News Briefs from August 21-25, 2001

OMB Report Addresses E-Government
8/25. The Office of Management and Budget (OMB) released a report [PDF] titled "The President's Management Agenda". The 64 page document contains 14 proposals for improving the management and performance of the federal government. One of the proposals pertains to electronic government.
The report states that the "Administration will advance E-government strategy by supporting projects that offer performance gains across agency boundaries, such as e-procurement, e-grants, e-regulation, and e-signatures. It will manage E-government projects more effectively by using the budget process to insist on more effective planning of IT investments by government agencies."
Among the proposals contained in the report are: (1) the web site will be expanded; (2) "Agencies will undertake a Federal Public Key Infrastructure (PKI) to promote digital signatures for transactions within the federal government, between government and businesses and between government and citizens"; (3) "By the end of 2002, all agencies will use a single e-procurement portal,, to provide access to notices of solicitations over $25,000"; (4) "Agencies will allow applicants for federal grants to apply for and ultimately manage grant funds online through a common web site"; and (5) "Major regulatory agencies will use the Web to inform citizens of the cases before them, allow access to the development of rules, and make more transparent the decisions they make".
Other proposals contained in the report include competitive sourcing, faith based initiatives, privatization of military housing, and criteria for allocating government spending on research and development projects.
Bush Addresses OMB Report
8/25. President Bush discussed the OMB report in his regular Saturday radio address. He stated that "Today, my Office of Management and Budget is releasing a report identifying 14 long-neglected management problems in the federal government, and offering specific solutions to fix them. For example, the United States government is the world's single largest purchaser of computers and other technologies for gathering and using information. In 2002, we will spend $45 billion on information technology. That's more than we've budgeted for highways and roads. Yet so far, and unlike private sector companies, this large investment has not cut the government's cost or improved people's lives in any way we can measure." See, transcript.
The report makes three point on this topic. First, it states that "Agencies typically evaluate their IT systems according to how well they serve the agency's needs -- not the citizens' needs." Second, it states that "Just as private-sector companies in the 1980s tended to use computers merely as souped-up typewriters and calculators, so government agencies in the 1990s have used IT to automate pre-existing processes rather than create new and more efficient solutions." Third, it states that "IT offers opportunities to break down obsolete bureaucratic divisions. Unfortunately, agencies often perceive this opportunity as a threat and instead make wasteful and redundant investments in order to preserve chains of command that lost their purpose years ago. Financial systems are often automated separately from procurement systems, which are in turn carefully segregated from human resources systems, significantly increasing costs and minimizing potential savings."
Bush Nominates Former Head of Space Command for Joint Chiefs
8/24. President Bush nominated Air Force General Richard Myers to be the Chairman of the U.S. Joint Chiefs of Staff (JCS). Myers is a former commander of the U.S. Space Command. He is currently Vice Chairman of the JCS. President Bush also announced the nomination of Marine Corps General Pete Pace, current commander of SOUTHCOM, to be Vice Chairman of the Joint Chiefs.
President Bush stated that Myers "is someone who understands that the strengths of America's armed forces are our people and our technological superiority." He added that "times of rapidly changing technology and ever-changing threats, will require tough choices. This team of strong leaders, Don Rumsfeld, General Myers and General Pace, knows that our nation must think differently, and we will think differently to protect and defend America's values and interests in the world." See, transcript of remarks by President Bush and Secretary of Defense Donald Rumsfeld.
A DOD bio of Myers states that "From August 1998 to February 2000, General Myers was the commander in chief, North American Aerospace Defense Command and U.S. Space Command; commander, Air Force Space Command; and Department of Defense manager, space transportation system contingency support at Peterson Air Force Base, Colorado, responsible for defending America through space and intercontinental ballistic missile operations."
Rep. Hyde Defends Taiwan and Urges Trade, Law and Internet for PRC
8/24. Rep. Henry Hyde (R-IL), Chairman of the House International Relations Committee, gave a speech to the Chinese National Association of Industry and Commerce in Taipei, Taiwan. He stated that "the United States must publicly state that we will never allow Beijing to subvert or destroy the world’s only functioning Chinese democracy and thereby eliminate its subtle, yet powerful influence on the Chinese people ..."
Rep. Hyde also said that "our hope and expectation that the advent of democracy in China will be a peaceful one. We do not seek conflict. China is not now our enemy, nor need she ever be. Only tragedy could come from such a foolish mistake. To avoid that fate, our efforts to encourage democracy must include helping China become fully integrated into the world, from enhanced trade and personal exchanges to the Internet and the rule of law. The closer and more unconstrained the connections between China and the outside world, the more certain the advance of freedom."
DC Circuit Returns Microsoft Case to District Court
8/24. The U.S. Court of Appeals (DCCir) issued its mandate in the Microsoft antitrust cases. It issued a certified copy of the court's judgment, which is sent to the U.S. District Court (DCC) in order to return jurisdiction to that court.
Judge Kotelly Assigned to Microsoft Case
8/24. U.S. District Court Judge Colleen Kotelly was randomly selected by court computer to preside in the Microsoft antitrust cases. She was appointed to the bench by former President Clinton. Her primary experience is in criminal law. She replaces Judge Thomas Jackson, who was removed for improper conduct. See, U.S.D.C. notice of assignment and bio of Judge Kotelly.
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8/24. The FCC published a notice of its third inquiry into whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion, pursuant to Section 706 of the Telecom Act of 1996. This notice of inquiry was adopted by the FCC at its August 9, 2001, meeting. See, Aug. 9 FCC release. This Federal Register notice contains deadlines for comments. Comments are due September 24, 2001. Reply comments are due October 9, 2001. See, Federal Register, August 24, 2001, Vol. 66, No. 165, at Page 44636. (CC Docket No. 98-146.)
8/24. The USPTO published a notice in the Federal Register regarding the composition and operations of the Committee on Discipline and representation of the Director in disciplinary cases. See, Federal Register, August 24, 2001, Volume 66, Number 165, at Pages 44526 - 44527.
8/24. The FTC issued a release that states that it entered into a Stipulated Judgment and Order for Permanent Injunction in FTC v. Stout, a case brought under Section 5 of the Federal Trade Commission Act against fraudulent spammers who sold purported Internet registration services. On December 22, 1999, the FTC filed a civil complaint in U.S. District Court (DNJ) against Robert Stout, dba Global Internet Federal Registry, Inc., Get Out From Under.Com, Inc., and Donald Lytle. The complaint alleged that defendants sent unsolicited commercial e-mail to Internet news groups stating that because of the Children's Online Privacy Protection Act, consumers were required to certify their age to maintain access to the Internet. The messages directed consumers to defendants' web sites, which stated that "all Internet users are required to register here for Internet licensing," and provided an application form that collected names, addresses, credit card numbers, and expiration dates. The Stipulated Judgment, which was filed in May of 2001, enjoins defendants from continuing this practice.
4th Circuit Affirms Judgment Against Parody Web Site Operator
8/23. The U.S. Court of Appeals (4thCir) issued its opinion in PETA v. Doughney, a domain name registration dispute involving claims of service mark infringement, unfair competition, dilution and cybersquatting. The Appeals Court affirmed the District Court's judgment that a domain name used for a non commercial parody web site must be transferred to the mark holder.
Background. Michael Doughney registered the domain with Network Solutions in 1995. He then created a parody web site titled "People Eating Tasty Animals," which advocated eating meat, hunting, and wearing fur. People for the Ethical Treatment of Animals was not amused. Moreover, it had registered the PETA mark in 1992. See, Trademark Registration No. 1,705,510. PETA demanded that Doughney transfer the domain name to it. Doughney offered to settle. PETA now holds the domain; Doughney has moved his parody site to
District Court. PETA filed a complaint in the U.S. District Court (EDVa) against Doughney in 1999 alleging service mark infringement under 15 U.S.C. § 1114 and Virginia common law, unfair competition under 15 U.S.C. § 1125(a) and Virginia common law, and service mark dilution and cybersquatting under 15 U.S.C. § 1125(d). The District Court granted summary judgment to PETA on all three claims. This appeal followed.
Infringement. The Appeals Court affirmed the summary judgment on service mark infringement. Doughney argued that, while PETA holds the PETA mark, there was no service mark infringement because his use of the mark was not in connection with goods or services, and because there was not a likelihood of confusion. The Court held that "Doughney need not have actually sold or advertised goods or services on the website. Rather, Doughney need only have prevented users from obtaining or using PETA's goods or services ..." Doughney argued also that there was no likelihood of confusion because once web users visited his web site, they would realize that it was a parody. The Court, however, held that its analysis should be limited to the domain name only, and not include the content of the web site. It conceded that "the website's content makes it clear that it is not related to PETA". However, it wrote: "The domain name simply copies PETA's Mark, conveying the message that it is related to PETA. The domain name does not convey the second, contradictory message needed to establish a parody -- a message that the domain name is not related to PETA, but that it is a parody of PETA." The Court did not address dilution.
Cybersquatting. The Appeals Court affirmed the District Court's grant of summary judgment to PETA under the recently enacted Anticybersquatting Consumer Protection Act (ACPA), codified at 15 U.S.C. § 1125(d). Dougherty argued that the ACPA should not be applied retroactively to his acts in 1995, that he did not seek financial gain, and that he did not act in bad faith. The Appeals Court rejected all arguments. The Court held that the ACPA does apply retroactively; Dougherty's statement that PETA should "settle" with him constituted seeking financial gain; and, based on application of the nine good faith criteria listed in the ACPA, Dougherty acted in bad faith.
FBI Invokes Classified Information Procedures Act in Computer Intrusion Case
8/23. The U.S. Attorney's Office (DNJ) filed a motion [PDF] in the U.S. District Court (D-NJ) in the case USA v. Nicodemo Scarfo that invokes the Classified Information Procedures Act, Title 18, U.S.C, Appendix III, to avoid producing information about the FBI's "Key Logger System" to a Scarfo, a criminal defendant. The System was surreptitiously installed on Scarfo's personal computer to record the keystroke entry of his encryption passphrase.
Scarfo seeks discovery regarding the FBI's "Key Logger System" to support his motion to suppress evidence gathered as a result of use of the system. Rather than comply with the discovery request, the prosecution requests "to file under seal with the Court and subsequently serve on defense counsel (subject to an appropriate protective order) an additional unclassified summary statement ... [and] to provide the Court with an in camera, ex parte submission ..."
Nicodemo Scarfo is an encryption savvy mobster involved in illegal gambling and loan sharking operations. The FBI obtained court authority to surreptitiously install on Scarfo's computer "recovery methods" that could capture password and encryption key information. The Court order stated: "IT IS ORDERED ... that Special Agents of the F.B.I. ... deploy recovery methods which will capture the necessary key related information and encrypted file(s) ... that Special Agents of the F.B.I. ... be authorized to enter the TARGET LOCATION surreptitiously, covertly, and by breaking and entering, if necessary, in order to deploy recovery methods which will capture the necessary key related information and encrypted file(s) whether they are stored on Nicodemo S. Scarfo's computer hard drive in the TARGET LOCATION or on removable media." The order further permitted multiple entries. It also allowed the FBI "to retrieve such key related information and encrypted file(s) through electronic means."
This is case number Crim. No. 00-404(NHP). Judge Nicholas Politan is presiding. The Assistant U.S. Attorney in charge of this case is Ronald Wigler.
The Electronic Privacy Information Center (EPIC) has collected and published case documents from this proceeding. See, index.
8th Circuit Affirms in Advanced Communications v. MCI
8/23. The U.S. Court of Appeals (8thCir) issued its opinion [PDF] in Advanced Communications v. MCI. Advanced Communications (AC) had once been granted by the FCC a construction permit for a Direct Broadcast Satellite (DBS) system; it had also been allocated various channels at different orbital locations as part of such a system. However, in 1995, the FCC's International Bureau denied AC's request for a second extension of time in which to develop its DBS system for lack of due diligence. AC appealed to the full Commission, but lost. The FCC then canceled the permit and reclaimed the orbital locations and channels. AC sought review by the U.S. Court of Appeals (DCCir), and lost again.
AC then filed a complaint in Arkansas state court against MCI alleging tortious interference with contract. MCI removed the case to U.S. District Court (EDArk). During the FCC's consideration, MCI had written a letter to the FCC urging it to cancel and re-auction AC's orbital locations and channels. The District Court ruled for MCI on the pleadings. The Appeals Court, in a brief opinion, held that AC is collaterally estopped from suing MCI on a theory of tortious interference by the decision of the U.S. District Court (DCCir).
GAO Releases Report on Security Weaknesses at Commerce Dept.
8/23. The General Accounting Office (GAO) released a report [PDF] titled "Information Security: Weaknesses Place Commerce Data and Operations at Serious Risk". It finds that the Department of Commerce's (DOC) information systems are not secure. The report was prepared by Robert Dacey and others at the GAO at the request of Rep. Billy Tauzin (R-LA), Chairman of the House Commerce Committee.
The report concludes that "Significant and pervasive computer security weaknesses place sensitive Department of Commerce systems at risk. Individuals, both within and outside Commerce, could gain unauthorized access to these systems and thereby read, copy, modify, and delete sensitive economic, financial, personnel, and confidential business data. Moreover, intruders could disrupt the operations of systems that are critical to the mission of the department."
On August 3, the House Commerce Committee's Subcommittee on Oversight and Investigations held a hearing titled "How Secure is Sensitive Commerce Department Data and Operations? A Review of the Department's Computer Security Policies and Practices." Dacey also testified at that hearing, along with witnesses from the DOC. See, prepared testimony of Dacey, prepared testimony of Johnnie Frazier (DOC Inspector General), and prepared testimony of Samuel Bodman (DOC Assistant Secretary for Technology Policy).
See also, opening statement of Rep. Jim Greenwood (R-PA), the Chairman of the Subcommittee, and prepared statement of Rep. Billy Tauzin, from the August 3 hearing.
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8/23. The U.S. Court of Appeals (DCCir) denied the FCC's request for a stay in the NextWave proceeding. The FCC has stated that it may petition the Supreme Court for writ of certiorari.  NextWave obtained spectrum licenses at FCC auctions in 1996, but did not make payments required by the installment plan, and filed a Chapter 11 bankruptcy petition. The FCC cancelled the licenses. The U.S. Court of Appeals (DCCir) ruled in its June 22, 2001, opinion that the FCC is prevented from canceling the spectrum licenses by § 525 of the Bankruptcy Code.
8/23. The Center for Democracy and Technology (CDT) announced that The Global Internet Policy Initiative (GIPI), a joint project of the CDT and Internews, signed a Memorandum of Understanding with the United Nations Development Program that "provides a framework for cooperation between GIPI and UDNP offices worldwide towards the promotion of sound Internet and information technology policies." See also, August 14 Internews release.
8/23. The U.S. Court of Appeals (2ndCir) issued its opinion in Nora Beverages v. The Perrier Group, a trade dress infringement case involving water bottles decided under § 43(a) of the Lanham Trademark Act, 15 U.S.C. § 1125(a).
IIPA Comments on IPR in FTAA
8/22. The International Intellectual Property Association (IIPA) submitted comments [PDF] on the draft consolidated text for the Chapter on Intellectual Property Rights of the Free Trade Area of the Americas (FTAA) Agreement to the Trade Policy Staff Committee (TPSC) of the USTR. See also, USTR web section on the FTAA and USTR summary of IPR position. August 22 was the deadline to submit comments to the USTR. See, USTR notice in the Federal Register of July 12, 2001, requesting public comment. See also, IIPA release.
Copyright. The IIPA comment states that the "proposed FTAA should contain the highest levels of substantive protection and enforcement provisions possible. This means that the IPR Chapter should, at a minimum: (a) be TRIPS- and NAFTA-plus, (b) include, on a technologically neutral basis, the obligations in the soon-to- enter-into-force WIPO Copyright and Performances and Phonograms Treaties (WCT and WPPT), and (c) include modern and effective enforcement provisions that respond to today's digital and Internet piracy realities."
Anti-Circumvention. The IIPA comment continues that "A provision must be included which tracks the WCT and WPPT obligations on making illegal the circumvention of technological measures and ensures that devices, services and components thereof are fully covered. Adequate and effective legal remedies, both criminal and civil, must be incorporated into the enforcement text. This is an essential element of a protection system that is adapted to the digital and Internet Age, where new forms of piracy are already harming the copyright-based industries.
Should Universal Service be Expanded to Include Broadband Internet Services?
8/22. The FCC and the Federal-State Joint Board on Universal Service released a notice [PDF] soliciting comments on expanding the definition of universal service. The notice states: "We also invite comment on whether any advanced or high-speed services should be included within the list of core services."
Nominally, universal service is the notion of providing basic telephone service to everyone who wants it. The theory underlying government involvement is that the costs of providing service vary by region and type of customer, and therefore, a series of cross subsidies are necessary to accomplish affordable pricing for all users. Universal service is also a powerful political rallying cry in the Congress, especially in the Senate, where sparsely populated states are over represented.
The Congress codified the FCC's longstanding practice of mandating universal service support for telecommunications services for high cost rural and low income areas in Section 254 of the Telecommunications Act of 1996. The section also instructed the FCC to extend universal service support to schools, libraries, and rural health care clinics. The FCC issued a report on May 7, 1997 broadly interpreting this program, which is also known as the e-rate, to extend, not only for telecommunications services, but also to Internet access and internal connections for Internet services. See also, FCC's universal service web section.
However, aside from this e-rate program, the FCC has interpreted universal service to include only old fashioned phone services, including single party service, voice grade access to the public switched telephone network, Dual Tone Multifrequency signaling or its functional equivalent, access to emergency services, access to operator services, access to interexchange service, access to directory assistance, and toll limitation services for qualifying low income consumers.
Universal service cross subsidies have run from long distance to local service, business to residential subscribers, urban to rural subscribers, and in the case of the e-rate, all phone subscribers to schools, libraries, and rural health clinics. The notice just released raises the question of what, beyond currently included services, should be included in cross subsidy regimes. The notice "invites comment on what services, if any, should be added to or removed from the list of core services eligible for federal universal service support and how those core services should be defined." The notice also references in several places "Internet access" and "high-speed and advanced services" as services under consideration.
Comments are due 60 days from publication in the Federal Register, which has not yet happened. Reply comments are due within 120 days from publication in the Federal Register.
FCC Prepared to Grant Broadband PCS Licenses
8/22. The FCC released a public notice [PDF] in which it stated that it is prepared to grant 4 (out of over 400) licenses that were auctioned by the FCC in its C and F block broadband PCS auctions completed in January. This is Auction Event No. 35, the re-auction of licenses originally auctioned in 1996.
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8/22. The U.S. Trade and Development Agency (TDA) gave $495,060 to the Ministry of Interior and Administration of Poland to conduct a feasibility study on rebuilding the design of its telecommunications and data transmission networks. See, TDA release.
Federal Circuit Rules in McGinley v. Franklin Sports
8/21. The U.S. Court of Appeals (FedCir) issued a divided opinion in McGinley v. Franklin Sports, a patent infringement case involving baseballs in which the Appeals Court addressed obviousness, and the role of trial court juries in suits involving claims of obviousness. The Court reversed a trial court JMOL which set aside a jury verdict.
Michael McGinley is the holder of U.S. Patent No. 5,407,193, which discloses a regulation baseball with markings for the placement of fingers for different types of pitches. McGinley filed a complaint in U.S. District Court (DKan) against Franklin Sports (FS) alleging patent infringement. The jury returned a verdict in favor of McGinley, finding the patent not invalid and willfully infringed. The District Court set aside the jury's verdict and granted FS's motion for JMOL on invalidity, concluding that as a matter of law, plaintiff's patent is invalid as obvious. The Court of Appeals reversed the grant of JMOL in favor of FS and ordered the jury's verdict reinstated. Judge Clevenger wrote the opinion of the Court, in which Judge Mayer joined. Judge Michel dissented.
MAPS Stops Blacklisting of Harris Interactive
8/21. Harris Interactive (HI) stated that it has reached an agreement with MAPS, a blacklisting service that had caused HI's e-mail surveys to be blocked by e-mail service providers that subscribe to MAPS's service. Under this agreement MAPS will stop its blacklisting of HI. See, HI release.
HI filed a complaint in U.S. District Court (WDNY) on July 31, 2000, against Microsoft (as operator of Hotmail), AOL, and other e-mail service providers, alleging violation of antitrust law, defamation, negligence, and other causes of action. All subscribed to the Realtime Blackhole List, which is maintained by the Mail Abuse Prevention System (MAPS). MAPS was also named as a defendant in that suit. AOL agreed to stop blocking HI email in August 2000. Microsoft agreed to stop in September. HI then dismissed that suit. See, HI September 13, 2001 release.
HI is a market research, polling and consulting firm based in Rochester, New York. It issued a release on August 21, 2001, in which it stated that "As a result of its decision to fully transition to COI, Harris Interactive recently reached agreement with the Mail Abuse Prevention System, LLC (MAPS), whereby MAPS will immediately remove Harris Interactive from their real-time blackhole list (RBL)." Gordon Black, C/CEO of HI, also stated in the same release that "During the last year we've extensively tested a confirmed opt-in (COI) registration process. Interestingly, we've found that our COI panel members give far more thoughtful and comprehensive survey responses than non-COI panelists– making these members invaluable to our customers."
GAO Issues Report on Use of DOD Spectrum for 3G
8/21. The GAO released a report [PDF] titled "Defense Spectrum Management: More Analysis Needed to Support Spectrum Use Decisions for the 1755-1850 MHz Band." It concluded that studies already conducted by the NTIA and DOD, and by industry, are inadequate, and that more study is needed before spectrum allocation decisions can be made.
The 1755 - 1850 MHz band, which is currently used by the Department of Defense (DOD) for satellite systems, mobile tactical communications, precision guided munitions, combat training, and other systems, is one of several bands identified for possible reallocation for use by Third Generation (3G) wireless systems. 3G is intended to bring broadband Internet access to mobile devices, among other things. Incumbent users of these identified spectrum bands, including the DOD, oppose reallocation of their spectrum for 3G services.
The DOD concluded that vacating the 1755 - 1850 MHz band could not be accomplished for satellite systems until at least 2017, and for most other systems until at least 2010. Its report added that the DOD could face significant operational restrictions in any frequency sharing situation. In addition, it stated that operationally suitable spectrum for reallocation of DOD systems may not be available. The NTIA's report in March 2001 incorporated the DOD's results and concluded that unrestricted sharing of the 1755 - 1850 MHz band is not feasible and any other sharing option would require considerable coordination. See, NTIA report [1.8 MB in PDF], the companion assessment by the DOD [12 MB in PDF], and a U.S. Air Force case study [.3 MB in PDF]. See, also, the NTIA's web page on 3G systems.
The GAO report concluded that "Spectrum decisions based on either the DOD or the industry study of the 1755 to 1850 MHz band would be premature at this time. Neither study contains adequate information to make reallocation decisions. In particular, we found that neither the DOD model nor the industry model is mature enough to calculate spectrum interference to satellites, and, therefore, cannot support a near-term decision."
The GAO recommended that "Before making reallocation decisions with a significant impact on national security and the economic welfare of the nation, the federal government should approach the alternatives with knowledge gained from a sound and complete analysis." The report made many recommendations for further areas of study.
The report was prepared at the request of Sen. James Inhofe (R-OK), the ranking Republican on the Senate Armed Services Committee's Subcommittee on Readiness and Management Support.
GAO Releases Report on L&E Cases Under NAFTA
8/21. The GAO released a report [PDF] titled "North American Free Trade Agreement: U.S. Experience With Environment, Labor, and Investment Dispute Settlement Cases."
DC Circuit Affirms in Global Crossing v. FCC
8/21. The U.S. Court of Appeals (DCCir) issued its opinion in Global Crossing v. FCC. Global Crossing petitioned for review of an order of the FCC requiring Global Crossing to pay Verizon compensation for payphone calls originating from Verizon payphones and routed over Global Crossing's network. The Court of Appeals denied the petition for review.
NextWave Obtains Financing from UBS Warburg
8/21. NextWave Telecom announced that "UBS Warburg has committed to provide the company with $2.5 billion in debt financing to fund the construction of its nationwide 3G wireless network. UBS Warburg has also been engaged by NextWave to serve as the company's financial advisor and will assist the company in consummating its plan of reorganization." See, NextWave release.
NextWave obtained spectrum licenses at FCC auctions in 1996, under an installment plan, thus creating a debtor creditor relationship between NextWave and the FCC. NextWave did not make payments, and filed a Chapter 11 bankruptcy petition. The FCC cancelled the licenses. The U.S. Court of Appeals (DCCir) ruled in its June 22, 2001, opinion that the FCC is prevented from canceling the spectrum licenses by § 525 of the Bankruptcy Code. The FCC has indicated that it may petition the Supreme Court for writ of certiorari. NextWave filed a plan of reorganization with the bankruptcy court on August 6.
FCC Seeks Comments on SBC Long Distance Requests
8/21. The FCC requested public comment on SBC's Section 271 application to provide interLATA service in the states of Arkansas and Missouri. The deadline to file comments is September 10, 2001. Reply comments are due by October 4. The deadline for the Department of Justice Evaluation is September 24. (CC Docket No. 01-194.) See, FCC notice.
Tauke Wants Regulatory Relief for Bells
8/21. Tom Tauke gave a speech titled "Delaying the Last Mile" at a Progress and Freedom Foundation conference in Aspen, Colorado. He advocated changes in the regulatory environment in which the regional Bell monopolies operate. Tauke is SVP for Public Policy and External Affairs at Verizon.
FCC Receives Comments on Intercarrier Compensation Regime
8/21. August 21 was the deadline to submit comments to the FCC in response to its Notice of Proposed Rulemaking (NPRM) regarding the concept of a unified intercarrier compensation regime. Intercarrier compensation includes both reciprocal compensation and access charges. The FCC specifically sought comments on alternative approaches, such as "bill and keep." The FCC published in its web site 34 comments received on or before August 21. Several of these comments are summarized below. Reply comments are due by October 5, 2001.
The FCC stated in its NPRM that "we begin a fundamental re-examination of all currently regulated forms of intercarrier compensation. We intend to test the concept of a unified regime for the flows of payments among telecommunications carriers that result from the interconnection of telecommunications networks under current systems of regulation. Specifically, we seek comment on the feasibility of a bill-and-keep approach for such a unified regime. We also seek alternative comment on modifications to existing intercarrier compensation regimes. In sum, we seek to move forward from the transitional intercarrier compensation regimes to a more permanent regime that consummates the pro-competitive vision of the Telecommunications Act of 1996 ..." See, NPRM [PDF], which was adopted on April 18, 2001, and released to the public on April 27. See also, notice in Federal Register, May 23, 2001, Vol. 66, No. 100, at Pages 28410 - 28418, regarding this NPRM.
BellSouth, a large Bell company, submitted a comment [PDF] in which it endorsed bill and keep. In contrast, the National Telephone Cooperative Association (NTCA), which represents small rural phone companies, submitted a comment [PDF] in which it said the "NPRM is premature and should be set aside". It wrote that bill and keep would raise rates in rural areas, and impact universal service, among other things. It also raised several legal obstacles to the NPRM. Other comments from rural telephone interests expressed similar objections to bill and keep.
Sprint submitted a comment in which it which it gave qualified support for a bill and keep regime. It wrote that "a bill and keep intercarrier compensation regime offers substantial public interest benefits, and that concerns raised in the NPRM regarding the potential economic inefficiencies associated with a bill and keep plan are exaggerated ... . We further believe that the Commission has legal authority to adopt a bill and keep regime ... . Therefore, Sprint supports the prompt implementation of bill and keep as regards local traffic (both CMRS and wireline) and interconnected local calls to ISPs. However, it is premature to adopt a bill and keep regime for long distance access traffic at this time ..."
The Personal Communications Industry Association (PCIA) submitted a comment [PDF] in which it argued that the FCC "should not adopt mandatory bill and keep for paging-LEC interconnection, but rather should implement bill-and-keep, if at all, as another option for interconnection for paging-LEC interconnection."
The Information Technology Association of American (ITAA) submitted a comment [PDF] to urge the FCC "to make clear that it does not intent to re-visit the question of whether ESPs should continue to be allowed to obtain service from local exchange carriers ("LECs") on the same terms as other business users, rather than being subject to carrier access charges." The ITAA also urged the FCC "not to adopt any intercarrier compensation regime that would treat ISP-bound traffic in a different manner than local voice traffic."
Global Crossing submitted a comment [PDF] which focused on packet voice traffic. It wants the FCC to "declare carriers rights to route packetized voice traffic through existing and future, private and public, peering and transit arrangements", "Prohibit any carrier from refusing to accept packetized voice traffic through existing and future, private and public, peering and transit arrangements", "Allow carriers to negotiate the termination of packetized voice traffic through peering and transit arrangements without regard to the traditional access charge and reciprocal compensation regimes", and "Prohibit carriers from imposing usage- sensitive charges unless mutually agreed to by the parties."
For further background on intercarrier compensation, and bill and keep proposals, see two working papers published by the FCC's Office of Plans and Policy. One is Bill and Keep at the Central Office as the Efficient Interconnection Regime [PDF], by Patrick DeGraba. It proposes "a unified approach to interconnection pricing called Central Office Bill and Keep ("COBAK"), which provides that a called party's carrier cannot charge an interconnecting carrier to terminate a call. Rather, each carrier recovers the cost of the loop and local switch from its own end-user customers). The second is A Competitively Neutral Approach to Network Interconnection [PDF], by Jay Atkinson and Christopher Barnekov. It proposes "a default bill and keep solution under which carriers split equally those costs that are solely incremental to interconnection, and recover all remaining costs from their own customers."

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