News Briefs from April 21-25, 2001

4/25. Sen. Charles Grassley (R-IA), Chairman of the Senate Finance Committee, gave a speech [PDF] to the European - American Business Council in which he discussed a new round of trade negotiations, the foreign sales corporation tax regime, fast track trade negotiating authority. He stated that "the message I want to send today is that I want to work with Democrats and Republicans to find common ground to move trade promotion authority this year. It's important. By doing so, we'll provide additional momentum to launching a new round of negotiations in Qatar."
4/25. The Business Software Alliance (BSA) announced that G.L. Homes of Florida Corp., a real estate developer based in Coral Springs, Florida, paid $119,922 to settle claims relating to unlicensed copies of Autodesk, Microsoft and Symantec software installed on its computers. See, BSA release.
4/25. Rep. Robert Andrews (D-NJ) and Rep. Lindsay Graham (R-SC) introduced HR 1545, a bill to amend the Fair Labor Standards Act of 1938 to clarify the exemption from overtime compensation requirements for some computer professionals. It provides that an "employee who is a computer systems, network, or database analyst, designer, developer, programmer, software engineer ... compensated at a rate of not less than $27.63 an hour ... shall be considered an employee in a professional capacity ..." The bill was referred to the House Education and Workforce Committee.
4/25. Sen. George Allen (R-VA) and Sen. Conrad Burns (R-MT) introduced S 777, a  bill to permanently extend the moratorium enacted by the Internet Tax Freedom Act. The bill was referred to the Senate Commerce Committee. On April 24, Rep. Chris Cox (R-CA), Rep. Bob Goodlatte (R-VA), and Rep. Tom Davis (R-VA) introduced HR 1552, a bill to extend the moratorium enacted by the Internet Tax Freedom Act through 2006.
4/25. The House Commerce Committee held a hearing on HR 1542, the "The Internet Freedom and Broadband Deployment Act of 2001." This bill is sponsored by Rep. Billy Tauzin (R-LA) and Rep. John Dingell (D-MI), the Chairman and ranking Democrat of the Committee, and by many other members. It was also introduced in the 106th Congress as HR 2420.
The 1996 Telecom Act, at Section 271, provides that the Regional Bell Operating Companies (RBOCs, such as Verizon and SBC) may not provide in region interLATA service (that is, long distance) without first complying with a 14 point checklist of items demonstrating that they have opened up their facilities to competitors. The underlying goal is to create local competition in telecommunications services. The RBOCs and some members of Congress now seek to exempt data, but not voice, traffic from the requirements of Section 271. The main thesis which they advance is that doing so will promote the deployment of DSL service by the RBOCs, and hence, make broadband Internet access more widely available. However, this thesis is hotly contested by others.
The long hearing gave members of the Committee the opportunity to express their support for, or opposition to, the bill. Almost all of the members of the Committee attended at least part of the hearing. Many spoke. Rep. Tauzin said in his opening statement that "To give carriers a greater economic incentive to deploy broadband services more rapidly everywhere in the United States, Congress needs to complete the deregulation begun by the Telecommunications Act by deregulating broadband services. Currently, there are regulations imposed upon the broadband services and facilities provided by incumbent local exchange carriers (ILECs) that are not imposed upon any other broadband carriers." Rep. Dingell said in his opening statement that HR 1542 will "make sure that competition for broadband Internet service is strong; that high speed Internet connections are delivered to Americans quickly; and, above all else, that no single sector of the industry is give a de facto monopoly ..." In a departure from his written statement, he added that "cable companies now have a fine monopoly." Rep. Fred Upton (R-MI), the Chairman of the Telecom Subcommittee, which is scheduled to mark up the bill on April 26, offered his qualified support. He said that "we need to provide deregulatory parity for broadband -- regardless of the platform by which it is delivered -- be it by telephone, wire, cable, wireless, or satellite." He suggested that the bill will be amended in mark up, particularly to increase penalties for phone companies which may be assessed by the FCC. Reps. Rick Boucher (D-VA), Eliot Engel (D-NY), Steve Buyer (R-IN), and Gene Green (D-TX) also offered their support for the bill.
The Commerce Committee often conducts its debates and disputes in private, and then presents a unified position at its public hearings and markups. This hearing was an exception. Opponents of the bill spoke adamantly. Rep. Ed Markey (D-MA) said in his opening statement that "this legislation is highly flawed for three key reasons. It is undigital, unnecessary, and unfair." He elaborated that "this legislation creates a technological land of make-believe where bits travelling through networks can be magically separated into voice and data. ... Ripping certain bits out of a network to be treated by regulators differently turns back the clock. It presents once again the problem of trying to force certain services into particular regulatory boxes even as technology renders such classification antiquated or meaningless." He added that "This bill is also unnecessary. The Bells don’t need legislation in order to provide digital services. They can and do offer DSL services today. The Bells don’t need legislation to offer Internet access. Again, they offer such services today."
Rep. Chris Cox (R-CA), who sits on the opposite end of the political spectrum from Rep. Markey, found himself in the unusual position of agreeing with all that Rep. Markey had said. Rep. Cox, like Rep. Markey, also condemned the scheduling of the mark up just one day after the hearing. Rep. Anna Eshoo (D-CA) represents Silicon Valley, and rarely takes confrontational position in public hearings. However, she stated that the proposal contained in this bill has been around for a long time, but "has never been less necessary than it is today." She said it would harm the competitive local exchange carriers (CLECs). "This bill drives the last nail into their coffin." She also questioned whether the RBOCs are interested in providing broadband services in rural areas. Rep. Chip Pickering (R-MS) called the bill "fundamentally flawed. It cannot be fixed." He said that it would "kill competition, kill convergence." He added that the bill will not pass in the Senate. Rep. Henry Waxman (D-CA) said that "my view is that 1542 will do more harm than good." Reps. Davis, Largent, Wilson, McCarthy, and Harmon also made statements critical of the bill, or its underlying premise.
The hearing also gave industry representatives a chance to state their positions. See, prepared testimony of:
 • Douglas Ashton (Bear Stearns)
 • James Cicconi (AT&T)
 • Joseph Gregori (InfoHighway)
 • James Henry (Greenfield Hill)
 • Gordon Hills (EOPENY)
 • Paul Mancini (SBC)
 • Clark McLeod (McLeod)
 • Charles McMinn (Covad)
 • Peter Pitsh (Intel)
 • Timothy Regan (Corning)
 • Thomas Tauke (Verizon)
The representatives of the RBOCs (Tauke and Mancini) praised the bill. Mancini said it "will encourage broadband deployment." The representatives of long distance and competitive phone companies (Cicconi, McLeod, and McGinn) attacked it. McGinn said the bill "is a poison pill for the high tech economy."
MCI WorldCom's Bernie Ebbers was not a witness, but released a statement in which he said that "This ill-conceived legislation sounds a death knell for the Internet economy." See also, statements of opposition from Sprint, CompTel, and the ITAA. See also, statements of support from the RBOCs; BellSouth, Verizon, and USTA.
4/25. The U.S. Court of Appeals (FedCir) issued its opinion in Telemac Cellular v. Topp Telecom, a patent infringement case which pertains to U.S. Patent No. 5,577,100, which discloses a mobile phone system with internal accounting capabilities for real time call debiting. Plaintiff, Telemac, obtained the patent in 1996. In 1998, Telemac filed a complaint in U.S. District Court (NDCal) against Topp alleging that Topp's TRACFONE system infringed several claims of this patent. The District Court granted Topp's motion for partial summary judgment that certain claims are invalid under 35 U.S.C. § 102(b) as anticipated by U.S. Patent No. 5,631,947. The Court then granted Topp's motion for summary judgment that none of the claims were infringed. The Appeals Court affirmed.
4/25. David Markey, BellSouth's VP for Governmental Affairs, will retire from BellSouth effective June 1, 2001. He will be replaced by Herschel Abbott, who is currently President of BellSouth's Louisiana operations. The new Chairman of the House Commerce Committee is Billy Tauzin, also from Louisiana. See, BellSouth release.
4/25. The House Science Committee held a hearing on the proposed budgets for FY 2002 for several research and development agencies. See, opening statement by Chairman Sherwood Boehlert (R-NY), and prepared testimony of Daniel Goldin (NASA), Rita Colwell (NSA), James Decker (Energy Dept.), and Scott Gudes (NOAA).
4/25. The FCC stated that it adopted an order approving the applications of VoiceStream, Powertel, and Deutsche Telekom (DT) for authority to transfer control of licenses and authorizations held by VoiceStream and Powertel to DT in connection with the applicants' proposed merger. See, FCC release and DT release. (IB Docket No. 00-187.)
4/24. Rep. Chris Cox (R-CA), Rep. Bob Goodlatte (R-VA), and Rep. Tom Davis (R-VA) introduced HR 1552, a bill to extend the moratorium enacted by the Internet Tax Freedom Act through 2006. The bill was referred to the House Judiciary Committee, of which Rep. Goodlatte is a member.
4/24. Rep. David Dreier (R-CA), Rep. Zoe Lofgren (D-CA), Rep. Jeff Flake (R-AZ), and Rep. Mike Honda (D-CA) introduced HR 1553, a bill to repeal export controls on high performance computers. The bill was referred to the Committee on International Relations and to the Committee on Armed Services. See, Lofgren release. Sen. Bob Bennett (R-UT) and Sen. Harry Reid (D-NV) are sponsors of a similar bill in the Senate, S 591.
4/24. Rep. Sheila Lee (D-TX) introduced HR 1562, the Immigration Restructuring and Accountability Act of 2001, a long bill that would, among others things, require the INS to establish "an Internet web-based system" that will allow any person or employer to track their filings under the Immigration and Nationality Act.
4/24. Rep. Marcy Kaptur (D-OH), a leading protectionist, addressed free trade and fast track trade negotiating authority in the House. She stated that "In Quebec City, President Bush said, 'Our commitment to open trade must be matched by a strong commitment to protecting our environment and improving labor standards.' But then he did a pirouette and he said, 'We should not allow labor and environmental codicils to destroy the spirit of free trade.' He had it right the first time. Those of us on the other side of the argument have been saying for years that these trade agreements should give individuals the same rights as multinational corporations."
4/24. Rep. Dana Rohrabacher (R-CA) addressed trade with the People's Republic of China in the House. He stated that "Large financial interests in our country whose only goal is exploiting the cheap, near-slave labor of China have been leading our country down the path to catastrophe. ... We have made a monstrous mistake, and if we do not face reality and change our fundamental policies, instead of peace, there will be conflict. Instead of democratic reform, we will see a further retrenchment of a regime that is run by gangsters and thugs, the world's worst human rights abusers. ... the barkers for open markets kept singing their song: 'Most-favored-nation status, just give us this and things will get better.' It was nonsense then and it is nonsense today."
4/24. Rep. Billy Tauzin (R-LA) and Rep. John Dingell (D-MI), the Chairman and Ranking Democrat on the House Commerce Committee, reintroduced their bill to provide interLATA data relief to regional Bell companies. The bill would exempt long distance data services from the requirements of Section 271. The bill is titled "The Broadband Deployment Act of 2001." Tauzin and Dingell describe their bill as a way to promote the deployment of broadband Internet access. Competitive local exchange carriers and long distance companies criticize the bill. The previous version of the bill (HR 2420, 106th Congress) had 224 cosponsors. The House Commerce Committee will hold a hearing on the bill on April 25; it will mark up the bill on April 26. See also, CompTel release, Sprint release, and USTA release.
4/24. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Auburn v. Qwest, a case regarding who bears the expense for a facility relocation made necessary by right of way improvements.
4/24. A "structural separation" bill was introduced in the Minnesota legislature. It would require Qwest to separate its retail and wholesale operations. AT&T praised the bill. See, AT&T release. Qwest condemned the bill. See, Qwest release.
4/24. The FTC released a follow-up report [PDF] to its September 2000 Report titled "Marketing Violent Entertainment to Children." The follow-up report states that "it appears that the motion picture and electronic game industries have taken a number of significant steps to limit marketing violent R-rated films and M-rated games to children and to provide parents with more information regarding the content of their products. In contrast, the music recording industry has not taken any visible steps with respect to explicit-content labeled music." The FTC will write a third report in the fall of 2001.
4/24. The U.S. Court of Appeals (9thCir) issued its opinion in Far Out Productions v. Oskar, a trademark infringement case. Far Out Productions filed a complaint against Howard Scott, an original member of the musical group WAR, and other artists, alleging infringement of the federally registered trademark WAR (Trademark Registration No. 1,169,651). Scott counterclaimed alleging fraud, conversion, and trademark infringement. Harold Brown, another original member of the group, filed a separate complaint against Far Out and its president, Jerry Goldstein, alleging that they had obtained the trademark fraudulently. The District Court consolidated the cases, and granted summary judgment to Far Out and Goldstein. The Appeals Court affirmed.
4/24. The U.S. Court of Appeals (6thCir) issued its opinion in US v. Champion, a sentence appeal. Champion plead guilty to four charges, including use of the Internet to coerce and entice a minor to engage in a sexual act in violation of 18 U.S.C. § 2422(b), and sexually exploiting a minor in violation of 18 U.S.C. § 2251(a). The victim was a 13 year old girl. He appealed the District Court's determination, during sentencing, that his offence was a "crime of violence". The Appeals Court affirmed.
4/24. The FCC received two reply comments in its proceeding on location privacy for mobile devices. See, comment of the CTIA [PDF] and comment of Cingular [PDF]. Both want the FCC to conduct a rule making proceeding. This proceeding concerns privacy rules for cell phones, PDAs, in car map and traffic services, wireless tollbooth collection systems, Blackberry e-mail pagers, Bluetooth enabled devices, and anything with an embedded GPS chip. The CTIA filed a petition [PDF] with the FCC on Nov. 22, 2000, requesting a rule making proceeding. In response, the FCC issued a Public Notice [PDF] on March 16, 2001 requesting comments on the CTIA's petition. The FCC received a dozen original comments on or before April 6. (See, WT Docket No. 01-72.)
4/24. The Senate Banking Committee held a hearing on several nominations. See, prepared statements of nominees, Grant Aldonas (Under Secretary of Commerce for International Trade), Kenneth Juster (Under Secretary of Commerce for Export Administration), Maria Cino (Assistant Secretary of Commerce and Director General of the United States and Foreign Commercial Service), and Robert Hubbard (Council of Economic Advisors).
Kenneth Juster stated in his testimony that "It is essential to the health of our nation's industrial and technological base that U.S. companies be able to export their goods, services, and technology without being hindered by arbitrary and unnecessary export controls." However, he added that "I fully appreciate the critical importance of protecting this country's national security by ensuring that our sensitive technologies do not fall into the wrong hands."
4/24. Sen. Kent Conrad (D-ND) introduced the Technology Education and Training Act of 2001 (TETA). The bill would provide tax credits to businesses that train workers in information technology skills. The bill is cosponsored by Sen. Olympia Snowe (R-ME), Sen. Harry Reid (D-NV), Sen. Tim Johnson (D-SD) and Sen. Mike DeWine (R-OH). See, Conrad release.
4/23. Todd Dickinson, former head of the USPTO, joined the Washington DC office of the law firm of Howrey Simon as a partner and head of the firm's Intellectual Property Group's licensing, counseling, prosecution and patent portfolio management practice. See, release.
4/23. April 23 was the deadline to file comments with the FCC in response to its requests for comments regarding whether ILECs, such as Verizon, must allow competitive fiber providers to connect to CLECs in ILEC central offices. On March 15 the Coalition of Competitive Fiber Providers filed a Petition for Declaratory Ruling [PDF] with the FCC requesting a determination that competitive fiber providers may, pursuant to § 251(b)(4) and § 224(f)(1) of the Communications Act, extend fiber to CLECs collocated in the ILEC central offices and place distribution frames in ILEC central offices. On March 22 the FCC issued its request for comments.
Verizon submitted a long and angry comment [PDF] opposing the fiber providers. It argued that they "seek complete freedom to place fiber and equipment anywhere in ILEC central office space that ILECs have placed their own facilities. They want this freedom in order to connect with their CLEC customers, without the need to collocate themselves. The Commission must reject this takeover proposal as wholly inconsistent with the Act, ... under the Petitioners' reasoning, however, third parties could collocate virtually any equipment, anywhere, for almost any purpose, simply by re-casting space in the central office as "conduits," "ducts," or "rights-of-way." This is nonsensical." On the other hand, the Competitive Telecommunications Association (CompTel) submitted a comment [PDF] in which it argued that the FCC should promptly grant the petition. Reply comments are due by May 8, 2001. See, Docket No. 01-77.
4/23. WTO Director General Mike Moore gave a speech in Berlin, Germany, in which he again advocated a new trade round. He also stated that "WTO members will never agree to use trade sanctions to enforce labour standards. It is a line in the sand that developing countries will not cross. They fear that such provisions could be abused for protectionist purposes. They also believe such matters are more appropriately considered in other international fora." President Bush, who is seeking fast track trade negotiating authority from the Congress, is engaged in a debate with some members of Congress over whether such authority should extend to labor standards.
4/23. The U.S. Court of Appeals (3rdCir) issued its opinion in Eichorn v. AT&T, Lucent, NCR and Texas Pacific Group, a case regarding whether a no-hire agreement violated the Sherman Act. In 1995 AT&T decided to sell one of its affiliates, Paradyne, a manufacturer of network access products for the telecom industry. To make Paradyne more attractive to buyers, AT&T adopted a human resource plan that placed restrictions on Paradyne employees' ability to transfer to any other division of AT&T. Then, AT&T reorganized into three companies, AT&T, Lucent, and NCR. AT&T transferred ownership of Paradyne to Lucent. Paradyne employees, now employed by Lucent, were precluded from seeking re-employment at any other AT&T division or affiliate after this trivestiture. Then, Lucent sold Paradyne to Texas Pacific Group, after agreeing that it would not hire any Paradyne employee or consultant whose annual income exceeded $50,000 for eight months. Plaintiffs, who are former employees of Paradyne, filed a complaint alleging violation of the Sherman Act and the ERISA. The District Court ruled against the plaintiffs on both counts. The Court of Appeals upheld the District Court on the antitrust claim, but reversed on the ERISA claim.
4/23. Verizon filed a Section 271 petition with the FCC requesting permission to provide long distance service in Connecticut. Verizon provides phone service to only two communities in the state -- Byram and Greenwich. See, release.
4/23. President Bush formally submitted 13 previously announced nominations to the Senate, including Timothy Muris to be a Federal Trade Commissioner, Peter Allgeier to be Deputy USTR, Viet Dinh to be an Asst. Atty. General, Roger Ferguson to be a Member of the Board of Governors of the Federal Reserve System, and Elizabeth Jones to be an Assistant Secretary of State for European Affairs. See, release.
4/23. Eric Wohlschlegel was named Director of Media Relations for the U.S. Chamber of Commerce. Previously, he briefly worked at the public affairs firm of Chlopak Leonard Schechter. Before that he was a spokesman for the House Commerce Committee. See, release.
4/23. The U.S. Copyright Office published a notice in the Federal Register that it will hold a public roundtable discussion on the intellectual property aspects of the preliminary draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters being negotiated by the Hague Conference on Private International Law. See, Federal Register, April 23, 2001, Vol. 66, No. 78, at Pages 20482 - 20483.
4/23. The IRS published a notice in the Federal Register requesting nominations for the Electronic Tax Administration Advisory Committee. The ETAAC provides an organized public forum for discussion of electronic tax administration issues in support of the goal that paperless filing should be the preferred and most convenient method of filing tax and information returns. Nominations are due by May 23, 2001. See, Federal Register, April 23, 2001, Vol. 66, No. 78, at Pages 20525 - 20526.
4/22. Government leaders meeting at the Summit of the Americas in Quebec City, Canada, issued a joint declaration titled "Connecting the Americas." It states that "We are committed to promoting the development of the telecommunications infrastructure needed to support and enhance all sectors of society and the economy and will seek to provide affordable universal access. We agree to promote the modernization of the telecommunications sector, noting the leading role of the private sector in deploying infrastructure and services ..." It also states that "We agree to establish conditions, taking into account national legal frameworks, that promote and strengthen free and fair competition in all telecommunications services." It states too that "Our governments will strive to encourage the growth of e-commerce and to promote Connectivity by providing government services and information on-line, to the extent possible." See also, transcript of joint press conference.
4/21. President Bush gave an address at the Summit of the Americas in Quebec City, Canada, in which he advocated free trade, fast track trade negotiating authority, and a new e-business fellowship program. He stated that "The United States will work for open trade at every opportunity. We will seek bilateral free trade agreements with friends and partners, such as the one we aim to complete this year with Chile. We will work for open trade globally through negotiations in the World Trade Organization. And here in the Americas, we will work hard to build an entire hemisphere that trades in freedom."
President Bush stated that "I'm committed to attaining trade promotion authority before the end of the year. I'm confident that I will get it."
President Bush also used his Quebec address to announce an electronic business fellowship program. He said that "we will sponsor the creation of the new Latin E-business Fellowship program. This will give young professionals from throughout the Americans the opportunity to learn about information technology by spending time with United States companies. It will empower them with the skills and background to bring the benefits of these technologies to their own societies."
President Bush stated in his Quebec address that "Our commitment to open trade must be matched by a strong commitment to protecting our environment and improving labor standards. Yet, these concerns must not be an excuse for self-defeating protectionism." On the previous day, the Office of the USTR announced that the Bush Administration will conduct written environmental reviews of major trade agreements. See, release.

Go to News Briefs from April 16-20, 2001.