TLJ News from July 26-31, 2007

FCC Adopts 700 MHz Band Order

7/31. The Federal Communications Commission (FCC) adopted, but did not release, a Second Report and Order (2ndR&O) regarding the 700 MHz band

The FCC issued a release [5 pages in PDF] that describes this 2nd R&O, and a band plan chart [PDF]. Also, all five Commissioners issued separate statements.

The 700 MHz band (698-806 MHz) is television broadcast spectrum that will be made available for public safety and commercial wireless services as a result of the digital television (DTV) transition.

The just announced 2ndR&O revises the band plan and service rules for the 700 MHz band. The FCC will auction 62 MHz for commercial uses early next year.

The 2ndR&O contains open access requirements. In the Upper C Block, the FCC will auction 22 MHz of paired spectrum by 12 Regional Economic Area Groupings (REAGs) with both open devices and open applications requirements. However, the FCC's release does not define or explain the meaning of two requirements. Commissioner McDowell wrote a long statement dissenting from these open access mandates. There will also be a limited build out requirement (40% of the population within 4 years) for this spectrum.

The 2ndR&O also provides for a "Public/Private Partnership". The commercial licensee would build a nationwide broadband interoperable network for use by public safety entities. However, it would then have preemptible secondary access to the spectrum.

Kevin MartinChairman Kevin Martin (at right) wrote in his statement [MS Word] that "While I also would have supported a network exclusively for the use of public safety, the simple reality is that there currently is no way to fund such an enterprise. The use of a public safety-private partnership, however, creates an opportunity to provide state-of-the-art technologies to our Nation’s first responders in a timely and affordable manner."

The FCC will use anonymous bidding procedures. It will use package bidding procedures when auctioning the 12 licenses in the Upper C Block.

The 2ndR&O also sets auction reserve prices. If the Upper C Block does not elicit a $4.6 Billion bid, it will be auctioned a second time without the open access requirements.

The 2ndR&O imposes no wholesale obligations on licencees.

The Digital Television and Public Safety Act of 2005 requires the FCC to conduct an auction of the commercial spectrum in this band by January 28, 2007.

This 2ndR&O is FCC 07-132 in WT Docket Nos. 06-150, 01-309, 03-264, 06-169, and 96-86, CC Docket No. 94-102, and PS Docket No. 06-229.

See, full story.

More FCC News

7/31. The Federal Communications Commission (FCC) released a Public Notice [3 pages in PDF] that requests public comments on two studies written by the FCC's Office of Engineering and Technology (OET) that assess the potential for interference from low power devices operating in television spectrum that is not being used by television broadcasters, which spectrum is also known as TV white space. This is DA 07-3457 in ET Docket No. 04-186. Initial comments are due by August 15, 2007. Reply comments are due by August 27, 2007. See, OET report [86 pages in PDF] titled "Initial Evaluation of the Performance of Prototype TV-Band White Space Devices" and OET report [28 pages in PDF] titled "Direct-Pickup Interference Tests of Three Consumer Digital Cable Television Receivers Available in 2005".

7/31. The Federal Communications Commission (FCC) announced on July 24, 2007, that it would consider a Report and Order (R&O) regarding roaming obligations of CMRS providers at its July 31, 2007, event titled "Open Meeting". The FCC announced in a release [PDF] on July 31, 2007, that it deleted this item from its agenda. This pertains to the proceedings tilted "Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers" and "Automatic and Manual Roaming Obligations Pertaining to Commercial Mobile Radio Services", and numbered WT Docket No. 05-265 and WT Docket No. 00-193, respectively.

7/31. The Federal Communications Commission (FCC) released a Public Notice [4 pages in PDF] that announces that the FCC seeks comments on ten studies related to FCC regulation of ownership of media entities. Initial comments are due by October 1, 2007. Reply comments are due by October 16, 2007. This item is DA 07-3470 in MB Docket Nos. 06-121 and 02-277, and MM Docket Nos. 01-235, 01-317, and 00-244. FCC Commissioners Jonathan Adelstein and Michael Copps wrote in a statement [PDF] that this Public Notice is "unfair, unnecessary, and ultimately unwise".

People and Appointments

Barry Ohlson   Scott Bergmann
Ohlson   Bergmann

7/31. Federal Communications Commission (FCC) Commissioner Jonathan Adelstein announced that Barry Ohlson (at right), his Senior Legal Advisor, "has decided to begin considering other opportunities outside the Commission". Adelstein also announced that Scott Bergmann "will be assuming the position and responsibilities of Senior Legal Advisor". See, FCC release [PDF].

More News

7/30. The Federal Communications Commission (FCC) released a Notice of Proposed Rulemaking (NPRM) [22 pages in PDF] in its proceeding titled "In the Matter of DTV Consumer Education Initiative". This NPRM seeks comments on several proposals relating to consumer education about the digital television transition. The FCC adopted this NPRM on July 21, 2007, and released it on July 30, 2007. It is FCC 07-128 in MB Docket No. 07-148. Initial comments will be due within 30 days of publication of a notice in the Federal Register. Reply comments will be due within 45 days. This publication had not take place as of the July 31, 2007, issue of the Federal Register. See also, FCC release [PDF].

7/30. The Progress and Freedom Foundation (PFF) released a paper [14 pages in PDF] titled "Has Deregulation Affected Investment in Special Access?". It is a statistical analysis of the impact of the Federal Communications Commission's (FCC) 1999 framework for deregulating the high capacity connections that provide voice and data for businesses and government entities. The author is the PFF's Scott Walsten. He finds that "at the state level the number of special access lines provided by the ILEC increases the larger is the share of a state's population living in areas in which the ILEC has been granted pricing flexibility. The limited data on prices and complete lack of information from competitors, however, make it impossible to reach definitive conclusions."

7/30. The U.S. Patent and Trademark Office (USPTO) announced in a release that the USPTO and the Japan Patent Office (JPO) "have launched a free service that will allow the two offices to electronically exchange patent application priority documents and help further streamline the patent application process."

7/30. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register that announces, describes, recites, and sets the comment deadline for its proposed changes to its rules governing practice before the Board of Patent Appeals and Interferences in ex parte patent appeals. The notice states that "The proposed rules seek to provide examiners and Office reviewers with a clear and complete statement of an appellant's position at the time of filing an appeal brief so as to enhance the likelihood that appealed claims will be allowed without the necessity of further proceeding with the appeal, minimize the pendency of appeals before the Office, minimize the need for lengthy patent term adjustments in cases where claims become allowable as a result of an action by the Board in an appeal, provide uniform treatment of requests for an extension of time filed after an appeal brief is filed, and make the decision-making process more efficient." Comments are due by September 28, 2007. The USPTO will hold no hearing. See, Federal Register, July 30, 2007, Vol. 72, No. 145, at Page 41472-41490.

7/30. The Department of Justice (DOJ) filed a criminal information in U.S. District Court (CDCal) that charges Samuel Shangteh Peng with violation of the Export Administration Regulations (EAR), which implement the Export Administration Act, as expired. It states that Peng was the International Sales Manager and export control officer for Endevco Corporation, a company that produces electronic sensors and vibration testing equipment that have both military and non-military applications. It further states that, without a license from the Department of Commerce's (DOC) Bureau of Industry and Security (BIS), Peng exported controlled items to Hindustan Aeronautics, Ltd. (HAL), in Bangalore, India, which was a prohibited entity listed on the DOC's Entity List at the time of the export. The DOJ added in its release that HAL was subsequently removed from the Entity List. The DOJ added that "Peng has agreed to plead guilty to the charges".

7/30. The Federal Trade Commission (FTC) announced in a release that its is seeking comments on the uses of Social Security Numbers (SSNs) in the private sector. The FTC seeks comments "on the various uses of SSNs by the private sector, the necessity of those uses, alternatives available, the challenges faced by the private sector in moving away from using SSNs, and how SSNs are obtained and used by identity thieves". The deadline to submit comments is September 5, 2007. The FTC also announced that it will host one or more public forums on the topic. However, it did not set any dates.

GAO Reports Significant Weaknesses in Information Security at Government Agencies

7/27. The Government Accountability Office (GAO) released a report [61 pages in PDF] titled "Information Security: Despite Reported Progress, Federal Agencies Need to Address Persistent Weaknesses".

The GAO examined 24 major federal agencies, including the Department of Homeland Security (DHS), Department of Justice (DOJ), Department of Commerce (DOC), and Department of the Treasury. However, the GAO did not examine information security at the Federal Communications Commission (FCC), Federal Trade Commission (FTC), Securities and Exchange Commission (SEC), or the Office of Management and Budget (OMB) or other offices in the Executive Office of the President (EOP).

The GAO reports finds that "Significant weaknesses in information security policies and practices threaten the confidentiality, integrity, and availability of critical information and information systems used to support the operations, assets, and personnel of most federal agencies. Recently reported information security incidents at federal agencies have placed sensitive data at risk, including the theft, loss, or improper disclosure of personally identifiable information on millions of Americans, thereby exposing them to loss of privacy and potential harm associated with identity theft."

The GAO reports finds that these 24 agencies "had weaknesses in one or more areas of information security controls. Most agencies did not implement controls to sufficiently prevent, limit, or detect access to computer networks, systems, or information. For example, agencies did not consistently (1) identify and authenticate users to prevent unauthorized access; (2) enforce the principle of least privilege to ensure that authorized access was necessary and appropriate; (3) establish sufficient boundary protection mechanisms; (4) apply encryption to protect sensitive data on networks and portable devices; (5) log, audit, and monitor security-relevant events; and (6) restrict physical access to information assets."

It adds that "agencies did not always configure network devices and services to prevent unauthorized access and ensure system integrity, such as patching key servers and workstations in a timely manner; assign incompatible duties to different individuals or groups so that one individual does not control all aspects of a process or transaction; and maintain or test continuity of operations plans for key information systems."

The report also states that "An underlying cause for these weaknesses is that agencies have not fully or effectively implemented agencywide information security programs. As a result, agencies may not have assurance that controls are in place and operating as intended to protect their information and information systems, thereby leaving them vulnerable to attack or compromise."

The report notes that the DOC's Bureau of Industry and Security (BIS), which regulates exports, suffered a "security breach" in July of 2006.

European Commission Initiates Proceeding Against Intel Alleging Anticompetitive Behavior

7/27. The European Commission (EC) announced in a release that it has "has sent a Statement of Objections (SO) to Intel on 26th July 2007. The SO outlines the Commission's preliminary view that Intel has infringed the EC Treaty rules on abuse of a dominant position (Article 82) with the aim of excluding its main rival, AMD, from the x86 Computer Processing Units (CPU) market."

The EC asserted in its release that "Intel has engaged in three types of abuse of a dominant market position. First, Intel has provided substantial rebates to various Original Equipment Manufacturers (OEMs) conditional on them obtaining all or the great majority of their CPU requirements from Intel."

"Secondly, in a number of instances, Intel made payments in order to induce an OEM to either delay or cancel the launch of a product line incorporating an AMD-based CPU."

"Thirdly, in the context of bids against AMD-based products for strategic customers in the server segment of the market, Intel has offered CPUs on average below cost", wrote the EC.

It added that "These three types of conduct are aimed at excluding AMD, Intel's main rival, from the market."

AMD complained to the EC, and is now the primary beneficiary of the EC's action.

See, full story.

People and Appointments

7/27. The U.S. District Court (DColo) imposed a sentence of 72 months in prison upon Joseph Nacchio, former CEO of Qwest Communications International. See, Department of Justice release.

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Alberto Gonzales7/27. Attorney General Alberto Gonzales (at right) gave a speech in Indianapolis, Indiana. He said that "the Internet has enabled child rape and molestation to become an industry".

7/27. The U.S. Court of Appeals (6thCir) issued its opinion [4 pages in PDF] in Tiseo Architects v. B&B Pools Service and Supply Company, a copyright case involving design and site plan drawings. The Court of Appeals affirmed the judgment of the District Court, which ruled against the copyright holder (Tiseo) on the basis that alleged infringers' designs were not "substantially similar". This case is Tiseo Architects, Inc. v. B&B Pools Service and Supply Company, et al., U.S. Court of Appeals for the 6th Circuit, App. Ct. No. 06-1819, an appeal from the U.S. District Court for the Eastern District of Michigan at Detroit, D.C. No. 05-70537, Judge Nancy Edmunds presiding. Judge Rodgers wrote the opinion of the Court of Appeals, in which Judge Cook and Dowd joined.

7/27. The U.S. Court of Appeals (10thCir) issued its opinion [18 pages in PDF] in Union Telephone v. Qwest, a dispute between carriers regarding compensation for telecommunications services. The Court of Appeals affirmed the District Court's summary judgment for Qwest. This case is Union Telephone Company v. Qwest Corporation, App. Ct. No. 06-8012, an appeal from the U.S. District Court for the District of Wyoming, D.C. No. 02-CV-209-WFD. Judge Lucero wrote the opinion of the Court of Appeals, in which Judges Anderson and McConnell joined.

7/27. The U.S. Department of Commerce (DOC) announced that it will co-host a two day conference on October 15-16, 2007, in Washington DC titled "Cross Border Data Flows, Data Protection, and Privacy". The hosts will be the DOC, the European Commission (EC), and the Article 29 Working Party on Data Protection. The DOC seeks comments. See, notice in the Federal Register: July 27, 2007, Vol. 72, No. 144, at Page 41290.

House Committee Holds Hearing on Export Controls

7/26. The House Foreign Affairs Committee's Subcommittee on Terrorism, Nonproliferation, and Trade held a hearing titled "Exports Controls: Are We Protecting Security and Facilitating Exports?".

Rep. Tom Lantos (D-CA) wrote in his opening statement that "the Administration is preparing changes to both munitions and so-called ``dual-use´´ licensing procedures. I strongly advise the Administration to reflect on past experiences and to consult with Congress this time around -- especially the Foreign Affairs Committees of the House and the Senate -- before finalizing these changes."

Rep. Brad Sherman (D-CA) wrote in his opening statement that the Department of State's (DOS) and Department of Commerce's (DOC) export control offices are understaffed and underfunded, and that "There are also turf battles between State and Commerce." He continued that "I am concerned that we are placing U.S. companies on a playing field dominated by confusion, needlessly adding to our mammoth trade deficit, and creating a perverse incentive to move the development and manufacture of new defense technologies overseas."

Rep. Sherman said that the Bush administration continues to seek renewal and revision of the Export Administration Act (EAA), which expired in 2001. He said that this bill "would give BIS the solid legal and statutory basis to oversee the dual-use export control system and strengthen its ability to punish violators, while laying the groundwork for more comprehensive reform in the future."

He also said that "Export controls must not place an undue burden on U.S. companies, thereby undermining America’s economic and technological competitiveness."

Ann Barr of the Government Accountability Office (GAO) wrote in her prepared testimony [37 pages in PDF] that there are two vulnerabilities in the export control system. "First, State and Commerce have yet to clearly determine which department controls the export of certain sensitive items. Unclear jurisdiction lets exporters -- not the government -- determine which export restrictions apply and the type of government review that will occur. Not only does this create an unlevel playing field among U.S. companies, it also increases the risk that items will fall into the wrong hands."

Second, wrote Barr, "a lack of clarity on exemption use has limited the government’s ability to ensure that unlicensed exports comply with export laws and regulations. These weaknesses compound an already challenged enforcement community, which has had difficulty coordinating investigations, balancing multiple priorities, and leveraging finite resources."

See also, prepared testimony of Christopher Padilla (head of the Department of Commerce's Bureau of Industry and Security), prepared testimony of Stephen Mull (Department of State), prepared testimony of John Douglass (head of the Aerospace Industries Association of America), and prepared testimony of Will Lowell (Lowell Defense Trade).

US and EU Sign PNR Data Transfer Agreement

7/26. Representatives of the United States (US) and European Union (EU) signed and released a document [7 pages in PDF] titled "Agreement Between the United States of America and the European Union on the Processing and Transfer of Passenger Name Record (PNR) Data by Air Carriers to the United States Department of Homeland Security".

The agreement provides that the EU "will ensure that air carriers operating passenger flights in foreign air transportation to or from the United States of America will make available PNR data contained in their reservation systems as requires by DHS."

The agreement adds that the "DHS is deemed to ensure an adequate level of protection for PNR data transferred from the European Union", and that the EU "will not interfere with relationships between the United States and third countries for the exchange of passenger information on data protection grounds."

Michael Chertoff, Secretary of Homeland Security, wrote in a statement that PNR data enables the DHS "to disrupt terrorist travel, deny admission to individuals presenting security concerns, and dismantle human trafficking and narcotics smuggling networks".

He added that the agreement "changes how the department collects PNR data from airline reservation systems. Air carriers will now transmit PNR data directly to the department. The agreement also provides legal assurance to European air carriers that they will not be in potential violation of European privacy law when complying with U.S. law concerning PNR data."

2nd Circuit Vacates in In Re WorldCom Securities Litigation

7/26. The U.S. Court of Appeals (2ndCir) issued its opinion [20 pages in PDF] in In Re WorldCom Securities Litigation, vacating the judgment of the District Court.

The California Public Employees Retirement System (CalPERS), and numerous other state and local pension funds and private pension funds, that are bondholders of WorldCom, filed class action complaints against bond underwriters of WorldCom alleging violation of Section 11 of the Securities Act of 1933 in connection with their filing of registration statements containing allegedly false and misleading information.

The relevant statute of limitations provides that an action must be brought "within one year after the discovery of the untrue statement or the omission, or after such discovery should have been made by the exercise of reasonable diligence."

These complaints were filed more than one year after the plaintiffs (CalPERS and others) were put on inquiry notice of the misinformation in the registration statements. However, other class action complaints were filed by other bond purchasers within the one year limitation. Those class action plaintiffs claimed to represent the plaintiffs in the present action.

The U.S. District Court (SDNY) dismissed the action as time barred. The plaintiffs in this action brought the present appeal.

The Court of Appeals vacated the judgment of the District Court and remanded.

It wrote that "The question presented is whether the filing of a complaint asserting a class action tolls the statute of limitations for putative class members who file individual suits (asserting the same claims) prior to the class certification decision." (Parentheses in original.)

Applying the opinion of the Supreme Court in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), it held that "the filing of a class action tolls the statute of limitations for all members of the asserted class, regardless of whether they file an individual action before resolution of the question whether the purported class will be certified."

This case is In Re WorldCom Securities Litigation, U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. 05-6979-cv, an appeal from the U.S. District Court for the Southern District of New York. Judge Leval wrote the opinion of the Court of Appeals, in which Judges Feinberg and Cabranes joined.

People and Appointments

7/26. Marisa Lino was named Assistant Secretary for International Affairs at the Department of Homeland Security (DHS). See, DHS release.

7/26. Paul Rosenzweig was named Deputy Assistant Secretary for Policy at the Department of Homeland Security (DHS). See, DHS release. The Assistant Secretary for Policy is Stewart Baker.

7/26. James Overdahl was named Chief Economist of the Securities and Exchange Commission (SEC), and head of the SEC's Office of Economic Analysis. He was previously Chief Economist of the Commodity Futures Trading Commission (CFTC). He has also worked for the Department of the Treasury's Office of the Comptroller of the Currency. He will replace Chester Spatt, who will return to the business school at Carnegie Mellon University. See, SEC release.

7/26. Anthony Vinciquerra (P/CEO of Fox Networks Group) and Greg Brown (P/COO of Motorola) were elected to the Board of Directors of Motorola. See, release.

More News

7/26. The U.S. Court of Appeals (10thCir) issued its opinion [11 pages in PDF] in Lane v. Simon, a First Amendment case involving state regulation of the content of a college newspaper. Katie Lane and Sarah Rice are former editors of a student newspaper at Kansas State University (KSU). They have graduated. They filed a complaint in U.S. District Court (DKan) against two KSU officials, Todd Simon and Stephen White, alleging violation of the First Amendment in connection with their attempts to regulate the content of the newspaper. The District Court granted summary judgment to the KSU officials. The Court of Appeals ducked the weighty constitutional issues by ruling that the case is moot because the plaintiffs have graduated. Moreover, the Court of Appeals held that this case does not fit into the capable of repetition yet evading review exception because KSU will not threaten their First Amendment rights in the future. This case is Katie Lane and Sarah Rice v. Todd Simon and Stephen White, U.S. Court of Appeals for the 10th Circuit, App. Ct. Nos. 05-3266 and 05-3284, appeals from the U.S. District Court for the District of Kansas, D.C. No. 04-CV-4079-JAR. Judge Lucero wrote the opinion of the Court of Appeals, in which Judges McConnell and Holmes joined.

7/26. The Federal Communications Commission (FCC) adopted and released a Memorandum Opinion and Order [16 pages in PDF] in its proceeding titled "In the Matter of Petition of Core Communications, Inc. for Forbearance from Sections 251(g) and 254(g) of the Communications Act and Implementing Rules". The FCC denied a petition filed by Core Communications requesting the FCC to forbear from the rate regulation preserved by 47 U.S.C. § 251(g), the rate averaging and rate integration required by 47 U.S.C. § 254(g), and all related implementing rules with respect to all telecommunications carriers. This item is FCC 07-129 in WC Docket No. 06-100.

7/26. Microsoft announced in a release that "it has agreed to acquire AdECN, Inc.," but without disclosing any financial details. Microsoft stated that AdECN is "an advertising exchange platform company" and that its "technology serves as a hub where advertising networks can come together in a neutral, real-time auction marketplace for buying and selling display advertising."

Go to News from July 21-25, 2007.