News from January 1-5, 2004

FCC Responds to National League of Cities' Petition for Rehearing in Brand X Case

1/5. The Federal Communications Commission (FCC) filed its brief [9 pages in PDF] with the U.S. Court of Appeals (9thCir) in opposition to the National League of Cities' petition for rehearing en banc in Brand X v. FCC.

The FCC previously filed its own petition for rehearing. See, story titled "FCC Files Petition for Rehearing En Banc in Brand X Case" in TLJ Daily E-Mail Alert No. 793, December 5, 2003.

On October 6, 2003 a three judge panel of the Court of Appeals issued its opinion [39 pages in PDF] vacating the FCC's declaratory ruling that cable modem service is an information service, and that there is no separate offering as a telecommunications service. The FCC adopted this Declaratory Ruling and Notice of Proposed Rulemaking [75 pages in PDF] at its March 14, 2002 meeting. This is FCC 02-77 in Docket No. 00-185 and Docket No. 02-52.

This October 6 opinion interferes with the FCC's attempt to pursue policies that it believes will promote broadband deployment, and development of services, such as voice over internet protocol, that depend on broadband access. This opinion is published at 345 F.3d 1120.

See also, story titled "9th Circuit Vacates FCC Declaratory Ruling That Cable Modem Service is an Information Service Without a Separate Offering of a Telecommunications Service" in TLJ Daily E-Mail Alert No. 754, October 7, 2003, and story titled "Reaction to 9th Circuit Opinion in Brand X Internet Services v. FCC" in TLJ Daily E-Mail Alert No. 756, October 9, 2003.

The FCC wants to treat cable modem service as an information service for regulatory purposes. Brand X, Earthlink, and other internet service providers (ISPs) want cable modem service classified in part as a telecommunications service. This would subject cable modem service to regulation on a common carriage basis, and thus, force cable broadband providers to let other ISPs use their facilities.

The National League of Cities and others who represent local governmental entities want cable modem service to be classified in part as a cable service. This would give local franchising authorities regulatory control over cable broadband providers that operate within their jurisdictions.

The just filed FCC brief responds to the arguments of the National League of Cities that the Court of Appeals should rehear en banc the issue of whether cable modem service is a cable service. The FCC argues that the Communications Act defines cable service as "one-way transmission", while internet access is not one way.

FCC Fines Fax Mill Five Million

1/5. The Federal Communications Commission (FCC) released an Order of Forefeiture [16 pages in PDF] that assesses a monetary forfeiture of $5,379,000 against, Inc. for violations of the the Telephone Consumer Protection Act (TCPA). The order states that willfully and repeatedly violated 47 U.S.C. § 227(b)(1)(C), and the FCC's rules, by sending unsolicited advertisements to telephone facsimile machines on behalf of its clients on 489 separate occasions.

FCC Chairman Michael Powell wrote in a separate statement [PDF] that ""Consumers hate to go to their fax machine only to find their resources have been wasted on spam and junk. We’re sending relief in the form of a simple message to junk faxers: violate our rules, and you will pay the consequences. Today’s action marks the largest forfeiture the Commission has ever issued in this area. We will not rest until consumers find peace from unwanted and unlawful intrusions – whether from telemarketing calls or junk faxes."

The FCC adopted this order on December 31, 2003. This item is FCC 04-2 in File No. EB-02-TC-120. See also, FCC release.

More News

1/5. Federal Communications Commission (FCC) Chairman Michael Powell will give a luncheon speech, and answer questions, on January 14 at the National Press Club (NPC). For information about prices and reservations, call 202 662-7501. The event will be in the NPC Ballroom, at 529 14th St. NW, 13th Floor.

1/5. The Securities and Exchange Commission (SEC) filed an amended complaint with the U.S. District Court (CDCal) in its civil securities fraud case against former executives of Gemstar-TV Guide International, Inc. The complaint adds three addition defendants: Peter C. Boylan, Jonathan B. Orlick, and Craig Waggy. This case SEC v. Henry Yuen, U.S. District Court for the Central District of California, D.C. CV 03-4376 NM (MANx). See, SEC release and release.

Ferguson Addresses Information Tech and Productivity Growth

1/4. Federal Reserve Board (FRB) Vice Chairman Roger Ferguson gave a speech titled "Lessons from Past Productivity Booms" in which he addressed, among other topics, the relationship between advances in information technology and economic growth. He spoke to the American Economic Association in San Diego, California.

He began by observing that labor productivity "has risen at an average annual rate of about 3 percent, up from an average annual rate of around 1-1/2 percent between 1973 and 1995." He said that "If productivity were to continue to improve at an average annual rate of 3 percent, the standard of living in the United States would double roughly every twenty-four years." He then set out to identify and explain the history of productivity growth of the U.S. economy. One of the causes of productivity growth that he discussed was news technologies.

He stated that "Although the productivity booms of the past century and a quarter obviously differed in many respects, each episode can readily be associated with the introduction of one or more new technologies." For example, he identified the development of railroads, the telegraph, and electrification of factories as technologies that drove prior periods of high productivity growth.

Roger FergusonFerguson (at right) continues that "For purposes of comparison, the technological origins of the more recent computer revolution also bear a brief mention. Obviously, the invention of the transistor and the development of the mainframe computer were precursors of the technological advances that contributed to the current productivity boom. However, the real drivers of the productivity gains in the 1990s were the related high-tech innovations of the 1970s and 1980s, including the personal computer, fiber optics, wireless communications, and the Internet."

He added that "Many of the recent technological innovations have significantly altered how firms interact with their customers, in ways that have raised the productivity of the economy. In the retail sector, the Internet stores made popular by have been adopted by nearly all large retail chains; in banking, it is now routine for customers to pay bills online; and for airlines, Internet reservations and e-tickets are the norm. Moreover, throughout the goods economy, from manufacturing to retailing, innovations in inventory management practices made possible by new technologies have substantially reduced costs."

Ferguson has spoken on past occasions about the technology and productivity. See, for example, speech of October 24, 2002, and story titled "FRB Vice Chairman Addresses Impact of Computer and Software Technology on Productivity Gains" in TLJ Daily E-Mail Alert No. 535, October 25, 2002. See also, speech of April 5, 2003, and story titled "FRB Vice Chairman Ferguson Addresses Business Method Patents" in TLJ Daily E-Mail Alert No. 639, April 8, 2003.

FRB Chairman Alan Greenspan also gave a speech on productivity gains on October 23, 2002. See also, story in TLJ Daily E-Mail Alert No. 534, October 24, 2002.

And, of course, Federal Reserve economists have been studying this subject. See, for example, article [30 pages in PDF] titled "Information Technology and Productivity: Where Are We Now and Where Are We Going?" by Stephen Oliner and Daniel Sichel, also published in the Federal Reserve Bank of Atlanta Economic Review, Third Quarter 2002, Volume 87, Part 3, at pages 15-44.

Rep. Hall Becomes a Republican

1/2. Rep. Ralph Hall (R-TX) switched his party affiliation from Democrat to Republican. He also registered to run for re-election as a Republican on Friday.

President Bush stated in a release that "I welcome Congressman Ralph Hall to the Republican Party. Ralph is a close friend of the Bush family. He is a well-respected leader of the highest integrity, and a tireless advocate for the people of Texas. We have worked closely together on the important challenges facing our Nation. I strongly support his re-election."

Rep. Ralph HallRep. Hall (at right) is currently the ranking Democrat on the House Science Committee, and the 4th ranking Democrat on the House Commerce Committee. Although, he is not a member of the Subcommittee on Telecommunications and the Internet. He currently is a member of both the Energy and Health Subcommittees.

Rep. Hall's district is overwhelmingly conservative and Republican. For many years, his voting record has been more Republican than that of some Republicans. He voted to impeach former President Bush. At the beginning of the 108th Congress, he  voted "present", rather than cast a vote in favor of Rep. Nancy Pelosi (D-CA) to be House Minority Leader.

In 2001, he voted for HR 1542 (107th Congress), the "Internet Freedom and Broadband Deployment Act of 2001" (also known as the Tauzin Dingell bill) in both Committee and the House.

He was one of 21 Democrats to vote in favor of HR 3005, the Bipartisan Trade Promotion Authority Act, on December 6, 2001. It passed by a vote of 215 to 214. See, Roll Call No. 481. This bill gives the President authority to negotiate trade agreements that can only be voted up or down, but not amended, by the Congress. trade promotion authority strengthens the bargaining position of the President, and the U.S. Trade Representative (USTR), in trade negotiations with other nations.

In 2000, Rep. Hall voted in favor of the Coble Amendment to increase funding for the U.S. Patent and Trademark Office (USPTO) by $134 Million. This was an amendment to HR 4690 (106th Congress), the Commerce Justice State (CJS) appropriations bill for FY 2001. It failed by a vote of 145-223. See, Roll Call No. 321. See also, story titled "House Rejects Coble Amendment on USPTO Funding" and story titled "Analysis of House Vote on Coble Amendment" June 25, 2000.

FCC News

1/2. The Federal Communications Commission (FCC) announced that its Reference Information Center will reopen on Monday, January 5, with restrictions. See, notice [PDF].

Go to News from December 26-31, 2003.