News from July 1-5, 2004

US, UK and Australia Sign MOU Regarding Spam

7/2. The U.S., United Kingdom, and Australia entered into a Memorandum of Understanding [11 pages in PDF] regarding cooperation in fighting spam e-mail.

It provides that the three nations "intend to use best efforts to exchange and provide appropriate information in relation to: consumer and business education; investigations and research in relevant areas, including the practices of address harvesting and dictionary attacks; speeches; research papers; journal articles; compliance education programs; self regulatory and technical enforcement solutions; amendments to relevant legislation; and staffing and resource issues, including the possibility of staff exchanges and visits."

It also provides that they "intend to use best efforts to assist one another and to cooperate on a reciprocal basis
  1. in providing or obtaining Evidence that could assist in determining whether a Person has committed or is about to commit a Spam Violation; or
  2. in facilitating the administration or enforcement against Spam Violations."

It also provides that they "intend to use their best efforts to inform each other as soon as practicable about Spam Violations occurring or originating in the Territory of the United States, the United Kingdom, or Australia, or that affect consumers in the Territory of the United States, the United Kingdom, or Australia."

FTC Publishes Final Rule Under Fairness to Contact Lens Consumer Act

7/2. The Federal Trade Commission (FTC) published a notice in the Federal Register that describes and provides an effective date (August 2, 2004) for its final rule implementing the Fairness to Contact Lens Consumers Act. See, Federal Register, July 2, 2004, Vol. 69, No. 127, at Pages 40481 - 40511. See also, FTC release.

One of the consequences of this legislation and rule making is the removal of some barriers to the sale of contact lenses over the internet. For example, the statute requires that contact lens prescribers provide their patients with a copy of their contact lens prescriptions after a contact lens fitting and verify those prescriptions to any third party designated by a patient.

The Act was HR 3140 in the 108th Congress. HR 3140 follows HR 2221, also titled the "Fairness to Contact Lens Consumers Act". It was introduced on May 22, 2003 by Rep. Richard Burr (R-NC), Rep. Billy Tauzin (R-LA), Rep. James Sensenbrenner (R-WI), and Rep. Jim Matheson (D-UT). See, story titled "Bill Would Facilitate Internet Sale of Replacement Contact Lenses" in TLJ Daily E-Mail Alert No. 669, May 29, 2003.

The House passed HR 3140 on November 19, 2003 by a vote of 406-12. See, Roll Call No. 644. See, story titled "House Passes Contact Lens Bill" in TLJ Daily E-Mail Alert No. 783, November 20, 2003. The Senate passed the bill by unanimous consent on November 20. President Bush signed it on December 6, 2003. See, story titled "Bush Signs Bill to Promote E-Commerce in Contact Lens Sales" in TLJ Daily E-Mail Alert No. 794, December 8, 2003. It became Public Law No. 108-164. It is now codified at 15 U.S.C. § 7601, et seq.

IRS Publishes Advance NPRM Regarding Expanding the Excise Tax on Telephones to Include New Technologies

7/2. The Internal Revenue Service (IRS) published a notice in the Federal Register which it identifies as an "advance notice of proposed rulemaking". This notice states that the IRS seeks comments on expanding the current three percent excise tax on telephone service to new "communications services" to "reflect changes in technology".

The vaguely worded and short notice does not put readers on notice of whether or not the IRS plans to promulgate a rule that expands the tax to include any or all voice over internet protocol (VOIP) services, applications, or technologies, or any other IP based communications.

The IRS notice asserts that "Since 1965, numerous communications services have been developed and marketed, the methods of transmission have expanded, and the industry has been deregulated. As a result of these changes, questions have arisen concerning the application of section 4251 to certain communications services that were not available in 1965. In response to these questions, Treasury and the IRS are considering proposing regulations that would revise the existing regulations to reflect changes in technology."

The IRS's notice adds that the purpose of the notice is "to solicit information from the public on how present technology should be treated within the description of telephonic or telephonic quality communication in the definitions of local and toll telephone service under section 4252."

See, full story.

More News

7/2. The Federal Communications Commission (FCC) released a report [53 pages in PDF] titled "Trends in the International Telecommunications Industry". The report was prepared by the FCC's International Bureau's (IB) Strategic Analysis and Negotiations Division and the Wireline Competition Bureau's (WCB) Industry Analysis and Technology Division. See also, FCC release [2 pages in PDF].

7/2. The Federal Communications Commission announced "that licensees that are required to pay annual regulatory fees must make their FY 2004 payments by 11:59 PM on August 19, 2004." See, notice [PDF].

FCC Releases Agenda for July 8 Meeting

7/1. The Federal Communications Commission's (FCC) released the agenda [PDF] for its meeting of July 8, 2004. The FCC will consider a R&O on the § 251 Unbundling Obligations of ILECs, a R&O on unlicensed RF devices, smart Antennas and WISPs, and a R&O and NPRM on secondary markets for spectrum rights.

The FCC will also consider an item regarding "reconfiguring the 800 MHz band to abate interference being encountered by public safety communications systems and other 800 MHz systems that do not employ cellular architecture", and a R&O and FNPRM regarding the deployment of wireless services in rural areas. And, the FCC will hear a report from its Consumer & Governmental Affairs Bureau on rural connectivity.

The meeting will be held a 9:30 AM on Thursday, July 9 in the FCC's Commission Meeting Room, at 445 12th Street, SW. The meeting is open to the public, and will be webcast by the FCC.

§ 251 Unbundling Obligations of ILECs. The agenda states, without elaboration, that the FCC will consider a Second Report and Order (R&O) in its "Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers". This is CC Docket No. 01-338. This is the proceeding often referred to as the "triennial review order" proceeding.

On August 21, 2003, the FCC released its triennial review order [576 pages in PDF], which addresses the unbundling requirements of incumbent local exchange carriers (ILECs) under 47 U.S.C. § 251.

On March 2, 2004, the U.S. Court of Appeals (DCCir) issued its opinion [62 pages in PDF] in USTA v. FCC overturning key provisions of the FCC's triennial review order. This case is also known as USTA II.

In particular, the Appeals Court wrote that "We therefore vacate, as an unlawful subdelegation of the Commission's § 251(d)(2) responsibilities, those portions of the Order that delegate to state commissions the authority to determine whether CLECs are impaired without access to network elements, and in particular we vacate the Commission’s scheme for subdelegating mass market switching determinations." See also, story titled "Appeals Court Overturns Key Provisions of FCC Triennial Review Order" in TLJ Daily E-Mail Alert No. 848, March 3, 2004.

On June 9, 2004, the FCC stated in a release [PDF] that "The Office of the Solicitor General has informed the Commission that it has decided not to appeal the D.C. Circuit decision vacating the Commission's local telephone unbundling rules." See, story titled "Solicitor General Will Not Seek Supreme Court Review in USTA II" in TLJ Daily E-Mail Alert No. 915, June 10, 2004.

Unlicensed RF Devices, Smart Antennas and WISPs. The FCC will consider a R&O concerning changes to several technical rules for unlicensed radiofrequency devices contained in Parts 0, 2, and 15 of its rules for unlicensed devices and equipment. This is ET Docket No. 03-201.

The FCC adopted its NPRM on September 10, 2003. See, FCC release [PDF]. See also, story titled "FCC Announces NPRM Regarding Unlicensed Devices" in TLJ Daily E-Mail Alert No. 739, September 15, 2003. The FCC released the NPRM [35 pages in PDF] on September 17, 2003.

This NPRM is FCC 03-223. See also, story titled "FCC Announces Deadlines for Comments on Unlicensed Devices NPRM" in TLJ Daily E-Mail Alert No. 800, December 16, 2003.

Last September, the FCC stated that these proposed rules would "permit operators, including wireless internet service providers (WISPs), and device manufacturers to more readily modify or substitute technically equivalent parts".

The FCC also stated that the FCC "proposes to amend its rules to specifically provide for the use of sectorized and phased array antenna systems. Often called ``smart antennas,´´ these antenna systems focus their radio transmissions according to the geographic locations of their users. Use of these advanced antenna technologies will increase spectrum efficiency because they allow for greater re-use of the same radio frequencies and may permit increased spectrum sharing among multiple wireless networks."

The FCC added that it proposes "rule modifications that would facilitate deployment of next-generation Bluetooth devices".

Secondary Markets for Spectrum Rights. The FCC will consider a Second R&O, Order on Reconsideration, and Second Further Notice of Proposed Rulemaking "concerning policies and procedures to promote the development of secondary markets in wireless radio spectrum usage rights". This is WT Docket No. 00-230.

WT Docket No. 00-230 was opened in 2000. The FCC adopted its original NPRM [61 pages in PDF] on November 9, 2000. See, 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.

On May 15, 2003 the FCC announced that it adopted a R&O and a Further Notice of Proposed Rulemaking (FNPRM) which allows certain FCC spectrum licensees to enter into leasing arrangements with third parties. See, FCC release [4 pages in PDF] and story titled "FCC Adopts Order Allowing Some Secondary Leasing of Spectrum" in TLJ Daily E-Mail Alert No. 663, May 16, 2003. However, the FCC did not release this R&O and FNPRM [198 pages in PDF] until October 7, 2003. See, story titled "FCC Finally Releases R&O and FNPRM in Secondary Spectrum Markets Proceeding" in TLJ Daily E-Mail Alert No. 755, October 8, 2003.

Both FCC Chairman Michael Powell and Commissioner Jonathan Adelstein gave speeches in May in which they addressed secondary markets. Adelstein stated in a speech [3 pages in PDF] on May 25 that "We have to be more creative with a term I have coined ``spectrum facilitation.´´ That means stripping away barriers, regulatory or economic, to get spectrum into the hands of operators serving consumers at the most local levels. That is why I supported new guidelines to facilitate a more robust secondary market. We removed significant obstacles and provided a framework for allowing licensees to lease spectrum more easily."

Powell stated in a speech [4 pages in PDF] on May 19 that "We have promoted the use of secondary markets for people that have more commercial flexibility in obtaining spectrum and allocating spectrum. Further, our spectrum leasing initiative will make spectrum more easily accessible to wireless operators interested in serving niche markets."

Other Agenda Items. The Commission will consider a R&O, Fifth R&O, Memorandum Opinion and Order, and Order regarding "reconfiguring the 800 MHz band to abate interference being encountered by public safety communications systems and other 800 MHz systems that do not employ cellular architecture". The FCC agenda adds that "Related orders implement changes in other bands made necessary to facilitate 800 MHz band reconfiguration."

The FCC will consider a R&O and Further NPRM regarding the deployment of wireless services in rural areas. This is titled "Facilitating the Provision of Spectrum-Based Services to Rural Areas and Promoting Opportunities for Rural Telephone Companies to Provide Spectrum-Based Services (WT Docket No. 02-381); 2000 Biennial Regulatory Review Spectrum Aggregation Limits for Commercial Mobile Radio Services (WT Docket No. 01-14); and Increasing Flexibility to Promote Access to and the Efficient and Intensive Use of Spectrum and the Widespread Deployment of Wireless Services, and to Facilitate Capital Formation (WT Docket No. 03-202)."

The FCC's Consumer & Governmental Affairs Bureau (CGAB) will present a report on the FCC's program titled "Lands of Opportunity: Building Rural Connectivity". The CGAB announced this program in August of 2003. Chairman Powell addressed it in a speech [3 pages in PDF] on November 7, 2003.

Bush Makes Recess Appointments

7/1. Presidents who are unable to obtain Senate confirmation of their nominees sometimes resort to recess appointments. President Bush used the July 4 recess to make recess appointments for two offices at the Department of Commerce.

The White House press office announced in a release that "The President intends to recess appoint Michael Gallagher, of Washington, to be Assistant Secretary of Commerce for Communications and Information. The President nominated Mr. Gallagher on October 14, 2003."

Mike GallagherMike Gallagher (at right) is the acting head of the National Telecommunications and Information Administration (NTIA), which has spectrum management responsibilities, and represents the position of the administration on telecommunications issues.

The White House press office also announced that "The President intends to recess appoint Theodore William Kassinger, of Maryland, to be Deputy Secretary of Commerce. The President nominated Mr. Kassinger on February 26, 2004."

The Constitution gives the President the authority to make recess appointments. It provides that "The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session."

More News

7/1. Hewitt Pate, the Assistant Attorney General in charge of the Department of Justice's Antitrust Division, stated in a release at the conclusion of the evidentiary phase of the trial in USA v. Oracle that ""The government sued to block Oracle's acquisition of PeopleSoft because it would harm competition. Now that the evidence is in, we look forward to presenting the court with our Findings of Fact, Conclusions of Law, post-trial brief, and to closing arguments as we enter the final phase of the trial." Proposed Findings of Fact and Proposed Conclusions of Law are due by July 8. Post trial briefs are due by July 12. Closing arguments are scheduled for July 20. This case is USA v. Oracle, U.S. District Court for the Northern District of California, San Francisco Division, D.C. No. C 04-0807 VRW, Judge Vaughn Walker presiding.

7/1. The Federal Communications Commission's (FCC) Wireline Competition Bureau's (WCB) Industry Analysis & Technology Division released the 2004 edition of its annual report [63 pages in PDF] titled "Reference Book of Rates, Price Indices, and Household Expenditures for Telephone Service". The report focuses on domestic trends in rates, price indices, and expenditures for telephone service. See also, FCC release [1 pages in PDF].

7/1. Microsoft announced in a release that it settled a class action law suit pending in the state of Vermont in which the class representatives alleged that Microsoft violated Vermont's consumer fraud act. The settlement provides that Microsoft will make vouchers with a total value of $9.7 Million available to class members to buy any manufacturer's desktop, laptop and tablet computers, any software available for sale to the general public and used with those computer products, and specified peripheral devices.

7/1. The Library of Congress published a notice in the Federal Register that announces and publishes some additions to its rules, and that lists deletions from its rules. The new rules cover, for example, administration of the Library of Congress. See, Federal Register, July 1, 2004, Vol. 69, No. 126, at Pages 39837 - 39844.

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