News from March 26-31, 2003

9th Circuit Rules on Antitrust Immunity of ILECs

3/31. The U.S. Court of Appeals (9thCir) issued its opinion [45 pages in PDF] in MetroNet Services v. U S West, a antitrust case involves the market for small business local telephone services in Seattle, Washington. The Appeals Court reversed the District Court's grant of summary judgment to U S West (now Qwest). In so doing, the Appeals Court rejected U S West's argument that it has antitrust immunity. This issue is already before the Supreme Court in the Trinko case.

U S West is the incumbent local exchange carrier (ILEC) in the Seattle Tacoma, Washington area. It sold a product named "Centrex", volume discounted line access and calling features, such as voice mail and call forwarding, to businesses with more than 20 phone lines. MetroNet purchased Centrex from U S West and resold it to aggregations of small businesses with 20 or less phone lines. Then, in 1997, U S West imposed a 20 line per location limitation, which eliminated MetroNet's ability to resell by this method.

MetroNet filed a complaint in U.S. District Court (WDWash) against U S West alleging that its imposition of per location pricing violates Section 2 of the Sherman Act, 15 U.S.C. § 2, by illegally maintaining a monopoly over the market for small business local telephone services in Seattle, and by denying MetroNet access to an essential facility. The District Court granted summary judgment to U S West. MetroNet appealed.

The Court of Appeals reversed. MetroNet introduced sufficient evidence to proceed to trial on it monopolization and essential facilities claims.

U S West also argued on appeal that the Telecommunications Act of 1996 preempts the antitrust claims. It cited Goldwasser v. Ameritech, 222 F.3d 390 (7th Cir. 2000) as authority. The Court of Appeals rejected this argument, relying on two other Appeals Court opinions, Law Offices of Curtis V. Trinko v. Bell Atl. Corp., 305 F.3d 89 (2d Cir. 2002), and Covad Communications Co. v. Bellsouth Corp., 299 F.3d 1272 (11th Cir. 2002).

The Supreme Court granted certiorari in the Trinko case on March 10, 2003. See, TLJ story titled "Supreme Court Grants Certiorari in Verizon v. Trinko". The Supreme Court's Order List [14 pages in PDF], at page 4, states that "The petition for a writ of certiorari is granted limited to the following Question: ``Did the Court of Appeals err in reversing the District Court's dismissal of respondent's antitrust claims?´´"

Supreme Court Denies Cert in Network Elements Case

3/31. The Supreme Court denied certiorari in Strand v. Verizon North, No 02-1227. See, Order List [11 pages in PDF], at page 3. This case involves a challenge to a Michigan Public Services Commission (MPSC) order requiring incumbent local exchange carriers (ILECs) to offer network elements and services to competitors through published tariffs and to combine unbundled network elements (UNEs) for competitors. (John Strand was sued as Chairman of the MPSC.)

The U.S. District Court (WDMich) held both invalid. The U.S. Court of Appeals (6thCir) issued an opinion in which it affirmed as to the tariff requirement, but vacated as to the UNEs requirement. The Supreme Court denied the petition for writ of certiorari, without opinion.

See also, story titled "Sixth Circuit Rules in Verizon v. Strand", TLJ Daily E-Mail Alert No. 545, November 8, 2002.

USTR Submits Proposal to WTO Regarding Trade in Services

3/31. The Office of the U.S. Trade Representative (USTR) released a document titled "Initial Offer" [120 pages in PDF] that it submitted to the World Trade Organization (WTO) in which it proposes to further open access to the U.S. services sectors. The offer addresses a wide range of services, including telecommunications, information, legal, financial and accounting services. See, full story.

People and Appointments

3/31. President Bush announced his intent to nominate Josette Shiner to be a Deputy U.S. Trade Representative. She is currently Associate U.S. Trade Representative for Policy and Communications. See, White House release.

More News

3/31. The U.S. District Court (DMass) issued its Memorandum and Order [38 page PDF scan] in U.S. v. Boston Scientific Corp., The District Court held that Boston Scientific violated a consent order of the Federal Trade Commission (FTC) and acted in bad faith, and harmed people with heart disease, when it reneged on its obligation to license its intravascular ultrasound technology to a competitor, Hewlett Packard. The Court imposed a fine of $7,040,000 on Boston Scientific. See also, FTC release and DOJ release

3/31. Sen. Charles Grassley (R-IA) and 18 other Senators wrote a letter to President Bush urging him "to launch negotiations for a Free Trade Agreement (FTA) with New Zealand". The President recently launched negotiations for a FTA with Australia.

3/31. The Federal Communications Commission (FCC) released an Order of Forefeiture [11 pages in PDF] in which it fined WebNet Communications $1,200,000 for repeated willful acts of unauthorized changing of consumers' carriers, or slamming.

3/31. The House Homeland Security Committee amended and approved HR 1416, the Homeland Security Technical Corrections Act of 2003.

Chairman and Members of Cyber Security Subcommittee Named

3/28. Rep. Chris Cox (R-CA) and Rep. Jim Turner (D-TX), the Chairman and ranking Democrat on the House Homeland Security Committee, announced the Chairman and members of the Subcommittee on Cybersecurity, Science, and Research & Development.

The Chairman will be Rep. Mac Thornberry (R-TX). The ranking Democrat will be Rep. Zoe Lofgren (D-CA). The other members will be Rep. Pete Sessions (TX), Rep. Sherwood Boehlert (R-NY), Rep. Lamar Smith (R-TX), Rep. Curt Weldon (R-PA), Rep. Dave Camp (R-MI), Rep. Bob Goodlatte (R-VA), Rep. Pete King (R-NY), Rep. John Linder (R-GA), Rep. Mark Souder (R-IN), Rep. Jim Gibbons (R-NV), Rep. Kay Granger (R-TX), Rep. Loretta Sanchez (D-CA), Rep. Robert Andrews (D-NJ), Rep. Sheila Lee (D-TX), Del. Donna Christensen (D-VI), Rep. Bob Etheridge (D-NC), Rep. Charlie Gonzalez (D-TX), Rep. Ken Lucas (D-KY), Rep. Jim Langevin (D-RI), and Rep. Carrier Meek (D-FL).

Rep. Mac ThornberryRep. Thornberry (at right) represents a district that includes much of the panhandle of Texas, including the cities of Amarillo and Wichita Falls. It is not a tech district. The economy is based upon cattle, cotton and oil. It is also the site of Sheppard Air Force Base and the Pantex Plant, a nuclear weapons assembly and disassembly facility. He also holds a seat on the House Armed Services Committee.

Rep. Thornberry stated in a release that "It is very important that we create a new partnership between government and industry to protect our infrastructure from cyber-attacks. One of the missions of this Subcommittee will be to work with the Department of Homeland Security and the private sector in figuring out the best ways to defend ourselves."

Rep. Lofgren represents a Silicon Valley district. She also is a member of the House Judiciary Committee, and its Courts, the Internet and Intellectual Property Subcommittee.

The Subcommittee membership also includes other members with a record of involvement in technology related issues.

Rep. Goodlatte is a co-chair of the Congressional Internet Caucus, and a member of the House Judiciary Committee, and its Courts, the Internet and Intellectual Property Subcommittee. He has long been active in technology related  legislative issues. For example, he and Rep. Lofgren for many years cosponsored legislation to liberalize encryption export controls.

Rep. Smith represents a district that includes some technology companies. He has also sponsored several technology related bills, including the "Cyber Security Enhancement Act of 2002", which was enacted as part of a larger Department of Justice authorization bill, and HR 1161, the "Child Obscenity and Pormography Prevention Act of 2003", which addresses computer generated images. The House passed this bill on March 27 as an amendment to HR 1104, the Child Abduction Prevention Act.

Rep. Boehlert is the Chairman of the House Science Committee, and has recently sponsored legislation pertaining to cyber security and nanotechnology.

The full Committee is scheduled to meet at 3:00 PM on Monday, March 31 to formally approve subcommittee assignments and Chairmen. The Committee is also scheduled to mark up HR 1416, the Homeland Security Technical Corrections Act of 2003.

Legislators Urge FCC to Amend Broadcast Ownership Rules by June

3/28. Rep. Billy Tauzin (R-LA) and eleven other members of the House and Senate wrote a letter to Federal Communications Commission (FCC) Chairman Michael Powell regarding media ownership rules.

"Our concerns are both procedural and substantive", wrote the legislators. "With respect to our procedural concerns, you have outlined a schedule for completing the biennial review that calls for the Commission to release its decision by June of this year. We respectfully request that the Commission adhere to this schedule. Permitting this important proceeding to slip into summer or fall will not make the issues involved any easier to resolve."

Rep. Billy TauzinRep. Tauzin (at right), and the others, continued that "the Commission's ownership restrictions are outdated. It is time for the Commission to amend all of its broadcast ownership rules and bring them into alignment with the realities of today's media marketplace. The public interest is in ensuring consumers a diverse source of local news, public affairs, and community interest programming. The extensive public record developed by the Commission underscores that perpetuation of outdated ownership rules in light of today's marketplace does not satisfy the requirements of the Telecommunications Act or the public interest."

They urged the FCC "to conclude its media ownership proceeding and to reach a final decision on the fate of all its ownership rules by June of this year."

Federal Claims Court Rules in Cell Phone Lotteries Case

3/28. The U.S. Court of Federal Claims issued its opinion [25 pages in PDF] in Folden v. USA, a case involving cellular license lotteries held in 1989. The plaintiffs, Gene Folden, Coastal Communications Associates and Judith Longshore, submitted applications to the Federal Communications Commission (FCC), but were disqualified. The licenses were awarded to others.

The plaintiffs filed a complaint in the U.S. Court of Federal Claims against the United States alleging that the FCC breached implied in fact contracts with the plaintiffs to award seven cellular licenses by lottery, and violated the takings clause of the First Amendment of the Constitution by abrogating their contract rights without compensation.

The Court granted the government's motion to dismiss the implied-in-fact contract claim for failure to state a claim, because the plaintiffs failed to establish the existence of an implied-in-fact contract. The Court also granted the government's motion to dismiss for lack of subject matter jurisdiction, because this Court lacks authority to review FCC licensing decisions. The Court also granted the government's motion to dismiss the takings clause claim, because the plaintiffs do not hold a property interest that is protected by the Fifth Amendment.

Judge Marion Horn [PDF] wrote the opinion.

People and Appointments

3/28. Federal Communications Commission (FCC) Chairman Michael Powell named the members of the Consumer Advisory Committee. See, FCC release [PDF].

More News

3/28. Qwest Communications filed a Section 271 application with the Federal Communications Commission (FCC) to provide in region interLATA services in the state of Minnesota. See, Qwest release.

3/28. The General Accounting Office (GAO) sent a letter [10 pages in PDF] to Sen. John Ensign (R-NV) and Sen. Daniel Akaka (D-HI) regarding "Information Technology: Observations on Department of Defense’s Draft Enterprise Architecture". The two Senators are the Chairman and ranking Democrat on the Senate Armed Services Committee's Subcommittee on Readiness and Management Support.

3/28. Federal Reserve Board Chairman Alan Greenspan gave a speech titled "Community Economic Development" at an Federal Reserve conference in Washington DC on sustainable community development. He addressed many topics, including the role of information technology in community development financing. He stated that "community developers have also sought to broaden their financing strategies" from debt financing to "community development venture capital funds and secondary markets ..." He elaborated that "Advances in technology have significantly improved the identification and development of new financing strategies. With increased information processing capacity, loan portfolio managers can better assess risk and monitor credit performance. Additionally, the ever increasing availability of data facilitates the development of neighborhood profiles that can be useful in understanding and tracking community socioeconomic trends. For example, the cross referencing of data sets on mortgage lending patterns, business start-ups, and employment figures against crime statistics and property values can provide a valuable perspective."

3/28. The Federal Communications Commission (FCC) published a notice in the Federal Register of its adoption of rule amendments pertaining to telling the truth to the FCC. The amendments provides that persons covered by the rule may not, in proceedings covered by the rule, make written or oral statements of fact that are, in material respects, intentionally incorrect or misleading or make written statements of fact without a reasonable basis for believing that the statement is correct and not misleading. The rule amendments are effective on March 28, 2003. See, Federal Register, March 28, 2003, Vol. 68, No. 60, at Pages 15096 - 15098.

3/28. The National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register regarding the availability of funds for grants awarded under the Public Telecommunications Facilities Program (PTFP). See, Federal Register, March 28, 2003, Vol. 68, No. 60, Page 15154.

3/28. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register regarding its notice of proposed rulemaking (NPRM) to amend its regulations to implement the Madrid Protocol Implementation Act of 2002 (MPIA). This Act was passed as a part of the larger HR 2215 (107th), the 21st Century Department of Justice Appropriations Authorization Act, which President Bush signed into law on November 2, 2002. Comments are due by May 27, 2003. The USPTO will hold a public hearing at 10:00 AM on Friday, May 30, 2003 in the Patent Theater, 2121 Crystal Drive, Room 200, Arlington, Virginia. Requests to present oral testimony are due by May 20, 2003. See, Federal Register, March 28, 2003, Vol. 68, No. 60, at Pages 15119 - 15138. See also, copy of notice in USPTO web site.

5th Circuit Rules in Texas Coalition v. FCC

3/27. The U.S. Court of Appeals (5thCir) issued its opinion [15 pages in PDF] in Texas Coalition v. FCC, denying a petition for review of a Federal Communications Commission (FCC) order that cable system operators may pass through to cable subscribers the full amount of the franchise fees imposed on them by local franchising authorities (LFA) and to identify the amount passed through on subscribers' bills.

The Texas Coalition of Cities for Utility Issues (TCCFUI) and the National Association of Telecommunications Officers and Advisors (NATOA), which represent LFAs, object to this practice. Some LFAs, including the City of Pasadena, requested that the FCC prohibit the practice. The FCC adopted its Memorandum Opinion and Order (MOO) on October 4, 2001 denying the request. See, October 4, 2001 FCC release [MS Word] announcing the MOO. See also, FCC 01-289, and 16 FCC Rcd. 18,192.

This petition for review of the MOO followed. The Court of Appeals denied the petition. It rejected the arguments of the TCCFUI and NATOA that 47 U.S.C. §§ 542 and 543 prevent the pass through of the entire franchise fee, and that the order was arbitrary and capricious.

Powell Addresses Media Concentration

3/27. Federal Communications Commission (FCC) Chairman Michael Powell gave a speech to the Media Institute regarding the FCC's pending proceedings pertaining to media ownership rules.

The Telecommunications Act of 1996 relaxed ownership rules, and required the FCC to conduct a review every two years of its rules. The Court of Appeals has ruled against the FCC in several recent petitions for review of its rules.

Powell stated that "Preserving a diverse media that is competitive and serves our global and local community remains as vital today as it has ever been. Broadcast ownership policies have long been an important tool in promoting these goals."

He continued that "Ownership restraints serve as a useful, though not precise, proxy for promoting diverse viewpoints among the electronic media. Preserving an adequate number of independent owners/editors increases the probability of a wider range of viewpoints in the coverage and treatment of issues of significant public importance."

Michael PowellPowell (at right) continued that because of the statutory requirement, and the Court of Appeals' rulings, "The stark result is this: Any hope we have of preserving the use of ownership rules as a way of promoting our diversity goals, will rest on the FCC’s ability to offer significantly more compelling explanations of the rules it employs. If we fail, the rules will be gone in a year. In making our choices, we cannot ignore the new breadth and depth of the media marketplace when placing limits on broadcast owners.  Ignoring other sources of viewpoints in a market is hazardous to the health of a reasonable broadcast regulatory regime. If we resort to passion, histrionics, intuition and the cries of Chicken Little to keep the current regime as it is, the rules will not stand for long."

However, he said that the rules will have to change. He articulated several reasons. He first said that "It is important for us to rebuild our media regulatory regime in order to get a coherent and internally consistent set of rules that more correctly reflect the media landscape and the rich and varied ways consumers and citizens get there information.  If we adopt rules that do not peer through the eyes and listen through the ears of consumers and see how they obtain news and information, then it is questionable whether we are truly acting in their stead, or merely using their name in vein to promote some other agenda."

He also argued that "scale and efficiency are becoming more vital to delivering quality news and public affairs. The world is getting smaller. We are all part of a global community as well as a local community. ... This complex world requires ever more sophisticated news gathering and delivery capability. The scale and resources necessary to do it are increasing."

He also argued that "Media is itself changing as a new digital world unfolds. Voice, video and data can now travel effectively on many more platforms and will begin to accelerate the proliferation of information. As this becomes possible the consumer is demanding greater personalization and control of his programming choices, using the computer tools integrated in his watching and listening devices. We see the internet itself becoming an essential source of important content."

He concluded his speech with a warning about potential violation of First Amendment rights. He said that "My warning is this, while we are right to concern ourselves with Citizen Kane, we should not use that concern to justify the resurrection of King George. Our founding fathers said little about commercial owners of news and print, but they reserved the top spot on the bill of rights to condemn the government from foisting its values, preferences, viewpoints or tastes on a free people. This is where the gravest constitutional danger lies."

FCC Reports on Consumer Complaints and Inquiries

3/27. The Federal Communications Commission (FCC) released a report [19 pages in PDF] titled "Report on Informal Consumer Inquiries and Complaints: 4th Quarter Calendar Year 2002".

The data contained in this report shows that consumers are concerned about financial items (rates, billing, slamming and cramming) and annoying phone calls and faxes. While the FCC method of aggregating data makes analysis difficult, there is little data in the report to suggest that there is much consumer concern over some of the issues that concern policy makers in Washington DC. For example, the data in the report does not reflect consumer concern about broadband services or issues pertaining to media concentration.

This report tracks consumer inquiries and complaints processed by the FCC's Consumer & Governmental Affairs Bureau (CGAB) during the fourth quarter of calendar year 2002. However, the CGAB obtained some of its data from other FCC components. The report contains summary data on the total number of complaints and inquiries for wireless communications, wireline communications, broadcast television and radio and cable services. See, table below.

  Complaints Inquiries
Wireline 11,625 56,592
Wireless 4,059 15,223
Broadcast 253 4,112
Cable 156 4,354

The report also provides some breakdown data for each of these four industry sectors.

Broadband Services. The report contains little data on complaints and inquiries about broadband services provided by cable and phone companies. However, the data that is in the report suggests that there are far lower levels of consumer concern over broadband services than over phone line and cell phone services.

The report states that there were a total of 15 complaints about cable modem broadband service in the fourth quarter. The report does not state the total number of consumer inquiries. For DSL service, the report contains no data on consumer complaints, but does state that there were a total of 361 inquiries.

The report contains no data on complaints or inquiries to state public utilities commissions or to local cable franchising authorities.

Wireline and Wireless. The number of broadband related complaint and inquiries are far less that the number of complaints and inquiries regarding plain old fashioned wireline phone service. There were 4,853 billing complaints, 1,127 cramming complaints, and 1,895 slamming complaints, and 3,009 TCPA complaints. These Telephone Consumer Protection Act complaints pertained to calls between 9PM and 8AM, junk faxes, commercial solicitations.

Similarly, the report shows 2,598 complaints about wireless billing and rates, and a total of 4,059 complaints for all subcategories.

Broadcast and Media Concentration. The broadcast complaint data reflects some statistical manipulation by the FCC. For example, the FCC report states that there were 253 total broadcast related complaints, and that there were a total of 97 obscenity or indecency related complaints. However, a footnote states that "The Commission received at least 6,900 correspondences regarding one specific program, and the Enforcement Bureau has accounted for these correspondences as one consolidated complaint in its complaint counts this quarter." The report does not state how many other multiple complaints were counted as a single complaint for the purposes of this report.

The report does not give a breakdown of complaints or inquiries that are related to media concentration. However, there could not have been many. There were only 253 total complaints about radio and TV broadcasting, and only 156 about cable service.

Moreover, many of the 4,112 inquiries about broadcast media pertained to low power FM, or how to start a radio station. Also, 179 communications pertained to famous atheist Madalyn Murray O'Hair. The FCC denied a petition to deny licenses for  noncommercial educational broadcast stations to religious entities on August 1, 1975. O'Hair has been dead since 1995.

The FCC has no subcategory for no complaints about rates, billing, slamming or cramming by broadcasters. This is because it is free. All of the complaints related to programming (218) or disability issues (35). Of the programming complaints, 97 related to obscenity or indecency, and 4 related to religious programs, leaving only 57 for "general criticism" and 60 for "other programming issues". The FCC does not state how many of these complaints relate to the effect of media concentration upon programming, such as diversity or local programming. However, 117 is the maximum that it could possibly have been.

House Passes HR 1104

3/27. The House amended and passed HR 1104, the Child Abduction Prevention Act, by a vote of 410-14. See, Roll Call No. 89. This bill includes the Amber Alert communications network provisions, a ban on certain misleading domain names, and amendments the Child Pormography Prevention Act of 1996 (CPPA) regarding the banning certain computer generated images.

The House Judiciary Committee amended and approved the bill on March 18. See, Committee version of bill [25 pages in PDF]. The full House approved several amendments to the Committee version.

Rep. Mike PenceFirst, the House approved by voice vote an amendment [2 page PDF scan] offered by Rep. Mike Pence (R-IN) (at right) regarding misleading domain names. It provides that "Whoever knowingly uses a misleading domain name with the intent to deceive a person into viewing obscenity on the Internet shall be fined under this title or imprisoned not more than 2 years, or both." Rep. Pence had previously introduced a stand alone bill, HR 939, the "Truth in Domain Names Act".

Second, the House approved by a vote of 406-15 an amendment [28 page PDF scan] offered by Rep. Lamar Smith (R-TX) pertaining to computer generated images. See, Roll Call No. 88.

It is essentially HR 1161, the "Child Obscenity and Pormography Prevention Act of 2003", which addresses the Supreme Court's April 16, 2002, opinion [PDF] in Ashcroft v. Free Speech Coalition, in which the Court held unconstitutional on First Amendment and overbreadth grounds provisions of the Child Pormography Prevention Act of 1996 (CPPA) banning computer generated images depicting minors engaging in sexually explicit conduct. See, story titled "House Subcommittee Holds Hearing on HR 1161", TLJ Daily E-Mail Alert No. 621, March 12, 2003. See also, March 27 release of Rep. Smith.

President Bush stated in a release that "I commend the House for acting today on legislation that will help expand, enhance, and coordinate the successful Amber Alert system across our nation. I look forward to legislation reaching my desk as quickly as possible so that I may sign it into law."

Treasury Official Addresses Anti Money Laundering Compliance and Information Technologies

3/27. David Aufhauser, General Counsel of the Department of the Treasury, gave a speech to the Securities Industry Association's (SIA) Anti-Money Laundering Compliance Conference. He raised, but rejected, the possibility of relying upon computer databases with financial transactions data to catch terrorists.

He said that "There is, I suppose, an alternative that would remove the burden of all compliance. Let me be more specific. After a long and trying day, a colleague who assists in the terrorist financing campaign said to me that we were going about things all wrong. We were looking for needles in haystacks -- the trick, he said, was in removing the hay."

"He explained. We have the technological capability today to take thousands of photographs a second over hostile territory -- every second, of every minute, of every day. That is a large amount of digital photographic data. Stored in a high-speed computer, married to algorithms invented by the smartest of people, the computer can be trained to think and to extrapolate from the data supplied to it. So, on any single day of the week, you can approach a computer screen and ask to be shown the anomalies -- i.e., what is different about this second, this minute and this day from any other day of the year. If it were photography of relevant quadrant in Afghanistan, the screen before you will go blank, all but for a tire tread that leads to what was once thought to be solid rock, but is now identified to be a cave and target for assault."

Aufhauser continued that "The analogy in the financial world is the real time production of electronic commerce to a central storage facility. If we joined all such information, and challenged it with formulas intended to detect anomalies, it is conceivable that the two wire transfers to Dubai from a small town in the U.S. in Maryland by Mohammed Atta days before the September 11 attacks would have set off a blinking yellow light that said something is amiss -- check it out before people lose their lives."

However, he concluded that "Even if it were doable, I do not recommend this tack. It would forfeit the intellectual capital and professional judgment of each of you and that is too high a price."

Tether States that DARPA's Total Information Awareness Project Does Not Data Mine

3/27. The House Armed Services Committee's (HASC) Subcommittee on Terrorism, Unconventional Threats and Capabilities held a hearing on the Department of Defense (DOD) science and technology policy and programs for fiscal year 2004. Anthony Tether, Director of the Defense Advanced Research Project Agency (DARPA), testified in support of the DARPA's Total Information Awareness (TIA) project. He rebutted characterizations of the project as "data mining".

Tether provided prepared testimony regarding the TIA project. He did not cover the program in his oral testimony. However, he was questioned about it by members of the Subcommittee. Rep. James Saxton (R-NJ), the Chairman of the Subcommittee, repeatedly stated that the DOD is not doing, or spending, enough on counter terrorism. He raised both bio technology and information technology issues.

Saxton argued that the U.S. is far superior to all foes in convention capabilities, but lacking in counter terrorism capabilities. He said that "We have got a different enemy. We need a small force to meet this enemy. But we need a huge collection system to know where he is so we can go get him. How much of our budget are we using using on information, are we using trying to develop new ways to collect information on our enemies?"

Tether responded, "We, you know, we have a program called TIA." Saxton elicited laughter when he interjected, "We know that." Tether went on to state that TIA project accounts for about 5% of DARPA's budget.

Tether also elaborated on the TIA project in response to questions. "Well, TIA, is in a research stage. It doesn't -- regardless of what you may have read in the papers -- it really is not a collection program. We are not collecting any data. We are not spying on U.S. citizens. Basically, what TIA is doing is providing tools to allow agencies to better collaborate with each other. I have been involved in the business for a long time, and every time I have seen an intelligence failure, it was never because we didn't have the data. We always ended up being able, in the forensics, to show that we had the data. It was just that the data was distributed. CIA had some. NSA had some. DIA had some. But the problem was that there was no technology which allowed them to collaborate with each other so that they could bring their data forward to solve a problem. And that is all that TIA, the research in TIA, is all about, is really to do that, to allow agencies to communicate with each other and to collaborate, and yet maintain the privacy of their sources and methods. It is in an experimental phase, so that we have, we are doing a spiral development. INSCOM is a major node. Now, INSCOM is not just a single place. INSCOM is worldwide. And, basically, we are learning how to use these tools. It will be many years before it, you know, it really is to the point where it needs to be."

Editor's Notes: The CIA is the Central Intelligence Agency. The NSA is the National Security Agency. The DIA is the Defense Intelligence Agency. The INSCOM is the U.S. Army's Intelligence and Security Command.

Tether was also asked, "Is the research project active and aggressive in regard to TIA?" Tether responded, "Yes it is. It is very active and aggressive. In all fronts, in language translation, in being able to create models. Another misunderstanding of TIA is that some people thought it was a data mining thing, that we went out and went into databases to look for patterns. Actually, it is the reverse. There is two major technologies. One is the collaboration technology. But, the other is to make things from a hypothesis based, or a model based, where you create a hypothesis, and you say, if this hypothesis is true, what are all of the observables that have to be true. And, then you take that pattern to the database to see if they exist."

He was also asked, "Have we gotten past the public relations problem?" Tether responded, "I am getting less letters."

Earlier this year the Congress passed HJRes 2, which provides further appropriations for FY 2003. It also included an amendment offered by Sen. Ron Wyden (D-OR) regarding the TIA program. See, item titled "Limitation on Use of Funds for Research and Development on Total Information Awareness Program", at Division M, Section 111.

See also, stories titled "House and Senate Pass FY 2003 Appropriation Package With TIA Amendment", TLJ Daily E-Mail Alert No. 604, February 14, 2003; "Senate Approves Total Information Awareness Amendment", TLJ Daily E-Mail Alert No. 590, January 24, 2003; "DARPA States FBI Is Involved in Total Information Awareness Program", TLJ Daily E-Mail Alert No. 588, January 22, 2003; and "Sen. Feingold Introduces Data Mining Moratorium Bill", TLJ Daily E-Mail Alert No. 586, January 20, 2003.

Tether Addresses TIA and Other Defense Info Tech Projects

3/27. Anthony Tether, Director of the Defense Advanced Research Project Agency (DARPA), who testified before the House Armed Services Committee's (HASC) Subcommittee on Terrorism, Unconventional Threats and Capabilities on March 27, provided details about the DARPA's Total Information Awareness (TIA), and other defense information technology programs, including cognitive computing, microsystems, self forming networks, and networked manned and unmanned systems, in his prepared testimony to the Subcommittee.

Total Information Awareness. He wrote that "The goal of our Information Awareness programs is to create information technology that America’s national security community can use to detect and defeat terrorist networks before they can attack us."

"It includes research in technologies to identify people at a distance, translate written and spoken languages into English, vastly increase the size and searchability of databases, improve decision-making by policy makers, find patterns in scattered data, and predict the behavior of terrorist groups."

"One of our Information Awareness programs is Total Information Awareness (TIA), around which there has been much controversy. If I knew only what I read in the press about TIA, I would be concerned too. So I’d like to briefly address some of the main concerns."

"No American’s privacy has changed in any way as a result of DARPA’s Information Awareness programs, including TIA. The Department of Defense is not developing technology so it can maintain dossiers on every American citizen. The Department of Defense is not assembling a giant database on Americans."

"Instead, the TIA program is designed as an experimental, multi-agency prototype network that participating agencies can use to better share, analyze, understand, and make decisions based on whatever data to which they currently have legal access. TIA will integrate three broad categories of information technologies from DARPA and elsewhere: advanced collaboration and decision support tools, language translation, and data search and pattern recognition."

"The ultimate goal is an interagency network to collaborate, ``connect the dots,´´ and prevent terrorist attacks. While the research to date is promising, TIA is, today, a series of experiments. We want to be clear that the DARPA program is an R&D project only. The Omnibus Appropriations Act of Fiscal Year 2003 (P.L. 108-007) requires that before we make major investments in preparation for deployment of a working system, we will need to make our case for deployment and Congress must permit such deployment."

"TIA is a program to make new tools. It does not permit any agency access to data that they don't already have, and it in no way alters the authority or responsibilities of those agencies in that regard. Policymakers, particularly Congress, will ultimately determine how TIA tools may be used and on what data."

Finally, Tether wrote that "On February 7, 2003, the DoD announced the establishment of two boards to oversee TIA. These boards, an internal oversight board and an outside advisory committee, will work with DARPA as we continue our research. They will help ensure that TIA develops and disseminates its tools to track terrorists in a manner consistent with U.S. constitutional law, U.S. statutory law, and American values."

Cognitive Computing. Tether addressed DARPA's work on cognitive computing. He wrote that "While current information systems are critical to U.S. national defense, they remain exceedingly complex, expensive to create and debug, hard to integrate with each other, insecure, and prone to failure. And, they still require the user to adapt to them, rather than the other way around. Computers have grown ever faster, but they remain fundamentally unintelligent and difficult to use. Something dramatically different is needed."

"In response, DARPA's Information Processing Technology Office (IPTO) is returning to its roots to take on Licklider's vision again in a strategic thrust called ``cognitive computing.´´ Cognitive computers can be thought of as systems that know what they are doing."

He added that "Cognitive computing systems will have the ability to reason about their environment (including other systems), their goals, and their own capabilities. They will be able to learn both from experience and by being taught. They will be capable of natural interactions with users and will be able to explain their reasoning in natural terms. They will be robust in the face of surprises and avoid the brittleness and fragility of previous expert systems." (Parentheses in original.)

Microsystems. Tether wrote that "Microelectronics, photonics, and microelectromechanical systems (MEMS) are three core technologies for the U.S. military, enabling it to see farther, with greater clarity, and better communicate information in a timely manner. DARPA is building on these accomplishments by shrinking ever more complex systems into chip-scale packages -- integrating the three core hardware technologies of the information age into systems on a chip. It is at the intersection of microelectronics, photonics, and MEMS that some of the greatest challenges and opportunities for DoD arise."

He continued that the Molecular Electronics program is seeking to replace today's computer switches, which are CMOS (complementary metal oxide semiconductor) transistors, with molecular switches. He stated that "in FY 2004, DARPA expects to demonstrate the first 16-kilobit memory based on molecular switches."

Self Forming Networks and Spectrum Utilization. Tether wrote that the DOD "is in the middle of a transformation to what is often termed ``network centric warfare.´´ In simplest terms, the promise of network centric warfare is that military organizations and systems can be seamlessly networked to change the terms of any conflict to favor U.S. and coalition forces. It will allow the United States and our allies to go beyond a correlation of local forces by providing them better information and letting them plan and coordinate attacks far more quickly and effectively than our adversaries."

He elaborated that "DARPA is conducting research in areas including self-forming, ad hoc networks; high capacity, multiband, multimode communications systems; ultra-wideband communications; spectrum sharing; information assurance; and low probability of detection/intercept/exploitation communications."

After reviewing several programs, he concluded that "Borne out of the need for rapid and efficient utilization of the shrinking military bandwidth, the neXt Generation (XG) Communications program will make 10 to 20 times more radio frequency communication spectrum available to the U.S. military by dynamically sharing unused spectrum across frequency, time, and space. It turns out that, on average, only a small portion of the commercial spectrum is actively used at any given moment, even though most of the spectrum is licensed for assumed 100 percent use. The key technology question becomes whether an XG system can exploit underutilized spectrum without interfering with the original licensee."

More DARPA Technology. Tether also addressed networked manned and unmanned systems. He wrote that "The idea is not simply to replace people with machines, but to team people with robots to create a more capable, agile, and cost-effective force that lowers the risk of U.S. casualties."

He also addressed DARPA's Mobile Autonomous Robot Software (MARS).

Finally, he touched on DARPA's Augmented Cognition project. He wrote that this will "measure the mental effort (``cognitive load´´) of the human user using advanced, near-infrared optical sensors to measure brain activity. The computational system will know and support the actual state of the user, rather than just infer the user’s state or intentions. This information will allow us to manipulate or vary the load so information can be presented to the warfighter in ways that reduce information overload and will take advantage of spare mental processing power."

Antitrust News

3/27. The U.S. Court of Appeals (DCCir) granted the request of the Computer & Communications Industry Association (CCIA) and the Software and Information Industry Association (SIIA) to appeal the District Court's decision the antitrust case, U.S. v. Microsoft. The Court of Appeals previously granted the request of the states of Massachusetts and West Virginia to appeal the District Court decision in New York v. Microsoft. These are D.C. Nos. 98-1232 and 98-1233. The District Court has approved settlements negotiated by Microsoft, the Department of Justice, and the settling states. See, CCIA release.

3/27. The Department of Justice's (DOJ) Antitrust Division published a notice in the Federal Register regarding the Proposed Final Judgment and Competitive Impact Statement in U.S. v. Gemstar-TV Guide International and TV Guide. See, Federal Register, March 27, 2003, Vol. 68, No. 59, at Pages 14996 - 15004.

People and Appointments

3/27. The Senate confirmed James Selna to be a Judge of the U.S. District Court for the Central District of California by a vote of 97-0. See, Roll Call No. 111.

3/27. The Senate confirmed Philip Simon to be a Judge of the U.S. District Court for the Northern District of Indiana.

3/27. The Senate Judiciary Committee approved the nomination of Texas Supreme Court Justice Priscilla Owen to be a Judge of the U.S. Court of Appeals for the Fifth Circuit. See also, White House release.

3/27. President Bush nominated three persons to be U.S. District Court Judges: Scott Coogler (Northern District of Alabama), Mark Kravitz (District of Connecticut), and John Woodcock (District of Maine). See, White House release.

3/27. The Securities and Exchange Commission (SEC) announced that Jackson Day, the Acting Chief Accountant, will leave the SEC. See, SEC release.

More News

3/27. The House Government Reform Committee held a hearing titled "Point, Click, Self-Medicate: A Review of Consumer Safeguards on Internet Pharmacy Sites". See, prepared testimony [15 pages in PDF] of Howard Beales, Director of the Federal Trade Commission's (FTC) Bureau of Consumer Protection, and prepared testimony of William Hubbard, Associate Commissioner for Policy and Planning at the Food and Drug Administration (FDA).

3/27. Lucent stated in a release that it "reached an agreement to settle all pending shareowner and related litigation against the company, its current and former officers and directors, and certain other defendants. The company did not admit any wrongdoing as part of the settlement, which is subject to final court approval. The agreement is a global settlement of what were 54 separate lawsuits, including the consolidated shareowner securities class action lawsuit in the U.S. District Court in Newark, N.J., and all related ERISA, bondholder, derivative and state securities cases. The lawsuits alleged that the company violated federal securities laws and related state laws."

3/27. The European Union announced its "100 Best Workplaces in the EU". Three U.S. technology companies made the list -- Microsoft, Cisco and Intel. Microsoft also made the top 10 list. The criteria used to evaluate these companies were credibility/integrity, respect for employees, fairness/equality, pride, and camaraderie. See, EU release [PDF], the EU's 100 Best Workplaces website, and Microsoft release.

3/27. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property postponed its hearing previously scheduled for March 27 on HR 1417, the Copyright Royalty and Distribution Act.

3/27. Rep. Zoe Lofgren (D-CA) introduced HR 1481, a bill to extend for five years the moratorium enacted by the Internet Tax Freedom Act. It was referred to the House Judiciary Committee. The Committee's Subcommittee on Commercial and Administrative Law is scheduled to hold a hearing on HR 49, the "Internet Tax Nondiscrimination Act", which would permanently extend the ban, at 10:00 AM on April 1.

3/27. The Progressive Policy Institute (PPI), a Democratic party think tank, issued a policy briefing regarding unsolicited e-mail, or spam. It wrote that "Congress should pass a spam bill this year that contains, at a minimum, the following provisions: Impose criminal penalties for falsifying header information ... Require a standard identifying label such as "ADV" in the subject line of all unsolicited commercial email ... Create a "universal opt-out" by authorizing and appropriating funds for the Federal Trade Commission to create a Do Not Spam list ... Preempt state laws regulating spam ... Work with other countries to establish a unified strategy for dealing with the spam problem".

DOJ Requires Univision to Divest Interests in Entravision Before Acquiring Hispanic Broadcasting

3/26. The Department of Justice's (DOJ) Antitrust Division filed a complaint in U.S. District Court (DC) against Univision Communications and Hispanic Broadcasting Corporation (HBC) seeking injunctive relief to block Univision's proposed acquisition of HBC. The DOJ also settled the case.

Univision is the largest broadcaster of Spanish language television programming in the U.S. It also has one cable channel, internet web sites, and music recording, distribution, and publishing operations. HBC operates over 60 mostly Spanish language radio stations. Entravision Communications, which is not named in the complaint, operates over 50 mostly Spanish language radio stations. The DOJ alleges that the transaction would lessen competition in the sale of advertising time on many Spanish language radio stations.

The DOJ simultaneously filed a proposed consent decree that would settle the lawsuit. The settlement would require Univision to sell a significant portion of its partial ownership in Entravision, relinquish its right to two seats on Entravision's Board of Directors, and give up give up the right to vote its shares or veto certain Entravision business decisions. See also, Stipulation and Order proposed Final Judgment

Hewitt Pate, the Acting Assistant Attorney General in charge of the Antitrust Division, stated in a release that "The changes required by the consent decree will enable advertisers that rely on Spanish-language radio to reach their targeted audience and to continue to benefit from competitive prices".

FCC Announces Appointments to Office of General Counsel

3/26. The Federal Communications Commission (FCC) announced several appointments in its Office of General Counsel (OGC).

Linda Kinney was named Acting Deputy General Counsel. She has worked at the FCC since 1994, and is currently Associate General Counsel. She previously worked as a legal advisor to former FCC Commissioner Susan Ness. Before working for the FCC, she worked for Whalen & Company, and in the San Francisco office of the law firm of Graham & James.

John Stanley was named Assistant General Counsel. He will focus on wireline competition issues. He joined the FCC in May 1999, and is currently Assistant Chief of the Competition Policy Division in the Wireline Competition Bureau (WCB). He previously worked for the Washington DC law firm of Wiley Rein & Fielding.

Jeff Dygert was named Deputy Associate General Counsel in the OGC's Administrative Law Division (ALD). He will have general oversight responsibility for the OGC agenda review process. He joined the FCC in 1996, and is currently a Deputy Division Chief in the WCB.

Marilyn Sonn was named Assistant General Counsel in the OGC's ALD. She will have oversight responsibility for agenda items from the FCC's Media Bureau. She has worked for the FCC since 1997. She previous worked for the law firm of Arent Fox Kintner Plotkin & Kahn.

David Horowitz was named Assistant General Counsel in the OGC's ALD. He will have oversight responsibility for agenda items from the Wireless Telecommunications Bureau and International Bureau. He has worked for the FCC since 1988, and is currently an attorney advisor in the OGC.

John Rogovin remains General Counsel.

For more information, contact Audrey Spivack at or 202 418-0512. See, FCC release [PDF].

More People and Appointments

3/26. President Bush nominated Michael Garcia to be an Assistant Secretary of Homeland Security for the Bureau of Immigration and Customs Enforcement (BICE). See, White House release and DHS release.

More News

3/26. Federal Communications Commission (FCC) Commissioner Michael Copps announced that he will hold another field hearing on media concentration. This one will take place in Durham, North Carolina. He has recently conducted hearings in Richmond, Virginia, and in Seattle, Washington. See, release [PDF].

3/26. The Information Technology Association of America (ITAA) hosted a conference titled "Securing Cyberspace: A Government Industry Partnership for the Future". Rep. Sherwood Boehlert (R-NY), Chairman of the House Science Committee, gave a speech titled "Securing Cyberspace: A Government Industry Partnership for the Future".

3/26. The Consumer Federation of America (CFA) and Consumers Union (CU) requested that the Federal Trade Commission (FTC) and the Department of Justice's (DOJ) Antitrust Division investigate "whether cable companies are violating antitrust law by charging Internet customers higher prices unless they sign up for the companies' television services". The CFA and CU asserted in a release that "the pricing and tying arrangements involve such steep discounts that they constitute anti-competitive tying and possibly predatory pricing schemes."

3/26. The U.S. Patent and Trademark Office (USPTO) announced that, effective May 1, 2003, the general address for the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, as well as for the Commissioner for Patents will be PO Box 1450, Alexandria, VA 22313-1450. The address for the Commissioner for Trademarks and other trademark related correspondence will not change. The USPTO has separate mailing addresses for other subject specific correspondence. These are provided in the USPTO web site.

Go to News from March 21-25, 2003.