|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
Among the proposals contained in the report are: (1) the www.firstgov.gov 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, www.FedBizOpps.gov, 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
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
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
Rep. Hyde Defends Taiwan and Urges Trade, Law and Internet for
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,
of assignment and bio
of Judge Kotelly.
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.
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
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
Background. Michael Doughney registered the domain peta.org 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 www.peta.org
domain; Doughney has moved his parody site to www.mtd.com/tasty/.
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 www.peta.org 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 peta.org 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
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
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
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
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
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.
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
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,
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. §
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
Should Universal Service be Expanded to Include Broadband
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
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
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.
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
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
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
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
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
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
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,