News from February 6-10, 2005

FCC Adopts FNPRM in Intercarrier Compensation Proceeding

2/10. The Federal Communications Commission (FCC) adopted, but did not release, a Further Notice of Proposed Rulemaking (FNPRM) in its long running proceeding regarding intercarrier compensation reform. The FCC issued a short release [3 pages in PDF]. Also, four Commissioners wrote brief statements.

This item does not provide the reformed intercarrier compensation regime for which this proceeding was initiated back in 2001. Nor does it resolve most of the issues that are the subject of petitions for declaratory rulings. These petitions had been on the agenda for the meeting, but were removed. Rather, the just adopted item is another NPRM.

The FCC adopted its original intercarrier compensation Notice of Proposed Rulemaking (NPRM) [70 pages in PDF] on April 19, 2001, and released it on April 27, 2001. It is FCC 01-132 in Docket No. CC 01-92. The present FNPRM is FCC 05-33, also in Docket No. 01-92.

This item also includes a FCC staff report on bill-and-keep.

Intercarrier compensation pertains to the flow of payments between telecommunications carriers that result from the interconnection of telecommunications networks, including access charges for long distance traffic, and reciprocal compensation.

The FCC's release briefly describes its "outmoded system". It states that it "relies on per-minute intercarrier payments that distinguish between different types of carriers and services, such as local and long-distance, or wireless and wireline, even though these distinctions often have no bearing on the cost of providing service. Furthermore, new technologies, such as Internet telephony, and new service offerings, such as bundled flat-rate packages, have eroded these distinctions."

The FCC has not released the FNPRM. Its short release states that four "common themes for reform have emerged", and that it seeks comment on seven of the proposals that have been submitted to it.

The FCC release lists the four themes. "First, any approach should encourage the development of efficient competition and the efficient use of and investment in telecommunications networks."

"Second, any approach must preserve universal service support, which ensures affordable rates for consumers living in rural and high-cost areas. Any proposal that would result in significant reductions in intercarrier payments should include a proposal to address the universal service implications of such reductions."

"Third, any approach must be technologically and competitively neutral. Given the rapid changes in telecommunications technology, new rules must accommodate continuing change in the marketplace, provide regulatory certainty and not impede novel technology."

"Finally, an approach that requires minimal regulatory intervention and enforcement is consistent with the competitive deregulatory environment of the 1996 Telecommunications Act. Proposals that rely on negotiated agreements between carriers might be preferable to regimes requiring detailed rules and regulations."

The seven proposals are as follows:

Outgoing FCC Chairman Michael Powell wrote in a separate statement [PDF] that he is "disappointed" that the FCC did not resolve the issues before it.

FCC Commissioner Kathleen Abernathy wrote in a separate statement [PDF] that "we are a long way from reaching consensus on appropriate reforms".

Kathleen AbernathyAbernathy (at right) continued that "most, if not all, industry and consumer groups recognize the crying need for change, and most appear to agree that we must develop a unified compensation system. The upcoming proceeding will determine whether the best solution is a unified system based primarily on bill-and-keep principles, or instead one that entails positive payments based on embedded or forward-looking costs".

FCC Commissioner Michael Copps wrote in a separate statement [PDF] that "Intercarrier compensation is a must-do item for this Commission this year. It should be our number one telecommunications priority."

Walter McCormick, P/CEO of the U.S. Telecom Association, stated in a release that "With technology and the telecom industry rapidly evolving, now is the time for the Commission to take a broad look at intercarrier compensation reform instead of dealing with this complicated regime on a piecemeal basis. Today's meeting was a positive step and we welcome the Commission’s comprehensive approach to these critical issues for the industry."

The FCC had previously listed on the agenda for this meeting the "Sprint Petition for Declaratory Ruling Regarding Obligation of Incumbent LECs to Load Numbering Resources and Honor Routing and Rating Points", and the "T-Mobile et al. Petition for Declaratory Ruling Regarding Incumbent LEC Wireless Termination Tariffs". See, Sprint's petition [PDF] and T-Mobile's petition [PDF].

Steve Largent, P/CEO of CTIA, which represents wireless service providers, stated in a release that "The FCC's failure to decide these petitions robs consumers in the very markets that would benefit most from additional competition ... Each FCC Commissioner and many members of Congress have on multiple occasions asked what could be done to improve service to rural consumers. Acting favorably on both petitions would be a significant step towards that goal and I hope action on both petitions will be forthcoming very soon. How can the FCC have any hope of reforming a hopelessly broken intercarrier compensation system if it cannot even restate long-settled FCC rules that have been repeatedly upheld by the courts?"

FCC Commissioner Jonathan Adelstein wrote in a separate statement [PDF] that the FCC "appears poised to act on the termination tariff issues raised in the T-Mobile petition."

FCC Releases Overview of Wireless Broadband Access Task Force's Report

2/10. The Federal Communications Commission's (FCC) Wireless Broadband Access Task Force, announced, but did not release, a report on wireless broadband services. The FCC issued a release [2 pages in PDF] and an overview [15 pages in PDF] of the report, and FCC Chairman Michael Powell, who formed the task force, wrote a statement [PDF].

Powell formed the Wireless Broadband Access Task Force on May 5, 2004. See, story titled "FCC Forms Wireless Broadband Access Task Force" in TLJ Daily E-Mail Alert No. 892, May 6, 2004.

He wrote in his statement that the FCC "needs to continue to create an innovative regulatory environment that will provide opportunities beyond today’s technological horizon. The Task Force’s Report offers some concrete suggestions as to how we can make that possible and is a positive step for progress in implementing the Commission’s broadband vision."

The task force's overview states that "To ensure that our nation's regulatory policies concerning wireless broadband do not impede innovation or delay service availability across America, the FCC should be vigilant and proactive in identifying and understanding emerging technologies and in ensuring that existing regulatory policies do not get in the way of these advances. Innovative technologies call for innovative regulatory policies. And the American public benefits most when regulatory policies enable consumers and businesses to fully tap the benefits of emerging wireless technologies."

The overview then lists numerous recommendations. With respect to unlicensed devices, it recommends that the FCC "Promote voluntary frequency coordination efforts by private industry ... to mitigate potential interference among users of license-exempt spectrum", and promote voluntary industry best practices.

It also recommends that the FCC "Consider increasing the transmission power limits in certain bands available for use by unlicensed devices in order to improve their utility for license-exempt WISPs", "Work closely with license-exempt WISPs to address, on a proactive basis, their needs relating to FCC policies and regulations", and "Consider hosting a WISP forum on an annual or periodic basis".

It also states that the FCC should "Work closely with the wireless broadband industry to ensure that, where necessary, the FCC addresses unlawful intentional violations, such as jamming and power boosting, of the technical rules applicable to unlicensed wireless broadband devices."

The overview of the report also contains recommendations regarding spectrum management by the FCC. It does not include any recommendation to create a property rights regime in spectrum.

Rather, it states that the FCC should adopt more "flexible use", "additional flexibility", and "significant new flexibility". It also recommends that the FCC should "Further facilitate secondary market arrangements that provide wireless broadband service providers with easy access to licensed spectrum, in places and amounts that they need, and enhance opportunities for more efficient and ``dynamic´´´ sharing of the same spectrum among different users and uses made increasingly possible by today's and tomorrow’s technologies."

It recommends that the FCC improve and streamline its spectrum allocation and assignment process, and that the FCC should expedite the DTV transition.

It also recommends that the FCC should "When adopting spectrum band plans, consider new flexible configurations -- such as allowing pairing of asymmetric bands".

It also addresses regulatory classifications. It states that the FCC should "Consider classifying wireless broadband as an ``information service´´ -- consistent with the FCC’s determination regarding broadband services offered over cable networks and its tentative conclusion regarding broadband offered over wireline". It also states that the FCC should "Consider examining whether wireless broadband constitutes an ``interstate service´´ so as to minimize potential regulatory hurdles at both the federal and state level." And, the FCC should "consider clarifying the scope of state authority in setting ``other terms and conditions´´ relating to wireless broadband services so as to ensure that there is consistent and minimal state regulation of nationwide wireless broadband deployment."

The CTIA praised the report in a release.

House Approves Real ID Act

2/10. The House approved HR 418, the "REAL ID Act of 2005", by a vote of 261-161. See, Roll Call No. 31. The Senate has not yet approved the bill. President Bush has expressed support for it.

Rep. James Sensenbrenner (R-WI) introduced HR 418 on January 26, 2005. However, he had sought, unsuccessfully, to have its language included in the intelligence reform bill that was enacted late last year.

He stated in the House on February 9 that "The goal of the REAL ID Act is straightforward. It seeks to prevent another 9/11-type terrorist attack by disrupting terrorist travel. The 9/11 Commission's terrorist travel report stated that 'abuse of the immigration system and a lack of interior enforcement were unwittingly working together to support terrorist activities.' The report further states that, 'members of Al Qaida clearly valued freedom of movement as critical to their ability to plan and carry out the attacks prior to September 11th.' Finally, the report observes, 'if terrorist travel options are reduced, they may be forced to rely on means of interaction which can be more easily monitored and to resort to travel documents that are more easily detectable."

The bill contains provisions related to the asylum system, deportation of aliens, and the San Diego border security fence. However, it also contains a title pertaining to drivers licenses and identification cards. It sets minimum requirements that states must follow in issuing drivers licenses and identification cards, and mininum requirements for the data included on, and features of, drivers licenses and identification cards.

The bill also includes a section that requires states to link electronic databases. It provides that "To be eligible to receive any grant or other type of financial assistance made available under this title, a State shall participate in the interstate compact regarding sharing of driver license data, known as the `Driver License Agreement', in order to provide electronic access by a State to information contained in the motor vehicle databases of all other States."

Senate Approves Class Action Reform Bill

2/10. The Senate approved S 5, the "Class Action Fairness Act of 2005", by a vote of 72-26. See, Roll Call No. 9. All of the votes against the bill were cast by Democrats.

This bill would amend Title 28 of the U.S. Code by adding a new Chapter 114 pertaining to class actions, by adding a new Section 1332 that creates federal jurisdiction over certain class action litigation, and by adding a new Section 1453 regarding the removal of certain class actions to federal court.

A key provision of the bill creates jurisdiction in U.S. District Courts over class actions in which the aggregate amount in controversy exceeds $5 Million and any member of a plaintiff class is a citizen of a different state from any defendant. For more on this bill, see story titled "Senate Judiciary Committee to Mark Up Class Action Fairness Act" in TLJ Daily E-Mail Alert No. 1,068, February 2, 2004.

The Senate rejected an amendment offered by Sen. Russ Feingold (D-WI) that would have established time limits for action by U.S. District Courts on motions to remand cases that have been removed to U.S. District Courts. It failed by a vote of 37-61. See, Roll Call No. 8. (This is Senate Amendment 12, published in the Congressional Record, February 9, 2005, at Page S1216.)

The House approved a similar bill in the 108th Congress. It may approve the Senate bill as early as next week.

President Bush has been an active proponent of this bill. He issued a statement. "Our country depends on a fair legal system that protects people who have been harmed without encouraging junk lawsuits that undermine confidence in our courts while hurting our economy, costing jobs, and threatening small businesses. The class action bill is a strong step forward in our efforts to reform the litigation system and keep America the best place in the world to do business. I applaud the strong bipartisan majority in the Senate for passing this bill, and I call on the House to act promptly so that I can sign it into law."

In addition, the President Bush gave a speech on February 9 on class action litigation reform.

Tom Donohue, P/CEO of the U.S. Chamber of Commerce, stated in a release that "The Senate has taken a critical step toward granting families, consumers and employers relief from the heavy burden of lawsuit abuse ... Now it's time for the House to finish the job and take back our civil justice system from plaintiffs’ lawyers seeking jackpot justice."

House Commerce Subcommittee Schedules Markup of SPY Act

2/10. The House Commerce Committee's Subcommittee on Commerce, Trade and Consumer Protection scheduled a meeting to mark up HR 29, the "Securely Protect Yourself Against Cyber Trespass Act", or SPY Act, on Wednesday, February 16, 2005.

This bill prohibits certain conduct with respect to spyware, and gives the Federal Trade Commission (FTC) civil enforcement authority. The House Committee Committee (HCC) held a hearing on this bill on January 26, 2005. At that time Rep. Barton predicted that HR 29 would go straight to full Committee markup. See, story titled "House Commerce Committee Holds Hearing on Spyware Bill" in TLJ Daily E-Mail Alert No. 1,064, January 27, 2005.

HR 29, the HCC's spyware bill, contains only provisions that fall within the jurisdiction of the HCC. The House Judiciary Committee (HJC) has jurisdiction over bills to amend the criminal code. Hence, provisions that criminalize spyware related conduct fall within the jurisdiction of the HJC.

In the current 109th Congress, as in the 108th Congress, the two committees have each advanced their own bill. The House bill is HR 744, the "Internet Spyware (I-SPY) Prevention Act of 2005".

The House approved both spyware bills late in the 108th Congress. However, the Senate did not approve either.

The House approved the HCC's HR 2929 (108th Congress), also titled the SPY ACT, by a vote of 399-1 on October 5, 2004. See, Roll Call No. 495. See also, story titled "House Passes First Spyware Bill" and story titled "Summary of House Commerce Committee Spyware Bill" in TLJ Daily E-Mail Alert No. 991, October 6, 2004.

The House approved HJC's HR 4661 (108th Congress), the "Internet Spyware (I-SPY) Prevention Act of 2004", by a vote of 415-0 on October 6, 2004. See, Roll Call No. 503. See also, story titled "House Approves Second Spyware Bill" in TLJ Daily E-Mail Alert No. 993, October 8, 2004.

Rep. Goodlatte Reintroduces Criminal Spyware Bill

2/10. Rep. Bob Goodlatte (R-VA), Rep. Zoe Lofgren (D-CA), and others, introduced HR 744, the "Internet Spyware (I-SPY) Prevention Act of 2005". Rep. Goodlatte, who is a senior member of the House Judiciary Committee, introduced a similar bill in the 108th Congress, HR 4661, titled "Internet Spyware (I-SPY) Prevention Act of 2004". The present bill is substantially identical to the bill as approved by the full House on October 6, 2004. See, full story.

FCC Adopts Digital Multicasting Must Carry Order

2/10. The Federal Communications Commission (FCC) adopted, but did not release, a Second Report and Order and First Order on Reconsideration. The FCC issued a short release [2 pages in PDF], and each of the five Commissioners wrote statements.

The FCC release states that this order "(1) affirms the Commission's tentative conclusion not to impose a ``dual carriage´´ requirement on cable operators (which would have required them to simultaneously carry broadcasters' analog and digital signals); and (2) affirms the Commission's prior determination that cable operators are not required to carry more than a single digital programming stream from any particular broadcaster." (Parentheses in original.)

While cable industry representatives expressed satisfaction with the FCC's order, the National Association of Broadcasters (NAB) said that it will fight on, in the courts, and in the Congress.

The FCC release also states that the order finds that "mandatory dual carriage is not necessary either to advance the governmental interests as identified by Congress and the Supreme Court, or to achieve the digital television transition."

This release also states that "With regard to the digital multicasting issue, the Commission affirmed its earlier conclusion and declined to require cable operators to carry any more than one programming stream of a digital television station. Although the Commission found that the operative statutory language at issue is ambiguous on the subject of multicast must carry, it also found on the current record, that such a requirement is not necessary to further the purposes of the must carry statute, as defined by the Supreme Court."

Michael PowellFCC Chairman Michael Powell (at right) wrote in a separate statement [PDF] that "Today we hold that Congress did not give broadcasters the statutory right to free carriage of all their channels on a cable provider’s system. This is the second time we have held the statute does not authorize ``multi-casting.´´ New digital technology allows broadcasters to take what once was one channel, and divide it into four to six or even more channels as compression technology advances. While that affords them expanded business opportunities, we hold nonetheless the statute limits cable carriage rights to one. They, of course, remain at liberty to commercially negotiate for carriage of other channels, just as public broadcasters have recently done and as other cable programmers must do."

In contrast, FCC Commissioner Kevin Martin wrote in a separate statement [PDF] that the FCC "made a policy judgment that the benefits of this programming were outweighed by the burden on cable operators. I disagree. I think the public would benefit more from more free programming."

Kevin MartinMartin (at left) argued that "by denying cable carriage to all but one of the potential broadcast streams, this Order effectively prevents any broadcaster relying on ``must carry´´ from investing in multiple programming streams."

He added that "this decision will have the most adverse impact on small, independent, religious, family-friendly and minority broadcasters. Network stations and most large-market broadcast affiliates are likely to get their signals carried through retransmission consent; must-carry was never about these large broadcasters."

Edward Fritts, P/CEO of the National Association of Broadcasters (NAB), stated that the NAB will seek judicial review, and a change in the statute.

He wrote in a statement that "In Washington, there are no final victories and no final defeats. We salute Commissioner Martin for recognizing the importance of providing additional programming choices for consumers. NAB will be working to overturn today's anti-consumer FCC decision in both the courts and in Congress. We look forward to the fight, because consumers deserve more. And broadcasters will continue to serve our communities, because that is what local stations do best."

Robert Sachs, the outgoing P/CEO of the National Cable & Telecommunications Association (NCTA), praised the FCC order. He wrote in a statement that "Today's decision is a major victory for consumers because it ensures that the marketplace, not government, will determine which programs local cable systems carry, ensuring greater consumer choice, and more diverse and better quality programming."

Sachs added that "Cable operators want to carry HDTV and other compelling digital TV content, especially if that content addresses local needs. In fact, cable operators already carry the digital signals of more than 500 local TV stations. To further advance the DTV transition, on January 31, 2005, the National Cable & Telecommunications Association, the Association of Public Television Stations, and the Public Broadcasting Service announced a long-term agreement that will ensure the carriage of public TV stations' digital signals on cable systems." See, story titled "Digital Multicasting Must Carry Developments" in TLJ Daily E-Mail Alert No. 1,073, February 9, 2005.

FCC Commissioner Kathleen Abernathy wrote in a separate statement [3 pages in PDF] that the FCC "lacks authority to mandate either dual carriage or multicast carriage". Commissioner Michael Copps wrote in a separate statement [4 pages in PDF] that he concurs in this item, but with many reservations. Commissioner Jonathan Adelstein wrote in a ten page concurring statement [PDF].

This item is FCC 05-27 in CS Docket No. 98-120.

9th Circuit Grants Rehearing En Banc in Yahoo v. LICRA

2/10. The U.S. Court of Appeals (9thCir) issued an order [PDF] granting a motion for rehearing en banc in Yahoo v. LICRA. The underlying dispute involves a French court's order censoring a web site located in the U.S. The issue currently before the Court of Appeals is whether the U.S. District Court has personal jurisdiction over the French parties.

In an action in France, La Ligue Contre La Racisme et L'Antisemitisme (LICRA) and L'Union Des Etudiants Juifs de France (UEJF) sued Yahoo and obtained a judgment ordering Yahoo to stop publishing certain material in its web site located in the U.S.

In the present action, Yahoo sued these French entities in the U.S. District Court (NDCal) seeking a declaratory judgment that the French judgment is unenforceable in the U.S. because it violates the First Amendment. The French entities argued that the U.S. Court lacks personal jurisdiction over them, notwithstanding the circumstances that their actions are directed at the censoring and fining of a business located in the Northern District of California.

On June 7, 2001, the District Court issued its Order Denying Motion to Dismiss [PDF] in which it rejected the French defendants' argument the Court lacks personal jurisdiction. See, story titled "U.S. Has Jurisdiction over French Defendants in Yahoo v. LICRA" in TLJ Daily E-Mail Alert No. 205, June 11, 2001.

On November 7, 2001, the District Court issued its Order Granting Motion for Summary Judgment [PDF] in favor of Yahoo. See, story titled "NDCal: French Court Order Restricting Internet Speech is Unenforceable in U.S." in TLJ Daily E-Mail Alert No. 305, November 9, 2001.

However, on August 23, 2004, the Appeals Court issued its split opinion [34 pages in PDF] reversing the District Court. It held that the District Court lacks personal jurisdiction because the French defendants have not purposely availed themselves of the benefits of the forum. See, story titled "9th Circuit Reverses in Yahoo v. LICRA" in TLJ Daily E-Mail Alert No. 965, August 24, 2004.

This case is Yahoo, Inc. v. La Ligue Contre La Racisme et L'Antisemitisme and L'Union Des Etudiants Juifs de France, U.S. Court of Appeals for the 9th Circuit, App. Ct. No. No. 01-17424, an appeal from the U.S. District Court for the Northern District of California, D.C. No. CV-00-21275-JF.

People and Appointments

2/10. President Bush formally nominated Robert Zoellick to be Deputy Secretary of State. He is current the U.S. Trade Representative (USTR). He will replace Richard Armitage. President Bush had previously announced that he would make this nomination. See, White House release.

More News

2/10. The Department of Commerce's Bureau of Industry and Security (BIS) released its annual report to the Congress titled "2005 Report on Foreign Policy-Based Export Controls". See especially, Chapter 9, titled "High Performance Computers", and Chapter 10, titled "Encryption".

2/10. Microsoft and Pfizer announced that they have initiated various proceedings against companies that sell purportedly generic versions of Pfizer's drug named Viagra. See, Microsoft release and similar Pfizer release. These releases state that Pfizer filed two lawsuits against two entities alleging "unlawful conduct involving trademark infringement and dilution and unfair competition under both federal and state law, as well as deceptive trade practices in violation of New York state law." Pfizer also filed ten domain name dispute actions to obtain the transfer of domain names that incorporate its trademarked drug name. These releases also state that Microsoft sued the same two entities alleging "that the pharmacy spammers sent e-mail with deceptive and misleading information in violation of the federal CAN-SPAM Act and other federal and state laws".

2/10. The Federal Communications Commission (FCC) adopted, but did not release, a Memorandum Opinion and Order and Second Order on Reconsideration, at its February 10 meeting regarding licensing procedures and interference rules related to Mobile Satellite Service (MSS) and Ancillary Terrestrial Components (ATC). The FCC issued a short release [PDF] and Commissioner Michael Copps wrote a statement [PDF]. This item is FCC 05-30 in IB Docket No. 01-185.

2/10. The Federal Communications Commission (FCC) adopted, but did not release, a Report and Order at its February 10 pertaining to charges to consumers for changing long distance providers. The FCC issued a short release [PDF] describing this item, and three Commissioners wrote separate statements. Commissioners Michael Copps wrote in his statement [PDF] that "While the Order lowers the mechanized threshold to $1.25, it raises the manual threshold to $5.50. To figure out if this is good or bad for consumers, it is important to determine how many changes are processed mechanically and how many are processed manually." See also, Michael Powell's statement [PDF], and Jonathan Adelstein's statement [PDF]. This item is FCC 05-32 in CC Docket No. 02-53.

2/10. The Federal Communications Commission (FCC) adopted, but did not release, a Second Order on Reconsideration at its February 10 regarding its rules implementing the Telephone Consumer Protection Act of 1991 (TCPA). The FCC issued a short release that describes this item, and Chairman Michael Powell wrote a separate statement [PDF]. This item is FCC 05-28 in CG Docket No. 02-278.

2/10. The Federal Communications Commission (FCC) adopted, but did not release, a Report and Order and Further Notice of Proposed Rulemaking, at its February 10 meeting regarding the accuracy of consumer phone bills. The FCC issued a short release [PDF] that describes this item, and Chairman Michael Powell wrote a separate statement [PDF]. This item is FCC 05-29 in CG Docket No. 02-386.

2/10. The Federal Communications Commission (FCC) adopted, but did not release, a Notice of Proposed Rulemaking (NPRM) at its February 10 meeting regarding the use of white space in the 900 MHz Business and Industrial Land Transportation Pool. The FCC issued a release [PDF] that describes this item. This item is FCC 05-31.

Sen. Stevens Addresses Process for Revising Telecom and Tech Laws

2/9. Sen. Ted Stevens (R-AK) gave a speech in Washington DC in which he discussed information and communications technologies, and revising the relevant legal framework.

Sen. Ted StevensSen. Stevens (at right), who is the new Chairman of the Senate Commerce Committee, stated that "The time has come to ensure that our communications laws keep pace with our communications advancements that we all know exist."

He also discussed his work on the Telecommunications Act of 1996. He said that "We talked very little about the Internet then. I was one of the cosponsors and one of the conferees on that bill before it became law. And, now, less than 10 years after its passage, it's obvious that it's necessary to rewrite it or to amend it -- we're not sure exactly what we’re going to do. The Internet was in its infancy when that Act was written and, although we did talk of tumbling technology, and knew that the Internet would evolve and converge, we really did not discuss in that Conference".

He did not say what new provisions will be included in new legislation. Rather, he discussed the process that he will pursue, and the issues that he thinks are important.

He said that "We will work with our colleagues and listen to testimony from people around the country before we commit to a specific plan of action on any issue." He added that "communications would be a Full Committee issue for this Congress". There is no longer a Communications Subcommittee. He also said that "We're not going to believe in hearings". Rather, Senators and staff will meet with groups of interested parties.

He also discussed what he thinks are the important issues. "As we review the nation's communications laws, Senator Inouye and I will not start by putting pen to paper, but by asking questions -- questions of our staffs, questions of almost everyone we meet. So, let me tell you some of the questions that we want to ask:"

The final issue deals with intellectual property, and hence, falls within the jurisdiction of the Senate Judiciary Committee. Also, several of the other issues, such as spam, spyware, and CALEA and other law enforcement issues, to the extent that they involve criminal provisions, also entail Senate Judiciary Committee jurisdiction.

Sen. Stevens concluded that "We hope to move away from a paradigm that puts each issue or technology into its ``proper´´ regulatory box. Instead, our emphasis will be on convergence and how to foster continued creativity and continued innovation in the whole communications field."

Microsoft Advocates Free Trade Agreements With IPR Protection

2/9. Microsoft published an essay in its web site on trade matters that affect intellectual property rights (IPR) protection.

Microsoft urges the Congress to vote to maintain U.S. membership in the World Trade Organization (WTO), to renew the President's trade promotion authority (giving the President authority to negotiate free trade agreements that the Congress can approve or reject, but not amend), and to approve the DR-CAFTA (a free trade agreement between the U.S., the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua).

Microsoft wrote that these things will "stimulate economic growth and sustain innovation here in the United States and around the world".

Microsoft added that "Particularly important to U.S. technology companies, DR-CAFTA mandates strong protection for U.S. patents, trade secrets and other intellectual property - continuing the progress made in other recent trade agreements. It also requires fair treatment for products delivered online, and requires that government procurement be open, transparent and based on merit. These policies are needed for the U.S. technology sector to compete fairly in global markets."

House Subcommittee Holds Hearing on IP Enabled Services

2/9. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing titled "How Internet Protocol-Enabled Services are Changing the Face of Communications: A View from Technology Companies".

The Subcommittee heard from five CEOs of technology companies -- Edward Zander (Motorola), Patricia Russo (Lucent), Irwin Jacobs (Qualcomm), Andy Mattes (Siemens), and Michael Quigley (Alcatel). The witnesses reviewed developments in wireless and internet protocol (IP) enabled services. They also offered their recommendations for how the Congress can promote new services.

See, full story.

House Commerce Committee Approves Bill to Increase Broadcast Indecency Fines

2/9. The House Commerce Committee approved HR 310, the "Broadcast Decency Enforcement Act of 2005", without amendment, on a roll call vote of 46-2.

Rep. Fred Upton (R-MI), Rep. Ed Markey (D-MA), Rep. Joe Barton (R-TX), and Rep. John Dingell (D-MI) introduced HR 310 on January 25, 2005. They are the Chairmen and ranking Democrats on the Subcommittee on Telecommunications and the Internet, and the full Commerce Committee. It has 57 sponsors.

This bill is similar to HR 3717 (108th Congress), titled the "Broadcast Decency Enforcement Act of 2004". The House approved that bill on March 11, 2004 by a vote of 391-22. See, Roll Call No. 55. However, the Senate did not approve the House bill. See also, S 2056 (108th Congress), also titled the "Broadcast Decency Enforcement Act of 2004".

See also, stories titled "House Passes Broadcast Decency Bill" in TLJ Daily E-Mail Alert No. 855, March 15, 2004, and "House Commerce Committee Passes Broadcast Decency Enforcement Act" in TLJ Daily E-Mail Alert No. 851, March 8, 2004.

HR 310 would amend the Communications Act by increasing the maximum penalty for obscene, indecent, or profane material in radio or television broadcasts from $32,500 to $500,000 per violation.

HR 310 also would enable the FCC to compel violators to broadcast advertisements. It provides that "in addition to imposing a penalty under this section, require the licensee or permittee to broadcast public service announcements that serve the educational and informational needs of children. Such announcements may be required to reach an audience that is up to 5 times the size of the audience that is estimated to have been reached by the obscene, indecent, or profane material".

The bill also requires the FCC to hold license revocations hearings for three time offenders.

The bill also increases maximum penalties for individual performers.

Finally, the bill states that it is the "sense of the Congress that the broadcast television station licensees should reinstitute a family viewing policy for broadcasters".

Rep. Fred Upton

Rep. Upton (at right) stated that "This legislation would significantly enhance the Federal Communications Commission's broadcast decency enforcement authority. As stewards of the public's airwaves, radio and television broadcasters have an obligation to abide by the decency laws which have been on the books for decades and have been upheld in the courts. Most of our local broadcasters act responsibly, but there are still to many who continue to push the envelope of indecency during the hours of 6:00 a.m. to 10:00 p.m., when children are most likely to be in the audience."

He added that "Currently, the maximum fine which the FCC can impose for violation of the decency laws is $32,500 per violation, which, to some broadcasters, is merely the ``cost of doing business´´ and, as such, is hardly a deterrent."

Rep. Greg Waldon (R-OR), who is a member of the Committee, and the owner of five radio stations, said that $500,000 is more than some stations are worth, and "a few indecent expressions, and you could loose it all".

While the vote on the bill was overwhelming, there was criticism during the Committee's debate.

First, several members argued that the bill does not go far enough. Rep. John Shimkus (R-IL) and Rep. Nathan Deal (R-GA) pointed out that the bill only applies to radio and television broadcasting. They said that it should also apply to cable television, satellite television, and satellite radio. However, they voted for the bill.

Rep. Deal also said that the Committee should reconsider cable programming when it rewrites the telecommunications laws.

No one argued that the bill should be extended to web casting, or internet based delivery of video or audio programming.

Rep. Al Wynn (D-MD) rebutted the arguments of Rep. Shimkus and Rep. Deal. He said that cable should be treated differently because it is materially different. Broadcast radio and television are free and over the air, while people "invite" cable into their homes.

Rep. Henry Waxman (D-CA) argued that the bill "has a chilling impact" on freedom of speech. He said that broadcasters, for fear of complaints and fines, are not broadcasting movies such as Schindler's List and Saving Private Ryan.

Rep. Janice Schakowsky (D-IL) argued that "big brother is put in charge of judging what is artistic expression". She suggested that political expression could be next. She added that she is "more concerned about infringing upon free speech", than broadcast displays of Janet Jackson's anatomy.

Rep. Schakowsky offered two amendments pertaining to penalties for individual performers. They were rejected by voice votes.

In the end, only Rep. Waxman and Rep. Schakowsky voted against the bill. Although, some members did not cast votes.

People and Appointments

2/9. Sen. Mark Dayton (D-MN) announced that he will not run for re-election in 1996. He wrote in a statement that "Everything I have worked for and everything I believe in depend upon this Senate seat’s remaining in the Democratic Caucus in 2007. I do not believe that I am the best candidate to lead the DFL Party to victory next year. I cannot stand to do the constant fund-raising necessary to wage a successful campaign, and I cannot be an effective Senator while also being a nearly full-time candidate. Thus, I am choosing to devote all of my time and energy to the job Minnesotans have elected me to do."

2/9. President Bush named William McGurn Assistant to the President for Speechwriting. McGurn previously worked for News Corporation, the Wall Street Journal (including as chief editorial writer), the Far Eastern Economic Review, and the National Review. See, White House release.

2/9. Carly Fiorina stepped down as Chairman and CEO of the Hewlett-Packard Company, effective immediately. Robert Wayman, HP's CFO was named CEO on an interim basis, and was appointed to the Board of Directors. Patricia Dunn, was named non-executive Chairman of the Board, effective immediately. See, HP release.

More News

2/9. The Federal Communications Commission (FCC) published a notice in the Federal Register that describes, recites, and sets the effective date (March 11, 2005) of its final rule regarding ultrawideband unlicensed devices operating in the 5925-7250 MHz, 16.2-17.7 GHz, and 22.12-29 GHz bands. See, Federal Register, February 9, 2005, Vol. 70, No. 26, at Pages 6771-6776. The FCC adopted its Second Report and Order and Second Memorandum Opinion and Order at its December 15, 2004 meeting, and released it on December 16, 2004. This item is FCC 04-285 in ET Docket No. 98-153. See also, story titled "FCC Adopts UWB Second Report & Order" in TLJ Daily E-Mail Alert No. 1,039, December 16, 2004.

2/9. The Department of Commerce's National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register that announces, explains, and sets the effective date (March 9, 2005) for its repeal of its rules governing reimbursement to federal entities by the private sector as a result of reallocation of frequency spectrum. This repeal was required by enactment late last year of the Commercial Spectrum Enhancement Act, which is now Public Law No. 105-261. See, Federal Register, February 9, 2005, Vol. 70, No. 26, at Pages 6776-6777.

Bush Gives Speech on Economic Policy

2/8. President Bush gave a long speech on economic policy in Detroit, Michigan. He did not reference technology or communications industries or companies.

He did say that one "pillar of a sound economic policy is to build on an environment that encourages initiative, lowers the cost of doing business, and constantly thinks about how to promote economic vitality and growth."

He also said that "A pro-growth strategy must roll back excessive federal regulation." However, he offered no specifics, such as which industry sectors face excessive regulation, or which regulatory agencies impose excessive regulation.

He also said that "A pro-growth strategy must address the growing burden of junk lawsuits." He continued that "Junk lawsuits have driven the cost of America's tort system to more than $240 billion a year -- greater than any major industrialized nation. Think about that. It creates a competitive disadvantage in a global economy, for the American economy to have so many lawsuits. It imposes unfair costs on job creators. It raises prices for consumers. Our legal system must serve the cause of justice, not the interests of trial lawyers. Congress needs to pass meaningful class action and asbestos legal reform this year."

The Senate is currently considering S 5, the "Class Action Fairness Act of 2005".

Bush also argued that "A pro-growth strategy requires a policy of free and fair trade."

Also, he said that "We should create a national marketplace for health insurance, so people can shop on the Internet across state lines to get high-quality coverage at lower prices."

Sen. Feingold Introduces Bill Regarding Interception of Computer Trespasser Communications

2/8. Sen. Russ Feingold (D-WI) introduced S 318, the "Computer Trespass Clarification Act of 2005", a bill to amend provisions of the USA PATRIOT Act regarding the interception of computer trespasser communications.

In the 108th Congress, Sen. Feingold introduced S 2783, the "Computer Trespass Clarification Act of 2004", on September 9, 2004. S 318 is very similar, but not identical, to S 2783. See, story titled "Sen. Feingold Introduces Bill to Amend PATRIOT Act Provisions Regarding Interception of Computer Trespasser Communications" in TLJ Daily E-Mail Alert No. 976, September 14, 2004.

S 318 (109th) and S 2783 (108th) both pertain to § 217 of the PATRIOT Act, which is titled "Interception of computer trespasser communications".

§ 217 amended 18 U.S.C. § 2510 by adding § 2510(21), which is a definition of "computer trespasser". It also amended 18 U.S.C. § 2511 by adding § 2511(2)(i), which provides that it is permissible for law enforcement to intercept wire or electronic communications of a computer trespasser transmitted to, through, or from the protected computer, if, among other requirements, the owner or operator of the protected computer authorizes the interception.

§ 217 is scheduled to sunset at the end of this year.

§ 2510 contains definitions. Subsection 21 defines "computer trespasser". Currently, it "(A) means a person who accesses a protected computer without authorization and thus has no reasonable expectation of privacy in any communication transmitted to, through, or from the protected computer; and (B) does not include a person known by the owner or operator of the protected computer to have an existing contractual relationship with the owner or operator of the protected computer for access to all or part of the protected computer."

§ 2511(2)(i) currently provides that "It shall not be unlawful under this chapter for a person acting under color of law to intercept the wire or electronic communications of a computer trespasser transmitted to, through, or from the protected computer, if -- (I) the owner or operator of the protected computer authorizes the interception of the computer trespasser's communications on the protected computer; (II) the person acting under color of law is lawfully engaged in an investigation; (III) the person acting under color of law has reasonable grounds to believe that the contents of the computer trespasser's communications will be relevant to the investigation; and (IV) such interception does not acquire communications other than those transmitted to or from the computer trespasser."

First, S 318 (109th) and S 2783 (108th) would revise § 2510(21)(B) to read as follows: "(B) does not include a person known by the owner or operator of the protected computer to have an existing contractual or other relationship with the owner or operator of the protected computer for access permitting access to all or part of the protected computer." (Words highlighted in bold red are added by S 2783 and S 318, while the crossed out words are deleted by S 2783 and S 318.)

S 318 (109th) and S 2783 (108th) would also amend § 2511(2)(i) to provide as follows: "It shall not be unlawful under this chapter for a person acting under color of law to intercept the wire or electronic communications of a computer trespasser transmitted to, through, or from the protected computer, if -- (I) the owner or operator of the protected computer is attempting to respond to communications activity that threatens the integrity or operation of such computer and requests assistance to protect rights and property of the owner or operator, and authorizes the interception of the computer trespasser's communications on the protected computer; (II) the person acting under color of law is lawfully engaged in an investigation; (III) the person acting under color of law has reasonable grounds to believe that the contents of the computer trespasser's communications will be relevant to the investigation; and (IV) such interception ceases as soon as the communications sought are obtained or after 96 hours, whichever is earlier, unless an interception order is obtained under this chapter, and does not acquire communications other than those transmitted to or from the computer trespasser." (Words highlighted in bold red are added by S 2783 and S 318.)

Sen. Russ FeingoldSen. Feingold (at right) explained these changes. He said that his bill will "more accurately reflect the intent of the provision, and also protect against invasions of privacy." See, Congressional Record, February 8, 2005, at Pages S1133-4

He stated that "Section 217 was designed to permit law enforcement to assist computer owners who are subject to denial of service attacks or other episodes of hacking. The original Department of Justice draft of the bill that later became the PATRIOT Act included this provision. A section by section analysis provided by the Department on September 19, 2001, stated the following: ``Current law may not allow victims of computer trespassing to request law enforcement assistance in monitoring unauthorized attacks as they occur. Because service providers often lack the expertise, equipment, or financial resources required to monitor attacks themselves as permitted under current law, they often have no way to exercise their rights to protect themselves from unauthorized attackers. Moreover, such attackers can target critical infrastructures and engage in cyberterrorism. To correct this problem, and help to protect national security, the proposed amendments to the wiretap statute would allow victims of computer attacks to authorize persons `acting under color of law' to monitor trespassers on their computer systems in a narrow class of cases.´´''

"Unfortunately," said Sen. Feingold, "the drafters of the provision made it much broader than necessary, and refused to amend it at the time we debated the bill in 2001. As a result, the law now gives the government the authority to intercept communications by people using computers owned by others as long as they have engaged in some unauthorized activity on the computer, and the owner gives permission for the computer to be monitored -- all without judicial approval.

"Only people who have a ``contractual relationship´´ with the owner allowing the use of a computer are exempt from the definition of a computer trespasser under section 217 of the PATRIOT Act. Many people -- for example, college students, patrons of libraries, Internet cafes or airport business lounges, and guests at hotels -- use computers owned by others with permission, but without a contractual relationship. They could end up being the subject of government snooping if the owner of the computer gives permission to law enforcement."

Sen. Feingold continued that "My bill would clarify that a computer trespasser is not someone who has permission to use a computer by the owner or operator of that computer. It would bring the existing computer trespass provision in line with the purpose of section 217 as expressed in the Department of Justice's initial explanation of the provision. Section 217 was intended to target only a narrow class of people: Unauthorized cyberhackers. It was not intended to give the government the opportunity to engage in widespread surveillance of computer users without a warrant."

He added that "My bill would modify the computer trespass provision in the following ways to protect against abuse, while still maintaining its usefulness in cases of denial of service attacks and other forms of hacking."

"First, it would require that the owner or operator of the protected computer authorizing the interception has been subject to ``an ongoing pattern of communications activity that threatens the integrity or operation of such computer.'' In other words, the owner has to be the target of some kind of hacking." And, "Second, the bill limits the length of warrantless surveillance to 96 hours."

This bill has no other original cosponsors. It was referred to the Senate Judiciary Committee. Sen. Feingold is a member.

Sen. Feingold Introduces Bill to Limit Sneak and Peak Authority

2/8. Sen. Russ Feingold (D-WI) introduced S 316, the "Reasonable Notice and Search Act", a bill to limit authority to delay notice of search warrants.

This bill pertains to delayed notification of search warrants, which critics, such as Sen. Feingold, refer to as "sneak and peak". Section 213 of the PATRIOT Act addressed these warrants.

Sen. Feingold introduced a very similar bill in the 108th Congress, S 1701, also titled the "Reasonable Notice and Search Act". See, story titled "Sen. Feingold Introduces Bill to Limit Delayed Notice Warrants" in TLJ Daily E-Mail Alert No. 753, October 6, 2003. Although, the present bill contains changes in both the substantive provisions, as well the provision regarding reports to the Congress.

Sen. Feingold explained his bill. "First, my bill would narrow the circumstances in which a delayed notice warrant can be granted to the following: potential loss of life, flight from prosecution, destruction or tampering with evidence, or intimidation of potential witnesses. The ``catch-all provision´´ in section 213, allowing a secret search when serving the warrant would ``seriously jeopardize an investigation or unduly delay a trial´´ can too easily be turned into permission to do these searches whenever the government wants." See, Congressional Record, February 8, 2005, at Pages 1130-1131.

"Second, I believe that any delayed notice warrant should provide for a specific and limited time period within which notice must be given -- 7 days. This is consistent with some of the pre-PATRIOT Act court decisions and will help to bring this provision in closer accord with the Fourth Amendment to the Constitution. Under my bill, prosecutors will be permitted to seek 7-day extensions if circumstances continue to warrant that the subject not be made aware of the search. But the default should be a week, unless a court is convinced that more time should be permitted."

"Third, Section 213 should include a sunset provision so that it expires along with the other expanded surveillance provisions in Title II of the PATRIOT Act, at the end of 2005. This will allow Congress to determine if the balance between civil liberties and law enforcement has been correctly struck."

Finally, S 316 would require the Department of Justice to submit brief reports to the Congress every six months that provide summary data on the number and disposition of these warrants.

The key provision of S 316 would amend subsection b of 18 U.S.C. § 3103a, which was amended by § 213 of the PATRIOT Act.

Subsection b would be amended as follows. (Words highlighted in bold red are added by the bill. Words with a strikethrough are deleted by the bill.)

Sen. Feingold also stated that "In 2003, by a wide bipartisan margin, the House passed an amendment to the Commerce Justice State appropriations bill offered by Representative Otter from Idaho, a Republican, to stop funding for delayed notice searches authorized under section 213. The size of the vote took the Department by surprise, and it immediately set out to defend the provision aggressively. Clearly, this is a power that the Department does not want to lose."

Rep. Butch Otter (R-ID) offered an amendment in the summer of 2003 to HR 2799 (108th), the Commerce, Justice, State and the Judiciary, and Related Agencies Appropriations Act for FY 2004. This was House Amendment 292. The House approved this amendment by a vote of 309-118 on July 22, 2003. See, Roll Call No. 408. This amendment pertained to the PATRIOT Act's provisions regarding delayed notice of search warrants.

This amendment provided, in full, that "None of the funds made available in this act may be used to seek a delay under Section 3103a(b) of title 18 United States Code." Rep. Otter's amendment could not address substantive law, since it was an amendment to an appropriations bill, which can only address appropriations.

This bill has no other original cosponsors. The bill was referred to the Senate Judiciary Committee. Sen. Feingold is a member.

Sen. Feingold Introduces Bill To Amend Patriot Act Regarding Library Records and Electronic Communications Providers

2/8. Sen. Russ Feingold (D-WI) introduced S 317, the "Library, Bookseller, and Personal Records Privacy Act".

This bill is a reintroduction of S 1507 (108th Congress), titled the "Library, Bookseller, and Personal Records Privacy Act", which Sen. Feingold and others introduced on July 31, 2003.

This bills pertains to § 215 of the PATRIOT Act and § 501 et seq. of the Foreign Intelligence Surveillance Act (FISA). The FISA only applies to foreign powers, and agents of foreign powers, including international terrorists. The statutes do not expressly include library records; however, it is not disputed that library records could be obtained. Some groups, and especially the American Library Association (ALA), have been vocal about FISA warrants for library records.

Former Attorney General John Ashcroft has said that there is no issue. Ashcroft stated in September 2003 that this section of the FISA has not been used to obtain library records.

Ashcroft testified before the Senate Judiciary Committee on June 8, 2004. However, no one asked him questions about the use of § 215 of the PATRIOT Act and § 501 of the FISA to obtain library records. Sen. Feingold did focus on a number of other surveillance issues, but not library records.

Basically, in 2001 § 215 rewrote § 501 et seq. of the FISA, which is codified in Title 50 as § 1861. It pertains to "Access to Certain Business Records for Foreign Intelligence and International Terrorism Investigations". § 215 (of the PATRIOT Act) replaced §§ 501-503 (of the FISA) with new language designated as §§ 501 and 502.

Currently, § 501 (as amended by § 215) requires that an application to a judge or magistrate "shall specify that the records concerned are sought for an authorized investigation conducted in accordance with subsection (a)(2) to obtain foreign intelligence information not concerning a United States person or to protect against international terrorism or clandestine intelligence activities." Allowing § 215 to sunset, or passing a bill such as Sen. Feingold's, would raise the standards for obtaining a FISA order for business records.

Sen. Feingold's bill would also provide that "The term `library´ means a library ... whose services include access to the Internet, books, journals, magazines, newspapers, or other similar forms of communication in print or digitally to patrons for their use, review, examination, or circulation."

Sen. Feingold explained his bill. "This bill would amend Sections 215 and 505 of the USA-PATRIOT Act to protect the privacy of law-abiding Americans. It would set reasonable limits on the Federal Government's access to library, bookseller, medical, and other sensitive, personal information under the Foreign Intelligence Surveillance Act (``FISA´´) and related foreign intelligence authority." See, Congressional Record, February 8, 2005, at Pages S1131-3.

He said that "Section 215 of the PATRIOT Act requires the FBI to show in an application to the court that the documents are ``sought for´´ an international terrorism or foreign intelligence investigation. There is no requirement that the FBI make a showing of individualized suspicion that the documents relate to a suspected terrorist or spy. In other words, under current law, the FBI could serve a subpoena on a library for all the borrowing records of its patrons or on a bookseller for the purchasing records of its customers simply by asserting that they want the records for a terrorism investigation."

He added that "Librarians and booksellers are concerned that under the PATRIOT Act, the FBI could seize records from libraries and booksellers in order to monitor what books Americans have purchased or borrowed, or who has used a library's or bookstore's internet computer stations, even if there is no evidence that the person is a terrorist or spy, or has any connection to a terrorist or spy."

Sen. Feingold acknowledged that this section has been used little, if at all. He said that "In testimony before the Judiciary Committee, Attorney General Ashcroft stated that as of September 18, 2003, the Department of Justice had never used Section 215. The Department has not made that claim in public testimony since then, leading many to speculate that the provision has now been used. Whether it has been used once, or dozens of times, the problem with the section remains -- it is too broad and does not permit adequate judicial supervision. There is a potential for overreaching that Congress must address."

He also said that "my concerns with the PATRIOT Act go beyond library and bookseller records. Under section 215 of the PATRIOT Act, the FBI could seek any records maintained by a business. These business records could contain sensitive, personal information -- for example, medical records maintained by a doctor or hospital or credit records maintained by a credit agency. All the FBI would have to do is simply assert that the records are ``sought for'' its terrorism or foreign intelligence investigation."

He also offered this explanation. "Suppose the FBI is conducting an investigation of an international terrorist organization. It has information that suspected members of the group live in a particular neighborhood. The FBI would like to obtain records from the library in the suspects' neighborhood. Under current law, the FBI could decide to ask the library for all records concerning anyone who has ever borrowed a book or used a computer, and what books were borrowed, simply by asserting that the documents are sought for a terrorism investigation. But under my bill, the FBI could not do so. The FBI would have to set forth specific and articulable facts giving reason to believe that the person to whom the records pertain is a suspected terrorist. The FBI could obtain only those library records -- such as borrowing records or computer sign-in logs -- that pertain to the suspected terrorists. The FBI could not obtain library records concerning individuals who are not suspected terrorists."

Sen. Feingold also discussed libraries and electronic communications providers. He said that "My bill would amend section 505 of the PATRIOT Act. Part of this section relates to the production of records maintained by electronic communications providers. Libraries or bookstores with internet access for customers could be deemed ``electronic communication providers´´ and therefore be subject to a request by the FBI under its NSL authority."

He elaborated that "safeguards are needed to ensure that any individual who accesses the internet at a library or bookstore does not automatically give up all expectations of privacy. Like the section 215 fix I've discussed, my bill would require an individualized showing by the FBI of how the records of internet usage maintained by a library or bookseller pertain to a suspected terrorist or spy."

This bill has nine original cosponsors. It was referred to the Senate Judiciary Committee.

Representatives Criticize JCT Proposal to Tax Internet Communications

2/8. Rep. Chris Cox (R-CA) and other Representatives wrote a letter to George Yin, the Chief of Staff of the Joint Committee on Taxation, criticizing the January 31, 2005 report [435 pages in PDF] of the JCT that proposed to expand the existing excise tax on phone service to include various internet protocol services.

The JCT report is titled "Options to Improve Tax Compliance and Reform Tax Expenditures". It includes a listing and analysis of three options for expanding the scope of the current excise tax on phone service. The broadest proposal calls for taxing "digital wireless, satellite and VOIP, or any combination" and "all data communications services". See, story titled "Joint Committee on Taxation Offers Recommendations for Expanding Excise Tax on Phones to IP Services" in TLJ Daily E-Mail Alert No. 1,074, February 10, 2005.

The Representatives wrote that "We were extremely disappointed to read your staff's recent suggestion that Congress consider taxing Internet access and extending the regressive, anti-consumer Federal Excise Tax on telephone service to other communications technologies."

"We were also perplexed that JCT would gratuitously suggest tax increases in response to a request from Senators about methods to reduce underreporting and underpayment by taxpayers." They continued that "Consumers who now enjoy freedom from regressive taxes on Internet access are not tax cheats. Nor or Internet users benefiting from a "loophole" simply because Congress has wisely rejected the transplantation of regressive, discriminatory, 1930s-era telephone taxes into the digital economy."

Rep. Chris CoxRep. Cox (at left) has led the House efforts to pass the Internet Tax Freedom Act, and bills to extend its provisions.

They also wrote that "The request that JCT received from Senators Grassley and Baucus gave no hint that its authors would be interested in proposals to crush innovation, discourage broadband deployment, or reduce America's Internet-led productivity growth. Since both Senators have voted at least twice in the last ten months against new taxes on Internet access, we're baffled as to how you could interpret a desire to reduce noncompliance with our tax laws as a request for new ways to tax the Internet."

They concluded, "The question demanding an answer now is why any consumers still have to pay a telephone tax created in 1898 to fund the Spanish-American War. Please report back to use on the policy benefits of ending the Federal Excise Tax on telecommunications."

The Representatives who signed the letter include, but are not limited to, Chris Cox (R-CA), Walter Jones (R-NC), Jeff Miller (R-FL), Patrick McHenry (R-NC), Mark Foley (R-FL), Chip Pickering (R-MS), Gerry Weller (R-IL), Ron Paul (R-TX), Mike Rogers (R-MI), Robert Simmons (R-CT), Fred Upton (R-MI), Charles Bass (R-NH), Anna Eshoo (D-CA), Vito Fosella (R-NY), and John Lewis (D-GA).

Sen. McCain Reintroduces LPFM Bill

2/8. Sen. John McCain (R-AZ), Sen. Maria Cantwell (D-WA), and Sen. Patrick Leahy (D-VT) introduced S __, the "Local Community Radio Act of 2005", a bill to eliminate the third adjacency restrictions for low power FM (LPFM) broadcasters.

Sen. McCain and Sen. Leahy introduced a similar bill in the 108th Congress, S 2505. It was not enacted into law. It would have provided that "The Federal Communications Commission shall modify its rules to eliminate third-adjacent minimum distance separation requirements between -- (1) low-power FM stations; and (2) full-service FM stations, FM translator stations, and FM booster stations."

Sen. John McCainSen. McCain stated in a February 8 release that "While Low Power FM radio stations were authorized five years ago, implementation has been severely hampered by commercial broadcasters’ flagrantly exaggerated claims of interference ... The most recent obstruction, a two year study conducted at the behest of broadcasters, cost taxpayers over two million dollars and proved what the FCC and community groups have known for years: Low Power FM stations will not cause significant interference to other broadcasters' signals. It is time for broadcasters to stop hiding behind false claims of interference when they are really afraid of the competition from truly local broadcasters."

The Federal Communications Commission's (FCC) Media Bureau hosted an event titled "Low Power FM Forum" at the FCC building on Tuesday morning, February 8.

FCC Chairman Michael Powell gave a speech. He stated that "one of the most significant things the Commission has done recently is in our report to Congress to urge that Congress lift the third adjacency restrictions that limit the availability of spectrum. We were excited that in 2004 Senator John McCain was willing to sponsor this legislation, and I have been told on the phone this morning that Senator McCain will introduce the LPFM bill this morning, again seeking the removal of the third adjacency restrictions which will provide new opportunities. So we're off to a fast start in the new Congress. I am hopeful and excited about this and we will have full support here at the Commission behind trying to make that a reality."

In response, the National Association of Broadcasters (NAB) wrote a letter to Members of Congress on LPFM on February 7, 2005.

The NAB letter states that "In 2000, Congress wisely passed legislation that permitted the FCC to continue licensing Low Power FM stations, but required the new micro-radio stations to adhere to 3rd adjacent channel interference protections. This compromise legislation, supported by NAB, National Public Radio and the Radio Reading Services for the Blind, ensured that the signals of low power FM stations and full power FM broadcasters would not interfere with each other. We would caution Congress against modifying 3rd adjacent channel protections." It asserts that third adjacent channel interference can be "aggravating".

Digital Multicasting Must Carry Developments

2/8. On February 3, 2005, the Federal Communications Commission (FCC) announced the agenda [PDF] for its Thursday, February 10, 2005 meeting. The first item on the agenda is a Second Report and Order (R&O) and First Order on Reconsideration concerning the carriage obligations of cable operators with respect to digital broadcasters. However, this agenda does not provide any specifics regarding the contents of this R&O. This proceeding is CS Docket No. 98-120.

On February 1, twelve Senators and Representatives wrote a letter [PDF] to the FCC stating that "a ruling requiring anything less than full carriage of a broadcaster's 6 MHz of spectrum would severely hinder small and independent broadcasters from competing in the marketplace and threaten a diversity of ownership and programming".

On February 7, the National Cable & Telecommunications Association (NCTA) wrote a letter [PDF] to Members of Congress regarding this meeting agenda item. The letter asserts that the National Association of Broadcasters (NAB) "has resorted to gross misstatements of fact in order to create fear that American consumers will somehow be deprived of the benefits of digital TV". It states that "compelling digital broadcast content is being carried voluntarily today on cable, and more such programming is being offered every day. In contrast, NAB is asking the Government to require cable operators to carry as many as half a dozen digital video channels for every single broadcast station in the country, regardless of whether these channels consist largely of infomercials, home shopping or other low value content."

The NCTA continues that "What the ``digital multicasting must carry´´ is really about is an effort by TV broadcasters to gain preferential carriage rights over all other programmers for channels that, in most cases, don’t even exist. Networks like A&E, The History Channel, Discovery, Lifetime, BET, CNN, Fox Cable News, and C-SPAN, and every other non-broadcast cable and satellite program network, must vigorously compete for carriage of new and existing programming on the basis of the quality of that programming and its perceived value to consumers. TV broadcasters already enjoy a competitive advantage by virtue of having government-guaranteed cable carriage of their primary video signal. Meanwhile, approximately 390 national and 60 regional cable networks compete in the market for limited cable shelf space."

The NCTA concludes that "The ``multiple must carry´´ mandate that the NAB seeks would reduce incentive to create innovative and compelling digital content, since broadcasters wouldn’t have to compete with other program networks for carriage."

Also, on January 31, 2005, the NCTA and the Association of Public Television Stations (APTS) announced an agreement titled "Public Television Digital Cable Carriage Agreement".

The NCTA stated in a release that this agreement "ensures that local Public Television stations' digital programming will be carried on cable systems serving the vast majority of the nation's cable subscribers. Further, it provides significant digital cable carriage incentives for local Public Television stations to produce more high definition, children's and local programming. It also recognizes and enhances the unique role that public broadcasters play in national homeland defense efforts and provides for cable carriage of additional emergency public safety information."

FCC Chairman Michael Powell praised the NCTA APTS agreement. He stated in a release [PDF] that "This monumental marketplace agreement will ensure that some of the most innovative high-definition and multicast broadcast programming will find its way into cable homes across the country. Today's announcement serves as a testament to both the public broadcast community's commitment to driving the DTV transition and cable operators' willingness to carry compelling digital broadcast programming to its subscribers."

FCC Commissioner Michael Copps also praised the NCTA APTS agreement in a release [PDF]. He added that "Although the Commission still must do its part to address a number of issues related to the digital transition, this agreement ensures that the future of public television shines brighter than ever with digital broadcasting and the opportunity for new educational and public affairs programming."

FCC Commissioners Kathleen Abernathy wrote in a release [PDF] that "This agreement on the voluntary carriage of multiple programming streams represents an important milestone in advancing the digital television transition, and, just as importantly, it demonstrates the viability of market-based solutions."

More FCC News

2/8. The Federal Communications Commission (FCC) published a notice in the Federal Register requesting public comment on competition in the multichannel video programming distribution market to assist it in preparing a report to the Congress that is due by September 8, 2005. This proceeding is MB Docket No. 05-28. Initial comments are due by March 1, 2005. Reply comments are due by March 16, 2005. See, Federal Register, February 8, 2005, Vol. 70, No. 25, at Pages 6593-6595. The FCC announced this inquiry in Public Notice is DA 05-169 [PDF], released last month. This report is required by § 208 of the Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA). The SHVERA requires the FCC to "complete an inquiry regarding the impact on competition in the multichannel video programming distribution market of the current retransmission consent, network nonduplication, syndicated exclusivity, and sports blackout rules, including the impact of those rules on the ability of rural cable operators to compete with direct broadcast satellite industry in the provision of digital broadcast television signals to consumers. Such report shall include such recommendations for changes in any statutory provisions relating to such rules as the Commission deems appropriate."

2/8. The Federal Communications Commission (FCC) announced that it will host its second annual Satellite Forum on March 21, 2005 from 10:00 AM to 3:30 AM. The FCC's notice [PDF] states that "Four sessions will highlight the areas of mobility, integrated services, solutions meeting needs in developing countries, and portability. The mobility session will outline satellite services that provide high-tech communication capabilities to consumers as they move, in trains, airplanes and automobiles. The integrated services session will showcase communications services that combine satellite and other technologies to serve consumers and businesses. The global solution session will discuss satellites providing instant infrastructure and disaster relief in the developing world. The portability session will display and discuss new, cutting edge consumer devices deployed for satellite communications."

More IPR News

2/8. The U.S. Patent and Trademark Office (USPTO) issued a notice regarding its Patent Electronic Filing System (EFS) and patent application authoring tools. The notice states that PASAT users should migrate to EFS-ABX. It adds that "Support for PASAT will be discontinued within the next few months". The notice elaborates that EFS "software enables patent applicants and practitioners to electronically author patent application information for submission to the USTPO via the Internet. EFS is comprised of three software components: the patent application specification authoring tool, the PDF creation tool and the submission software. A new authoring tool, EFS-ABX, has replaced the initial authoring tool, PASAT. This new authoring tool utilizes the power and flexibility of Microsoft Word to create patent application specifications in Portable File Format (PDF) and eXtensible Markup Language (XML). EFS-ABX is used in conjunction with the ABX PDF Writer software. PASAT users should make preparations to begin using EFS-ABX."

2/8. The Copyright Office published a notice in the Federal Register that announces "the termination of the proceeding to determine reasonable rates and terms for two compulsory licenses for the period beginning January 1, 2005, and ending on December 31, 2006. One license allows public performances of sound recordings by means of eligible digital audio transmissions; the other permits the making of an ephemeral phonorecord of a sound recording in furtherance of making a permitted public performance of the sound recording. The rates and terms applicable to new subscription services, eligible nonsubscription services, and services that transmit performances to business establishments that were in effect on December 31, 2004, will remain in effect during 2005." See, Federal Register: February 8, 2005, Vol. 70, No. 25, at Page 6736.

People and Appointments

2/8. President Bush announced that he has named Karl Rove Assistant to the President, Deputy Chief of Staff and Senior Advisor. The Deputy Chief of Staff assignment is new. See, White House release.

More Capitol Hill News

2/8. The House Rules Committee adopted a rule for consideration of HR 418, the "REAL ID Act of 2005". No amendments are in order. The House may approve the bill on Wednesday, February 9.

2/8. The Senate continued its consideration of S 5, the "Class Action Fairness Act of 2005". It will resume consideration of the bill on Wednesday, February 9.

2/8. The Senate Banking Committee held a hearing on the role of credit rating agencies in capital markets. See, Committee web page with hyperlinks to opening statements of Senators and prepared testimony of witnesses.

More News

2/8. Walter McCormick, P/CEO of the U.S. Telecom Association (USTA), released a statement in which he argued that "today's woefully outdated telecom rules are unable to keep pace with the new technologies driving a highly competitive communications industry", and that "it is time for strong Congressional leadership to move beyond the outdated framework of the 1996 Telecom Act, to restore America's innovation leadership and to put consumers in charge of our telecommunications future."

2/8. James Hance joined the Board of Directors of Sprint. He was previously Vice Chairman of Bank of America Corporation. See, Sprint release.

Bush Releases Budget Proposal for FY 2005

2/7. The Bush administration released it budget proposals for fiscal year 2006. It contains proposals for appropriations for the operation of government. See, links to the budget proposal, by agency, in PDF. See also, links to summaries, by agency, in HTML.

President Bush spoke about this budget at a White House event on January 7, but said nothing about the technology related provisions.

He said that "OMB Director Josh Bolten will be presenting the budget at noon. It is a budget that sets priorities. Our priorities are winning the war on terror, protecting our homeland, growing our economy." He added that "It's a budget that is a lean budget." See, transcript.

Bush's Budget Would Provide USPTO $1.7 Billion

2/7. The President's FY 2006 budget for the U.S. Patent and Trademark Office (USPTO) provides for funding of $1,703 Million, based upon estimated fee revenues of the same amount. This would be an increase of 9.6%.

Traditionally, the USPTO budget has been an exercise in smoke and mirrors. The Congress appropriates funding for the USPTO annually. However, the USPTO also collects user fees to fund the USPTO. For many years, the Congress has diverted some of these user fees to subsidize other government programs.

In the President's FY 2006 budget proposal, the USPTO would be funded at the level of $1,703 Million. In addition, estimated fees are also $1,703 Million. Hence, this budget projects no diversion. This would be an increase of $149 Million over FY 2005 funding. Moreover, this is up from $1,221 Million in FY 2004.

There is, however, nothing in this proposal to legislate an end to the practice of fee diversion in the future.

The USPTO is a part of the Department of Commerce (DOC). See, See, proposed DOC budget [43 pages in PDF] and summary.

This budget proposal also clarifies that if fee revenues are less than $1,703 Million, then the USPTO's funding would be reduced accordingly. On the other hand, if fee revenues exceed $1,703 Million, the excess would go to other government programs.

This increased level of funding is made possible by a projected increase in filings with the USPTO, and the fee increases contained in the omnibus appropriations bill that was enacted in the closing days of the 108th Congress.

On November 20, 2004, the House and Senate both approved a huge omnibus appropriations bill that provides appropriations for FY 2005 for most of the technology related executive branch entities. Also, while it was an appropriations bill, it also included many substantive law provisions. See, story titled "Congress Approves Omnibus Appropriations Bill" in TLJ Daily E-Mail Alert No. 1,023, November 22, 2005.

This omnibus bill included the USPTO fee increases (for FY 2005 and 2006 only) that were contained in HR 1561 (108th), the USPTO fee bill, but not the bill's language regarding ending fee diversion. See, story titled "Appropriations Bill Provides $1.54 Billion for USPTO, Temporary Fee Increases, But No End to Diversion" in TLJ Daily E-Mail Alert No. 1,023, November 22, 2005.

March 3, 2004, the House approved HR 1561, the full title of which is the "United States Patent and Trademark Fee Modernization Act of 2003", by a vote of 379-28. See, Roll Call No. 38. See also, story titled "House Passes USPTO Fee Bill" in TLJ Daily E-Mail Alert No. 849, March 4, 2004.

This bill contained increases in user fees that implement the USPTO's 21st Century Strategic Plan. It also provided for U.S. outsourcing of patent searches, and an end to the diversion of user fees to subsidize other government programs. The Senate Judiciary Committee, but not the full Senate, approved this bill. The omnibus appropriations bill essentially cut and pasted the fee increase language of HR 1561. However, it only applied the increases to FY 2005 and 2006.

Steve Pinkos, Deputy Under Secretary of Commerce for Intellectual Property, spoke and answered questions in a telephonic news conference on Monday afternoon. He emphasized that this is the second straight year that the President has called for the USPTO to have access to all of the fees collected by the USPTO. "That is major progress", said Pinkos.

The USPTO also issued a release which states that "In FY 2006, the USPTO anticipates hiring 900 patent examiners and 75 trademark examining attorneys. By the end of FY 2006, the USPTO expects to have over 4,500 patent examiners and over 350 trademark examining attorneys."

The President's budget proposal states that "the USPTO would have a program level of $1,703 million in 2006 and offsetting fees of $1,703 million. This spending authority resulted from legislation, enacted for 2005 and 2006, that increased and restructured patent and trademark fees. The Administration plans to submit a legislative proposal to permanently extend these changes beyond 2006."

It also states that "Resources requested in 2006 will be used to fund additional patent examiner staff" and "continue the implementation of E-Government in Patents", "begin competitively sourcing the classification and reclassification functions currently performed by patent examiners" and "expand bilateral and multilateral agreements to strengthen intellectual property rights globally and reduce duplication of effort among international intellectual property offices."

Summary of Bush's Budget Proposals for the Commerce Department

2/7. The President's FY 2006 budget proposal for the entire Department of Commerce (DOC) is $9.4 Billion. See, proposed DOC budget [43 pages in PDF] and summary.

rightCarlos Gutierrez (at right), the Secretary of Commerce, stated in a release that "Our budget request reflects this Department’s continuing commitment to creating conditions for economic and job growth as well as economic opportunity by promoting innovation, entrepreneurship, competitiveness and stewardship".

The Commerce Department includes many technology related components, such as the U.S. Patent and Trademark Office (USPTO), the National Telecommunications and Information Administration (NTIA), the National Institute of Standards and Technology (NIST), the Bureau of Industry and Security (BIS), and the Office of Technology Policy (OTP).

The USPTO is addressed in a related story in this issue titled "Bush's Budget Would Provide USPTO $1.7 Billion".

NTIA. The President's proposed budget for the NTIA would provide $21,450,000 in FY 2006. This continues a trend of decreasing funding for the NTIA, as the Bush administration cuts the NTIA's grant programs.

The proposal includes $2 Million for "Public Telecommunications Facilities, Planning and Construction". There is no new funding for information infrastructure grants.

The President's proposal describes the functions performed by the NTIA. However, it reveals little about the Bush administration's spectrum policies. The budget summary likewise states little. The President's budget materials for the Federal Communications Commission (FCC) reveal more about the Bush administration's spectrum related policies. See, related story in this issue titled "Bush's Budget Would Provide FCC $304 Million"

BIS. The administration proposal provides $77 Million for the BIS, which is also still known as the Bureau of Export Administration (BXA). The BIS's primary purpose is to regulate exports for national security purposes. However, this also includes regulation of the export of dual use items, such as computers and software. This proposal is up from $68 Million in FY 2005.

The President's budget states that the BIS administers the Export Administration Act (EAA). This statute has lapsed, and the Congress has not enacted a replacement EAA. The President's proposal says nothing about legislative proposals.

The administration's summary states that the BIS "helps protect against the export of goods and technologies sensitive to U.S. national security and economic interests. Export controls on sensitive dual-use commodities are necessary to stem the proliferation of weapons of mass destruction, to halt the spread of weapons to terrorists or countries of concern, and to further important U.S. foreign policy objectives. BIS also assists other countries in developing and strengthening their national export control systems. The Budget requests an additional $10 million for initiatives to improve BIS’ ability to maintain an up-to-date export control list and enhance enforcement activities to ensure sensitive goods and technologies do not fall into the wrong hands."

NIST. The Bush administration proposal provides $532 Million for the NIST. $426 Million of this is for Scientific and Technical Research and Services. The President's budget proposal would terminate the Advanced Technology Program (ATP). See also, NIST release.

OTP. The President's budget proposal includes $4.2 Million for the Office of Technology Policy, which is down from $6.5 Million in FY 2005.

Rep. Sherwood Boehlert (R-NY), the Chairman of the House Science Committee, commented in a release about the President's budget proposal. He said that "As everyone knows, this is a very tight budget, with an overall cut to non-defense domestic discretionary spending. Given that context, the science programs fared relatively well. I was especially pleased to see the significant increase proposed for the laboratories at the National Institute of Standards and Technology.

He continued. "That said, I would certainly like to see more robust increases in the science budget, particularly for the National Science Foundation (NSF) and the Department of Energy Office of Science. And I am especially troubled by the proposed cuts in the education programs at NSF. The Committee will be reviewing the overall civilian R&D budget in some depth at our February 16 hearing.

Bush's Budget Would Provide FTC $212 Million

2/7. The President's proposed budget for FY 2006 provides $212 Million for the Federal Communications Commission (FCC). See, the proposed budget for independent agencies [119 pages in PDF] and summary.

This is a slight increase over the FY 2005 budget. The budget proposal states that it will enable the FTC "to maintain the current performance of its missions."

The administration summary also addresses several issues, including the Do Not Call Registry, spam, identity theft, and competition policy.

It states that "The Budget includes funding for the FTC to continue enforcing the National Do-Not-Call Registry, in partnership with States and the Federal Communications Commission. Since its inception, more than 73 million numbers have been signed up for the Do-Not-Call Registry, which has stopped over 835 million unwanted telemarketing calls each month."

It states that the FTC "currently is pursuing cases under the" CAN SPAM Act.

It also addresses the FTC's Competition Bureau. It states that "As part of its efforts to monitor the marketplace for anticompetitive mergers and practices, FTC pursues administrative remedies in antitrust cases regarding a variety of consumer issues, such as high technology, health care, and oil and gasoline." The budget proposal states that "The goal of the maintaining competition mission is to prevent anticompetitive mergers and other anticompetitive business practices in the marketplace. The mission works to accomplish this goal through three objectives: (1) identify anticompetitive mergers and practices that cause the greatest consumer injury; (2) stop anticompetitive mergers and practices through law enforcement; and (3) prevent consumer injury through education."

Bush's Budget Would Provide FCC $304 Million

2/7. The President's proposed budget for FY 2006 provides $304 Million for the Federal Communications Commission (FCC). See, the proposed budget for independent agencies [119 pages in PDF] and summary.

The budget summary states that this includes an increase over FY 2005 is for "inflationary increases". The FCC stated in a release [PDF] that "The requested FY 2006 funding level will cover mandatory increases for salaries and benefits and inflationary increases for office space rental, supplies, printing, postage and contractual services. The budget level also includes funds to allow the FCC to consolidate and upgrade commission-owned facilities at Columbia, Maryland; to provide for critical enhancements to the FCC’s major electronic filing systems; to implement a government-wide automated human resources system; and to fund additional staff to assist with program oversight associated with USF audit activities."

The Bush administration's summary also addresses spectrum auctions.

It states that "Recent years have witnessed enormous growth in advanced communications technologies. Following the FCC decision to deregulate broadband, companies announced over $6 billion in planned investment to bring broadband to an additional 20 million homes, supporting the Administration’s goal of universal, affordable access to broadband by 2007. The FCC plans to auction 90 MHz of spectrum for advanced wireless services, half of which represents spectrum moving from Federal to private use. This spectrum will allow multiple companies the opportunity to become broadband providers -- stimulating vigorous com- petition and bringing lower prices and improved services to consumers."

It continues that "Spectrum auctions have proven to be an effective mechanism to assign licenses for certain spectrum-based services. Since 1994, communications service providers have won over 25,000 licenses and paid over $14 billion into the Treasury through FCC auctions. The Administration supports legislation to extend indefinitely the FCC’s auction authority, which expires in 2007."

"To continue to promote efficient spectrum use, the Administration also supports granting the FCC authority to set user fees on unauctioned spectrum licenses based on public-interest and spectrum-management principles. Fee collections are estimated to begin in 2007 and total $3.1 billion in the first 10 years."

It concludes that "To encourage the digital transition, the Administration seeks to create incentives for television broadcasters to vacate the analog spectrum, as required by law, in a timely fashion. The Administration supports authorizing legislation for the FCC to establish an annual lease fee for analog spectrum use by commercial broadcasters starting in 2007. Individual broadcasters would be exempt as they return their analog spectrum, and collections would decline."

President's Budget Proposes to Give IRS Access to New Hires Database

2/7. The Presidents budget provides $10.7 Billion for the Internal Revenue Service (IRS), which is a part of the Department of the Treasury (DOT). See, proposed budget for the DOT [42 pages in PDF] and summary. This is a 4.3 percent increase over FY 2005.

IRS Access to New Hires Database. The proposed budget also states that it "includes a legislative proposal to give IRS access to the National Directory of New Hires database". See, DOT budget proposal, at page 30. states that "The National Directory of New Hires is maintained by the Federal Office of Child Support Enforcement in the Administration for Children and Families at the U.S. Department of Health and Human Services." It adds that "The purpose of this new database was entirely laudable -- helping states locate parents who have skipped out on their child support obligations. All databases are created for laudable purposes."'s New Hires database web page further states that "A database covering every working American should entitle people to be concerned about their privacy, and their civil rights. It was a database of information, collected for laudable purposes, after all, that allowed Japanese Americans to be rounded up and interned during World War II." is edited by Jim Harper, who is now Director of Information Policy Studies at the Cato Institute. TLJ spoke with Harper about the President's proposal. He stated that "this is another example of databases mixing and merging" to the detriment of individual privacy. It is "typical mission creep". He added that "employers won't stand in the shoes of individuals to protect privacy".

E-File Project. "The Budget funds the Modernized E-File Project at an estimated $56 million", the administration summary states. "Electronic filing also benefits the Government through reduced processing costs. The Budget includes a legislative proposal to increase the Secretary of the Treasury's authority to mandate electronic filing from businesses and tax exempt organizations. This measure will assist the IRS in moving to its goal of receiving 80 percent of all tax returns electronically. A corresponding decrease in the cost of paper processing is reflected in the Budget. In addition to improving efficiency, access to electronic tax data will improve IRS’s ability to track organizations that finance terrorism."

IRS Commissioner Mark Everson stated in a release that "The budget holds Business Systems Modernization funding steady at substantially the same level Congress approved last year. The IT modernization program has had a number of successes in the past year, including the first update to the main IRS database in 40 years, the roll-out of new Internet services for taxpayers and practitioners and improved administrative systems. The 2006 budget focuses resources on projects with direct impact on taxpayer service and enforcement efforts."

DOT Financial Management Service. The administration summary also states that the DOT "is improving its payments and collections processes and moving toward an ``all-electronic Treasury.´´ Treasury administers the Government’s payments and collections systems through the Financial Management Service (FMS). In 2004, FMS issued over 705 million electronic payments and 235 million paper checks. FMS annually issues over 940 million non-Defense payments, valued at $1.5 trillion, including Social Security benefits, tax refunds, and veterans’ benefits. Streamlining the payments and collections processes and continually investing in state-of-the-art technology is integral in processing these payments and collections accurately, timely, and more safely and securely for the taxpayer. The Budget provides funding for FMS' electronic initiatives, such as:, which is a Government-wide web portal to collect non-tax revenue electronically; Paper Check Conversion, which converts checks into electronic debits thereby moving funds more quickly; and Stored Value Cards, which directly support military operations overseas."

Summary of Bush's Budget Proposals for Other Agencies

2/7. The Bush administration released it budget proposals for fiscal year 2006. This includes the proposed budgets for the Department of Homeland Security (DHS), Department of Justice (DOJ), Office of the U.S. Trade Representative (USTR), and Securities and Exchange Commission (SEC).

Department of Justice. President Bush's budget proposal for the Department of Justice [44 pages in PDF] provides $144,451,000 for the Antitrust Division. However, neither the budget proposal, nor the administration's DOJ summary, provide details about future competition policy.

Nor do the administration's DOJ budget proposal or summary provide details about DOJ activities related to implementation or expansion of the Communications Assistance for Law Enforcement Act (CALEA), enforcement of computer related crime statutes, or enforcement of intellectual property laws.

See also, DOJ release.

DHS. See, President Bush's budget proposal [PDF] and summary. See also, transcript of news conference of acting Secretary of Homeland Security James Loy, and DHS summary.

The section of the budget proposal for Information Analysis and Infrastructure Protection (IAIP) references cyber security. It states that its program "Combines available cyber security information for dissemination in a timely, understandable, and responsible manner. It provides a system that allows citizens, businesses, and other institutions to communicate directly with the United States Government regarding cyber security information. Additionally, Cyber Security studies the interconnection of cyber assets to identify critical points in our Nation's cyber infrastructure that could be exploited by malicious persons. IAIP has developed a secure collaboration capacity that allows government and industry cyber experts to address threats to our cyber infrastructure in a collaborative manner in real time."

USTR. The President's budget proposal for the Executive Office of the President [PDF] includes the funding proposal for the USTR. It provides $38,779,000.

SEC. The President's budget provides $888 Million for the SEC.

FCC Releases SHVERA NPRM Regarding Significantly Viewed Signals

2/7. The Federal Communications Commission (FCC) released a notice of proposed rulemaking (NPRM) [460 pages in PDF] in its proceeding titled "In the Matter of: Implementation of the Satellite Home Viewer Extension and Reauthorization Act of 2004 Implementation of Section 340 of the Communications Act". See also, FCC release [PDF].

With this NPRM the FCC initiates a proceeding required by the SHVERA. The Congress included this bill in the huge omnibus appropriations bill, HR 4818 (108th Congress), that it enacted late last year.

Section 202 of the SHVERA creates a new Section 340 of the Communications Act that authorizes satellite carriers to offer FCC determined "significantly viewed" signals of out of market broadcast stations to subscribers. This NPRM includes the list of stations currently deemed "significantly viewed". The body of this NPRM is 33 pages. The list of stations is several hundred pages long.

The NPRM elaborates that "The SHVERA adopts for satellite carriers and subscribers the concept of ``significantly viewed,´´ which has applied in the cable context for more than 30 years. In 1972, the Commission adopted the concept of ``significantly viewed´´ signals to differentiate between out-of-market television stations ``that have sufficient audience to be considered local and those that do not.´´" (Footnote omitted.)

The NPRM also explains the consequences for copyright royalties. "The copyright provisions that apply to cable systems have recognized the Commission's designation of stations as ``significantly viewed´´ and treated them, for copyright purposes, as ``local,´´ and therefore subject to reduced copyright payment obligations. The copyright provisions governing satellite carriers did not, however, provide a statutory copyright license for significantly viewed signals, and as a consequence such signals are not, as a practical matter, generally available for carriage for satellite distribution outside of their Designated Market Areas (``DMAs´´). Recognizing that the reach of a station's over-the-air signal is not constrained by the boundary of a DMA, the SHVERA now will allow a satellite carrier to treat an otherwise distant signal as ``local´´ in a community where such signal is ``significantly viewed´´ by consumers in that community. In this way, the statutory provisions governing satellite carriage of broadcast stations move closer to the provisions that have long governed cable carriage." (Footnote omitted.)

Initial comments are due by April 8, 2005, and reply comments are due by April 29, 2005.

This NPRM is FCC 05-24 in MB Docket No. 05-49. The FCC adopted this NPRM on February 4, 2005, and released it on February 7, 2005.

People and Appointments

2/7. David Israelite was named P/CEO of the National Music Publishers' Association (NMPA). He replaces Edward Murphy. Israelite previously worked in the Office of the Attorney General. He was also Chairman of the Department of Justice's Task Force on Intellectual Property. Before that, he worked for the Republican National Committee. And before that, he worked for Sen. Kit Bond (R-MO).

More News

2/7. The Department of Commerce's Bureau of Industry and Security (BIS) announced that its Information Systems Technical Advisory Committee will hold a partially closed meeting on February 23 and 24 in San Diego, California. The agenda for the open portion of the meeting includes a presentation on excimer lasers and extreme ultraviolet (EUV) light, a presentation on microwave semiconductor technology, and an overview of the STI Cell processor (the Sony, Toshiba and IBM system on a chip technology). The agenda for the closed portion of the meeting is undisclosed. The BIS is accepting public comments. Send comments to Lee Ann Carpenter at See, notice in the Federal Register, February 7, 2005, Vol. 70, No. 24, at Page 6412.

2/7. The Electronic Privacy Information Center (EPIC), ACLU, and EFF wrote a letter [PDF] to a school district in the state of California urging it not to include radio frequency identification (RFID) tags in students' identification badges. The three groups assert that "the RFID badges jeopardize the safety and security of students by broadcasting identity and location information to anyone with a chip reader. The RFID badges will make it much easier for anyone -- not just school officials -- to target and find" the students.

Greenspan Discusses Technology in Speeches in UK

2/6. Federal Reserve Board (FRB) Chairman Alan Greenspan gave pair of speeches in the United Kingdom in which he discussed, among other topics, information technology.

On February 4 he gave a speech in London, England titled "Current Account", in which he discussed the role of information technology in globalization. He said that "The advance of information and communication technology has effectively shrunk the time and distance that separate markets around the world. The vast improvements in these newer technologies have broadened investors' vision to the point that foreign investment appears less exotic and risky. Combined with improvements in transportation networks, these developments have expanded the range of tradable goods and services that can be brought to each market and have enabled greater integration of the productive resources of national economies."

He continued that "Both deregulation and technological innovation have driven the globalization process by tearing down the barriers that have separated economic agents, thus lowering costs. The effect of these developments has been to markedly increase the willingness and ability of financial market participants to reach beyond national borders to invest in foreign countries, just as a century and more ago savings moved beyond local investment opportunities to develop national markets."

Then, on February 6, he gave a speech in Kirkcaldy Scotland titled "Adam Smith" in which he praised Adam Smith, free markets and free trade. He also said that "Although workers in developed and many emerging nations have witnessed an extraordinary rise in living standards, some shadow of worker angst of the earlier period remains. Today's vast technological advances and the labor turnover associated with it have not sparked the violence of the early nineteenth-century Luddites, but they are nonetheless associated with significant job insecurity."

Go to News from February 1-5, 2005.