|News from May 6-10, 2003|
1st Circuit Holds Monitoring Web Site Traffic Can Violate Wiretap Act
5/9. The U.S. Court of Appeals (1stCir) issued its opinion in In Re Pharmatrak Privacy Litigation, reversing a District Court summary judgment in a case brought under the Electronic Communications Privacy Act (ECPA) involving web site monitoring.
The opinion contains detailed explanations of the technology involved, included access logs, cookies, web forms, and get and post methods. And, its conclusions are based on the specific technological details of this case. Moreover, the holding appears to be limited to a narrow set of facts not present in most situations involving web site monitoring.
In this case, the web site operators contracted with a third party to conduct monitoring, and did not disclose this third party involvement to users. More importantly, this third party exceeded the usual techniques of web site monitoring (involving access logs and cookies, which are anonymous), and also accessed some personally identifying information of web site visitors who filled out web forms, the data of which was sent to the web site operators by the "get" method. This means that the data was appended to the uniform resource locator (URL) of the web address receiving the form. And since it was a part of the URL, it was available to this third party. See, full story.
Court Upholds FCC Order Allowing Noncommercial Public TV to Offer Subscription Services on Excess Digital Capacity
5/9. The U.S. Court of Appeals (DCCir) issued its opinion [14 pages in PDF] in United Church of Christ v. FCC, upholding the Federal Communications Commission's (FCC) order allowing some advertiser supported public television.
The FCC adopted a Report and Order on October 11, 2001, that provides that noncommercial public television stations may offer subscription services, including advertiser supported subscription services, on their excess digital capacity. This order was adopted in the FCC proceeding titled "In re Ancillary or Supplementary Use of Digital Television Capacity by Noncommercial Licensees" and numbered MM Docket No. 98-203. See also, notice of the order in the Federal Register, November 26, 2001, Vol. 66, at Pages 58973 - 58982. And see, order, at 16 FCC Rcd 19042.
The United Church of Christ, Alliance for Community Media, and Center for Digital Democracy filed a petition for review of the FCC's order with the Court of Appeals. The petitioners argued in their brief [50 pages in PDF] that the order was contrary to 47 U.S.C. § 399b.
They also argued that the FCC inadequately explained its departure from agency precedent that prohibited broadcasting of advertisements by noncommercial public television stations and restricted the transmission of subscription television by those stations.
The Court of Appeals denied the petition for review.
399b(a) provides that the term "advertisement" means "any message or other programming material which is broadcast or otherwise transmitted in exchange for any remuneration". Meanwhile, 399b(b) provides that "No public broadcast station may make its facilities available to any person for the broadcasting of any advertisement". That is, the definition of advertisement references "broadcast or other transmitted", while the prohibition only references "advertisement".
The Court found that the intent of Congress is not clear on the issue before the Court. It further held that the FCC reasonably interpreted § 399b to prohibit only "broadcast" and not other transmissions of advertisements by these stations.
The Court also held that the FCC "adequately addressed its precedent by explaining that the high costs of digital technology required greater flexibility, that digital technology offers enough capacity that public stations can offer subscription services while still preserving their primary use for public educational broadcasts, and that some prior Commission decisions had authorized such stations to operate their facilities for commercial purposes on a limited basis."
Harold Feld of the Media Access Project argued the case for the petitioners. He stated in a release [PDF] that "We are disappointed with the court's ruling. The FCC sets aside special licenses solely for the use of non-commercial educational programming. For programmers to use these noncommercial licenses to offer commercial programming undermines the very purpose of public television. Every party to this challenge supports the mission of public television and believes that it needs more money to continue to produce high-quality programming for the digital age. But this is not the way. As FCC Commissioner Copps said when he dissented from the FCC Order below, this compromises the very soul of public television."
Rep. Rush Introduces Telecom Diversity Bill in House
5/9. Rep. Bobby Rush (D-IL) and others introduced HR 2044, the Telecommunications Ownership Diversification Act, a bill to amend the Internal Revenue Code to provide for a deferral of tax on gain from the sale of telecommunications businesses in specific circumstances or a tax credit and other incentives to promote diversity of ownership in telecommunications businesses.
This is the companion bill in the House to S 267, sponsored by Sen. John McCain (R-AZ). See, story titled "Sen. McCain Introduces Telecom Diversity Bill" in TLJ Daily E-Mail Alert No. 595, January 31, 2003.
The bill recites that "It is consistent with the public interest and with the pro-competition policies of the Telecommunications Act of 1996 to provide incentives that will facilitate investments in, and acquisition of, telecommunications facilities by economically and socially disadvantaged businesses, thereby diversifying the ownership of telecommunications facilities."
Rep. Rush (at right) stated in a release that "This bill would level the playing field ... so that economically disadvantaged businesses owners could enter the communications field. Minority and economically disadvantaged business owners have been absent from the telecommunications revolution. There are many factors attributed to this lack of participation, ... but chief among them is the lack of capital. My bill would remedy this problem by making minor changes to the existing tax code, so that individuals who are currently under-represented in the ownership of telecommunications companies are able to compete on an equal footing with large companies."
The bill was referred to the House Ways and Means Committee.
The original cosponsors of the bill include Rep. John Dingell (D-MI), the ranking Democrat on the House Commerce Committee, and Rep. Fred Upton (R-MI), the Chairman of the House Telecommunications and Internet Subcommittee. However, while the bill is cosponsored by these, and other members of the House Commerce Committee, it lacks original co-sponsors who are members of the Ways and Means Committee.
People and Appointments
5/9. The Senate confirmed William Emil Moschella to be an Assistant Attorney General in charge of legislative affairs.
5/9. Siebel Systems issued a release in which it stated that "On May 6, 2003, the SEC contacted the company and indicated that a May 1, 2003 article on CBS MarketWatch had raised questions regarding the company's compliance with Regulation FD. The article stated that the company's stock had risen by $0.63 during the course of the day after a dinner attended by certain financial analysts, investors, and executives of the company." Siebel also announced that it is conducting its own internal review. See also, the Securities and Exchange Commission's (SEC) Regulation FD page.
5/9. The National Telecommunications and Information Administration (NTIA) belatedly published in its web site a copy of the speech delivered by Mike Gallagher on spectrum issues. He is Deputy Assistant Secretary for Communications and Information at the NTIA.
5/9. The Federal Election Commission (FEC) made seven recommendations to the Congress for changes in federal election law. The FEC is required by 2 U.S.C. § 438(a)(9) to make to make legislative recommendations annually. The list includes one item pertaining to publishing copies of electronically filed items on the internet. The FEC stated in a release that it would "Require mandatory electronic filing, at a date to be determined by Congress, for those persons and political committees filing designations, statements, reports or notifications pertaining only to Senate elections if they have, or have reason to expect to have, aggregate contributions or expenditures in excess of $50,000 in a calendar year. Also, require that electronically filed designations, statements, reports or notifications pertaining only to Senate elections be forwarded to the Commission within 24 hours of receipt and to be made accessible to the public on the Internet, if Congress does not change the point of entry for filings pertaining only to Senate elections."
5/9. The Federal Trade Commission (FTC) and the Food and Drug Administration (FDA) sent letters to four web site operators regarding their marketing claims pertaining to their products. The products relate to Severe Acute Respiratory Syndrome (SARS) and other health and safety products. The letter regarding claims pertaining to SARS states that "The FTC staff strongly urges you to review all claims you are making for your products, particularly claims that your products can prevent, mitigate, treat or cure SARS. If your claims are not supported by competent and reliable scientific evidence they should be deleted or revised immediately." The FTC possesses civil enforcement authority under the Federal Trade Commission Act. It can seek injunctive and monetary relief through judicial or administrative actions. See also, letter regarding claims pertaining to masks and clothing to protect individuals from bio-chemical or nuclear agents, letter regarding claims pertaining to treatments and cures for anthrax and other health hazards, and letter [PDF] regarding claims pertaining to potassium iodide products for protection against nuclear radiation.
Senate Passes Amendments to FISA
5/8. The Senate amended and passed S 113, an untitled bill to amend the Foreign Intelligence Surveillance Act of 1978 (FISA), by a vote of 90-4. See, Roll Call No. 146.
Sen. Jon Kyl (R-AZ), the sponsor of the bill, stated in the Senate that "FISA allows us to get warrants, among other things, and allows us to surveil people we suspect of committing acts of terrorism against us; for example, to get a warrant to search their computer or their home. There are two instances where the law currently applies. The underlying predicate is that there has to be probable cause that somebody is committing, about to commit, or planning to commit some kind of criminal act, a terrorism kind of act. It applies to two kinds of people: somebody who is either working for a foreign government or somebody who is working for a foreign terrorist organization."
Sen. Kyl (at right) elaborated that "That leaves a little loophole because there are some terrorists who are not on the membership list, shall we say, or who are not card-carrying members of a foreign terrorist organization or a foreign government; people such as Zacarias Moussaoui, for example, whom we now believe to have been loosely involved in the al-Qaida attack of September 11."
The FISA applies to surveillance of agents of foreign powers. The bill, as amended, would add to the definition "agent of a foreign power", which is codified at 15 U.S.C. § 1801, "any person other than a United States person, who ... engages in international terrorism or activities in preparation therefor".
Sen. Charles Schumer (D-NY), a cosponsor of the bill, also spoke in the Senate in support of the bill.
The Senate approved an amendment to the bill offered by Sen. Russ Feingold (D-WI) that expands the reporting requirements imposed upon the Department of Justice for its annual report to the Congress on FISA activities. The requirements are currently minimal. One of the new requirements is reporting the aggregate number of pen register orders pertaining to non U.S. persons.
The Senate rejected an amendment in the nature of a substitute offered by Sen. Dianne Feinstein (D-CA) by a vote of 35-59. See, Roll Call No. 145. It would have provided that "Upon application by the Federal official applying for an order under this Act, the court may presume that a non-United States person who is knowingly engaged in sabotage or international terrorism, or activities that are in preparation therefor, is an agent of a foreign power under section 101(b)(2)(C)."
Sen. Feinstein argued that the Kyl Schumer bill "drops a primary requirement for FISA warrants; that is, the individual or the target be agents of a foreign power." She further argued that her proposal "grants the court a presumption. So the FISA court may presume that a target is an agent of a foreign power, or the court may choose not to invoke that presumption. The bottom line is the court is given some discretion."
Donaldson Blames Internet and Cable News Media for Disillusionment with Wall Street
5/8. Securities and Exchange Commission (SEC) Chairman William Donaldson gave a speech in which he criticized internet media and cable networks for covering market activity "with all the shameful components more typical of the tabloids". Donaldson spoke in New York City to the Economic Club of New York.
He stated that "As the market boom intensified throughout the 1990's, the appetite for real-time reports of market activity and breathless stock analysis throughout the day grew beyond Wall Street and its professional observers. Savvy media entrepreneurs saw a golden opportunity and developed new information sources to augment the traditional business pages of newspapers around the country, delivering viewers the latest corporate news via the Internet and multiple 24-hour cable networks."
Donaldson (at right) continued that "When the news of scandals broke, these outlets reported them not only as business stories, but also as human interest stories with all the shameful components more typical of the tabloids: glamorous lifestyles, big bank accounts, intrigue, power and victimization. This only fueled the fire of broad-based American outrage with the business community."
He added that "Out of that outrage, a general disillusionment with Wall Street and corporate America developed and has continued to grow. In my view, such cynicism is a major threat to the long-term health and growth of our economy. Without the confidence and participation of mainstream America, our markets cannot resume their rightful and necessary place as the engine of American prosperity."
House Members Question Powell Regarding Internet and Cable News Media
5/8. Rep. John Dingell (D-MI), Rep. Ed Markey (D-MA), Rep. Jose Serrano (D-NY), and Rep. David Obey (D-WI) wrote a letter to Federal Communications Commission (FCC) Chairman Michael Powell regarding its media ownership proceeding.
They asserted that the FCC's new rules will "substantially affect not only the degree of competition in the broadcast marketplace but also the level and quality of political discourse in our democratic society". The urged the FCC to "afford the public an opportunity to comment on a specific set of proposed changes to its present rules before it promulgates a final set of rules".
The letter also contains numerous written questions to be answered by the FCC. One series of questions pertains to the role of internet and cable news sources.
They wrote, "Your often stated rationale for eliminating or weakening the media ownership rules is the emergence of new communications media -- primarily cable and the Internet -- as sources of news and information. As you know, however, several non-FCC related studies indicate that the most watched network news broadcasts, the most popular cable channels and the most visited websites for news and information are all owned by the same handful of companies."
They then inquired, "(1) Is there an FCC-commissioned study that disputes that contention? (2) Does your analysis supporting any proposed changes treat the NBC broadcast network, the CNBC cable channel, the MSNBC cable channel, the CNBC website and the MSNBC website as five different sources of information or as one source with five different distribution outlets? (3) How does your analysis take into account the extent to which a source has local news coverage?"
Murdoch Defends News Corp.'s DirecTV Deal
5/8. The House Judiciary Committee held an oversight hearing titled "Direct Broadcast Satellite Service in the Multichannel Video Distribution Market". It focused on News Corporation's proposed acquisition of a 34% interest in Hughes Electronics Corporation. Direct broadcast satellite service provider DirecTV is a unit of Hughes.
Rupert Murdoch, the Ch/CEO of News Corporation, asserted in his prepared testimony that the transaction will be "to the ultimate benefit of all pay-TV customers, whether they are direct-to-home satellite or cable subscribers". He cited "improvements in local-into-local service, new and improved interactive services, and the many new diversity programs". He also noted "the absence of any horizontal or vertical merger concerns about this transaction".
He elaborated that "News Corp. will work aggressively to build on the services already provided by Hughes to make broadband available throughout the U.S., particularly in rural areas. Broadband solutions for all Americans could come from partnering with other satellite broadband providers, DSL providers, or new potential broadband providers using broadband over power line systems, or from other emerging technologies. News Corp. believes it is critical that consumers have vibrant broadband choices that compete with cable’s video and broadband services on capability, quality and price."
He also addressed antitrust issues. He asserted that there are no horizontal merger concerns: "Because this transaction involves an investment in DIRECTV, a multichannel video programming distributor with no programming interests, by News Corp., a programmer with no multichannel distribution interests, no ``horizontal´´ competition issues arise. There will be no decrease in the number of U.S. competitors in either the multichannel video distribution market or the programming market. To the contrary, because of News Corp.'s plans to bring ``best practices´´ and innovations to DIRECTV, competition in these markets will intensify and consumers will be presented with more and better choices."
He also addressed vertical integration: "The transaction does result in a ``vertical´´ integration of assets because of the association of DIRECTV’s distribution platform and News Corp.'s programming assets. But this “vertical” integration is not anti-competitive for two reasons. First, neither News Corp. nor DIRECTV has sufficient power in its relevant market to be able to act in an anti-competitive manner. DIRECTV has a modest 12 percent of the national multichannel market, compared to as much as 29 percent of the market held by the largest cable operator. News Corp. has a modest 3.9 percent of the national programming channels, compared to the largest cable programmer at 15.2 percent of the channels."
See also, opening statement of Rep. James Sensenbrenner (R-WI), Chairman of the Committee; prepared testimony of Kevin Arquit, a former Director of Competition at the Federal Trade Commission (FTC), who argued that there is no reason to oppose the transaction on antitrust grounds; prepared testimony of Neal Schnog, President of Uvision and Vice Chairman of the American Cable Association (ACA), who testified in opposition to the transaction; and prepared testimony [13 pages in PDF] of Gene Kimmelman, Director of the Consumers Union, who argued that antitrust officials should impose conditions upon the proposed transaction.
FCC Announces Agenda for May 15 Meeting
5/8. The Federal Communications Commission (FCC) released the agenda [3 pages in PDF] for its May 15 meeting. It lists four items. The meeting will be at 9:30 AM at the FCC's Commission Meeting Room. The meeting will webcast by the FCC.
The FCC will consider a Report and Order and Further Notice of Proposed Rulemaking concerning the promotion of secondary market mechanisms to facilitate efficient use of wireless spectrum. This is WT Docket No. 00-230. See, related story, below.
The FCC will consider a Second Report and Order regarding telecommunications relay services (TRS) for persons with hearing and speech disabilities, an Order on Reconsideration that resolves certain pending issues on reconsideration, and a Further Notice of Proposed Rulemaking regarding TRS. This is CC Docket No. 98-67.
The FCC will consider a Notice of Proposed Rulemaking concerning the operation of unlicensed National Information Infrastructure devices under Part 15 of FCC rules.
The FCC will consider a Further Notice of Proposed Rulemaking regarding classification of Bell Operating Companies (BOCs) and incumbent independent local exchange carriers (ILECs) provision of in-region, interstate and international interexchange telecommunications service and how changes to the competitive landscape within the interexchange market should affect this classification and on what approach is appropriate for BOCs and independent LECs, if and when these carriers may provide in region, interexchange services outside of a separate affiliate. This is CC Docket No. 00-175.
FCC to Consider Further NPRM Regarding Spectrum Markets
5/8. The Federal Communications Commission (FCC) announced that it will consider a Report and Order and Further Notice of Proposed Rulemaking in its proceeding regarding the promotion of secondary market mechanisms for spectrum. Spectrum markets could make more spectrum available for uses associated with mobile internet access devices.
This item is part of WT Docket No. 00-230. This proceeding was opened in 2000, but the FCC has taken little action in it in recent years. However, the FCC has been more active on this topic in a series of related and overlapping administrative proceeding, and informal actions.
The FCC adopted its original Notice of Proposed Rulemaking [61 pages in PDF] in WT Docket No. 00-230 on November 9, 2000. It is titled "In the Matter of Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets". It also announced something titled "Policy Statement".
Tom Sugrue, Chief of the FCC Wireless Telecommunications Bureau (WTB), stated at the FCC's November 9, 2000, meeting that the original NPRM seeks to "clarify and revise Commission policies and rules in a manner that will promote the development of more robust secondary markets for the use of radio spectrum."
Lisa Gaisford, an attorney with the WTB, stated at the November 9 meeting that "the Policy Statement articulates four guiding principles ... "First, Licensees should generally have clearly defined right to use spectrum, including frequency bands, service areas, and license terms of sufficient length, with reasonable renewal expectancy to encourage investment. ... Second, the right to use spectrum should be easily transferable for lease or sale, divisible, or aggregatable. ... Third, licensees and users should have flexibility in determining the services to be provided and the technology used for operation, consistent with the other policies and rules governing the service. ... And fourth, licensees and users have a fundamental obligation to protect against, and the right to be protected from, interference to the extent provided in the Commission's rules."
See also, TLJ story titled "FCC Discusses Secondary Markets for Wireless Spectrum", and TLJ news analysis titled "Mobile Internet Access Devices and the Internet", both dated November 10, 2000.
The FCC released this NPRM on November 27, 2001. On December 26, it published a notice in the Federal Register describing the NPRM and setting deadlines for public comments. See, Federal Register, Dec. 26, 2000, Vol. 65, No. 248, at pages 81475 - 81486.
The FCC's website contains 121 comments, reply comments and other items associated with this proceeding. See, for example, March 7, 2002, comment of the National Telecommunications and Information Administration (NTIA).
FCC started its original rule making proceeding in WT Docket No. 00-230 over two years ago, but until now, has taken little further action. However, the FCC has taken more action in related and overlapping matters.
For example, FCC Chairman Michael Powell formed a Spectrum Policy Task Force (SPTF) in June of 2002. It solicited comments and held hearings, outside of the context of any rule making proceeding. See, story titled "Powell Creates Task Force to Conduct Spectrum Inquiry" in TLJ Daily E-Mail Alert No. 446, June 7, 2002.
The FCC announced this report on November 7, 2002. See, story titled "FCC Announces Report on Spectrum Policy" in TLJ Daily E-Mail Alert No. 545, November 8, 2002.
The SPTF released its Report [73 pages in PDF] on November 15, 2002. One of the many topics addressed by the report is moving towards markets. The report recommends that "spectrum policy must evolve towards more flexible and market oriented regulatory models."
This report labels the FCC's historic control and planning of spectrum use as the "command and control" model. The report advocates continuing this model for some spectrum uses, such as broadcasting and public safety, but also recommends using two other models. It states that the FCC should also allow "the granting of exclusive spectrum usage rights through market based mechanisms" and "spectrum commons".
However, its recommendation regarding markets is very limited. For example, while the report makes numerous recommendations regarding reducing regulatory constraints, allowing more flexibility of use, and increasing regulatory certainty, it does not advocate a system of property ownership in spectrum. Entities that use spectrum would still be licensees, not owners, and still be subject to FCC regulation, except in the case of unlicensed users, who would not be owners either.
The words "property", "owner", and "ownership" are barely used in the report, and usually only in the context of making clear that the report is not recommending a system of property ownership. Also, while the word "rights" is used frequently throughout the report, it is usually coupled with words that dilute its meaning. For example, the report refers to "spectrum users' rights and obligations", "spectrum rights and obligations", "Spectrum Rights and Responsibilities", and "flexible rights ... and clarity in the rules".
See also, story titled "FCC Releases Spectrum Policy Task Force Report" in TLJ Daily E-Mail Alert No. 552, November 19, 2002.
The FCC also sought public comments on the SPTF report. The comment period ended on February 28, 2003. See, original notice [PDF] and notice of extension [PDF]. This is ET Docket 02-135.
There is another relevant FCC action that advocates a more market oriented model. On November 15, 2002, the FCC's Office of Plans and Policy (OPP) released its OPP Working Paper No. 38 [62 pages in PDF] titled "A Proposal for a Rapid Transition to Market Allocation of Spectrum." It was written by Evan Kwerel and John Williams of the OPP.
This paper states that "The current administrative allocation of spectrum has led to shortages and waste." It adds that "A consensus is forming that the current process of allocating radio spectrum by administrative decision making is in serious need of reform. ... Billions of dollars of cumulative loss to the U.S. economy have been attributed to inefficient spectrum allocations under the current system. The solution, according to most economists, is to replace the current administrative allocation with a spectrum market." (Footnote omitted.) See, story titled "FCC Releases OPP Paper With Spectrum Reform Proposal" in TLJ Daily E-Mail Alert No. 552, November 19, 2002.
There is another noteworthy, but non-FCC, paper [36 pages in PDF] titled "Spectrum Management: Property Rights, Markets, and The Commons", by Gerald Faulhaber and David Farber. It is AEI Brookings Joint Center for Regulatory Studies, Working Paper No. 02-12, December 2002. Faulhaber, an economist, and Farber, an engineer, are now both professors at the University of Pennsylvania. However, both previously worked at the FCC.
Also, in a related proceeding, the FCC announced a Notice of Inquiry (NOI) regarding "Additional Spectrum for Unlicensed Devices Below 900 MHz and in the 3 GHz Band" on December 11, 2002. Unlicensed devices would include, among other things, 802.11. This is OET Docket No. 02-380. The comment period is still open. See, story titled "FCC Announces Notice of Inquiry Re More Spectrum for Unlicensed Use" in TLJ Daily E-Mail Alert No. 566, December 12, 2002.
There is also the October 30, 2002 speech by Chairman Powell titled "Broadband Migration III: New Directions in Wireless Policy".
Bush Names Members of Info Tech Advisory Panel
5/8. President Bush announced his intent to appoint 25 people to the President's Information Technology Advisory Committee (PITAC). See, White House release.
Marc Benioff (Ch/CEO of Salesforce.com) and Edward Lazowska (Bill and Melinda Gates Chair in the Department of Computer Science & Engineering at the University of Washington) will be the two Co-Chairs of the PITAC.
The other appointees will be:
Ruzena Bajcsy (Department of Computer and Information Science at the University of Pennsylvania)
Carter Beese (President of Riggs Capital Partners and former SEC Commissioner)
Pedro Celis (software architect in the SQL Server group at Microsoft)
Luis Fiallo (VP of TeleGlobe)
Jose-Marie Griffiths (chair and professor of information science at the University of Pittsburgh)
William Hannigan (Ch/CE of Sabre)
Jonathan Javitt (Senior Adjunct Fellow at the Maryland Potomac Institute for Policy Studies)
Judith Klavans (Director of the Center for Research on Information Access at Columbia University)
Thomson Leighton (professor of applied mathematics at the Massachusetts Institute of Technology)
Peter Neupert (Chairman of Drugstore.com)
Eli Noam (professor of finance and economics at Columbia University)
David Patterson (professor of computer science at UC Berkeley)
Daniel Reed (head of the Department of Computer Science at the University of Illinois at Urbana Champaign)
Eugene Spafford (professor of computer sciences at Purdue University)
David Staelin (professor of electrical engineering at MIT)
Peter Tippett (CTO TruSecure)
The PITAC provides the President "with advice and information on high-performance computing and communications, information technology, and the Next Generation Internet". See, summary of relevant executive orders.
Rep. Sherwood Boehlert (R-NY), Chairman of the House Science Committee, stated in a release that "I am very pleased with today's appointment of members to serve on the President's Information Technology Advisory Committee. These appointments come at a critical time for our economic security and our homeland security, particularly in the area of cybersecurity. These new PITAC members are some of the best scientific, engineering, and business minds in the country, and I believe their collective knowledge and experience will be enormously beneficial to the President and to the Nation.
Senate Democrats Continue Filibuster of Owen and Estrada
5/8. The Senate again rejected a pair of cloture motions to end the Democrats' filibusters of the nominations of Texas Supreme Court Justice Priscilla Owen to be a Judge of the U.S. Court of Appeals for the Fifth Circuit (see, Roll Call No. 144) and the nomination of Miguel Estrada to be a Judge of the U.S. Court of Appeals for the DC Circuit (see Roll Call No. 143). Under Senate Rule 22, a cloture motion requires a super majority of 60 votes to pass. The votes broke down along party lines, with a few Democrats voting to end the filibuster.
The nomination of Miguel Estrada is particularly important for technology law. First, the DC Circuit hears many petitions for review of final orders of federal agencies, such as the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC). Second, the DC Circuit has also heard appeals in several important non administrative tech cases in recent years. For example, it heard the Eldred case regarding copyright terms, and the Microsoft antitrust case. It is also likely to soon hear RIAA v. Verizon, regarding use of DMCA subpoenas in the context of peer to peer music copying on the internet. Finally, persons appointed to the DC Circuit are frequently later nominated for the Supreme Court. Clarence Thomas, Antonin Scalia, Ruth Ginsburg, Douglas Ginsburg, Robert Bork and Warren Burger were, or had been, Judges on the DC Circuit when they were nominated for the Supreme Court.
President Bush stated that "Miguel Estrada and Priscilla Owen have been waiting two years for an up-or-down vote in the Senate. Both of these nominees are of the highest integrity and character with tremendous legal experience. Both have been unanimously rated ``Well Qualified´´ by the American Bar Association. Each has the support of a majority of Senators, yet votes on their nominations are being blocked by a minority of Senators who are engaged in simultaneous filibusters. These partisan obstructionist tactics are unprecedented, unacceptable, and inconsistent with the Senate's Constitutional responsibility." See, White House release.
See also, memorandum titled "Republican Whining", by David Carle of the staff of Sen. Patrick Leahy (D-VT), the ranking Democrat on the Senate Judiciary Committee.
The Democratic controlled Senate in the 107th Congress did not confirm Owen. President Bush made this a regular feature of his speeches on behalf of Republican Senate candidates during the campaign leading up to the November 2002 elections.
More People and Appointments
5/8. The Senate confirmed John Roberts to be a Judge of the U.S. Court of Appeals for the District of Columbia Circuit. President Bush first nominated Roberts in 2001. However, the Democratic controlled Senate took no action. Bush reappointed Roberts in January of 2003. He is currently a partner in the Washington DC office of the law firm of Hogan & Hartson. See, HH bio and DOJ bio.
5/8. President Bush nominated Michael Mosman to be a Judge of the U.S. District Court (DOre). See, White House release.
5/8. The International Intellectual Property Alliance (IIPA) sent a letter [PDF] to the International Trade Commission (USITC) stating its support for the U.S. Chile free trade agreement (FTA).
House Passes Nanotech R&D Bill
5/7. The House passed HR 766, the Nanotechnology Research and Development Act of 2003, a bill to authorize the appropriation of over $2 Billion over three years for research and development at the National Science Foundation (NSF) and other federal agencies.
It passed by a vote of 405-19. See, Roll Call No.167. The bill enjoys broad bipartisan support. However, all nineteen of the no votes were cast by Republicans.
The bill is sponsored by Rep. Sherwood Boehlert (R-NY). Its lead cosponsor is Rep. Mike Honda (D-CA), who represents a Silicon Valley district. He stated that "The funding for nanotechnology research and development will fuel the growth and maturation of the industry, and will lead to the three most important priorities in Silicon Valley -- jobs, jobs, jobs".
The House narrowly rejected two amendments offered Rep. Chris Bell (D-TX). One would have expanded the scope of the bill to also include "research on the potential of nanotechnology to produce or facilitate the production of clean, inexpensive energy". Another would have expanded the bill's language pertaining to studying "societal and ethical concerns, including environmental concerns" to also include "toxicological studies".
The Senate has not yet passed this bill. However, Sen. George Allen (R-VA) and Sen. Ron Wyden (D-OR) have introduced and held a hearing on related legislation in the Senate. See, S 189, the "21st Century Nanotechnology Research and Development Act".
See also, related stories: "House Science Committee Approves Bill to Authorize Funding for Nanotech Research" in TLJ Daily E-Mail Alert No. 654, May 2, 2003; "Senate Commerce Committee Holds Hearing on Nanotechnology" in TLJ Daily E-Mail Alert No. 654, May 2, 2003; "House Science Committee Holds Hearing on Nanotechnology" in TLJ Daily E-Mail Alert No. 641, April 10, 2003; Commerce Department Official Addresses Nanotechnology in TLJ Daily E-Mail Alert No. 641, April 10, 2003; "Representatives Introduce Bill To Authorize Nanotech R&D Funding" in TLJ Daily E-Mail Alert No. 606, February 18, 2003; "Rep. Honda Introduces Nanotechnology Bill" in TLJ Daily E-Mail Alert No. 582, January 14, 2003; "Senate Commerce Committee Approves Nanotechnology Bill" in TLJ Daily E-Mail Alert No. 513, September 20, 2002; and "Senators Introduce Nanotechnology R&D Bill" in TLJ Daily E-Mail Alert No. 511, September 18, 2002.
Abernathy Advocates Reliance on Market and Criticizes Triennial Review Order
5/7. Federal Communications Commission (FCC) Commissioner Kathleen Abernathy gave a speech [5 pages in PDF] titled "Trust the Market". She praised the FCC's trust of market forces in its regulatory decisions pertaining to wireless phone service and unlicensed wireless devices, but criticized the FCC's failure to rely on market forces in its triennial review order.
Abernathy (at right) began by praising the FCC's decisions, long ago, regarding the wireless industry. She said that "the wireless experience illustrates how Commission policy ought to work: We establish policies that encourage entry into the marketplace; firms compete with one another based on price and service quality; and consumers make choices that maximize their welfare. In the end, some firms succeed while others fail, and it is the role of regulators to referee between carriers and consumers and among providers -- not to pick winners and losers."
"Regulators are often hesitant to trust markets to operate rationally", said Abernathy. "There is always a tendency to believe that direct intervention and manipulation will somehow yield a better result for consumers." She contrasted the decisions long ago not to impose common carrier type regulation on the cellular sector, and the decisions now being made regarding unlicensed spectrum use, with the UNE-P portions of the FCC's triennial review order.
She said that currently the FCC is "moving towards increasing the amount of unlicensed spectrum that is available for new entrants to provide telecommunications services" such as WiFI, Bluetooth, cordless telephones and garage door openers. She added that "the FCC does intervene to establish certain rules of the road to avoid harmful interference and allow multiple devices to operate in the same frequency band", but that the FCC has resisted "the urge to impose heavy handed regulation."
She continued that "the FCC affirmed its decision to allow ultra-wide band devices on an unlicensed basis to be deployed in a large portion of the lower frequency bands. ... The Commission is also looking at additional frequency bands at 70, 80 and 90 MHz for other unlicensed devices. And just last month the FCC issued a notice of inquiry seeking information on what technical rules are required to allow power line broadband carrier services to be utilized. We are hopeful that power lines might offer a new broadband pipe to the home and office over the existing power infrastructure by operating in unlicensed frequency bands."
The FCC's ultrawideband (UWB) proceeding is ET Docket No. 98-153. The FCC adopted its First Report and Order [118 pages in PDF] on February 14, 2002 (released April 22, 2002). See also, Memorandum Opinion and Order [91 pages in PDF] adopted on February 13, 2003. The FCC's broadband over powerline (BPL) proceeding is ET Docket No. 03-104. The FCC adopted its Notice of Inquiry [21 pages in PDF] at its April 23, 2003 meeting. See, stories titled "FCC Announces NOI Regarding Broadband Over Powerlines" in TLJ Daily E-Mail Alert No. 648, April 24, 2003; and "FCC Releases NOI on Broadband Over Power Lines" in TLJ Daily E-Mail Alert No. 656, May 7, 2003.
In contrast to the FCC's action in these proceedings, Abernathy stated that the FCC "has taken a step back from relying on competitive market forces" in other areas. "Such slippage will ultimately harm consumers by stifling innovation and choice in the marketplace which may ultimately lead to fewer choices and higher rates for consumers. It can also lead to unintended consequences, such as uncertainty and a lack of capital investment. This is what happened in part of the recently adopted triennial review order."
See, TLJ stories on the FCC's February
20, 2003 order:
• FCC Announces UNE Report and Order
• FCC Order Offers Broadband Regulatory Relief
• FCC Announces Decision on Switching
• Commentary: Republicans Split On FCC UNE Order
• Congressional Reaction To FCC UNE Order
See also, TLJ story titled "Commerce Committee Holds Hearing on FCC Triennial Review Order", February 26, 2003.
She summarized the content of the order, which the FCC announced in February, but has not yet released.
She then criticized the portion of the order that eliminates line sharing over copper loops. She elaborated that "new fiber investment, copper loops are already in place. So giving competitors like Covad the ability to share those loops does not deter investment at all. In fact, allowing competitors to offer DSL through line sharing promotes competition and investment. If the incumbent wants to find a way to differentiate its service offerings, it can build new fiber loop facilities without being subject to the TELRIC unbundling regime."
She also said that the UNE-P portions of the order represent a "failure to put some faith in the market". She continued that "I believe the majority’s decision to allow each state commission to decide the fate of unbundled switching, based on a largely subjective analysis, was bad for the telecom market and, in the long term, will be bad for consumers."
She added that this part of the order is "legally indefensible", and will result in litigation and uncertainty.
She concluded that "I am disappointed by this outcome, because the FCC had an opportunity to put us on a path towards more sustainable facilities-based competition and, ultimately, a greater reliance on market forces. Instead, the majority opted for an extraordinary degree of regulatory oversight and uncertainty. And while I have no doubt that the state commissions will attempt in good faith to make economically sound decisions, I also know that different states will reach diametrically opposed conclusions based on the same underlying facts."
WTO Authorizes FSC/ETI Related Tariffs
5/7. The World Trade Organization (WTO) authorized the European Union (EU) to impose $4 Billion in retaliatory tariffs on U.S. exports. The WTO previously ruled that the U.S. Foreign Sales Corporation (FSC) tax regime, its replacement, the Extraterritorial Income (ETI) tax regime, constitute illegal export subsidies. This ruling permits the EU to impose retaliatory tariffs. On February 26, 2003, the EU released a revised list of items that may be subject to retaliatory tariffs.
The WTO's Dispute Settlement Body (DSB) stated in a release that "The EC requested authorization from the DSB to take appropriate countermeasures (see WT/DS108/26) and to suspend concessions vis-à-vis the US for an amount of US$4.04 billion per year according to the arbitration report WT/DS108/ARB issued in August 2002. The EC added on a more positive note that obtaining the authorization did not mean that they would immediately resort to countermeasures. The EC said that they were still willing to give the US a short additional period to make the necessary legislative changes."
Bills have been introduced to bring U.S. tax law into compliance with the WTO rulings, including HR 1769, the Job Protection Act of 2003. It was introduced by Rep. Phil Crane (R-IL), Rep. Charlie Rangel (D-NY), and others on April 11, 2003. The Senate Finance Committee and House Ways and Means Committee have jurisdiction over trade issues.
Sen. Charles Grassley (R-IA), the Chairman of the Senate Finance Committee, stated in a release [PDF] that "It's important to remember that today's action doesn't mean that the EU will impose extra duties any time soon. The Europeans know we're working on this issue. I've encouraged them to exercise restraint before moving forward with any sanctions so our legislative process can move toward a resolution of this issue. They're exercising that restraint. I believe this will be helpful as we continue to move forward."
The House Ways and Means Committee issued a release in which it stated that "Today, the European Commission’s (EC) spokeswoman, Arancha Gonzalez, cast serious doubts on legislative efforts to phase out the illegal U.S. tax regime known as FSC-ETI. The leading proponent of such an approach is Rep. Charlie Rangel (D-NY), who with cosponsor Rep. Phil Crane (R-IL) introduced H.R. 1769."
Also on May 7, EU Trade Commissioner Pascal Lamy stated in a release that "I am encouraged by the determination of the US Administration and Congressional leaders to ensure repeal of FSC/ETI during the course of the current fiscal year. I also trust that any solution found by the US will be fully compatible with WTO rules. The Commission will review the situation in the autumn, and if there is no sign that compliance is on the way at that time, it would then start the legislative procedure for the adoption of countermeasures by 1 January 2004."
Sen. Grassley continued that "I'm committed to complying with the WTO decision once the Finance Committee has completed action on an economic growth package, and the threat of sanctions won't change our timetable for addressing this issue. Already one bill has been introduced in the House providing for the repeal of FSC/ETI. I'm studying several proposals, and I'll continue working with Senator Baucus to reach agreement on introducing legislation in the Senate. I intend to work to enact legislation this year, before the end of this year's congressional session."
Sen. Grassley added that "Imposing sanctions would only disrupt this ongoing process and cause further delays in achieving a resolution. The retaliation list targets many important exports, among them a number of agricultural exports including both corn and soybean products. Sanctions would needlessly elevate bilateral trade tensions in the targeted areas and derail our efforts to resolve this issue in a timely way. Sanctions could also lead to a deeper economic slowdown when we need to do all we can to expand world trade and economic growth."
FCC Fines Qwest for Providing In Region InterLATA Service
5/7. The Federal Communications Commission (FCC) released an Order and Consent Decree [12 pages in PDF] that fines Qwest Communications $6.5 Million for providing in region interLATA services in violation of the FCC's merger order approving the merger, in 2000, of U S West and Qwest.
Specifically, the Consent Decree recites that "Qwest admits that, with respect to the following matters, Qwest violated the Qwest/U S WEST Merger Order by not terminating, suitably modifying or divesting by the close of the merger (June 30, 2000) the following services provided to the following customers: a. Two leases of dark fiber: one to Timing Solutions Corp. in Arizona and one to MEANS, Inc. in Minnesota. b. Six private line services: one DS3 to Electric Lightwave, Inc. between Medford, OR, and Portland, OR; four DS3s to Triumph Communications each of them having one end point in Denver, CO, with the other end points in Chicago, IL, Kansas City, MO, Los Angeles, CA, and Sacramento, CA; and one DS3 to Teleglobe USA Inc. between Seattle, WA, and Los Angeles, CA."
It further states that "Qwest agrees that it shall make a voluntary contribution to the United States Treasury in the amount of $6.5 million. This amount shall be paid within 10 calendar days after the Commission order adopting this Consent Decree becomes final." See also, FCC release [PDF].
5/7. Rep. Anthony Weiner (D-NY) introduced HR 2025, the "Subway Cell Access Act". The bill would amend the Communications Act to provide that the Federal Communications Commission (FCC) "shall, by regulation, require that each commercial mobile service provide service for the universal emergency telephone number designated under section 251(e)(3) within each subterranean boarding station that is located within any geographic area in which such commercial mobile service provides service at ground level." The bill was referred to the House Commerce Committee.
House Crime Subcommittee Approves Internet Gambling Bill
5/6. The House Judiciary Committee's Subcommittee on Crime, Terrorism, and Homeland Security approved HR 21, the "Unlawful Internet Gambling Funding Prohibition Act", without amendment, by a voice vote. This bill, which is sponsored by Rep. James Leach (R-IA), would attempt to functionally bar internet gambling by prohibiting the use of financial instruments, such as credit cards, in any transaction involving illegal internet gambling. See, full story.
Representatives Introduce Bill to Update Computer Professionals Exception to Overtime Pay Requirement
5/6. Rep. Joe Wilson (R-SC) and Rep. Robert Andrews (D-NJ) introduced HR 1996, a bill to amend the Fair Labor Standards Act (FLSA) regarding certain technology workers. 29 U.S.C. § 213 contains exceptions to the requirement that a minimum wage and overtime be paid. Subsection (a)(17) currently states the exception for persons who are a "computer systems analyst, computer programmer, software engineer, or other similarly skilled worker".
The minimum wage for computer professionals is not at issue. This bill, and the FLSA, require that a wage far above the minimum wage be paid for this exception to apply -- $27.63 per hour. Rather, the issue is which computer and information workers must be paid overtime for over forty hours per week.
The bill would expand the language of the existing exception, and broaden the number of workers covered by the exception. The bill would also bring the language of the FLSA up to date with the changing nature of computer related work. This exception was last amended in 1996.
For example, the FLSA now references "computer systems", but neither networks, the internet, intranets nor databases. Similarly, the FLSA does not now reference computer or network security.
The bill would provide an exception for the following: "any employee who is a computer systems, network, or database analyst, designer, developer, programmer, software engineer, or other similarly skilled worker -- (i) whose primary duty is -- (I) the application of systems or network or database analysis techniques and procedures, including consulting with users, to determine hardware, software, systems, network, or database specifications (including functional specifications); (II) the design, configuration, development, integration, documentation, analysis, creation, testing, securing, or modification of, or problem resolution for, computer systems, networks, databases, or programs, including prototypes, based on and related to user, system, network, or database specifications, including design specifications and machine operating systems; (III) the management or training of employees performing duties described in subclause (I) or (II); or (IV) a combination of duties described in subclauses (I), (II), or (III) the performance of which requires the same level of skills; and (ii) who, in the case of an employee who is compensated on an hourly basis, is compensated at a rate of not less than $27.63 an hour."
This is a re-introduction of a bill introduced in the 107th Congress by Rep. Andrews and former Rep. Lindsey Graham. See, HR 1545 (107th). Sen. Lindsey Graham (R-SC) was elected to the Senate in November, 2002. He re-introduced his bill in the Senate in the current (108th) Congress as S 495 on March 3, 2003.
The National Association of Computer Consultant Businesses supports this legislation.
House Crime Subcommittee Holds Hearing on DOJ Reauthorization
5/6. The House Judiciary Committee's Subcommittee on Crime, Terrorism, and Homeland Security held an oversight hearing titled "Reauthorization of the U.S. Department of Justice: Bureau of Alcohol, Tobacco and Firearms; Federal Bureau of Investigation; and Drug Enforcement Administration."
The witnesses were Pasquale D'Amuro (Executive Assistant Director, Counterterrorism / Counterintelligence, Federal Bureau of Investigation), Richard Hankinson (Deputy Director, Bureau of Alcohol, Tobacco, Firearms, and Explosives), and Rogelio Guevara (Chief of Operations, Drug Enforcement Administration).
D'Amuro referenced the FBI's obsolete information technology in his prepared testimony. He wrote that "the FBI's investigative efforts depend on state of the art technology and I want to report that tremendous progress is being made in this critical area. Over 21,000 new desktop computers and nearly 5,000 printers and scanners have been provided and high-speed local area networks have been deployed in over 600 FBI locations. I understand that we still have a long way to go but I want to thank the Subcommittee for the support it has provided on these critical technology issues."
See also, story titled "FBI Loses 317 Laptops" in TLJ Daily E-Mail Alert No. 485, August 6, 2002; and story titled "Senate Subcommittee Holds Hearing on FBI's Antiquated Computers" in TLJ Daily E-Mail Alert No. 471, July 17, 2002.
Murdoch to Testify at House Hearing
5/6. The House Judiciary Committee announced that Rupert Murdoch, Ch/CEO of News Corporation, will testify at its May 8 hearing titled "Direct Broadcast Satellite Service in the Multichannel Video Distribution Market". See, release.
General Motors and Hughes Electronics announced on April 9 that "GM intends to split off Hughes, and simultaneously sell GM's 19.9 percent economic interest in Hughes to News Corp. ... for $14 per share, or approximately $3.8 billion." See, Hughes release. Direct broadcast satellite service provider DirecTV is a unit of Hughes.
Hughes also stated that "The transaction is subject to a number of conditions, including approval by a majority of each class of GM stockholders -- GM $1-2/3 and GM Class H -- voting both as separate classes and together as a single class. The transaction, which has been approved by the GM, Hughes and News Corp. boards of directors, remains subject to regulatory clearance under the Hart-Scott-Rodino Act and by the Federal Communications Commission. Completion of the transaction is also contingent on the receipt of a favorable ruling from the Internal Revenue Service that the split-off of Hughes from GM would be tax-free to GM and its stockholders for U.S. Federal Income Tax purposes."
Murdoch stated in a telephone conference call on April 9 that "we expect the transaction to close by the end of calendar 2003". He also stated that News Corp. would follow the Federal Communications Commission's (FCC) program access regulations.
The Consumers Union (CU) issued a release condemning the proposed transaction. Gene Kimmelman, Director of the CU, is scheduled to testify along with Murdoch.
The other witnesses will include Kevin Arquit (former Director of Competition at the Federal Trade Commission) and Neal Schnog (President of Uvision and Vice Chairman of the American Cable Association). The hearing will be webcast.
In October 2001, Hughes accepted an offer by EchoStar to sell its DirecTV Digital Broadcast Service to EchoStar. However, a year later, the FCC declined to approve the transfer of licenses associated with the proposed merger. See, TLJ story titled "FCC Declines to Approve EchoStar DirectTV Merger", October 10, 2002. The Department of Justice also filed suit to block the merger.
See also, story titled "GM, Hughes and News Corps Announce Directv Deal" in TLJ Daily E-Mail Alert No. 643, April 14, 2003.
House to Consider Nanotechnology R&D Act
5/6. The House Rules Committee adopted an open rule for consideration of HR 766, the Nano Technology Research and Development Act of 2003. The House is scheduled to take up the bill on Wednesday, May 7.
This bill would authorize the appropriation of over $2 Billion over three years for nanotechnology research and development programs at the National Science Foundation (NSF), Department of Energy (DOE), Department of Commerce's (DOC) National Institute of Standards and Technology (NIST), National Aeronautics and Space Administration (NASA), and Environmental Protection Agency (EPA). The majority of the funding would go to the NSF. See, Republican Whip Notice.
See also, story titled "House Science Committee Approves Bill to Authorize Funding for Nanotech Research" in TLJ Daily E-Mail Alert No. 654, May 2, 2002.
Bush and Goh Sign US Singapore FTA
5/6. President Bush and Singapore Prime Minister Goh Chok Tong signed the U.S. Singapore Free Trade Agreement (FTA) at a ceremony at the White House. President Bush stated that "The agreement contains state of the art protections for Internet commerce and intellectual property that will help drive growth and innovation in our dynamic technology sectors". See, transcript.
This FTA is over 800 pages, and is arranged in 21 chapters. See especially, chapters pertaining to intellectual property rights [30 pages in PDF], electronic commerce [4 pages in PDF], and joint statement regarding electronic commerce [5 pages in PDF]. See also, chapter pertaining to telecommunications [16 pages in PDF], Side Letter on State Issues, and Side Letter on Divestment Issues.
Prime Minister Goh (at right) stated that "The U.S.-Singapore FTA is an ambitious and comprehensive agreement. It removes barriers in the goods and services trade and in investments. It breaks new ground in emerging areas like e-commerce. It also establishes high standards in intellectual property, transparency and customs. The FTA will expand opportunities for American businesses in Singapore. More importantly, the U.S.-Singapore FTA can be a model for other FTAs under President Bush's Enterprise for ASEAN Initiative, or EAI. I hope the EAI will quickly result in more FTAs between the U.S. and Southeast Asia."
See also, Joint Statement issued on May 6, 2003.
This FTA still requires the approval of the Congress. Under the trade promotion authority bill passed by the last Congress, the Congress can approve or reject, but not amend, this FTA.
Sen. Charles Grassley (R-IA), the Chairman of the Senate Finance Committee, stated in a release that "I welcome this bilateral free trade agreement. It’ll be our first with an Asian nation, I hope the first of many. Singapore is America's largest trading partner in Southeast Asia. A U.S-Singapore free trade agreement will add to the growing trade that our countries share. It especially will offer a new market for American companies in financial and professional services. This agreement continues our goal toward greater trade liberalization, not only in the Pacific, but throughout the globe. I appreciate the President's interest in concluding free trade agreements. We have to make up for lost time and missed opportunities prior to this Administration."
People and Appointments
5/6. Mitch Daniels, Director of the Office of Management and Budget (OMB), announced that he will leave his position in 30 days.
5/6. Uzoma Onyeije was named Legal Advisor in the Office of the Bureau Chief of the Federal Communications Commission's (FCC) Wireless Telecommunications Bureau (WTB). He will advise the Bureau Chief (John Muleta) and Deputies on wireless regulatory issues, including matters before the Commercial Wireless Division. He has worked at the FCC since March of 2001. Before that, he worked the law firms of Mintz Levin and Wiley Rein & Fielding. See, FCC release [PDF].
5/6. The General Accounting Office (GAO) released testimony [15 pages in PDF] titled "Telecommunications: Data-Gathering Weaknesses in FCC's Survey of Information on Factors Underlying Cable Rate Changes". The GAO wrote that "Based on interviews with 100 randomly sampled cable franchises that completed FCC’s 2002 survey, GAO’s preliminary analysis indicates that FCC's survey may not be a reliable source of information on the cost factors."
5/6. Providian National Bank submitted a request for an advisory opinion [9 page PDF scan] to the Federal Election Commission (FEC). Providian has an affinity credit card program. It enters into agreements with companies or organizations to be affinity sponsors. Providian then provides credit cards that are co-branded by Providian and the affinity sponsors. Providian further states that while it uses the affinity sponsor's trademarks and membership lists, its only interest is increasing the number of its credit card customers. And now, Providian wants to enter into affinity agreements with national political party committees. Providian states that it would not contribute any money to party committees, but it would enable its customers to do so, such as by directing rebates or bonuses to party committees. Providian requests an advisory opinion confirming that these affinity agreements with party committees are permissible under the Federal Election Campaign Act (FECA).
5/6. Rep. Maurice Hinchey (NY) introduced HRes 218, a resolution to express the sense of the House that the Federal Communications Commission (FCC) should not revise its media ownership rules without more extensive review and comment by the public. It was referred to the House Commerce Committee. See, Hinchey release.
Go to News from May 1-5, 2003.