News from October 16-20, 2003

Supreme Court Denies Cert in PSLRA Case

10/20. The Supreme Court denied certiorari, without opinion, in America West Holding v. No. 84 Employer-Teamster Joint Council Pension Trust Fund, S.C. No. 03-250. See, Order List [10 pages in PDF] at page 3.

The Court passed up an opportunity to interpret (and resolve the conflict between the various circuits) the heightened pleading requirements language of the Private Securities Litigation Reform Act of 1995 (PSLRA).

The plaintiffs filed a complaint in the U.S. District Court (DAriz) against America West Holding Corporation and some of its officers and directors alleging securities fraud. They alleged violation of Section 10(b) of the 1934 Act and Rule 10b-5 thereunder. They also alleged violation of Section 20(a) of the 1934 Act. They are represented by the class action securities fraud specialists, Milberg Weiss.

The District Court dismissed the complaint. The Court of Appeals (9thCir) issued its opinion [PDF] on February 13, 2003, reversing and remanding. It was a split opinion.

This case is America West Holding Corporation, et al. v. No. 84 Employer-Teamster Joint Council Pension Trust Fund, S.C. No. 03-250, a petition for writ of certiorari to the U.S. Court of Appeals for the Ninth Circuit. The Appeals Court number is 01-16725. This case arose in the U.S. District Court for the District of Arizona, D.C. No. CV-99-00399-OMP.

CDT Releases Report on Broadcast Flag

10/20. The Center for Democracy and Technology (CDT) released a report [31 pages in PDF] titled "Implications of the Broadcast Flag: A Public Interest Primer". It pertains to the Federal Communications Commission's (FCC) Notice of Proposed Rulemaking (NPRM) [15 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Copy Protection".

This NPRM proposed that the FCC promulgate a broadcast flag rule, and seeks comment on this, and related questions. This is MB Docket No. 02-230. While the FCC adopted this NPRM on August 8, 2002, it remains an open proceeding. However, the FCC stated in its report and order containing digital plug and play cable compatibility rules (announced on September 10) that the FCC "will address Digital Broadcast Copy Protection issues in the near future." See, stories titled "FCC Adopts Digital Plug and Play Cable Compatibility Rules" and "FCC States That It Will Act On Broadcast Flag" in TLJ Daily E-Mail Alert No. 737, September 11, 2003.

The Copyright Act gives rule making authority for implementing the Copyright Act to the Library of Congress, not the FCC. Moreover, there is no specific grant of authority to the FCC in the Communications Act to promulgate copyright protection regulations.

Nevertheless, the FCC is involved in this issue because it seeks to promote a transition to DTV. That is, programming that is in digital format is more susceptible to copying and copyright infringement than analog programming, because it is easier to make and distribute exact copies of digital content. Thus, content providers have a disincentive to make their works available in digital format. To the extent that less content is made available in digital format, consumers have less incentive to purchase DTV receivers and equipment. So, the FCC, which seeks a conversion to DTV, has involved itself in copy protection issues.

See also, stories titled "FCC Issues NPRM on Broadcast Flag" and "FCC Debates Its Authority to Promulgate Broadcast Flag Rule" in TLJ Daily E-Mail Alert No. 489, August 12, 2002. See also, FCC release [PDF].

The CDT report states that "Proposed broadcast flag regulations, currently before the FCC, create many legitimate concerns for television viewers, Internet users, and industry groups. As drafted they may restrict reasonable uses of content by viewers, hinder future technology innovation, and impose costs that are not worth the limited copy protection provided."

The CDT continues that "Better versions of the broadcast flag proposal could be created to deal with many of these concerns, primarily by creating more clearly objective and focused functional standards for the devices and uses that will be permitted by flag regulations, and by creating a more open and accountable process for certifying permitted technologies."

It adds that "Even with those improvements, the flag proposal poses unresolved issues regarding technical regulation of computers and the Internet by the government, the impact of the flag itself on innovation and future consumer uses, and the definition of "fair use" and other copyright doctrines in the digital age. It also leaves other serious copy protection problems for television content unresolved."

The CDT also submitted a shorter comment [4 pages in PDF] to the FCC on December 6, 2002.

People and Appointments

10/20. The Computer Systems Policy Project (CSPP) announced in a release that Bruce Mehlman will become its Executive Director on December 1, 2003. He is currently the Assistant Secretary for Technology Policy at the Department of Commerce (DOC). He will replace Ken Kay, who will open an office of Infotech Strategies in Tucson, Arizona. The CSPP is a CEO lead technology association. Its members are Dell, HP, Motorola, Intel, Unysis, EMC, NCR, and IBM.

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10/20. The House Rules Committee adopted a closed rule for consideration of HJRes 73, making continuing appropriations for FY 2004. The House is scheduled to consider the resolution on Tuesday, October 21.

10/20. The Supreme Court denied certiorari, without opinion, in Richard Hodges v. Sprint Spectrum, No. 03-5996. See, Order List [10 pages in PDF] at page 5.

10/20. Novell announced that the U.S. District Court (CDCal) entered judgment of copyright and trademark infringement against Keynet Corporation. See, Novell release.

10/20. The Office of the U.S. Trade Representative (USTR) announced in a release that Robert Zoellick will visit the People's Republic of China on October 19-21 after attending the Ministerial Meeting of the Asia Pacific Economic Cooperation (APEC) forum in Bangkok, Thailand. He will discuss, among other topics, "increasing protection for U.S. intellectual property".

10/20. The Brookings Institute released a report [53 pages in PDF] titled "Spreading the Wealth: Building a Tech Economy in Small and Medium-Sized Regions", by Paul Sommers and Deena Heg. The report offers recommendations on how to enhance technology-based economic development. See also, summary.

10/20. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register regarding amendments to its rules of practice to conform them to certain amendments made to the regulations under the Patent Cooperation Treaty (PCT). See, Federal Register, October 20, 2003, Vol. 68, No. 202, at Pages 59881-59889.

10/20. The Senate confirmed Margaret Catharine Rodgers to be a Judge of the U.S. District Court for the Northern District of Florida by a vote of 82-0. See, Roll Call No. 401.

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10/19. President Bush announced that he intends to negotiate a free trade agreement with Thailand. See, White House release.

Senate to Take Up  Class Action Reform Bill

10/17. The Senate will begin consideration of S 1751 on Monday, October 20, at 2:00 PM. Sen. Charles Grassley (R-IA), Sen. Herb Kohl (D-WI) and others introduced the bill on October 16. An earlier version of this bill, S 274, titled the "Class Action Fairness Act of 2003", was introduced on February 4, 2003. It was approved by the Senate Judiciary Committee on July 31, 2003.

The House version of the bill, HR 1115, sponsored by Rep. Bob Goodlatte (R-VA), Rep. Rick Boucher (D-VA) and others, and also titled the "Class Action Fairness Act of 2003", was approved by the full House on June 12, 2003 by a vote of 253-170. See, Roll Call No. 272. See, story titled "House Passes Class Action Fairness Act" in TLJ Daily E-Mail Alert No. 680, June 13, 2003.

President Bush has also been advocating passage of this legislation in some of his political speeches in the United States. See, story titled "Bush Praises Class Action Reform Bill" in TLJ Daily E-Mail Alert No. 757, October 14, 2003.

Powell Appoints Nancy Victory to WRC-07 Post

10/17. Federal Communications Commission (FCC) Chairman Michael Powell appointed Nancy Victory to be Chair of the FCC's Advisory Committee for the 2007 World Radiocommunication Conference (WRC-07). See, FCC release [PDF].

Victory was previously the Assistant Secretary of Commerce for Communications and Information, that is, head of the National Telecommunications and Information Administration (NTIA). She resigned in August following a finding by the Office of the Inspector General (OIG) of the Department of Commerce (DOC) that she had violated rules governing the ethical standards for federal government employees. See, OIG Memorandum dated June 25, 2003. See, full story.

Sen. Warner Advocates Public Private Nanotechnology Efforts

10/17. Sen. John Warner (R-VA), the Chairman of the Senate Armed Services Committee, spoke in the Senate regarding nanotechnology. He stated that "Of all the areas of scientific innovation being developed today, none is more profound than nanotechnology."

He elaborated that "In the area of national security, nanotechnology has been identified as one of the most important strategic research areas. Revolutionary applications could include: very lightweight but extremely strong armor, vastly smaller and more powerful computers, microscopic sensor systems, and tiny unmanned vehicles. These could provide vastly increased capabilities for our armed forces. Conversely, to fall behind in these new areas will present us with a critical security risk."

"Unfortunately, the United States is no longer the only world leader in many areas of nanoscience, as many countries have recognized its importance and are greatly increasing their funding. With stakes this high, we must pay close attention to the choices we make", said Warner.

He concluded that "I understand the stakes and stand four-square behind public-private efforts to keep America in the lead in nanotechnology." See, Congressional Record, October 17, 2003, at pages S12832-3.

Microsoft and DOJ Submit Joint Status Report on Compliance with Antitrust Judgment

10/17. Microsoft, the Department of Justice, and the state plaintiffs, filed their pleading titled "Interim Joint Status Report on Microsoft's Compliance with Final Judgments" with the U.S. District Court (DC) in U.S. v. Microsoft, D.C. No. 98-1232 (CKK), the government antitrust case against Microsoft.

The report focuses on the requirement that Microsoft make available for license certain communications protocols used by Windows, and on complaints regarding a feature of Windows XP named "Shop for Music Online".

The Report states that this feature "allows a user to go online to purchase compact discs from retailers". It continues that the DOJ and state plaintiffs "are concerned that the feature invokes Microsoft's Internet Explorer, rather than the user's chosen default browser, in a manner that may be inconsistent with Section III.H.2(b). Plaintiffs and Microsoft have conferred extensively on this issue, and the Technical Committee has also been engaged on the issue. If Plaintiffs and Microsoft are unable to resolve this issue, the parties may seek assistance from the Court."

The District Court, Judge Colleen Kotelly presiding, will hold a status conference on Friday, October 24, at 9:00 AM in Courtroom 11 of the U.S. Courthouse at 333 Constitution Ave., NW.

People and Appointments

10/17. On Wednesday, October 15, the Senate Banking Committee approved the nominations of Harvey Rosen and Kristin Forbes to be members of the Council of Economic Advisers. Then, on Friday, October 17, the full Senate approved the nominations by voice vote.

10/17. On Wednesday, October 15, the Senate Banking Committee approved the nominations of Julie Myers and Peter Lichtenbaum to be Assistant Secretaries of Commerce for Export Enforcement. Then on Friday, October 17, the full Senate approved the nominations by voice vote.

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10/17. Hewitt Pate, Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division, wrote a business review letter for the National Cable Television Cooperative (NCTC). He wrote that, based upon the information provided to it by the NCTC, "the Department does not believe that NCTC's proposed joint purchasing procedures will have anticompetitive effects", and "the Department has no current intention to challenge the NCTC's proposed procedures for jointly negotiating national cable programming contracts for its active members". This letter clears the way for this consortium of primarily independent and smaller owners of cable television systems to jointly purchase national cable network programming. See also, DOJ release.

10/17. The Federal Trade Commission (FTC), Federal Communications Commission (FCC), and U.S.A. filed their consolidated opening brief [120 pages in PDF] with the U.S. Court of Appeals (10thCir) in Mainstream Marketing v. FTC. They argue that the FTC's telemarketing do not call registry does not violate the First Amendment of the Constitution.

District Court Holds that Vonage's VOIP is an Information Service

10/16. The U.S. District Court (DMinn) issued its Memorandum and Order [PDF] in Vonage v. Minnesota Public Utilities Commission, holding that Vonage is an information service provider, and that the MPUC cannot apply state laws that regulate telecommunications carriers to Vonage. The Court wrote that "State regulation would effectively decimate Congress's mandate that the Internet remain unfettered by regulation."

The conclusion that a service provider offers an information service, rather than telecommunications service, would prevent state and federal government entities from applying rules that apply to telecommunications, such as those pertaining to the filing of tariffs, cross subsidies, unbundling, wiretapping and other electronic surveillance by the FBI and other law enforcement agencies, and 911. See, full story.

House Intellectual Property Caucus Advocates Ending USPTO Fee Diversion

10/16. Rep. Robert Wexler (D-FL), Rep. Jay Inslee (D-WA), and Rep. Tom Feeney (R-FL) held a press conference to announce the formation of a Congressional Caucus on Intellectual Property, and to advocate an end to the practice of diverting user fees collected by the U.S. Patent and Trademark Office (USPTO) to fund other government programs. Specifically, the Caucus wants the House leadership to schedule a vote on HR 1561, the "United States Patent and Trademark Fee Modernization Act of 2003".

They were joined by Gerald Mossinghoff, who was head of the USPTO in the Reagan administration, and Todd Dickinson, who was head of the USPTO in the Clinton administration.

The USPTO is funded solely from user fees. However, since 1990 a part of the fees collected by the USPTO have been diverted to pay for other government programs. Companies that own intellectual property, and their trade groups, have never liked this arrangement. They have called it a hidden tax, and a tax on innovation.

Rep. Robert WexlerRep. Wexler stated that "In years past, the Judiciary Committee, at different points, has passed a bill similar to 1561. It has never, to my knowledge, been heard by the full House. And we are making a prominent effort in trying to get the House leadership to advance the bill to the House floor so that we can get a debate and a vote."

He added that "the bill enjoys a strong degree of support from both small businesses and larger corporations. I think there is a growing understanding that the U.S. Patent and Trademark Office is one of the few agencies that actually brings more money into the Treasury than is allocated in terms of expenditures on it."

Rep. Inslee stated that "we are right now in one of the biggest periods of job loss in American history, and we need an economic policy. Everybody knows that our economy will blossom, and we will create new jobs, only when we create new technologies, because that is the way America creates new jobs."

Inslee continued that "it is the single best economic investment that the United States can make, and the full House needs to seize a little destiny, even though a particular committee may not like this issue. But, I believe that ultimately, we are going to get this done, because I believe that people are starting to understand."

He added that "the U.S. Congress is throwing sand in the gears of technological development" and "it is really a national embarrassment".

Rep. Tom FeeneyRep. Feeney (at left) stated that "the truth of the matter is the patent process takes too long. We have lost the entire reason that the founding fathers set -- the importance of protecting intellectual property."

He also argued that "If you are willing to provide a short, concise and reasonable application, you ought to, number one, get hurried up treatment."

Mossinghoff stated that "the fact is the Office is not keeping up with its workload" and that "pendency might go up as high as four years". He said that "that is unacceptable to U.S. industry. It is unacceptable to high technology inventors. And, we have got to do something to address that, and bring us back to something like the 18 months which we established when we established the fee funding in the first place".

Todd DickinsonDickinson (at right) said Mossinghoff's projection (of four year pendency) is "valid" and "likely to be borne out if the revenue does not arrive. And it would be a disaster for the vending community, a disaster for the investment community, the high technology community in this country, and for the public at large. Because, what it does, if you are not able to get your patents out of the Office soon enough, or your trademark registration, for that matter, the patent in particular, people will stop using the system. It will atrophy. People will keep their inventions secret. The public disclosure function of the patent system will be undermined, and in that, undermining the incentive to move forward. Invention and technology will be undermined."

There have been many attempts to end the diversion of USPTO fees over the years. All have failed. The proposals are strongly supported by the members of the House Judiciary Committee, and its Subcommittee on Courts, the Internet and Intellectual Property (CIIP), as well as by many members of the Senate Judiciary Committee.

However, the House Appropriations Committee and the Senate Appropriations Committee continue to pass annual appropriations bills for the Departments of Commerce, Justice and State (CJS) that continue the practice of fee diversion. (Rep. Wexler and Rep. Feeney are members of the Committee.)

The Clinton and current Bush administrations have expressed support for ending the diversion of fees, but have continued to submit annual budgets that perpetuate the diversion.

There has been one vote in the full House on this issue. In June of 2000, Rep. Howard Coble (R-NC), who was then the Chairman of the CIIP Subcommittee, offered an amendment to the CJS appropriations bill that would have reduced the size of the diversion. It failed on a role call vote of 145-223. See, TLJ story titled "House Rejects Coble Amendment on USPTO Funding", June 25, 2000.

The Coble amendment was supported more by Republicans (48% voted yes) than by Democrats (18% vote yes). The Judiciary Committee members voted 20 yes, and 6 no. The Appropriations Committee members voted 8 yes and 41 no. There was also disproportionate support for the Coble amendment from Representatives from California and other western states. See, TLJ story titled "Analysis of House Vote on Coble Amendment", June 25, 2003.

FCC Announces Service Rules for 3G Spectrum

10/16. The Federal Communications Commission (FCC) announced, but did not release, a Report and Order, containing service rules for the 1710-1755 MHz and 2110-2155 MHz bands. It only released a short press release [2 pages in PDF] describing the R&O, and brief statements of four of the five Commissioners.

These spectrum bands have been allocated for advanced wireless services (AWS), which is also known as Third Generation wireless services, or just 3G. These services are intended to bring broadband internet access to portable and fixed devices.

The FCC release states that "The rules adopted today include provisions for application procedures, licensing, technical operations, and competitive bidding. This spectrum will be licensed by geographic areas under the FCC's flexible, market-oriented Part 27 rules, and will be assigned by competitive bidding. In order to accommodate the needs of a variety of providers, including large carriers as well as small and rural providers, the band plan for this spectrum includes a mixture of license sizes and geographic areas."

FCC Chairman Michael Powell wrote in a separate statement [PDF] that "Our service rules also reflect several key principles for efficient use of spectrum as noted by the Commission's Spectrum Policy Task Force, including: maximizing the flexibility of licensees to choose the types and characteristics of the services that they will offer in their licensed spectrum; grouping like spectrum uses together so that technically compatible operations remain close to one another; and defining spectrum users’ rights and responsibilities in the clearest manner possible."

FCC Commissioner Kevin Martin wrote in a separate statement [PDF] that "A crucial ingredient to these services, however, is sufficient spectrum. This Order provides some of that spectrum, allowing a significant amount of spectrum to be used for services such as expanded voice, data, and broadband applications provided over high-speed fixed and mobile networks ..."

FCC Commissioner Michael Copps wrote a separate statement [PDF] in which he dissented from part of the Report and Order. He wrote that "I have serious concern with the Commission's decision to move ahead without consolidation protections in the form of a spectrum aggregation limit. Under the rules we adopt today, one company could apparently end up controlling the entire AWS band in a city or a geographic region, leaving no AWS spectrum for competitors. That’s a result I do not like."

Tom Wheeler, P/CEO of the Cellular Telecommunications & Internet Association (CTIA) stated in a release that the "CTIA's recent Semi-Annual data survey shows that wireless minutes of use continue to grow exponentially, while carriers continue to develop innovative and compelling data services that will require an ever-increasing segment of the airwaves. This additional spectrum, matched with the flexibility provided by these new service rules, will help carriers meet America's future wireless demands in all their forms and variations".

The FCC announced the notice of proposed rulemaking (NPRM) in this proceeding on November 7, 2002. See, story titled "FCC Adopts 3G Order and NRPM" in TLJ Daily E-Mail Alert No. 546, November 11, 2003.

This Report and Order is FCC 03-251, in WT Docket No. 02-353. For more information, contact Eli Johnson at 202-418-1395 or

FCC Announces Rules for Licensing 71-76 GHz, 81-86 GHz, and 92-95 GHz Bands

10/16. The Federal Communications Commission (FCC) announced, but did not release, a Report and Order regarding service rules for spectrum to be used by millimeter wave technologies in the 71-76 GHz, 81-86 GHz, and 92-95 GHz bands. It only released a short press release [2 pages in PDF] describing the R&O, and brief statements of four of the five Commissioners.

Possible Uses of These Spectrum Bands. The FCC release states that this spectrum will be used to "promote the development of an additional competitive broadband deployment platform". It adds that "These bands are well-suited for licensees to offer a broad range of innovative products and services, including high-speed, point-to-point wireless local area networks, and broadband Internet access."

FCC Chairman Michael Powell wrote a separate statement [PDF] that "Proponents of networks in theses bands say they intend to use the spectrum to compete in the market for large volume telecommunications users. Ultimately, however, the highly advanced technology used here may encourage a broad range of new products and services, such as high-speed wireless local area networks and broadband access systems for the Internet."

FCC Commissioner Kevin Martin wrote a separate statement [PDF] that "the private sector is experimenting with different uses for these bands, and this spectrum may ultimately be used commercially for high-speed wireless local area networks, broadband access systems for the Internet, point-to-point communications, and point-to-multipoint communications."

The Wireless Communications Association International (WCAI) stated in a release that "The rules will trigger an unprecedented wave of innovation in millimeter wave technology, and will pave the way for the development of new, efficient broadband service in a variety of markets -- both private and government." See also, November 1, 2002 comment [39 pages in PDF] submitted by the WCAI to the FCC in response to its notice of proposed rulemaking (NPRM).

Cisco Systems submitted a comment [45 pages in PDF] on December 18, 2002 in which it argued that the 71-76 GHz and 81-86 GHz bands "are capable of extremely high bandwidths previously attainable only with fiberoptic cable; they are much faster, easier, and less expensive to install than fiber; and they provide a more flexible network architecture than fiber. In addition, the propagation characteristics of the band offer the possibility of practically limitless frequency re-use."

Loea Communications Corporation submitted a comment [68 pages in PDF] on December 18, 2002 in which it argued that "The 71-76 GHz and 81-86 GHz bands will truly enable real ``first mile´´ (for customers) or ``last mile´´ (for carriers) access to advanced broadband services virtually anywhere in the United States - not just in major metropolitan areas that have access to high speed wireline services. Because the 71-76 GHz and 81-86 GHz spectrum may be utilized without the tremendous resources necessary to deploy fiber optic cable and other wired high-speed transmission facilities, its is Loea's belief that this spectrum can play an important role in ensuring that every American wishing for broadband services will be able to obtain such services quickly and at reasonable costs."

Licensing Approach. The FCC release states that since the signals in these bands will have "pencil-beam" characteristics, "systems can be engineered to operate in close proximity to one another without causing interference." Hence, the FCC has developed a new licensing approach. The FCC release states that "Traditional frequency coordination between users will not be required. Instead, each path will be registered in a database, and entitled to interference protection based on the date of registration."

The FCC release elaborates that "The FCC will issue an unlimited number of non-exclusive, nationwide licenses authorizing non-Federal Government entities to use the entire 12.9 gigahertz of spectrum in these three bands. Licensees will generally be provided interference protection on a link-by-link basis, with the priority being set based on the date of link registration. Initially, non-Federal Government links will be registered in the FCC's Universal Licensing System (ULS) database, subject to coordination with Federal Government links under the existing coordination process involving the Interdepartment Radio Advisory Committee of the National Telecommunications and Information Administration (NTIA). Within four months of the publication of this Report and Order in the Federal Register, FCC staff, in conjunction with NTIA, will release a Public Notice establishing the implementation plan of a new, automated mechanism for coordination of non-Federal Government links with Federal Government users."

Jonathan AdelsteinFCC Commissioner Jonathan Adelstein (at right) wrote a separate statement [PDF] that "In layman's terms, we are making it easy for our licensees to get access to spectrum for really fast connections -- gigabit speeds."

He continued that "While I continue to support auctions to resolve cases of mutual exclusivity for applicants seeking wide-area licenses (such as in the Advanced Wireless Services item we also adopt today), the public interest is not always served by adopting a licensing scheme that creates mutual exclusivity. We already have held auctions for spectrum similar to 70/80/90 GHz, only to see that spectrum lay relatively unused for years -- that outcome does not serve the public interest." (Parentheses in original.)

"We had an opportunity here to break that mold, and I am glad we did", said Adelstein. "It would be easier for all of us if we could do a ``one size fits all´´ approach, but we cannot. Simply put, some bands, like 70/80/90 GHz, may be better suited for coordinated use; some bands (like the AWS bands) are not. Just as some bands will require unique interference criteria based on propagation characteristics, others may be subject to frequent coordination with NTIA."

Unlicensed Use in the 92-95 GHz Band. The FCC release states further that "The FCC is also permitting unlicensed, indoor use of the 92.0-94.0 GHz and 94.1-95.0 GHz bands by non-Federal Government users, to be governed by Part 15 of the FCC's rules and based on existing regulations for the 57-64 GHz band. The FCC will not permit unlicensed use of the 71-76 GHz and 81-86 GHZ bands at this time."

The WiFi Alliance submitted a comment [4 pages in PDF] on December 18, 2002 in which it wrote that "at the present time, the technology to utilize the 92-95 GHz band is limited, providing for future unlicensed needs is sound public policy and it is clear that technology will continue to advance and eventually spectrum will be necessary to accommodate widespread beneficial unlicensed uses of millimeter wave bands."

More Information. The federal government is currently using, and has plans to use, these three bands for a variety of uses. Nevertheless, the National Telecommunications and Information Administration (NTIA) submitted a comment supporting sharing of these bands with commercial users. Although, one reason for this support is to "reduce the pressure on spectrum demand in the frequency bands below 3 GHz." See, comment [19 pages in PDF] submitted on February 3, 2003.

See also, NTIA report [29 pages in PDF] titled "Frequency Sharing Between the Fixed and Radiolocation Services in the 92 to 95 GHz Band"; and December 18, 2002 comment [8 pages in PDF] submitted by the Boeing Corporation.

The FCC adopted its Notice of Proposed Rulemaking (NPRM) on June 13, 2002, and released the text of this NPRM on June 28, 2002. The NPRM is FCC 02-180. This Report and Order is FCC 03-248, in WT Docket No. 02-146. For more information, contact Jennifer Burton at 202-418-0680 or

FCC Announces Order on Remand Regarding High Cost Universal Service Support Mechanism

10/16. The Federal Communications Commission (FCC) announced, but did not release, an Order on Remand, Further Notice of Proposed Rulemaking, and Memorandum Opinion and Order that revises the FCC's high cost universal service support mechanism. It only released a short press release [2 pages in PDF] describing the item, and brief statements of the five Commissioners.

This item follows the July 31, 2001 opinion of the U.S. Court of Appeals (10thCir) in Qwest v. FCC, 258 F.3d 1191, which reversed and remanded the FCC's Ninth Order "because it does not provide sufficient reasoning or record evidence to support its reasonableness." See also, the FCC web page titled "Tenth Circuit Remand".

The FCC release states that this item "Requires the states to compare rates in their rural areas with a nationwide urban rate benchmark to determine whether such rural and urban rates are reasonably comparable", "Concludes that a rate review and expanded certification process will induce states to achieve reasonably comparable rates", and "Reaffirms that comparing statewide average costs to a nationwide cost benchmark appropriately determines high-cost support for non-rural carriers."

The FCC release further states that this item "Defines the statutory terms ``sufficient´´ and ``reasonably comparable´´ more precisely" and "Modifies the high-cost mechanism for non-rural carriers by basing the cost benchmark -- which is used to determine the amount of support -- on two standard deviations above the national average cost per line."

This item also includes a further notice of proposed rulemaking (FNPRM) that seeks comment on issues related to the rate review and expanded certification process, as well as "whether additional targeted federal support should be made available to states that implement explicit universal service mechanisms to encourage states to adopt universal service mechanisms that will be sustainable in a competitive environment".

See also, separate statement [3 pages in PDF] of Chairman Michael Powell, separate statement [PDF] of Commissioner Kathleen Abernathy, separate statement [PDF] of Commissioner Kevin Martin, separate statement [PDF] Commissioner Michael Copps, and separate statement [PDF] Commissioner Jonathan Adelstein.

This item is FCC 03-249, in CC Docket No. 96-45. For more information, contact Katie King at 202-418-7400 or

9th Circuit Rules on Service in Domain Name Dispute

10/16. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Consorzio Prosciutto di Parma v. Truax. The Consorzio Prosciutto di Parma (Consortium) obtained a trademark registration for the mark "Parma Ham" from the U.S. Patent and Trademark Office. Subsequently, Chris Truax registered the domain name The Consortium sought a transfer of the domain name to it.

Ultimately, the Consortium filed a complaint in U.S. District Court (SDCal) against Truax, and two companies that he controlled, alleging violation of the Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d), by registering and using the domain name in bad faith. The Consortium never obtained personal service upon Truax. Rather, pursuant to an order from the District Court, it served the California Secretary of State. Neither Truax nor his companies appeared. The Consortium obtained a judgment by default.

Then, Truax finally sought relief, but not through a motion in the District Court to set aside the judgment, but by an appeal to the Court of Appeals. The Court of Appeals dismissed the appeal. Truax's remedy is to file a motion for relief from judgment under Rule 60 of the Federal Rules of Civil Procedure in the District Court.

This case is Consorzio Prosciutto di Parma v. Domain Name Clearing Company, LLC, Internet News Portals Group, LLC, and Chris Truax, No. 02-56839, an appeal from the U.S. District Court for the Southern District of California, Judge John Rhoades presiding, D.C. No. CV-00920-JSR.

Ashcroft Addresses Roving Wiretaps

10/16. Attorney General John Ashcroft gave a speech to the Defense Research Institute in Washington DC in which he addressed roving wiretaps under the PATRIOT Act.

He stated in his prepared text that "In the days after September 11, we did not have to look far to find investigative tactics to prevent additional acts of terrorism. The answer was simple: use the same tools to prevent terrorism that we use to prevent other crimes. For example, for years we have used roving wiretaps in organized crime and drug cases. If a drug trafficker is working on a big haul of contraband and moves from his home phone to his office phone and then to his cell phone, the FBI can use the same wiretap to listen to all his conversations, instead of having to get a warrant for each phone the trafficker is using."

"If tools like this work against gangsters, drug king pins and murderers, then why shouldn't we use them against terrorists? We should. And that is why Congress passed the PATRIOT Act by a wide, bipartisan margin. It gives law enforcement the same tools and the same capabilities to prevent terrorism that we have used to combat other forms of crime", said Ashcroft.

SEC Commissioner Addresses Trade Through Rules and Technology

10/16. Securities and Exchanged Commission (SEC) Commissioner Cynthia Glassman gave a speech in Scotsdale, Arizona to the Security Traders Association (STA) in which she addressed the SEC's trade-through rules, and technology.

Cynthia GlassmanGlassman (at right) stated that "As the national market system was being developed, when technology was still in the Dark Ages, trade-through rules played an important structural role in ensuring compliance with best execution obligations. But I'm not convinced that the current rules are effective in today's environment, where direct electronic access is the norm among traders in the Nasdaq market and is getting a toehold in the listed market."

She continued that "The technology now exists for customers to get the information they need to ensure that they are getting best execution. Best execution means different things to different customers -- whether price, speed, cost or liquidity. I believe that there are strong arguments for modifying -- or even eliminating -- the trade-through rule. First, it would remove barriers for customers for whom best execution means something other than the best price. Second, it would focus attention on the broker's best execution analysis. It is the broker who is in the best position to know what his customer means by best execution."

She concluded that "the questions are: Who are the trade-through rules really protecting? Do they in fact protect limit orders in the penny environment? Or are we entrenching slow markets?"

People and Appointments

10/16. Brian Roehrkasse was named Press Secretary for the Department of Homeland Security (DHS). He has been the Deputy Press Secretary for the DHS since its creation in December of 2002. Before that, he was Assistant Director of Public Affairs at the Department of Transportation. Before that, he worked for the Presidential Inaugural Committee and the Bush Cheney 2000 Presidential Campaign. And before that, he worked for three years at NCG Porter Novelli in San Diego, California.

10/16. Northrop Grumman Corporation's Board of Directors elected Charles Noski, corporate vice president and chief financial officer, effective December 1, 2003. He will replace Richard Waugh. See, release.

10/16. Neil Gaffney was named Director of Communications of the Electronic Industries Alliance (EIA). See, EIA release.

More News

10/16. The General Accounting Office (GAO) released a report [40 pages in PDF] titled "Electronic Government: Planned e-Authentication Gateway Faces Formidable Development Challenges". This report concludes that "Although the original goal was for the e-Authentication gateway to be operational by September 2003, GSA has achieved few of its project objectives and recently extended the milestone for completing a fully operational system to March 2004. GSA has completed several important tasks, such as issuing a request for information and fielding a demonstration prototype of the gateway. However, other essential activities, such as developing authentication profiles -- requirements summaries that address the needs of the other 24 OMB e-government initiatives -- have not yet been fully addressed. Further, to meet the new milestone, GSA plans to compress the acquisition process for the operational gateway by awarding a contract by December 2003 for delivery of an operational gateway by March 2004. This accelerated schedule may be difficult to achieve. The modest progress achieved to date calls into question the likelihood that the project can successfully field an operational gateway, even within the revised schedule."

Go to News from October 11-15, 2003.