PM. The Federal Communications Bar
Association's (FCBA) Online Communications Practice Committee will host a brown bag
lunch. The topic will be Federal Communications Commission (FCC) and
Agriculture (USDA) policies related to deployment of wireless broadband
services in rural areas. The speakers will be Peter Corea (Special Counsel, FCC's
WTB's Broadband Division) and Chris Moore (USDA). For more info contact Ann Bobeck at
email@example.com. RSVP to Evelyn Opany at
Piper Rudnick, 1200 19th St., NW, 7th
Deadline to submit reply comments to the
Federal Communications Commission (FCC) in response to
of Inquiry (NOI) [30 pages in PDF] regarding its annual report to the Congress on the
status of competition in the market for the delivery of video programming. See also, story
titled "FCC Adopts NOI For Annual Report to Congress on Video Programming" in
TLJ Daily E-Mail Alert No. 916, June 11, 2004. This NOI is FCC 04-136 in MB Docket No.
04-227. See also,
notice in the Federal Register, July 1, 2004, Vol. 69, No. 126, at Pages
39930 - 39933.
Deadline to submit comments and notices of intention to
participate to the Copyright Office regarding
ascertainment of controversy for the 2002 cable royalty funds. The CO published a
notice in the Federal Register that "directs all claimants to royalty fees
collected for calendar year 2002 under the cable statutory license to submit comments
as to whether a Phase I or Phase II controversy exists as to the distribution of those
fees and announces the deadline for the filing of Notices of Intention to Participate
in a royalty distribution proceeding concerning those royalty fees." See, Federal
Register, July 26, 2004, Vol. 69, No. 142, at Pages 44548 - 44549.
|Thursday, August 26
6:00 - 9:15 PM. The
DC Bar Association's Intellectual Property
Law Section and Computer and Telecommunications Law Section will host a continuing
legal education (CLE) program titled "Software Patent Primer: Acquisition,
Exploitation, Enforcement and Defense". The speakers will be Richard Litman
(Litman Law Firm), Stephen
Parker (Rothwell Figg, Ernst & Manbeck),
David Temeles (Temeles & Temeles), and
Martin Zoltick (Rothwell Figg).
Prices vary. See,
For more information, contact 202-626-3488. Location: D.C. Bar Conference
Center, B-1 Level, 1250 H Street, NW.
|Friday, August 27
Deadline to submit comments to the
Federal Communications Commission (FCC) in response
to its notice of proposed rulemaking (NPRM) regarding unlicensed use of the
3650-3700 MHz band. The FCC adopted this NPRM on April 15, 2004. This item is
FCC 04-100 in ET Docket Nos. 04-151, 02-380 and 98-237. See,
in the Federal Register, May 14, 2004, Vol. 69, No. 94, at Pages 26790 -
26803. See also, story titled "FCC Announces NPRM Regarding Unlicensed Use in
the 3650-3700 MHz Band" in TLJ Daily E-Mail Alert No. 878, April 16, 2004.
Deadline to submit comments to the
Federal Communications Commission FCC) in response to
of proposed rulemaking (NPRM) [11 pages in PDF] that proposes to
require that television and radio broadcasters retain program recordings for a
period of time for purposes of enforcing the statutory prohibition, codified at
18 U.S.C. § 1464,
against obscene, indecent, or profane programming. This NPRM is FCC 04-145 MM
Docket No. 04-232. See, story titled "FCC Proposes That Broadcasters Retain
Recordings To Facilitate Enforcement of Smut Ban" in TLJ Daily E-Mail Alert No.
933, July 8, 2004. See,
notice in the Federal Register, July 30, 2004, Vol. 69, No. 146, at Pages
45665 - 45668.
|Monday, August 30
The Republican National Convention will be held in New York City on August
30 through September 2.
|Wednesday, September 1
TIME ? The
Executive Office of the President's (EOP)
Office of Science and Technology Policy's (OSTP)
National Science and Technology
Council's (NSTC) Committee on Technology's Subcommittee on Nanoscale Science,
Engineering and Technology will hold a meeting that is close to the public. For more
information, contact Geoff Holdridge at
firstname.lastname@example.org. Location: National
Science Foundation (NSF), Room 1235.
12:00 NOON - 1:30 PM. The DC
Bar Association's Intellectual Property Law Section and Trademark Committee will
host a panel discussion titled "Use Of Surveys In
Trademark Cases". The speakers will be
Bassam Ibrahim (Burns Doane) and Jessica Pollner (PricewaterhouseCoopers). See,
notice. Prices vary from $20 to $40. For more information, call 202
626-3463. Location: D.C. Bar Conference Center, B-1 Level, 1250 H Street, NW.
Deadline to submit comments to Federal
Communications Commission (FCC) in response to its
Notice of Proposed Rulemaking (NPRM) [38 pages in PDF] regarding use by
unlicensed devices of broadcast television spectrum where the spectrum is not
in use by broadcasters. See,
notice in the Federal Register, June 18, 2004, Vol. 69, No. 117, at pages
34103-34112. See also,
titled "FCC Adopts NPRM Regarding Unlicensed Use of Broadcast TV Spectrum" in
TLJ Daily E-Mail Alert No. 898, May 14, 2004, and story titled "FCC Releases
NPRM Regarding Unlicensed Use of TV Spectrum" in TLJ Daily E-Mail Alert No.
905, May 26, 2004. This NPRM is FCC 04-113 in ET Docket Nos. 04-186 and
The Federal Trade
Commission's (FTC) final rule amending its Telemarketing Sales Rule (TSR)
by revising the fees charged to entities accessing the National Do Not Call
Registry takes effect. See,
notice in the Federal Register, July 30, 2004, Vol. 69, No. 146, at Pages
45580 - 45586.
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