News from March 21-25, 2002

Commerce Department Hosts Broadband Demand Conference
3/25. The Department of Commerce (DOC) hosted a roundtable titled "Understanding Broadband Demand: Broadband & Business Productivity". Participants discussed what is broadband, what is the extent of business demand for broadband services, what are the applications of broadband access, and what are the benefits of broadband.
The DOC has bifurcated its examination of broadband. The National Telecommunications and Information Administration (NTIA) is studying "supply" issues, while the Technology Administration (TA) is studying "demand" issues. This conference dealt with the latter. The event was chaired by Phil Bond (Under Secretary for Technology), Kathleen Cooper (Under Secretary for Economic Affairs), and Bruce Mehlman (Assistant Secretary for Technology Policy).
Twenty-one representatives of technology companies, communications companies, and business groups participated. About 40 other persons were in attendance at the three hour event.
Some participants presented the results of surveys of businesses regarding demand for broadband services. Bruce Josten of the U.S. Chamber of Commerce presented survey results that showed that 11% of the businesses surveyed do not have Internet access, and that 55% of those that do have only dial up modem service. He concluded that "the value proposition has not yet been demonstrated to" small and medium sized businesses.
Bruce Phillips of the National Federation of Independent Businesses stated that many small businesses are not interested in broadband services. He said that it must be demonstrated to them that broadband can increase their bottom line.
In contrast, Bojana Mamuzic of SBC was more upbeat. Her company conducted a survey of 500 small businesses and found that three quarters had found that broadband had increased productivity. She argued that if industry builds broadband facilities, then "the market will follow". She cited the example of caller ID. She said that SBC's initial surveys showed that only 20% would use it, whereas, in fact, over 50% now use it.
Paul Nunes of Accenture added that there are many costs to businesses for adopting broadband services. He cited networking equipment and installation, computer equipment upgrades, storage upgrades, and employee training.
Many participants addressed applications that might drive business demand for broadband services, including teleworking, e-commerce, communications, and grid computing. Participants also referenced, but did not focus on telemedicine, distance learning, interactive gaming, and HDTV.
William Mularie of the Telework Consortium stated that the promise of telework is being under fulfilled "because of the inadequacies of our infrastructures". He pointed out that most broadband connections today provide asymmetric transfer rates, with most of the increase in speed being in the download. "Nirvana is not faster downloads," said Mularie. "Telework requires symmetric communications." He stated that he would like to see rates of 10 to 100 mbps.
Brad Allenby of AT&T focused on how telework has benefited AT&T. He said that the company saves on real estate costs, greater worker retention, and increased productivity, both in terms of hours worked, and output per hour. He added that broadband is not just a matter of speeds; it must also be convenient and "psychologically comfortable".
Chris Caine of IBM suggested that grid computing might become the killer app of broadband. Mularie stated that "the killer app is human to human communications."
Greg Wood of Internet2 stated that many applications of broadband do not yet exist. He said that the situation of broadband today is similar to that of the Internet 20 years ago, when people at DARPA were wondering what people would use the Internet for.
The conference did not focus on broadband related government policies. However, Stag Newman and others argued that state and local regulation, fees, and delays, particularly with respect to access to rights of way, are inhibiting broadband deployment. He advocated the adoption of a set of best practices by the Department of Commerce. Harris Miller of the Information Technology Association of America (ITAA) argued that the government should lead by example, such as through telework programs.
District Court Orders DOJ to Expand Its Search for Carnivore Records
3/25. The U.S. District Court (DC), Judge James Robertson presiding, issued a Memorandum Order in EPIC v. DOJ, a Freedom of Information Act (FOIA) suit regarding records pertaining to the FBI's e-mail surveillance system known as Carnivore. The Department of Justice (DOJ) has already produced some records. The Court ordered it to continue its search for more responsive records.
In July of 2000, the Electronic Privacy Information Center (EPIC) submitted a request, pursuant to the FOIA, 5 U.S.C. § 552, for "all FBI records concerning the system known as 'Carnivore' and a device known as 'EtherPeek' for the interception and/or review of electronic mail (e-mail) messages." The EPIC also asked for expedited processing of its request.
The EPIC filed a complaint on July 31, 2000, in the U.S. District Court (DC) alleging failure to respond to the EPIC's request for expedited processing. See, EPIC's Carnivore page for links to further pleadings. In late January 2001, the FBI completed its processing of EPIC's FOIA request. It stated that there are 1,756 pages of responsive material. It produced 1,502 pages in part; 254 were withheld in their entirety. The DOJ then moved for summary judgment. However, the EPIC asserted that the DOJ has not conducted an adequate search. In particular, it asserted that the DOJ has not adequately searched FBI divisions, including the offices of General Counsel and Congressional and Public Affairs.
In its March 25, 2002, order, the District Court denied the government's motion for summary judgment and ordered it to "conduct and complete within 60 days of the date of this order a further search of FBI records reasonably expected to produce the requested information, including (but not necessarily limited to) the files of the FBI offices of General Counsel and Congressional and Public Affairs." (Parentheses in original.)
On March 21, 2002, the U.S. District Court (DC), Judge Ricardo Urbina presiding, issued its opinion [PDF] in Judicial Watch v. FBI, a separate FOIA suit to compel release of documents related Carnivore. That suit was filed on February 1, 2001. The complaint, and the underlying FOIA request, sought records pertaining to "An FBI automated system designed to ``wiretap´´ the Internet and reportedly dubbed ``Carnivore.´´" Judicial Watch asserts that the FBI produced no records. The Court dismissed that suit for failure to exhaust administrative remedies.
David Sobel, General Counsel for the EPIC, concluded: "One case is dead. Now, the other is moving."
FCC's Cable Modem Service Ruling Is Challenged in Court
3/25. Verizon, Earthlink, BrandX, and several interest groups filed petitions for review of the Federal Communications Commission's (FCC) Declaratory Ruling and Notice of Proposed Rulemaking (DR & NPRM) of March 15, 2002, in which the FCC ruled that cable modem service is an interstate information service. Three petitions were filed with the U.S. Court of Appeals (DCCir), and one (BrandX's) was filed with the U.S. Court of Appeals (9thCir).
The FCC announced its Declaratory Ruling and Notice of Proposed Rulemaking [PDF] at its meeting on March 14. It released the 75 page document on March 15. It addresses the legal classification and the appropriate regulatory framework for broadband access to the Internet over cable system facilities. The vote was three to one. Commissioner Michael Copps wrote strenuous dissent. This is GN Docket No. 00-185 and CS Docket No. 02-52. See also, FCC release.
DR & NPRM. The FCC concluded "that cable modem service, as it is currently offered, is properly classified as an interstate information service, not as a cable service, and that there is no separate offering of telecommunications service. In addition, we initiate a rulemaking proceeding to determine the scope of the Commission's jurisdiction to regulate cable modem service and whether (and, if so, how) cable modem service should be regulated under the law ..." The DR & NPRM further states that "The Communications Act does not clearly indicate how cable modem service should be classified or regulated", but nevertheless "conclude[s] that cable modem service as currently provided is an interstate information service, not a cable service, and that there is no separate telecommunications service offering to subscribers or ISPs."
The regulatory classification of cable modem services has significant implications. Classification as a telecommunications service could lead to the result that cable operators must provide "open access" to their cable facilities to competing ISPs. Hence, ISPs, such as Earthlink and BrandX have challenged the ruling. Similarly, classification as a cable service could lead to regulation by a multitude of local franchising authorities. Incumbent local exchange carriers (ILECs), such as Verizon, would like to see their DSL service receive regulatory treatment at least comparable to that of cable operators' cable modem service.
Four Petitions for Review. Verizon Telephone Companies and Verizon Internet Solutions dba filed petition number 02-1100 with the DC Circuit on March 25. Their attorneys are William Barr, Michael Glover, Edward Shakin, and John Frantz, in house counsel all.
EarthLink, Inc. filed petition number 02-1097 with the DC Circuit on March 22. Their attorneys are John Butler and Earl Comstock of the law firm of Sher & Blackwell, and Dave Baker, VP for Law and Public Policy at Earthlink
The Consumer Federation of America (CFA), Consumers Union, and the Center for Digital Democracy (CDD) filed petition number 02-1099 with the DC Circuit on March 25. Their attorneys are Andrew Jay Schwartzman, Harold Feld and Cheryl Leanza of the Media Access Project (MAP).
BrandX Internet, an ISP based in Santa Monica, California, filed a petition with the 9th Circuit.
Verizon's Legal Arguments. Petitions for review typically do not contain legal arguments. Those are presented later in the briefs. Typically, these petitions merely assert that the final order of the agency is "arbitrary, capricious, an abuse of discretion, contrary to statutory authority, and otherwise not in accordance with law".
However, Verizon's petition for review does address legal issues. It states that the FCC "reached a final determination to classify high-speed Internet access service offered over cable systems ... as an interstate information service. ... It also determined that cable modem service does not contain a telecommunications service that is subject to regulation on a common carrier basis, ... and is not subject to the FCC rules that apply to wireline telephone companies that provide functionally equivalent high-speed Internet access services over their facilities. ..."
Verizon continues that "The Declaratory Ruling thus classifies cable modem service in a radically different manner from functionally equivalent high-speed Internet access services offered by telephone companies and their affiliated ISPs, such as Petitioners here. The Declaratory Ruling also exempts cable modem service from numerous regulatory requirements and burdens that apply to functionally equivalent high-speed Internet access services offered by telephone companies and their affiliated ISPs. While in separate proceedings the Commission has sought comment on potential changes in the ongoing regulatory treatment of high-speed Internet access service offered by telephone companies, its current rules impose burdens that cable companies are shielded from as a result of the Declaratory Ruling. Petitioners participated in the proceedings before the FCC in this matter and are aggrieved by the FCC's Declaratory Ruling within the meaning of 28 U.S.C. § 2344."
Verizon concludes that "the Declaratory Ruling's differential treatment of equivalent parties provided by cable companies and telephone companies violates the First and Fifth Amendments of the United States Constitution, the Communications Act of 1934, as amended, is arbitrary, capricious and an abuse of discretion within the meaning of the Administrative Procedure Act, ..."
Earthlink's Legal Arguments. Earthlink has previously filed comments with the FCC. Based on these, Earthlink is likely to advance the argument that, while cable Internet access is an information service, the underlying transport service is a common carrier service under the Communications Act, and hence, subject to regulation as a common carrier service, including the obligation to offer the same service to others.
In addition, on March 15, Dave Baker, Earthlink's VP for Law and Public Policy, stated in a release that "The FCC fails to make the fundamental distinction between how you treat regulated networks like cable systems and unregulated information services like broadband Internet access that travel over those networks. Both statute and longstanding FCC precedent draw these distinctions ..."
He added that "broadband is already deployed to 85 percent of American homes. The challenge is not just providing more broadband connections, but giving consumers meaningful choices in their broadband providers over those connections. Encouraging broadband deployment does not mean sacrificing consumer choice. Unfortunately, today's FCC decision does just that."
Interest Groups' Legal Arguments. The Media Access Project (MAP) stated in a March 25 release that the FCC's DR & NPRM "effectively freed cable operators from having to provide non-discriminatory ``open access´´ to the public." The MAP also stated that "the legal status of cable modem service has important First Amendment ramifications". It elaborated that "Without non-discriminatory open access, cable operators retain the legal right to censor messages, to limit the size and nature of files which can be uploaded and downloaded and to favor content provided by their commercial ``partners´´ and ``preferred vendors.´´"
Similarly, Jeff Chester of the CDD, stated in a March 14 release that "Michael Powell's FCC has struck a deadly blow to the future health of the Internet and has given a great victory to the cable industry lobby". He added that "Cable will now be able to become an even more powerful media gatekeeper, controlling much of what will be digitally distributed into U.S. homes."
Further Proceedings. Additional parties have 60 days from the date of the order to file petitions for review. Also, the circuit courts will likely consolidate all petitions for review, and assign the matter to either the DC Circuit or the 9th Circuit by lottery.
AT&T v. Portland. The Appeals Court already has a precedent on this topic. The U.S. Court of Appeals (9thCir) ruled in AT&T v. City of Portland that cable modem service is a telecommunications service. (See, TLJ story, Ninth Circuit Reverses District Court in AT&T v. Portland, June 22, 2000.) The Appeals Court which hears the present petitions for review could determine that the facts underlying the two cases are essentially the same, and follow the Portland case as precedent. On the other hand, the Appeals Court in this case could determine that the Portland case did not involve review of a FCC order, and hence, is not applicable.
The FCC was not a party to the Portland case. However, it did file an amicus curiae brief. The FCC also addressed the Portland case in its DR & NPRM. It wrote that "While we are considering the broad issue of the appropriate national framework for the regulation of cable modem service, the Portland court considered a much narrower issue -- whether a local franchising authority, whose authority was limited to cable service, had the authority to condition its approval of a cable operator’s merger on the operator's grant of multiple ISP access." The FCC also wrote that "The Ninth Circuit’s decision was based on a record that was less than comprehensive", and that the FCC "was not a party to the case and did not provide its expert opinion on this issue."
9th Circuit Affirms Injunction and Shut Down Order in Napster Case
3/25. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in A&M Records v. Napster, affirming the modified preliminary injunction and shut down order of the U.S. District Court (NDCal).
The Appeals Court previously held Napster liable for contributory and vicarious infringement for operating a peer to peer music copying service. See, A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001). The present appeal concerns the modified preliminary injunction (MPI) and shut down order of the District Court. The MPI requires Napster to remove any user file from the system's music index if Napster has reasonable knowledge that the file contains plaintiffs' copyrighted works; plaintiffs must give Napster notice of specific infringing files. The District Court ordered Napster to disable its file transferring service until certain conditions were met and steps were taken to ensure maximum compliance. The Appeals Court affirmed the MPI and shut down order.
Cary Sherman, General Counsel of the Recording Industry Association of America (RIAA), had this to say after the ruling. "Once again, the 9th Circuit Court of Appeals has affirmed that Napster must do everything feasible to police its system against copyright infringement. As we have said from the very beginning, technologies are available that allow copyrighted works to be filtered out of a peer to peer system, and the big news from today's decision is the court's strong endorsement of that point."
People and Appointments
3/25. Rep. Robert Ehrlich (R-MD) announced his candidacy for Governor of Maryland. Rep. Ehrlich is currently a member of the House Commerce Committee.
3/25. Microsoft announced that Sen. John McCain (R-AZ), the ranking Republican on the Senate Commerce Committee, and Rick Belluzzo, P/COO of Microsoft, will appear together at Boys & Girls Clubs media event in Scottsdale, Arizona. See, MSFT release.
3/25. The Business Software Alliance (BSA) named Jeri Clausing Director of Public Relations / Policy. Clausing was previously Executive Editor of Interactive Week. Before that, she covered technology policy for the New York Times. She also has a Texas background. She previously worked at the Fort Worth Star Telegram and the Dallas Times Herald. She also graduated from Southern Methodist University in Dallas.
More News
3/25. The Federal Communications Commission's (FCC) reorganization went into effect. See, FCC information on reorganization.
3/25. World Intellectual Property Organization (WIPO) began a three day conference in Geneva, Switzerland, "for the purpose of preparing a strategic blueprint for the future evolution of the international patent system". See, WIPO release, conference overview and agenda.
3/25. The State Department announced that the Department of Commerce and the U.S. Trade and Development Agency will provide 20 fellowships for persons from the Andean region. The fellowships will provide "training in the use of information technologies to improve efficiency and productivity, emphasizing supply chain management and the integration of information technologies in ``back office´´ operations." See, release.
DC Circuit Rules on FCC Fees in COMSAT v. FCC
3/22. The U.S. Court of Appeals (DCCir) issued its opinion in COMSAT v. FCC, a case regarding fees paid to the Federal Communications Commission (FCC) by regulated entities.
47 U.S.C. § 159(a)(1) provides that "The Commission, in accordance with this section, shall assess and collect regulatory fees to recover the costs of the following regulatory activities of the Commission: enforcement activities, policy and rulemaking activities, user information services, and international activities."
Until 1995, the FCC exempted Comsat from the payment of fees. In 1996, the FCC instituted a special "signatory fee" for COMSAT. The Court of Appeals held that it was invalid because it was not instituted pursuant to a rule making proceeding or change in law. See, COMSAT v. FCC, 114 F.3d 223 (D.C. Cir. 1997), also known as COMSAT I.
In 1998, PanAmSat, a competitor of COMSAT, sought review of the FCC's fee exemption for COMSAT. The Appeals Court then wrote that the statute makes "no suggestion that Comsat should be exempt," and remanded to the FCC for reconsideration of the exemption. See, PanAmSat Corp. v. FCC, 198 F.3d 890 (D.C. Cir. 1999).
In 2000, the FCC adopted a Report and Order that assessed COMSAT's space station fee at $1,609,050 -- calculated as $94,650 for each of its 17 geosynchronous space stations.
COMSAT then brought this petition for review, challenging both the FCC assertion that it can collect fees from COMSAT, and the amount of the fees. The Appeals Court, relying on its PanAmSat opinion, denied the petition.
The Court continued that "the $1.6 million in fees assessed to COMSAT seem to bear no relation to the signatory related costs that the Commission identified COMSAT as having created and that it has said it wishes to recover. Signatory related costs apparently amounted to only $233,425 in 1996, and although the record lacks reported figures for 2000, an extrapolation on the basis of the change in the regular fee per satellite would yield an estimate for Intelsat signatory related costs in 2000 of about $442,000, only about a quarter of the fees actually assessed" However, the Court did not overturn the fee amount.
COMSAT did not raise, and the Court did not address, whether fees that "bear no relation to the signatory related costs" are fees, as opposed to taxes. The administration's FCC FY 2003 budget proposal requests that the FCC be funded at the level of $278,092,000. Of this, $248,149,000, or 89 percent, would come from "regulatory fees".
Kolasky Addresses International Antitrust
3/22. William Kolasky, a Deputy Assistant Attorney General in the Antitrust Division of the Department of Justice, gave a speech titled "International Convergence Efforts: A U.S. Perspective" to the International Dimensions of Competition Law Conference in Toronto, Canada.
He discussed the International Competition Network (ICN), a framework for interaction and cooperation among government officials, private firms and non-governmental organizations that was begun last October.
He also addressed the relationship between the EU and the US. He stated that "In merger review and cartel enforcement, Washington and Brussels have, over the years, developed an excellent working relationship. This relationship has helped foster a considerable degree of substantive convergence, especially in how we define markets and how we evaluate the likely competitive effects of horizontal mergers. As a result, we have tended to reach similar conclusions on matters when we become fully engaged with one another on the analysis and we are working from a common set of facts." He added that "until last year in the GE/Honeywell case, neither of us had prohibited a merger over the other's objection."
He stated that "As cross border trade and investment grows, and as markets become increasingly global, there is real value in seeking to have competition authorities worldwide develop a common approach to common problems." He advocated the adoption of six principles: "Protect competition, not competitors. Recognize central role of efficiencies in antitrust analysis. Base decisions on sound economics and hard evidence. Acknowledge the limits to our predictive capabilities. Be flexible and forward looking. Impose no unnecessary bureaucratic costs."
He concluded that "one thing we have learned in the wake of GE/Honeywell is that ... there is a considerable gap in how we understand and apply these principles in practice, not just on mergers, but in the nonmerger area as well. We have, for example, identified at least five key areas where the EC approach seems to be significantly different from our approach: treatment of efficiencies, predatory pricing, fidelity rebates and bundled discounts, essential facilities, and monopoly leveraging."
IT Groups Oppose Hollings Bill
3/22. Several information technology groups announced their opposition to S 2048, the "Consumer Broadband and Digital Television Promotion Act". Sen. Ernest Hollings (D-SC) and other Senators introduced this copy protection bill on March 21. The bill would direct the Federal Communications Commission (FCC) to adopt rules for hardware and software makers mandating security system standards and encoding rules to protect copyrighted digital content.
Harris Miller, President of the Information Technology Association of America (ITAA), stated that "This is an anti consumer, anti progress bill pure and simple. As we move into the 21st Century, movie chieftains want to gallop back toward the 19th. On the eve of the Academy Awards ceremony, where Hollywood honors itself in a lavish show, the entertainment lobby in Washington has crafted this misdirected legislation that would introduce new, onerous government mandates on the IT sector and consumers requiring a single one size fits all solution to the problem of digital piracy. Instead of realizing that the movie industry and the IT industry have common goals -- to offer consumers exciting content in as many different formats and delivery vehicles as they wish, while preventing illegal use of that content -- Hollywood has decided that the interests of consumers are outweighed by its desire to stop a few bad actors from content pirating." See ITAA release.
Jonathan Zuck, President of the Association for Competitive Technology (ACT), stated that the bill provides "for government interference in a process best handled by the market." He added that "the federal government has difficulties creating standards for cutting edge technology."
Robert Holleyman, P/CEO of the Business Software Alliance (BSA), stated that "A broad government technology mandate is not a solution to the piracy problem. Unfortunately, no one solution will solve all piracy threats in all circumstances. The technology industry loses more than $11 billion each year to software piracy, so we share the movie industry’s passion for resolving this issue. The voluntary multi industry efforts currently underway should be permitted to continue in order to identify effective, workable market solutions." See, BSA release.
Ken Kay, Executive Director of the Computer Systems Policy Project (CSPP), stated that "Government mandates on technology products, as proposed in the Hollings bill, will decrease consumer choice, degrade product performance, stifle innovation, and reduce global competitiveness for US IT products. The best solution to protecting digital content is a marketplace driven solution."
Sen. Dorgan Addresses Trade Promotion Authority
3/22. Sen. Byron Dorgan (D-ND) spoke at length in the Senate in opposition to HR 3005, which would extend trade promotion authority (TPA) to the President. TPA would permit the President to negotiate trade agreements that the Congress could accept or reject, but not amend. It is also known as "fast track authority".
He stated that "I do not believe Congress should grant fast track authority. I think it is undemocratic. I do not believe it is necessary for us to have fast track authority in order to negotiate trade agreements. We negotiate the most sophisticated agreements without fast track authority. Nuclear arms treaties are negotiated and brought to the Congress without fast track authority. Only trade agreements, we are told, must have this handcuff put around Members of Congress, so they cannot offer any amendments."
Sen. Dorgan added that "Our government is not ensuring a level playing field. We have stacked the deck with bad international trade agreements, ineffective trade negotiators and bad agreements, one after the other."
The House approved HR 3005 on December 6, 2001. The Senate Finance Committee approved its version of the bill later in December by a vote of 18 to 3. Senate Majority Leader Tom Daschle (D-SD) has not yet scheduled a date for consideration of the bill.
People and Appointments
3/22. Rep. Ernie Fletcher (R-KY) was appointed to the House Commerce Committee. He replaces former Rep. Steve Largent (R-OK), who resigned from Congress last month to run for Governor of Oklahoma. Fletcher was also appointed to the Subcommittee on Environment and Hazardous Materials, and to the Subcommittee on Oversight and Investigations. Rep. Charles Bass (R-NH), who is already a member of the Commerce Committee, will take Largent's place on the Subcommittee on Telecommunications and the Internet. Both Fletcher and Bass voted for passage of HR 1542, the Tauzin Dingell bill; Largent had been one of its leading opponents. See, Committee release.
3/22. William Hooton was appointed Assistant Director of the Federal Bureau of Investigation (FBI) for the Records Management Division. Hooton previously worked for Tower Software, a records management software company, and for Science Applications International Corporation. Before that he worked in digital images management at the National Archives. Before that, he worked for the IRS. See, FBI release.
3/22. The Senate confirmed Randal Quarles to be a Deputy Under Secretary of the Treasury. See, Cong. Rec., March 22, 2002, at S2343.
3/22. The Senate confirmed Kenneth Lawson to be an Assistant Secretary of the Treasury. See, Cong. Rec., March 22, 2002, at S2343.
More News
3/22. The Bivings Group released a report [PDF] titled "The Internet's Role in Political Campaigns: Utilization by Incumbent United States Senators and Representatives in 2002". The report concludes that "Less than 30 percent of the campaign committees for incumbent U.S. Senators and Representatives have a functional website specifically for the 2002 election." The Bivings Group is a Washington DC based public relations firm.
3/22. Six groups wrote a letter [PDF] to Members of Congress expressing their opposition to the pending EchoStar DirecTV merger. They asked that legislators "oppose the merger and make your voice heard by writing the Department of Justice and the Federal Communications Commission." The groups are the American Antitrust Institute (AAI), National Association of Broadcasters (NAB), USAction, National Rural Telecommunications Cooperative (NRTC), National Rural Electric Cooperative Association, and the American Cable Association. The AAI asserts the merger "violates antitrust laws".
DOJ Recommends Approval of BellSouth's GA & LA Long Distance Applications
3/21. The Department of Justice (DOJ) submitted to the Federal Communications Commission (FCC) its evaluation [31 pages in PDF] of BellSouth's Section 271 application to provide in region interLATA services in the states of Georgia and Louisiana. The DOJ "recommends that the FCC approve BellSouth's application." This is CC Docket No. 02-35.
Herschel Abbott, BellSouth's VP for governmental affairs, stated in a release that "Competition is flourishing throughout the BellSouth region, with close to 300 competitors offering local service to more than four million lines in the region -- approximately 1.3 million of those in Georgia and Louisiana."
High Tech v. High Touch Banking
3/21. Federal Reserve Board Governor Susan Bies gave a speech titled "Current Challenges of Community Banks" to the Ohio Bankers Day Conference in Columbus, Ohio. She stated that "The surprisingly strong and persistent growth in the number of branch offices also suggests that the personal touch, which plays to the strength of community banks, remains an important element of banking in the age of the Internet."
Hollings Introduces Copy Protection Bill
3/21. Sen. Ernest Hollings (D-SC) introduced S 2048, the "Consumer Broadband and Digital Television Act", a bill that would require software and electronic equipment makers to build copy protection technology into their products.
The bill states that the FCC "in consultation with the Register of Copyrights, shall make a determination, not more than 12 months after the date of enactment of this Act, as to whether (A) representatives of digital media device manufacturers, consumer groups, and copyright owners have reached agreement on security system standards for use in digital media devices and encoding rules; and (B) the standards and encoding rules conform to the requirements of" the bill.
The bill further states that if such an agreement is reached, then the FCC shall initiate a rule making proceeding to codify the agreement. However, if such an agreement is not reached, then the FCC shall initiate a rule making proceeding "to adopt security system standards and encoding rules that conform" with the standards and encoding rules of the bill.
Security System Standards. The bill requires that "the security system standards shall ensure, to the extent practicable, that (1) the standard security technologies are (A) reliable; (B) renewable; (C) resistant to attack; (D) readily implemented; (E) modular; (F) applicable to multiple technology platforms; (G) extensible; (H) upgradable; (I) not cost prohibitive; and (2) any software portion of such standards is based on open source code".
Encoding Rules. The bill requires that "In achieving the goal of promoting as many lawful uses of copyrighted works as possible, while preventing as much infringement as possible, the encoding rules shall take into account the limitations on the exclusive rights of copyright owners, including the fair use doctrine." It further requires that "No person may apply a security measure that uses a standard security technology to prevent a lawful recipient from making a personal copy for lawful use in the home of programming at the time it is lawfully performed, on an over the air broadcast, premium or non-premium cable channel, or premium or non-premium satellite channel, by a television broadcast station ... , a cable system ... , or a satellite carrier ..." (Citations to the U.S. Code omitted.)
The bill prohibits a "manufacturer, importer, or seller of digital media devices" from selling, or offering for sale, in interstate commerce, "a digital media device unless the device includes and utilizes standard security technologies that adhere to the security system standards" required by this bill.
Hillary Rosen, P/CEO of the Recording Industry Association of America (RIAA), stated that "The introduction of the 'Consumer Broadband Act' sends an unmistakable signal about the importance of protecting digital music and other content from piracy. Without stringent protections, online piracy will continue to proliferate and spin further out of control."
"We appreciate that Senators Hollings, Stevens, Inouye, Breaux, Nelson and Feinstein have sent a wake up call to the information technology and consumer electronics industries that the time has come to achieve a voluntary marketplace solution to the growing threat of online piracy. We have been, and continue to be, eager to work out a voluntary solution, for that is in the best interests of everyone involved, especially the American consumer. We look forward to working with the Senate and House Commerce and Judiciary Committees on combating the digital piracy that threatens the development of the legitimate marketplace for music," said Rosen.
Rep. Boucher Writes FCC Re Digital TV Set Top Boxes
3/21. Rep. Rick Boucher (D-VA) wrote a letter to the Federal Communications Commission (FCC) to "express my disappointment with the Commission's decision to keep secret the license agreement that a manufacturer must sign in order to bring to market a competitive ``navigation device´´ (such as a cable ready digital television receiver or a set top box) that can connect directly to a cable system." (Parentheses in original.)
At issue is the Cablelabs PHILA license. PHILA is an acronym for "POD-Host Interface License Agreement". POD is an acronym for "point of deployment". CableLabs stated in a January 7, 2002, release that "The PHILA is a portion of the CableLabs OpenCable project; companies that sign the accord receive a license to deploy proprietary technology necessary to manufacture OpenCable set tops. The agreement focuses on the copy protection technology of the connecting point between an OpenCable point of deployment (POD) card and the OpenCable set-top box. This interface is the link that allows a retail cable box to be portable across a variety of different cable system headends by standardizing the communication between individual addressable POD modules and the connected set-top terminals or navigation devices."
Rep. Boucher explained that "This is no ordinary license; it has clear public policy consequences, with direct effect on consumers. Congress needs to know whether its previous direction to the Commission with respect to the competitive availability of navigation devices has been carried out appropriately. It is indefensible that a license to implement a public trust, mandated by an act of Congress, be kept ``secret.´´ There is absolutely no public policy justification for this secrecy."
The Consumer Electronics Association (CEA) issued a release praising Rep. Boucher. The CEA also stated that the PHILA agreement contains anti consumer provisions.
District Court Rules in Carnivore FOIA Case
3/21. The U.S. District Court (DC) issued its opinion [PDF] in Judicial Watch v. FBI, a Freedom of Information Act (FOIA) suit filed to compel release of documents related to the Federal Bureau of Investigation (FBI) e-mail surveillance system known as "Carnivore". The U.S. District Court (DC) dismissed the suit for failure to exhaust administrative remedies.
Judicial Watch submitted to the FBI a request for records pertaining to Carnivore, pursuant to the FOIA, 5 U.S.C. § 552. Judicial Watch asserts that the FBI did not comply with the requirements of the FOIA. It alleges that the FBI provided no documents. However, Judicial Watch did not file an administrative appeal within the FBI.
Judicial Watch instead proceeded directly to the filing of a complaint in District Court against the FBI alleging failure to comply with the FOIA. The FBI moved to dismiss. The District Court dismissed the complaint for failure to exhaust administrative remedies. The Court did not reach other issues, such as what documents the FBI would be required to release under a FOIA request.
The Electronic Privacy Information Center (EPIC) also submitted a separate FOIA request to the FBI regarding Carnivore. EPIC also filed a complaint in U.S. District Court (DC). See, EPIC's case summary with links to select pleadings and produced records.
Senate Committee Approves E-Gov Bill
3/21. The Senate Governmental Affairs Committee amended and approved S 803, the "E-Government Act of 2001". The bill is sponsored by Sen. Joe Lieberman (D-CT), the Chairman of the Committee.
The bill would establish an Office of Electronic Government headed by a Senate confirmed administrator within the Office of Management and Budget, authorize the appropriation of $345 Million over four years for an e-government fund to support interagency e-government projects, establish an online directory of federal web sites, require federal courts to publish opinions online, and fund a federal training center to recruit and train information technology professionals. See, Committee release.
State Department Official Addresses Worldwide IT Development
3/21. David Gross gave a speech at Third World Telecommunications Development Conference, in Istanbul, Turkey, in which he addressed promoting information technologies around the world.
He stated that "While advances of democracy and free markets have brought prosperity to billions of people, too many people are being left behind." He added that "information based technologies are fundamental to meeting basic development objectives".
Gross also offered several recommendations: "Build human capacity through training, education, and knowledge creation initiatives. Ensure the participation of local communities and the development of local content. Promote private sector leadership and regulate only when necessary. Establish administrative and economic systems based on predictable and transparent rules, and especially good governance."
Gross is the Deputy Assistant Secretary of State for International Communications and Information Policy. He is the head of the U.S. Delegation to the conference.
More News
3/21. The House Financial Services Committee held a hearing titled "The Effects of the Global Crossing Bankruptcy on Investors, Markets, and Employees". See, prepared testimony of witnesses: John Legere (Global Crossing), Dan Cohrs (Global Crossing), Afshin Mohebbi (Qwest), Michael Salsbury (WorldCom), Andrew McGrath (Cable and Wireless Global), John Morrissey (SEC), Scott Cleland (Precursor Group), and Will McNamara (Scientech).
3/21. Billy Joe Acosta plead guilty in U.S. District Court (NDCal) to one count of criminal copyright infringement in violation of 18 U.S.C. § 2319(c)(1) and 17 U.S.C. § 506(a)(2). He stated in his plea agreement [PDF] that in 2000, he "offered for sale over the Internet on eBay and Yahoo! auctions at least 10 copies of recordings of a live musical performance by Thirty Odd Foot of Grunts (a rock band that features Russell Crowe) on August 4, 2000 in Austin, Texas, that contained copyrighted songs." (Parentheses in original.) Joseph Sullivan is handling the case. He works in the Computer Hacking and Intellectual Property Unit in the U.S. Attorney's Office (USAO) for the Northern District of California. See also, USAO release and information [PDF].
3/21. The General Accounting Office (GAO) released a report [PDF] titled "Information Technology: OMB Leadership Critical to Making Needed Enterprise Architecture and E–government Progress". The report was prepared as testimony for the House Government Reform Committee's Technology and Procurement Policy Subcommittee hearing on March 21 titled "How The Federal Government Can Transition From Old Economy Speed to Become A Model for Electronic Government".
3/21. President Bush signed an Executive Order establishing the President's Homeland Security Advisory Council.
3/21. Sen. Richard Durbin (D-IL) introduced S 2062, titled the Comprehensive Trade Negotiating Authority Act of 2002.

Go to News Briefs from March 16-20, 2002.