TLJ News from July 16-20, 2007

Google Will Bid in 700 MHz Auction If FCC Accepts Its Four Conditions

7/20. Eric Schmidt, CEO of Google, sent a short letter [PDF] to Kevin Martin, Chairman of the Federal Communications Commission (FCC), and to the other FCC Commissioners, in which he addressed the FCC's proceedings regarding the promulgation of rules governing the upcoming 700 MHz spectrum auction. He wrote that Google would bid if the FCC would impose certain license conditions that it requests.

Google submitted a comment [9 pages in PDF] to the FCC on July 9, 2007, in which it stated that "the FCC must include open platforms as part of the applicable licensing requirements for paired commercial blocks in the Upper 700 MHz Band. In particular, as a means of stimulating both ``first order´´ and ``second order´´ broadband competition, the Commission should extend to all CMRS-type spectrum licensees the obligation to provide (1) open applications, (2) open devices, (3) open services, and (4) open access."

Schmidt wrote in his July 20 letter that "We hereby inform you that, should the Commission expressly adopt the four license conditions requested in our July 9th letter -- with specific, enforceable, and enduring rules -- Google intends to commit a minimum of $4.6 billion to bidding in the upcoming auction."

Google explained its four conditions in its July 9 comment. It wrote that its "open applications" means that "the wireless service provider shall not block or otherwise inhibit the ability of end users to download and utilize applications".

Google proposed that the FCC adopt a licensing condition that provides that "all commercial licensees seeking to provide a CMRS-type commercial service using 700 MHz spectrum must not block, impair, impede, or otherwise unreasonably limit the ability of end users to download and utilize software applications."

Second, Google wrote that its "open devices" condition means that "the wireless service provider shall not lock individual handsets to specific wireless networks".

It proposed that the FCC adopt a licensing condition that provides that "all commercial licensees seeking to provide a CMRS-type commercial service using 700 MHz spectrum must allow end users to utilize lawful handsets in conjunction with their CMRS service."

Third, Google wrote that its "open services" condition means that "a third party service provider is able to acquire wireless service on a wholesale basis, at commercially reasonable rates, terms and conditions".

It proposed that the FCC adopt a licensing condition that provides that "all commercial licensees seeking to provide a CMRS-type commercial service using 700 MHz spectrum must provide wholesale service to requesting resellers, based on reasonably nondiscriminatory commercial terms and conditions."

Finally, Google wrote that its "open access" or "open networks" condition is similar to the FCC's Computer Inquiry requirement that "whereby local exchange carriers (LECs) must allow Internet service providers (ISPs) to interconnect with last-mile networks in order to provide an information service. The key distinction here is that facilities-based ISPs would be required to interconnect their own network facilities with the last-mile towers of the wireless providers. The ISPs then would purchase or lease discrete blocks of network capacity and provide a competing retail service."

It proposed that the FCC adopt a licensing condition that provides that "all commercial licensees seeking to provide a CMRS-type commercial service in the Upper 700 MHz spectrum must open their networks to interconnect with any third party, such as an ISP or CLEC, at any reasonable point in the wireless network."

In addition, Google published a statement in its web site on July 20 by its Chris Sacca.

Sacca wrote that "In the U.S., wireless spectrum for mobile phones and data is controlled by a small group of companies, leaving consumers with very few service providers from which to choose."

After summarizing Google four licensing conditions, he wrote continued that "The FCC is currently considering draft rules for the auction, and the reports we've heard are that those rules include some -- but not all four -- of the openness conditions that we and consumer groups support. While any embrace of open platforms is welcome, only if the FCC adopts all four principles will we see the genuinely competitive marketplace that Americans deserve. In particular, guaranteeing open services and open networks would ensure that entrepreneurs starting new networks and services will have a fair shot at success, in turn giving consumers a wider choice of broadband providers."

He added that Google has committed at least $4.6 Billion because this is the "the reserve price that FCC has proposed for the auction", but that Google expects that if the FCC were to adopt Google's four principles, then there would be "much higher bids".

The FCC's proceeding numbers are WC Docket No. 06-150, WC Docket No. 06-129, PS Docket No. 06-229, and WT Docket No. 96-86.

CTIA Responds to Google on 700 MHz Auction

7/20. Steve Largent, head of the CTIA -- The Wireless Association, commented in a release on Google CEO Eric Schmidt's July 20 letter [PDF] to Kevin Martin, Chairman of the Federal Communications Commission (FCC) regarding rules for the forthcoming 700 MHz auction.

See also, story titled "Google Will Bid in 700 MHz Auction If FCC Accepts Its Four Conditions" in TLJ Daily E-Mail Alert No. 1,613, July 20, 2007.

Largent wrote that Schmidt's letter "highlights the Internet giant's scheme to have the 700 MHz auction rigged with special conditions in its favor. If Google is willing to commit almost $5 billion dollars for spectrum that it wants encumbered with various requirements, then let it win that spectrum in a competitive auction and choose that business model. Google and its allies, with their collective market capitalization approaching half a trillion dollars, don't need a government handout at taxpayers' expense. The competitive wireless industry welcomes all new entrants, but no company should be able to buy a custom-fit government regulation that suits their particular business plan. Consumers should decide if they're right, not the federal government".

AT&T wrote in a July 12, 2007, comment [10 pages in PDF] filed with the FCC that Google's request to impose four conditions on certain licenses "is intended to diminish the value of those licenses, thus preventing wireless service providers such as AT&T from bidding on them and clearing the path for Google to obtain them at below-market rates."

AT&T added in its July 12 comment that "Google’s request -- to obtain a leg-up in the auction process through the artifice of ``open access´´ regulation -- is a self-serving attempt to obtain spectrum at discounted rates that would turn the clock back on a decade of bipartisan consensus on the proper approach to wireless deregulation, deprive taxpayers of billions of dollars, inhibit the explosive growth of wireless broadband, and -- perhaps most importantly -- expose the Commission to reversal in the courts and thereby delay the vital public purposes to be served by the 700 MHz auction."

Then, AT&T submitted a comment [3 pages in PDF] on July 19, 2007, in which it expressed support for a proposal of FCC Chairman Martin.

AT&T wrote that Martin's "proposal would allow one block of the upper 700 band to be auctioned to those who would adhere to a wireless business model which is open to different devices and applications. At the same time, we understand that the plan contains a number of safeguards which address many of AT&T's concerns about the Google Plan."

AT&T recited its understanding of Martin's proposal. First, wrote AT&T, "The draft order would simply take one block of the upper 700 band being auctioned to allow an experiment with an alternative open devices/open applications business model of the type proposed by Google and others, but would do so without mandating changes to existing business models in the highly competitive wireless environment".

Second, "The proposal does not mandate a wholesale business model in any particular block, nor does it mandate net neutrality style regulations on the other commercial spectrum being auctioned"

Third, "The proposal puts in place an appropriate reserve requirement for the auction overall, and for the particular block described above, to ensure that neither Google nor others would be able to obtain any block of spectrum without paying an appropriate price to the U.S. Treasury".

Finally, AT&T wrote that "The proposal provides that if bids for this particular block do not meet reserve requirements, or if no qualified bidder comes forward, the block would be withdrawn and re-auctioned without the open device/open applications requirements".

AT&T described this proposal as "interesting and creative". It stated that "AT&T has no objection to, and would support, the Chairman's auction proposal".

People and Appointments

7/20. David McCue was named Chief Information Officer of Computer Sciences Corporation (CSC). See, CSC release.

More News

7/20. The Department of Commerce's (DOC) National Institute of Standards and Technology (NIST) published a notice in the Federal Register that announces that it seeks sector members for it advisory committees, including its Information Security and Privacy Advisory Board (ISPAB), Advanced Technology Program Advisory Committee, and Visiting Committee on Advanced Technology. See, Federal Register, July 20, 2007, Vol. 72, No. 139, at Pages 39793-39798.

7/20. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS) published a notice in the Federal Register that announces that it seeks private sector members for its Technical Advisory Committees (TAC), including its Information Systems TAC, which provides advice on the regulation of the export, and deemed export, of electronics, computers, telecommunications, and information security products. See, Federal Register, July 20, 2007, Vol. 72, No. 139, at Page 39788.

Rep. Stupak Introduces Bill to Continuously Fund Public Safety Communications with Spectrum Auction Revenues

7/19. Rep. Bart Stupak (D-MI), Rep. Vito Fossella (R-NY), and Rep. Eliot Engel (D-NY) introduced HR 3116 [LOC | WW], the "Public Safety Interoperability Implementation Act", a bill that would create a permanent grant program for public safety communications and the interoperability of emergency communications equipment.

Rep. Engel stated in a release that the one time Public Safety Interoperable Communications (PSIC) grants announced on July 18, 2007, were "not nearly enough", and that the Congress should "create a continuing funding stream from the auction of the broadcast spectrum which is expected to bring billions of dollars to the government".

The Congress provided for a one time set of grants for public safety communications in the Digital Television Transition and Public Safety Act of 2005, which was Title III of the Deficit Reduction Act of 2005, which is now Public Law No. 109-459.

On July 18, the National Telecommunications and Information Administration (NTIA) and Department of Homeland Security (DHS) announced that they will award $968 Million in PSIC grants by September 30, 2007. See, story titled "Public Safety Interoperable Communications Grant Applications Due in 30 Days" in TLJ Daily E-Mail Alert No. 1,612, July 19, 2007.

HR 3116 would create a separate fund in the Digital Television Transition and Public Safety Fund, which is provided for in 47 U.S.C. § 309(j)(8)(E), titled the "Public Safety Communications Trust Fund".

The bill was referred to the House Commerce Committee. All three original cosponsors are members.

Adelstein Discusses E911 Location Accuracy Proceeding

7/19. Federal Communications Commission (FCC) Commissioner Jonathan Adelstein gave a speech [4 pages in PDF] at an event hosted by the E9-1-1 Institute in Washington DC. He discussed the FCC's Notice of Proposed Rulemaking (NPRM) [PDF] regarding E911 location obligations.

Adelstein criticized this NPRM when it was adopted back on May 31, 2007. See, story titled "FCC Extends E911 Location Tracking Rules to Interconnected VOIP" in TLJ Daily E-Mail Alert No. 1,589, May 31, 2007.

He said on July 19 that the FCC "is seeking comment on several issues relating to wireless E911 location accuracy and reliability requirements in order to ensure that E911 service continues to evolve and meet the needs of public safety and the American people. In an interesting procedural decision, the Commission has bifurcated the comment cycle and the issues on which it is seeking comment. In the first section, we seek comment on a tentative conclusion that we should require licensees to satisfy location accuracy standards at a geographical level defined by the coverage area of each public safety answering point (PSAP). Also in the first section, we seek comment on whether we should defer enforcement of a more exacting location accuracy requirement in order to allow wireless carriers to come into compliance."

The comment period for this part of the NPRM has closed.

Adelstein continued that "In the second section, we ask for comments on several other issues regarding the deferral of a more stringent accuracy requirement and the more technical aspect of location accuracy. Among the items, we seek comment on tentative conclusions to (1) establish a single location accuracy requirement irrespective of technology, (2) establish a mandatory schedule for accuracy testing, (3) require carriers to automatically provide reliability or confidence data to public safety answering points, and (4) extend E911 wireless location accuracy requirements to interconnected VOIP services that may be used in more than one location."

Comments on this part of the NPRM are due by September 18, 2007.

This item is FCC 07-108 in PS Docket No. 07-114, CC Docket No. 94-102, and WC Docket No. 05-196. The FCC adopted this item on May 31, 2007, and released on it on June 1, 2007. See also, notice in the Federal Register, June 20, 2007, Vol. 72, No. 118, at Pages 33948-33955.

Jonathan AdelsteinAdelstein (at right) commented in his July 19 speech that "I think it is still too early to unconditionally support all of the tentative conclusions in this item. We have not seen the full record, nor have we conducted our own review of current data and future technology. I have proposed that the FCC put in place a series of hearings and reports to guide the development of our goals."

He continued that "Our ultimate goal of advancing E911 will not be well-served if our proceeding, regardless of how well-intentioned, rushes to judgment by issuing a series of tentative conclusions without even beginning to conduct the necessary due diligence. Specifically, I am troubled that we are considering imposing a new compliance requirement that we know some carriers will not be able to meet in certain circumstances. Even worse, the FCC is bifurcating this proceeding by setting a new accuracy compliance standard before we can even make a determination as to how to actually improve location accuracy."

He said that "'we also need to take a step back from the issue and consider the future of E911 and how it will be used in an IP-based world. For example, we should gather evidence about those situations when callers cannot be located, or not quickly enough."

He also suggested convening "a committee of industry and public safety experts to develop and submit recommendations to the FCC regarding technical standards and protocols for the next generation of automatic location services".

House Agriculture Committee Approves Rep. Space's RUS Broadband Loans Amendment

7/19. The House Agriculture Committee amended and approved HR 2419 [LOC | WW], the "Farm Bill Extension Act of 2007". This is a huge bill that is largely unrelated to technology. However, the Committee approved an amendment offered by Rep. Zack Space (D-OH) pertaining to the U.S. Department of Agriculture's (USDA) Rural Utilities Service's (RUS) loans for broadband services.

Rep. Collin Peterson (D-MN), the Chairman of the Committee, introduced the underlying bill on May 22, 2007.

Rep. Space released a summary of the broadband loan provisions of the bill, as amended by his amendment. First, he stated that "The USDA loan program has been abused by wealthy developments that are not truly underserved rural areas. This legislation will close that loophole, making more funds available to areas truly in need of financial assistance."

Second, he wrote that "the USDA requires an applicant company to possess 20% of the loan equity on hand when applying. This legislation would lower that requirement to 10% for areas where 40% of residents are unserved. This legislation would also require the USDA to reduce the paperwork burden and conduct outreach to underserved areas with information about the program."

He wrote that "This bill would ban USDA loans into areas already serviced by 3 or more providers."

He also wrote that the amortization periods for loans would be increased from 10 or 15 years to 35 years.

Finally, he stated that the bill would increase the number of companies eligible for financial assistance. HE explained that "Current legislation forbids loans to companies with over 2% of the nation’s subscriber lines.  This bill would eliminate the 2% rule altogether, but stipulate that only 10% of the funds made available for the loan program would be available to providers with more than 10% of the nation’s subscriber lines, and providers with between 2% and 10% of the nation’s subscriber lines would have access to only 40% of the funds made available for the program."

Kyle McSlarrow, head of the National Cable & Telecommunications Association (NCTA), praised the amendment in a release. He said that this amendment ensures "that the USDA's Rural Utilities Service Broadband Loan Program is better targeted to communities that currently do not have access to broadband service. This week's markup demonstrates important progress in the effort to reform the RUS Broadband Loan Program."

Walter McCormick, head of the USTelecom, stated in a release that "We appreciate Congressman Space's leadership on this important amendment to help spur broadband deployment in unserved areas. The amendment will help achieve the goal of universal broadband service by extending the amortization period for broadband loans, reducing burdensome paperwork requirements, addressing loan security requirements and providing additional congressional oversight of the program."

FRB Report Addresses Economy and Tech Sector

7/19. Ben Bernanke, Chairman of the Federal Reserve Board (FRB), testified before the Senate Banking Committee (SBC) on Thursday, July 19, and before the House Financial Services Committee on Wednesday, July 18, 2007. See, prepared testimony. He also presented the FRB's Monetary Policy Report to the Congress [31 pages in PDF]

Ben BernankeBernanke (at right) wrote in his prepared testimony that "Overall, the U.S. economy appears likely to expand at a moderate pace over the second half of 2007, with growth then strengthening a bit in 2008 to a rate close to the economy’s underlying trend."

The Monetary Policy Report contains details about technology related sectors of the economy.

First, the report addresses developments in productivity and the use of information technology. It states that "Gains in labor productivity have slowed lately." It continues that "output per hour in the nonfarm business sector rose just 1 percent over the year ending in the first quarter of 2007, down from the pace of 2 percent per year recorded over the preceding two years (and down from much larger increases in the first half of the decade)." (Parentheses in original.)

The FRB report explains that "The slowing in productivity was associated with the deceleration in output and thus was probably, at least in part, a temporary cyclical phenomenon. Indeed, the fundamental forces that in recent years have supported a solid uptrend in underlying productivity -- the driver of real wage gains over time -- remain in place. They include the rapid pace of technological change and firms' ongoing efforts to use information technology to improve the efficiency of their operations.

It adds that "Increases in the amount of capital, especially high-tech capital, available to each worker also appear to be providing considerable impetus to productivity growth."

Second, the report addresses business investment in equipment and software (E&S), and the impact of the release of Microsoft's Vista operating system.

It states that "solid gains in real outlays on equipment and software seem likely in light of the anticipated expansion in business output, continuing strong profits, and generally favorable financial conditions. Opportunities to realize significant gains in efficiency by investing in high-tech equipment should provide ongoing support to equipment spending as well."

It elaborates that "Within the major components of E&S, real spending on high-tech equipment expanded at an annual rate of more than 20 percent in the first quarter of 2007 because of both a surge in outlays on computers after the release of a major new operating system and a spurt in investment in communications gear."

Finally, the FRB report addresses international technology related trade. It states that "Despite continued solid foreign economic expansion and persisting stimulus from earlier declines in the dollar, the growth of real exports of goods and services slowed to an annual rate of less than 1 percent in the first quarter from its exceptionally strong pace of more than 10 percent in the fourth quarter. The slowdown was particularly evident in sales of capital goods -- especially aircraft and computers".

Regarding imports, the report states that "After falling at an annual rate of 2½ percent in the fourth quarter, real imports of goods and services rose at a 5½ percent rate in the first quarter." It adds that imports of computers and semiconductors accelerated.

SEC's Cox Suggests Legislation Requiring Internet Based Disclosures by Municipal Borrowers

7/19. Chris Cox, the Chairman of the Securities and Exchange Commission's (SEC), gave a speech in Los Angeles, California, titled "Integrity in the Municipal Market". He called for limited federal legislation regulating municipal bond markets. He suggested that the Congress set disclosure requirements for municipal borrowers. Moreover, Cox said that he envisions use of the internet and interactive data in this disclosure process.

Chris CoxCox (at left) said that circumstances have changed since the securities regulation regime was created over 70 years ago, when the municipal bond market was small, and dominated by institutional investors.

He said that now, "Fully 36% of all municipal securities are owned directly by households. And up to another one-third of the total municipal market is held indirectly through money market funds, mutual funds, and closed-end funds." However, the municipal market is not regulated like the corporate securities market.

He continued that "Adherence to the Governmental Accounting Standards Board's standards by all issuers of municipal securities is just as important as adherence to the Financial Accounting Standards Board's standards by all corporate issuers. But under current law, the Commission does not have the same authority to require the use of proper accounting standards by municipal issuers that it does for issuers of corporate securities."

"The best way to address the problems and needs of municipal securities investors in a coherent manner is through legislation", said Cox. But, he added, "Nor do I believe it would be appropriate for the Commission to review the disclosure documents of municipal issuers as it does those of public companies."

He suggested that the Congress could "establish a limited regulatory regime designed expressly for the needs of the municipal market. That limited regulation should be focused on ensuring that investors in primary offerings receive the information they need, prior to the sale -- at the time they make their decision to invest."

He elaborated that "model legislation might provide that the offering documents and periodic reports provided to investors contain information similar to what they're accustomed to seeing for all of the other securities they own."

Moreover, "It could focus on making this information available on a more timely basis, for example, by tapping the power of the Internet to provide an easily accessible, free source for the display of that information, similar to the SEC's EDGAR system."

And, it "could mandate municipal issuer use of generally accepted governmental accounting standards."

He also suggested that municipal borrowers could create interactive data through the use of XBRL. See, SEC's web site on interactive data. This is an entirely voluntary program.

Cox said in his Los Angeles speech that "some of the improvements we're seeking can be accomplished without either new legislation or new regulation. For example, when it comes to insuring that disclosure is timely, there are impressive private sector efforts underway to tap the power of technology to enable real-time financial reporting. The international consortium that is developing the open-source XBRL standard to make both textual disclosure and financial statement disclosure interactive holds great promise not just for the corporate market, but for the municipal market as well."

He added that "U.S. municipal issuers should consider the benefits of using XBRL in order to reduce their costs of disclosure, to stay competitive in the capital markets of the 21st century, and to insure that they're getting the best information to their investors in the most timely and useful way. Greater use of interactive data in the municipal market will benefit municipal issuers and investors alike."

SEC Suspends Web Tool for Finding Companies that Do Business in Countries that Support Terrorism

7/19. The Securities and Exchange Commission (SEC) announced that it has temporarily suspended its web tool that permitted users to obtain information from company disclosure documents about their business interests in countries that the Department of State has designated as "State Sponsors of Terrorism".

Public companies are required by statute and regulation to report on material activities in countries that support terrorism, currently Iran, Cuba, Sudan, North Korea and Syria. The SEC's online service enabled web users to easily access such information.

The online service had been in operation for less than one month. The SEC stated in a release that "we are temporarily suspending the availability of the web tool while it undergoes reconstruction. We will work to improve the web tool so that it meets the various concerns that have been expressed."

"Alternatively", the SEC announced, "our staff is considering whether the use of interactive data tags applied by companies themselves could permit investors, analysts and others to easily discover this disclosure without need of an SEC-provided web tool at all. In the interim, the companies' disclosure regarding their business contacts in the five nations will continue to be available through the SEC's EDGAR database, and findable using our new full-text search capability."

It added that SEC staff "will also consider whether to recommend a Concept Release on the question of how best to make public company disclosure of activities in terrorist states more accessible. The release would solicit public comment in a formal way".

The SEC disclosed that "Iran was the country most frequently clicked on, followed by Cuba, Sudan, North Korea, and Syria. Those who went to a country list most often clicked through to the text of companies' own disclosure".

Senate Commerce Committee Approves Broadcast Indecency Bill

7/19. Senate Commerce Committee (SCC) approved S 1780 [LOC | WW], the "Protecting Children from Indecent Programming Act", a bill to facilitate the Federal Communications Commission's (FCC) ability to regulate broadcast indecency.

Sen. Jay Rockefeller (D-WV) and others introduced this bill on July 12, 2007. It would amend 47 U.S.C. § 303 note to provide that the FCC "shall maintain a policy that a single word or image may constitute indecent programming". However, the bill contains no provision regarding whether, or in what circumstances, any word or image would be indecent.

The bill is cosponsored by Sen. Daniel Inouye (D-HI), Sen. Ted Stevens (R-AK), and Sen. Mark Pryor (D-AR).

This bill is a reaction to the June 4, 2007, divided opinion [53 pages in PDF] of the U.S. Court of Appeals (2ndCir) in Fox Television v. FCC, a broadcast indency case. The majority wrote that "the FCC's new policy sanctioning ``fleeting expletives´´ is arbitrary and capricious under the Administrative Procedure Act for failing to articulate a reasoned basis for its change in policy." The court vacated and remanded to the FCC. See, story titled "2nd Circuit Vacates and Remands FCC Profanity Order" in TLJ Daily E-Mail Alert No. 1,590, June 4, 2007.

S 1780, by providing a statutory basis for sanctions based upon single words, would have the effect of overturning the court's holding.

However, there is also the matter of the court's dicta. The court did not rule on the basis of any of the Constitutional issues raised by the case. However, the court did write in dicta that "we are skeptical that the Commission can provide a reasoned explanation for its ``fleeting expletive´´ regime that would pass constitutional muster".

This bill cannot overturn a Constitutional constraint.

Caroline Frederickson, of the American Civil Liberties Union (ACLU), sent a letter to Sen. Inouye and Sen. Stevens on July 18, 2007, in which she wrote that "Our concern with the FCC’s indecency regime is that it is vague and shifting. This creates the effect of turning down the thermostat on free speech, chilling artists and broadcasters. What is acceptable today may not be acceptable tomorrow. The FCC has also made clear that its determinations will be based on a ``contextual´´ analysis rather than any clear rules. This merely adds to the confusion and increases the chill on speech."

She continued that "The FCC's vague indecency standard breeds uncertainty and chills free speech. Furthermore, it is unnecessary for the FCC to enforce indecency standards. The actual number of programs drawing complaints has decreased, and parents now have the tools to protect their children from objectionable content. Finally, the FCC’s authority to regulate indecency is on shaky constitutional grounds."

FCC Chairman Kevin Martin, who recommended Congressional legislation after the Court of Appeals' June 4 opinion, stated in a release on July 19 that "I appreciate the actions by the Senate Committee on Science, Commerce and Transportation, which affirmed the Commission’s ability to protect our children from indecent language and images on television and radio. Significantly, members of Congress stated once again what we on the Commission and every parent already knows; even a single word or image can indeed be indecent."

Senate Commerce Committee Approves Number Portability Bill

7/19. Senate Commerce Committee (SCC) approved  S 1769 [LOC | WW], the "Same Number Act of 2007", a bill pertaining to number portability.

Sen. Ted Stevens (R-AK) and Sen. Daniel Inouye (D-HI) introduced this bill on July 11, 2007.

Sen. Stevens stated in a release that "Many consumers prefer to take their current number when switching to a new provider, but if this process is burdensome or slow, it may deter consumers from changing services".

He added that "Congress must ensure that consumers are not hampered by delays or protracted procedures which arise from switching to new providers. This legislation would require the FCC to revisit its number portability rules and extend them to all applicable voice communications services."

The bill would require the Federal Communications Commission (FCC) to write rules within 270 days that "identify classes of ports", "where appropriate, establish expeditious time frames for each class of port, which may include timeframes for different stages of the porting", "establish requirements governing the exchange of data between voice service providers in connection with porting a number, including any limits on customer validation fields or other data fields that may be required by voice service providers", and "encourage the reasonable automation of the porting process".

The requirements of this bill would apply to "a telecommunications service" and to "any service that is not a telecommunications service, but that otherwise is an IP-enabled voice service as defined in section 9.3 of the Commission's regulations (47 C.F.R. 9.3), as those regulations may be amended by the Commission from time to time".

Senate Commerce Committee Approves Broadband Data Bill

7/19. Senate Commerce Committee (SCC) amended and approved S 1492 [LOC | WW], the "Broadband Data Improvement Act". See, amendment in the nature of a substitute [16 pages in PDF].

Sen. Daniel Inouye (D-HI), the Chairman of the SCC, and others introduced this bill on May 24, 2007.

The bill would require the Federal Communications Commission (FCC) to revisit its definitions, and how it collects data, pertaining to broadband internet access services.

Broadband service providers have argued that there is significant and increasing competition in the provision of broadband services, and cite periodic FCC reports to support their claims.

Critics have argued that the FCC's data is deficient, and results in overstating the availability of broadband services and competition between providers.

For example, Gigi Sohn, head of the Public Knowledge, stated in a release that the FCC's "methods for collecting information about the availability of high-speed Internet services in the United States are woefully inaccurate and incomplete. In order to begin to fashion a new policy, we must have better data."

Sohn added that "This legislation will go a long way to taking the important step of giving policymakers accurate information that is needed if the United States is to raise its standing in the world rankings for the availability of broadband service. We look forward to action on the bill by the full Senate."

On July 17, 2007, Kyle McSlarrow, head of the National Cable & Telecommunications Association (NCTA), sent a letter to Sen. Inouye expressing support for S 1492. He stated that "The cable industry believes that improving federal data collection and dissemination regarding where broadband services have been deployed in the United States is necessary in order to achieve the goal of ubiquitous broadband availability for all Americans."

Walter McCormick, head of the USTelecom, stated in a release after the markup that "We appreciate the committee's dedication to developing more accurate broadband deployment data. USTelecom and its member companies share the Senators' commitment to broadband deployment and we support elements of the bill, particularly the Connected Nation provisions, which address deployment issues using a model proven to be successful at the state level. We appreciate the committee's changes and will continue to work with members of the committee and the staff as the bill moves forward."

House and Senate Judiciary Committees Approve Patent Reform Bills

7/19. On July 18, 2007, the House Judiciary Committee (HJC) amended and approved HR 1908 [LOC | WW] , the "Patent Reform Act of 2007". Also, on July 19, 2007, the Senate Judiciary Committee (SJC) amended and approved S 1145 [LOC | WW], also titled the "Patent Reform Act of 2007". See, full story.

People and Appointments

7/19. Federal Communications Commission (FCC) Commissioner Jonathan Adelstein named Renée Crittendon to be his Legal Advisor for spectrum and international issues. She has worked for the FCC since 2001, most recently as Deputy Bureau Chief in the Wireline Competition Bureau (WCB). She has also worked for Prism Communication Services, Inc., Piper & Marbury (which is now DLA Piper) and Leventhal Senter & Lerman. See, release [PDF].

7/19. Chester Spatt, the Securities and Exchange Commission's (SEC) Chief Economist and Director of the SEC's Office of Economic Analysis (OEA), will leave the SEC at the end of July. He will return to Carnegie Mellon University as a professor at its Tepper School of Business. See, SEC release.

7/19. President Bush named Andrew Ciafardini to be Special Assistant to the President for Intergovernmental Affairs. He previously held the title of "Government to Citizen Portfolio Manager" in the Office of Management and Budget's (OMB) Office of E-Gov & IT. See, White House release.

7/19. President Bush named Harold Kim to be Special Assistant to the President for Legislative Affairs. Kim was previously Deputy Chief Counsel of the Senate Judiciary Committee. See, White House release.

7/19. President Bush named Stephen Potts to be Associate Counsel to the President. Potts was previously Chairman of the Board of Directors of the Ethics Resource Center. See, White House release.

More News

7/19. The Federal Communications Commission (FCC) announced that it will hold another public meeting regarding regulation of ownership of media. See, FCC release [PDF]. This one will be in Chicago, Illinois.

7/19. James Bessen and Michael Meurer released several chapters of their forthcoming book to be titled "Innovation at Risk". They state that their book will provide "an authoritative and comprehensive empirical evaluation of the economic performance of patents". They argue that "Patents do provide incentives to invest in research, development, and commercialization. In some sectors, such as the pharmaceutical industry, these benefits outweigh the costs. However, for most firms today, patents fail as a property system; they generate costly disputes and litigation that outweigh the positive incentives." They add that "patents today often fail to grant well-defined property rights. Over the last two decades, the courts have made patent boundaries less certain, most notably by permitting increasingly abstract patent claims and tolerating patents on a growing number of obvious inventions. As a result, most innovators cannot easily and reliably determine whether their technology infringes others’ patents. Institutions that effectively support clear property boundaries for real property are dysfunctional or non-existent for patents."

Bush Signs Executive Order Creating Import Safety Group

7/18. President Bush issued an Executive Order that establishes within the Department of Health and Human Services (DHHS) an Interagency Working Group on Import Safety. The Secretary of Health and Human Services will be the chairman, and the U.S. Trade Representative (USTR) will be a member. The order states that the purpose of the working group is "to promote the safety of imported products".

The order elaborates that this includes "reviewing or assessing current procedures and methods aimed at ensuring the safety of products exported to the United States, including reviewing existing cooperation with foreign governments, foreign manufacturers, and others in the exporting country's private sector regarding their inspection and certification of exported goods and factories producing exported goods and considering whether additional initiatives should be undertaken with respect to exporting countries or companies".

The mandate of the working group also includes "identifying potential means to promote all appropriate steps by U.S. importers to enhance the safety of imported products" and "surveying authorities and practices of Federal, State, and local government agencies regarding the safety of imports to identify best practices and enhance coordination among agencies".

See also, notice in the Federal Register, July 20, 2007, Vol. 72, No. 139, at Pages 40051-40055.

Also on July 18, 2007, the Senate Commerce Committee (SCC) held a hearing titled "Safety of Chinese Imports: Oversight and Analysis of the Federal Response".

9th Circuit Holds that Service Provider Cannot Unilaterally Change Contract by Publishing Amended Version in Web Site

7/18. The U.S. Court of Appeals (9thCir) issued its per curiam opinion [13 pages in PDF] in Douglas v. Talk America, granting a petition for writ of mandamus to the U.S. District Court (CDCal), and vacating the District Court's order compelling arbitration of a dispute between a telecommunications service provider and one of its customers. The Court of Appeals held that the service provider can not enforce an arbitration clause that exists only in a revised copy published in its web site, when the customer had no notice.

The Court of Appeals stated that the issue is "whether a service provider may change the terms of its service contract by merely posting a revised contract on its website". It applied basic contract law principles to hold that in this case the service provider can not.

Joe Douglas contracted for long distance telephone service with America Online (AOL). Talk America (TA) then acquired this business from AOL. TA then published a revised "contract" in its web site that added service charges, and included a class action waiver, an arbitration clause, and a New York choice of law clause. Douglas signed no revised contract. Douglas states that TA never notified him of the web site changes.

When Douglas learned of the additional charges, he filed a class action complaint in U.S. District Court (CDCal) alleging violation of the Communications Act, breach of contract, and violations of various California consumer protection statutes.

The District Court granted TA's motion to compel arbitration. The Federal Arbitration Act does not provide for interlocutory appeals of such orders. Hence, Douglas brought the present petition for writ of mandamus.

The Court of Appeals applied the five prong test of Bauman v. U.S. Dist. Court, 557 F.2d 650 (9th Cir. 1977), which provides that a necessary precondition for granting a writ of mandamus is that "The district court's order is clearly erroneous as a matter of law."

The Court of Appeals resorted to the most basic fundamentals of contract law to decide whether the District Court's order was erroneous. It wrote that "a party can't unilaterally change the terms of a contract; it must obtain the other party’s consent before doing so", and that "a revised contract is merely an offer and does not bind the parties until it is accepted."

The Court of Appeals added that "Even if Douglas's continued use of Talk America's service could be considered assent, such assent can only be inferred after he received proper notice of the proposed changes. Douglas claims that no such notice was given."

Moreover, the Court of Appeals wrote, "the California Court of Appeal has held that a revised contract containing an arbitration clause is unenforceable against existing customers, even when they are given notice by mail."

The Court of Appeals thus concluded that the District Court "erred in holding that Douglas was bound by the terms of the revised contract when he was not notified of the changes. The error reflects fundamental misapplications of contract law and goes to the heart of petitioner's claim."

And furthermore, the Court of Appeals added that even if the parties had agreed to changes in the contract, "the new terms probably would not be enforceable in California because they conflict with California's fundamental policy as to unconscionable contracts."

The Court of Appeals then proceeded to analyze the four other Bauman factors. It found that three of the four weighed in Douglas' favor, and hence, granted the petition for writ of mandamus.

This case is Joe Douglas v. U.S. District Court for the Central District of California, respondent, Talk America, Inc., real party in interest, U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 06-75424, an appeal from the U.S. District Court for the Central District of California, D.C. No. CV-06-03809-GAF. The Court of Appeals issued a per curiam opinion by Judges Kozinski, Gould, and Callahan.

3rd Circuit Issues Opinion Upon Rehearing in Core Communications v. Verizon

7/18.. The U.S. Court of Appeals (3rdCir) issued its opinion [PDF] upon rehearing in Core Communications v. Verizon, a case regarding the proper procedure of adjudicating disputes regarding interconnection agreements between carriers.

The Court of Appeals issued its initial opinion on May 9, 2007. See, story titled "3rd Circuit Holds Interconnection Actions Must First Be Brought in the State PUC" in TLJ Daily E-Mail Alert No. 1,579, May 10, 2007.

 The Court of Appeals again held that the state public utility commissions that approve these interconnection agreements "are given the first crack at interpreting and enforcing" these agreements.

This case is Core Communications, Inc. v. Verizon Pennsylvania, Inc., U.S. Court of Appeals for the 3rd Circuit, App. Ct. No. 06-2419, an appeal from the U.S. District Court for the Eastern District of Pennsylvania, D.C. No. 04-cv-04513, Judge Timothy Savage presiding.

Judge Fisher wrote the May 9 opinion of the Court of Appeals, in which Judges Smith and Diamond joined.

Judge Fisher wrote the July 18 opinion of the Court of Appeals, in which Judges Scirica and Diamond joined. (Judge Scirica was added to the panel following the recusal of Judge Smith.)

Public Safety Interoperable Communications Grant Applications Due in 30 Days

7/18. Carlos Gutierrez, the Secretary of Commerce), John Kneuer, head of the National Telecommunications and Information Administration (NTIA), and Michael Chertoff, Secretary of Homeland Security, held a news conference regarding $968 Million in Public Safety Interoperable Communications (PSIC) grants to be awarded by September 30, 2007. Applications by states, territories and the District of Columbia may be due by August 19, 2007.

Gutierrez stated that "Today we are announcing a nearly $1 billion Public Safety Interoperable Communications Grant Program authorized by Congress. These are targeted federal grants, specifically designated by Congress to fund interoperability. The purpose is to help state and local public safety agencies fill interoperability gaps and enhance their ability to communicate when responding to hazards." See, transcript.

The Congress created this grant program in the Digital Television Transition and Public Safety Act of 2005, which was Title III of the Deficit Reduction Act of 2005, which is now Public Law No. 109-459.

Sen. Ted Stevens (R-AK), the ranking Republican on the Senate Commerce Committee (SCC), stated in a release that "Congress has increasingly heard from public safety officials that the police, firefighters and emergency medical response personnel throughout the country need help achieving interoperability in today’s communications world ... These funds will play a vital role in improving emergency services in Alaska and across America."

See also, Department of Homeland Security (DHS) release and release. See also, Department of Commerce (DOC) release.

The NTIA released a draft of a notice [8 pages in PDF] to be published in the Federal Register that states that applications for grants are due "no later than 11:59 p.m. Eastern Daylight Time 30 days after publication in the Federal Register". This notice was not published as of the July 19, 2007, issue of the Federal Register. The NTIA web states that this notice will be published on July 20. 30 days after July 20 is Sunday, August 19.

GAO Reports on Electronic Medical Records at VA and DOD

7/18. The Government Accountability Office (GAO) released a report [26 pages in PDF] titled "Information Technology: VA and DOD Are Making Progress in Sharing Medical Information, but Remain Far from Having Comprehensive Electronic Medical Records".

The report states that the Veterans Administration (VA) and Department of Defense (DOD) "have been pursuing ways to share data in their health information systems and create comprehensive electronic medical records since 1998", but that they "have faced considerable challenges, leading to repeated changes in the focus of their initiatives and target dates".

It continues that while the VA and DOD "have made progress ... much work remains to achieve the goal of a shared electronic medical record and seamless transition between the two departments."

The report states that "In the long-term project to develop modernized health information systems, the departments have begun to implement the first release of the interface between their modernized data repositories, and computable outpatient pharmacy and drug allergy data are being exchanged at seven VA and DOD sites. However, significant work remains including agreeing to standards for the remaining categories of medical information and populating the data repositories with all this information."

It adds that the "VA and DOD are achieving exchanges of health information. However, these exchanges are as yet limited, and it is not clear how they are to be integrated into an overall strategy toward achieving the departments' long-term goal of comprehensive, seamless exchange of health information."

People and Appointments


7/18. President Bush named Craig Morford to be acting Deputy Attorney General (DAG). He will replace the outgoing DAG, Paul McNulty. Morford is the U.S. Attorney for the Middle District of Tennessee. See, DOJ release and White House release.

7/18. President Bush nominated Robert Dow to be a Judge of the U.S. District Court for the Northern District of Illinois. See, White House release.

More News

7/18. The Children's Food and Beverage Advertising Initiative of the Council of Better Business Bureaus (CBBB) announced at an event hosted by the Federal Trade Commission (FTC) titled "Weighing In: A Check-Up on Marketing, Self-Regulation, and Childhood Obesity" that 11 companies have pledged to focus their advertising primarily directed to children under age 12 on products meeting "better-for-you standards" or refrain from advertising to that age group. See, CBBB release [PDF] and FTC event agenda [PDF]. Federal Communications Commission (FCC) Commissioner Deborah Tate stated in a release [PDF] that "This is an admirable step in the right direction. Hopefully, others, including members of the Task Force on Media and Childhood Obesity, will follow their example and take even further measures to positively impact childhood obesity."

Sen. Leahy and Sen. Kennedy Introduce Health Information Privacy Act

7/17. Sen. Patrick Leahy (D-VT) and Sen. Ted Kennedy (D-MA) introduced S 1814 [LOC | WW], the "Health Information Privacy and Security Act of 2007" or "HIPSA". See also, Sen. Leahy's section by section summary of the bill.

Sen. Patrick LeahySen. Leahy explained the need for this bill. He said that "The explosion of electronic health records, digital databases and the Internet is fueling a growing supply and demand for Americans' health information. The ability to easily access this information electronically, often by the click of a mouse, or a few key strokes on a computer, can be very useful in providing more cost-effective health care. But, the use of advancing technologies to access and share health information can also lead to a loss of personal privacy." See, Congressional Record, July 17, 2007, at Page S9500.

He continued that "In the Information Age, the traditional right and expectation of confidentiality between patient and doctor is at great risk. Without adequate safeguards to protect health privacy, many Americans will simply not seek the medical treatment that they need, nor agree to participate in health research, because they fear that their sensitive health information will be disclosed without then consent or knowledge. And those who do seek medical treatment must assume the risk of the unauthorized disclosure of their health information due to a data security breach or other privacy violation."

Sen. Leahy said that this bill provides that individuals have "the right to inspect and copy his or her own health records and to receive notice of the privacy rights and practices of data brokers and others who store this information in electronic database". It further would require that "data brokers establish safeguards to secure health information from data security breaches and other unauthorized disclosures".

He also said that the bill would prohibit the "disclosure or use of health information without a patient's authorization". It would also require that "any health information intended to be used for medical research first be stripped of personally identifying information to protect an individual's privacy".

The bill also provides a civil cause of action for the Department of Justice, state Attorneys General, and for individuals, for violations. Individuals could recover compensatory damages or liquidated damages of $5,000. The bill also provides for punitive damages. The bill also creates criminal penalties for violation.

While the bill provides privacy protections in the commercial context, it also provides for government access to health records. As with most existing or proposed laws that regulate commercial acquisition and use of personal information, this bill contains broad law enforcement and intelligence exceptions.

Under this bill, disclosure to a law enforcement agency would require a court order, but the standard would be minimal. The agency seeking the information would merely have to show that the information sought is "relevant and material to an ongoing criminal investigation" and that "the law enforcement need for the information outweighs the privacy interest of the individual". The bill also provides for no notice orders.

Under this bill, disclosure to an intelligence or national security agency would be made "otherwise by law", which is likely intended as a reference to various provisions of Title 50.

The law enforcement and intelligence exceptions of this bill are designated as § 215, perhaps ironically. It was § 215 of the 2001 PATRIOT Act that expanded government access to business records under the Foreign Intelligence Surveillance Act (FISA), which is codified in Title 50.

The bill also contains numerous other exceptions. Records holders could disclose information to public health agencies, to report neglect or abuse, for the purposes of oversight and judicial investigation, and for emergency purposes (including both emergencies involving the subject of the records, and third parties).

With respect to preemption, the bill provides that "Nothing in this Act shall be construed to preempt or modify any provisions of State statutory or common law to the extent that such law concerns a privilege of a witness or person in a court of that State. This Act shall not be construed to supersede or modify any provision of Federal statutory or common law to the extent such law concerns a privilege of a witness or entity in a court of the United States. Authorizations pursuant to section 202 shall not be construed as a waiver of any such privilege."

The bill was referred to the Senate Committee on Health, Education, Labor, and Pensions. Sen. Kennedy is the Chairman.

Bush Nominates Four for Courts of Appeals

7/17. President Bush nominated four persons to be Judges of U.S. Courts of Appeals: Robert Conrad (4th Circuit), Catharina Haynes (5th Circuit), Shalom Stone (3rd Circuit), and John Tinder (7th Circuit). See, White House release.

President Bush nominated Robert Conrad to be a Judge of the U.S. Court of Appeals (4thCir). See, White House biography. He is currently a Judge of the U.S. District Court for the Western District of North Carolina. He worked in the U.S. Attorneys Office for the Western District of North Carolina from 1989 through 2004. He was appointed U.S. Attorney in 2001.

President Bush nominated Catharina Haynes to be a Judge of the U.S. Court of Appeals (5thCir). See, White House biography. She is a partner in the Dallas, Texas, office of the law firm of Baker Botts.

President Bush nominated Shalom Stone to be a Judge of the U.S. Court of Appeals (3rdCir). See, White House biography. He is a member of the Roseland, New Jersey, law firm of Walter Hayden & Brogan. Bush has nominated him for the seat previously held by Justice Sam Alito.

President Bush nominated John Tinder to be a Judge of the U.S. Court of Appeals (7thCir).  See, White House biography. He has been a Judge of the U.S. District Court for the Southern District of Indiana since 1987.

Tinder was one of the District Court Judges who presided in Daniel Wallace v. IBM, Red Hat and Novell, D.C. No. No. 1:05-cv-678 and App. Ct. No. 06-2454. See, story titled "7th Circuit Holds GPL and Open Source Software Do Not Violate Antitrust Law" in TLJ Daily E-Mail Alert No. 1,487, November 10, 2006. He was also the Judge who presided in Entertainment Network, Inc. and, Inc. v. Harley Lappin, D.C. No. TH01-0076-C-T/H, a challenge to federal regulations that prohibit the video recording and live webcasting of the executions of a federal prisoner. He rejected the plaintiffs' claim. See, opinion [31 pages in PDF].

Bush Administration Delays in Responding to Senate Subpoenas for Records Regarding Electronic Surveillance Program

7/17. Fred Fielding, counsel to President Bush, sent a letter to Sen. Patrick Leahy (D-VT), Chairman of the Senate Judiciary Committee (SJC), regarding the SJC's subpoena for records pertaining to an extra judicial electronic surveillance program operated by the National Security Agency (NSA).

Sen. Leahy issued subpoenas on June 27, 2007, to the Department of Justice (DOJ), the Office of the White House, the Office of the Vice President, and the National Security Council (NSC). He set a return date of July 18, 2007.

See, stories titled "Senate Judiciary Committee Subpoenas President, VP, DOJ and NSC Regarding Warrantless Electronic Surveillance" in TLJ Daily E-Mail Alert No. 1,604, June 29, 2007, and "Senate Judiciary Committee Authorizes Issuance of Subpoenas Directed at Bush Administration Regarding Surveillance" in TLJ Daily E-Mail Alert No. 1,599, June 21, 2007.

Fielding wrote to Sen. Leahy that "Pursuant to our telephone conversation of this date, I write in response to your letters of June 27, 2007, to the National Security Council Legal Adviser and General Counsel, to the Attorney General and to me."

He continued that "Your letters attach subpoenas from the Senate Judiciary Committee seeking material relating to any ``program or programs of warrantless electronic surveillance´´ (``the Program´´) instituted following the terrorist attacks on our Nation on September 11, 2001. The subpoenas cover the period from September 11, 2001 to the present, and they demand a wide range of materials, including both classified and unclassified documents. Since June 27, we have been working diligently to assess your requests and identify and collect documents responsive to the subpoenas. However, it has become clear that we will not be able to come close to completing our review process by the July 18 return date." (Parentheses in original.)

He concluded that "We therefore respectfully request that the Committee extend the return dates on its June 27 subpoenas for a length of time sufficient to accomplish such a more exhaustive review and respectfully propose that members of our staffs consult on this need, in order to determine a new prospective return date for providing responses."

Sen. Leahy received a similar letter from Shannen Coffin, counsel to Vice President Cheney.

Sen. Leahy issued a release in which he stated that "The Judiciary Committee is willing to accommodate reasonable requests and to work with the Administration on its response to these subpoenas. I hope the White House uses this additional time constructively to finish gathering the relevant information and then works with us in good faith on ways to provide it so that we will have the information we need to conduct effective oversight at long last."

"Congressional oversight is necessary to determine whether this Administration has conducted itself appropriately in carrying out and defending the President's warrantless surveillance program. The Judiciary Committee’s inquiry into the legal justification for the surveillance program is essential to performing its legislative and constitutional oversight responsibilities."

Snider Estimates U.S. Government Has Given Away $480 Billion in Spectrum Usage Rights

7/17. The New America Foundation (NAF) released a paper [52 pages in PDF] titled "America's $480 Billion Spectrum Giveaway: How it Happened, and How to Prevent it from Recurring". The author is the NAF's Jim Snider.

The paper argues that while the U.S. has nominally established a spectrum auction system, with exceptions for certain categories, such as public safety and terrestrial broadcasting, this system has largely distributed public assets without compensation.

First, the paper presents its arguments regarding the nature and size of this "giveaway".

The paper estimates that 90 percent of the value of spectrum usage rights has been given away without public compensation. The paper estimates the value of spectrum usage rights by using data disclosed by publicly traded companies that hold spectrum usage rights in their Forms 10-K for the year 2006 filed with the Securities and Exchange Commission (SEC). It estimates the total value at $522 Billion.

The paper then estimates Department of the Treasury receipts at $40 Billion. Hence, it argues that there has been an approximately $480 Billion "giveaway".

Second, the paper presents arguments regarding how spectrum usage rights holders acquire these rights without full public compensation. This is a discussion of lobbying and political communications strategies. For example, it argues that uncompensated value is transferred through the license modification process. It elaborates that the compensated license acquisition in the auction process merely provides a "foot in the door" for the spectrum usage rights holder.

See, full story.

GAO Criticizes USCIS's IT Transition Plans

7/17. The Government Accountability Office (GAO) wrote a letter [66 pages in PDF] to Chairmen and ranking Republicans on the Appropriations Committees' Homeland Security Subcommittees regarding the Department of Homeland Security's (DHS) U.S. Citizenship and Immigration Services (USCIS).

The letter reports on the USCIS's business process and information technology transition plans, scheduled for completion in "2013 at an estimated cost of up to $536 million".

The report finds that the USCIS current "inefficient, paper-based processes" hinder its ability to process applications. The report recommends that the "USCIS must transform from its current unreliable, inefficient, and paper-intensive environment."

Moreover, the report states that "It is important that USCIS acquire IT systems and services in a way that employs leading IT management practices, such as those embodied in federal guidance that we and others have issued relative to enterprise architecture management, IT systems development and acquisition, and IT services acquisition. USCIS is early in the process of developing its own enterprise architecture. However, USCIS’ plans do not include a performance element, an important architectural component. Moreover, while the agency is following DHS' procedures to align the transformation with DHS’ enterprise architecture, we have previously reported that these procedures are not sufficient, and that DHS’ enterprise architecture is not complete."

People and Appointments

7/17. Jim Snider, Research Director of the Wireless Future Program at the New America Foundation (NAF) will leave the NAF. The NAF's Michael Calabrese stated on July 17, 2007, that Snider will leave "this summer" to pursue "book writing" and "academic pursuits". Snider obtained a Ph.D. degree in political science from Northwestern University, and an MBA degree from Harvard Business School.

7/17. VeriSign named Albert Clement to be Chief Financial Officer (CFO) and Richard Goshorn to be SVP, General Counsel and Secretary. See, VeriSign release.

More News

7/17. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS), which regulates exports, published a notice in the Federal Register that announces that it seeks comments regarding the Commerce Control List (CCL) of items subject to the Export Administration Regulations (EAR). The CCL affects the export of dual use items including software and technology. The deadline to submit comments is September 17, 2007. See, Federal Register, July 17, 2007, Vol. 72, No. 136, at Pages 39052-39053.

7/17. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS) published a notice in the Federal Register that announces, describes, recites, and sets the effective date (July 17, 2007) for a change in its rules regarding the export and reexport of certain radiation hardened microelectronic circuits. See, Federal Register, July 17, 2007, Vol. 72, No. 136, at Pages 39009-39010.

7/17. The Securities and Exchange Commission (SEC) published a notice in the Federal Register that announces, describes, recites, and sets the effective date (August 20, 2007) for its rules changes regarding extending the current interactive data voluntary reporting program to enable mutual funds voluntarily to submit supplemental tagged information contained in the risk/return summary section of their prospectuses". See, Federal Register, July 17, 2007, Vol. 72, No. 136, at Pages 39289-39300. See also, SEC release with hyperlinks to video of SEC Chairman Chris Cox's statement on this subject at the SEC's June 20, 2007, meeting.

7/17. The Rural Utilities Service (RUS) published a notice in the Federal Register that announces, describes, recites, and sets the comment deadline (September 17, 2007) for its proposed rule changes regarding the fiber optic cable specification used by borrowers, their consulting engineers, and cable manufacturers. The RUS notice states that these changes "bring the specification to meet current industries standards. Additional requirements have been included in the specification to meet the construction requirement of fiber-to-the-home construction." See, Federal Register, July 17, 2007, Vol. 72, No. 136, at Pages 39028-39039.

7/17. The United States-Central Asian Council on Trade and Investment, which was established by the U.S. Central Asian Trade and Investment Framework Agreement, held its third annual meeting. The Office of the U.S. Trade Representative (OUSTR) issued a release that states that the meeting covered "barriers to doing business, trade liberalization and the WTO, and protection of intellectual property rights".

7/17. Rep. John Spratt (D-SC), Rep. Rick Boucher (D-VA), Rep. Ralph Hall (R-TX), Rep. Bart Gordon (D-TN), and 11 other Representatives sent a letter [PDF] to Kevin Martin, Chairman of the Federal Communications Commission (FCC), urging the FCC to "allow radio operators to use FM translators as a fill-in service for AM radio stations". They added that "Currently, in order for an AM radio to rebroadcast an AM signal on an FM translator it must apply for a waiver of section 74.1201, which prohibits the retransmission of the signal of a standard broadcast station on an FM translator ..." This proceeding is RM-11338.

OECD Releases Recommendations Regarding Cross Border E-Commerce Dispute Resolution Procedures

7/16. Member nations of the Organization for Economic Cooperation and Development (OECD), including the U.S., adopted a document [13 pages in PDF] titled "OECD Recommendation on Consumer Dispute Resolution and Redress".

The recommendations in this document cover electronic and mobile commerce disputes between businesses and consumers, as well as offline disputes, but not business to business disputes. The document recommends that nations provide cost effective and simple procedures that would enable consumers to obtain redress for "economic harm". It further recommends the use of technology based and online dispute resolution processes.

The document also recommends that nations make available "collective resolution" of disputes. This would include actions by government agencies, by consumer groups, and class actions.

This document sets forth in broad terms some principles regarding resolution of cross border e-commerce disputes. However, it leaves many issues untouched, such as where cross border disputes would be resolved, what nation's laws would apply to cross border transactions, and what compulsory production of testimony and records would be available.

This document follows the OECD's document [9 pages in PDF] titled "1999 Guidelines for Consumer Protection in the Context of Electronic Commerce", and the OECD's document [33 pages in PDF] titled "2003 Guidelines for Protecting Consumers from Fraudulent and Deceptive Practices Across Borders".

The U.S. Federal Trade Commission (FTC) stated in a release that this latest document is "aimed at protecting consumers in the evolving global marketplace".

The FTC release summarizes the contents of the document. It states that it includes "principles for domestic and cross-border disputes, and addresses both real world and online commerce. It also contains specific principles for member countries to make cross-border dispute resolution and redress more effective, including participating in international and regional consumer complaint, advice, and referral networks; expanding the awareness of justice system participants, including the judiciary, law enforcement officials, and other government officials, as to the needs of foreign consumers who have been harmed by domestic wrongdoers; encouraging greater use of technology to facilitate resolution of cross-border disputes; taking steps to minimize legal barriers to consumer dispute resolution and redress mechanisms outside the consumer’s country; and developing multi- and bi-lateral arrangements to improve international judicial co-operation in the recovery of foreign assets and the enforcement of judgments in appropriate cross-border cases."

The OECD document contains a recitation of purposes. It states, for example, that "the availability of effective dispute resolution and redress mechanisms can increase consumer confidence and trust in the online and offline marketplace, encourage fair business practices, and promote cross-border commerce, including electronic and mobile commerce."

The OECD document further states that due to "rapid growth in electronic commerce" it seeks to "provide consumers with confidence that their claims arising from both online and offline transactions with business will be settled in a fair and effective manner".

It states that "Consumers should have access to dispute resolution mechanisms to resolve their individual disputes with businesses, and where appropriate, obtain redress." Although, the document provides that this means redress of "economic harm". It does not provide for punitive damages, or recovery for non-economic losses. It adds that "These mechanisms should not impose a cost on consumers that is disproportionate to the value of the claim at stake."

It states that consumers should be able to obtain redress on their own, acting individually, without counsel, and in an expedited manner.

It suggests that nations make available "Alternative dispute resolution services, including online dispute resolution, by which consumers and businesses engage in an out-of-court process to reach an agreement".

It also suggest that nation make available "Simplified court procedures for small claims, which offer consumers the opportunity to obtain a judicial determination of their dispute through less formal and expedited procedures than those used in traditional court proceedings."

The document also addresses collective actions, including "Actions initiated by an individual consumer in his or her own name and acting as a representative party for other consumers who have suffered economic harm as a result of the similar conduct of the same entity or related entities", "Actions initiated by consumer organisations acting as representative parties for consumers", and "Actions initiated by consumer protection enforcement authorities acting as representative parties for consumers"

This OECD document also recommends that "Member countries should work towards ... Encouraging the greater use of technology, where practicable, to facilitate the dissemination of information, and the filing and management of consumer disputes, in particular cross-border disputes."

OUSTR Seeks Comments on GATS Article XXI and Internet Gambling

7/16. The Office of the U.S. Trade Representative (OUSTR) published a notice in the Federal Register that requests comments on the negotiations for compensatory adjustments to U.S. Schedule of Services Commitments under WTO General Agreement on Trade in Services (GATS) in response to notice of the United States of intent to modify its schedule under Article XXI of the GATS. See, Federal Register, July 16, 2007, Vol. 72, No. 135, at Pages 38846-38847.

This pertains to U.S. regulation of internet gambling. The nation of Antigua and Barbuda, which is home to internet gambling operations, filed a complaint in 2003 against the U.S with World Trade Organization (WTO) asserting that U.S. laws banning some gambling services violate the treaty obligations of the U.S.

The WTO has found fault with U.S. laws. The report of the compliance panel was adopted by the WTO Dispute Settlement Body (DSB) on May 22, 2007.

See, full story.

People and Appointments

7/16. Qwest Communications International named Shirley Bloomfield to be SVP for Federal Relations, effective August 20, 2007. See, Qwest release.

More News

7/16. The Federal Communications Commission (FCC) announced that it will host a day long event titled "Digital Television Consumer Education Workshop" on Wednesday, September 26, 2007. See, FCC release.

Go to News from July 11-15, 2007.