Source: http://techlawjournal.com/home/newsbriefs/2004/02c.asp
Timestamp: 2019-04-22 08:21:01+00:00

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TLJ News: February 11-15, 2004.
Zoellick (at right) stated in a release [3 pages in PDF] that "We believe the United States has much to gain in pursuing a negotiation with Thailand. Thailand already is our 18th largest trading partner with $19.7 billion in total trade during 2002. The increased access to Thailand’s market that an FTA would provide would further boost trade in a wide range of both goods and services, enhancing employment opportunities in both countries".
Intellectual Property Rights. The USTR's letters to Congress state that the objectives in the area of intellectual proporty rights include to "Seek to establish standards to be applied in Thailand that build on the foundations established in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and other international intellectual property agreements, such as the World Intellectual Property Organization (WIPO) Copyright Treaty, the WIPO Performances and Phonograms Treaty, and the Patent Cooperation Treaty.
Another objective is to "Seek to strengthen Thailand’s laws and procedures to enforce intellectual property rights, such as by ensuring that Thai authorities seize suspected pirated and counterfeit goods, equipment used to make such goods or to transmit pirated goods, and documentary evidence."
2/13. Ken Johnson, Communications Director and Deputy Staff Director for the House Commerce Committee, announced his resignation, effective February 16. He is a long time staff assistant to Rep. Billy Tauzin (R-LA), who has also announced his retirement.
2/12. Sen. Lamar Alexander (R-TN) and others introduced S 2084, the "Internet Tax Ban Extension and Improvement Act". The title of the bill is not descriptive of its content. The bill would nominally extend the Internet Tax Freedom Act through November 1, 2005. However, it would also allow a range of new taxes that could be imposed by state and local governments. See, full story.
2/12. The General Accounting Office (GAO) released a report [53 pages in PDF] titled "Aviation Security: Computer-Assisted Passenger Prescreening System Faces Significant Implementation Challenges". The appropriations bill for the Department of Homeland Security (DHS) for FY 2004 established criteria for the CAPPS II program, and required that the GAO report on the program's compliance with these criteria. The report finds that the most of the criteria have not been met. See, full story.
2/12. The Federal Elections Commission (FEC) published in its web site a request for an advisory opinion [PDF] submitted to the FEC by Viacom, Inc. (owner of MTV) regarding its plans to conduct an online mock election. The original request is dated January 16, 2004. The FEC also published follow-up correspondence.
MTV Networks (MTVN) is a division of Viacom International, Inc., which is a subsidiary of Viacom. Inc. The request states that MTVN plans to conduct a mock presidential election, to be conducted online. The request states that "Both voting and registration will be available online, through www.chooseorloose.com and/or www.mtv.com, and potentially via a toll-free telephone number."
Viacom's advisory opinion request (AOR) also describes various communications of political information that will be made as a part of this online election system.
The AOR raises a number of issues regarding the application of federal election laws to online political activity. For example, Viacom requests an opinion that "none of the funds expended for the production or promotion costs of the Preelection will constitute a corporate contribution, expenditure, or electioneering communication."
Viacom asserts that it activities are covered by the press exemptions contained in the Federal Election Campaign (FECA), and FEC regulations. That is, it asserts that "The entire process is a form of commentary and reporting on the election process ..."
Viacom's request does not raise online privacy issues associated with its planned mock online election.
Viacom further states in its AOR that "Participants must provide sufficient personally identifying information to enable a third-party verification of their identity and registered address. Participants will be issued a unique user ID ..." It also states that "Third-party verification, e-mail confirmation, and unique participant IDs will be used ..."
It further states that "Registration and voting will be open to any U.S. resident or U.S. citizen over the age of 12."
The Children's Online Privacy Protection Act (COPPA), which is codified at 15 U.S.C. §§ 6501-6505, and the Federal Trade Commission's (FTC) COPPA Rule, apply to collection of personally identifying information online from children who are 12 and under.
2/12. The General Accounting Office (GAO) released a report [pages in PDF] titled "Information Technology: Management: Governmentwide Strategic Planning, Performance Measurement, and Investment Management Can Be Further Improved".
The report states that "According to the President’s most recent budget, the federal government spends billions of dollars annually on information technology (IT) -- reportedly investing about $50 billion in fiscal year 2002 and expecting to invest about $60 billion in fiscal year 2004. Despite this substantial investment, the government’s management of information resources has produced mixed results."
The report finds that "Agencies' use of IT strategic planning/performance measurement practices is uneven -- 46 percent of the practices are in place, 41 percent are partially in place, and 7 percent are not in place."
The report further finds that "Agencies' use of IT investment management practices is also mixed in that 44 percent of the practices are in place, 37 percent are partially in place, and 17 percent are not in place."
The report was prepared for the House Government Reform Committee and the Senate Governmental Affairs Committee.
Sen. Susan Collins (R-ME), the Chairman of the Senate Committee, stated in a release that "Agencies are doing well in their selection of their IT projects, but oversight of these projects remains weak ... Without oversight, there is no way to ensure that the projects are completed on time, and within budget, and that they work as anticipated."
Rep. Tom Davis (R-VA), the Chairman of the House Committee, stated that "Agencies' full use of IT strategic planning, performance measurements, and investment management practices needs to be increased. If the Federal government is going to spend over $60 billion a year on IT products, then 100% of the agencies should have these measures in place; the taxpayers deserve nothing less. No country, government, agency, or IT shop should be complacent. Overall results are encouraging but so much more can be done. At the end of the day, agencies need to realize that it does not matter how much money you spend on IT, but how you spend the money".
2/12. The Federal Communications Commission (FCC) adopted, but did not release, a Declaratory Ruling (DR) on Pulver.com's petition for declaratory ruling regarding the classification of its Free World Dialup (FWD) service. The FCC issued a press release [PDF] that reveals almost nothing about the content of the DR.
Terri Natoli, of the FCC's Wireline Competiton Bureau's (WCB) Competition Policy Division (CPD), presented this item at the FCC's February 12 meeting. She stated that the DR finds that FWD is "not telecommunications as defined by the Act", that FWD is "not telecommunications service as defined by the Act", and that FWD is "an information service as defined by the Act". See, full story.
2/12. Jeff Pulver wrote this in the Pulver.com website: "The Commission should be commended for providing key and necessary clarification that the FWD computer-to-computer VoIP service is not a telecommunications service. By doing this, the FCC has sent a strong signal to consumers and capital markets that the FCC is not interested in subjecting end-to-end IP Communications services to traditional voice telecom regulation under the Communications Act. It is indeed a great day for the Internet!"
Pulver added that "This has been a long and windy road, but one which I recommend others consider traveling on in the future. This is a great day for the worldwide IP Communications Industry!"
Michael Gallagher, the acting head of the National Telecommunications and Information Administration (NTIA), stated in a release that "The Internet is a primary catalyst for the growth of our economy. The Department of Commerce commends the FCC for its actions today to provide a foundation for exciting new services such as VoIP that will enhance the productivity of the American worker and enrich the lives of American consumers. Capital investment and entrepreneurial innovation, not regulation, will maintain U.S. leadership in voice, video and interactive data services. We also support the Commission's efforts to provide law enforcement the 21st century tools to track those who seek to threaten our homeland using 21st Century networks."
Ed Black, President of the Computer & Communications Industry Association (CCIA), stated in a release that "The Commission got this one right, there's no doubt about it ... Applying old regulations to modern Internet technology that bares only a passing resemblance to yesterday's phone network just doesn't make sense."
2/12. The Federal Communications Commission (FCC) adopted, but did not release, a notice of proposed rulemaking (NPRM) regarding technical rules intended to facilitate the deployment of broadband over powerline (BPL) at its February 12 meeting. This item is FCC 04-29 in ET Docket No. 04-37.
Commissioners stated that BPL has the potential to become a facilities based broadband internet access provider, and therefore it is appropriate to adopt technical rules. In addition, while Commission Copps agreed that the FCC should adopt technical rules, he criticized the NPRM for not also addressing related policy issues.
The FCC issued a short press release summarizing the NPRM, and each Commissioner made a statement.
The FCC release states that this NPRM sets forth "procedures to measure the radiofrequency (RF) energy emitted by equipment used to provide broadband service over power lines and establish particularized interference mitigation requirements."
The FCC release further states this NPRM "proposes rules requiring BPL devices to employ adaptive interference mitigation techniques to prevent harmful interference to existing users, such as public safety and amateur radio operators. These techniques would enable BPL devices to cease operations altogether, dynamically reduce transmit power, and/or avoid operating on specific frequencies to prevent harmful interference".
It also states that this item "proposes developing a public database that would include such information as location, operational frequencies, and modulation type of BPL devices, which will facilitate the resolution of interference issues in a timely fashion". It also seeks comments on "specific RF measurement guidelines for BPL devices and other carrier current systems".
FCC Chairman Michael Powell wrote in a separate statement (which he read at the FCC meeting), that "Another broadband pipe is coming closer to reality."
FCC Commissioner Michael Copps (at right) wrote in a separate statement (which he read) that "I strongly support the technical inquiries and proposals we make today." He continued that "Today’s item dodges some of the hardest questions, however. For the same reasons it is important to provide certainty for industry and consumers as concerns interference, it is important to provide certainty on the policy implications that we will surely face as powerline broadband expands. These questions are hard and uncomfortable ones. But we should never shy away from asking the hard questions."
He added that "I would tackle now issues such as CALEA, universal service, disabilities access, E911, pole attachments, competition protections, and, critically here, how to handle the potential for cross-subsidization between regulated power businesses and unregulated communications businesses. Is it right to allow electricity rate payers to pay higher bills every month to subsidize an electric company’s foray into broadband?"
FCC Commissioner Kathleen Abernathy wrote in a separate statement this item "is an important step forward in promoting the Commission's goal of facilitating the deployment of broadband services to all Americans. Moving toward commercial deployment of BPL systems also will further our goal of developing robust facilities-based competition. I want consumers to have a choice of multiple, facilities-based providers, such as cable, DSL, wireless, satellite, and to the extent possible, power line."
FCC Commissioner Kevin Martin wrote in a separate statement that "Because power lines are ubiquitous -- reaching virtually every community and every home -- BPL systems have the potential to become a last-mile solution throughout the United States. As such, they would not only provide competition to cable broadband and DSL, they could bring Internet access and high-speed broadband to rural and isolated areas, which have been difficult to serve because of the high infrastructure costs of reaching those areas. BPL systems also serve an important homeland security function, providing a redundant data network."
On April 23, 2003, the FCC adopted a Notice of Inquiry [21 pages in PDF] in this proceeding, which is titled "In the Matter of Inquiry Regarding Carrier Current Systems, including Broadband over Power Line Systems". It released the text on April 29. See also, notice in the Federal Register, May 23, 2003, Vol. 68, No. 100, at Pages 28182 - 28186.
See also, story titled "FCC Announces NOI Regarding Broadband Over Powerlines" in TLJ Daily E-Mail Alert No. 628, April 24, 2003, and story titled "FCC Releases NOI on Broadband Over Power Lines" in TLJ Daily E-Mail Alert No. 656, May 7, 2003. The NOI is FCC 03-100.
Michael Gallagher, the acting head of the National Telecommunications and Information Administration (NTIA), stated in a release that "Broadband over power lines holds promise to be the ``Third Wire´´ into American homes -- a competitive, facilities-based, cost-effective new way to deliver high-speed Internet services to American citizens. We are pleased that the FCC is moving forward on broadband over power lines." He added that "The Commission's proposed rules, as informed by the NTIA interference analysis, will provide policy makers with the rigorous technical data and measurements that will be necessary to accurately and fairly judge the prospects of this exciting, innovative new use of existing infrastructure."
2/12. The U.S. Court of Appeals (2ndCir) issued its opinion [28 pages in PDF] in Swedenburg v. Kelly,. The District Court held that the NY statute prohibiting out of state wineries from selling directly to NY residents, such as via the internet wine, violated the Commerce Clause of the Constitution. The Appeals Court reversed, holding that NY's statute is a permissible exercise of authority granted to states under the 21st Amendment, thus rejecting the Commerce Clause challenge.
New York Statute. New York Alco. Bev. Cont. Law § 102(1)(c) provides in part: "No alcoholic beverages shall be shipped into the state unless the same shall be consigned to a person duly licensed hereunder to traffic in alcoholic beverages. This prohibition shall apply to all shipments of alcoholic beverages into New York state and includes importation or distribution for commercial purposes, for personal use, or otherwise, and irrespective of whether such alcoholic beverages were purchased within or without the state ..."
The Court wrote that "This case requires us to reconcile the competing demands of the Twenty-first Amendment's grant of authority to the states to regulate the intrastate traffic of alcohol, with the power reserved to Congress under the Commerce Clause ``[t]o regulate Commerce ... among the several States.´´" The Court concluded that "the challenged regime is within the ambit of the Twenty-first Amendment".
However, the Appeals Court held that § 102(1)(a) is overbroad and violates the First Amendment.
2/12. The Federal Communications Commission (FCC) announced that its Internet Policy Working Group (IPWG) will hold the first in a series of a meetings which it titles "Solutions Summits" on March 18, 2004. The FCC stated in a release [PDF] that "leaders in government and industry can discuss creative ways to address policy issues that arise as communications services move to Internet-based platforms". The March 18 meeting will focus on 911/E911 issues.
2/12. The Federal Communications Commission (FCC) adopted, but did not release, a notice of proposed rulemaking (NPRM) regarding network outage reporting at its February 12 meeting. This item is FCC 04-30 in ET Docket No. 04-35. The FCC issued a release [PDF] that states that "proposes to require wireless, wireline, cable, and satellite telecommunications providers to report information electronically to the Commission about significant disruptions to their communications systems." See, also, FCC Chairman Michael Powell's separate statement [PDF], Commissioner Kathleen Abernathy's separate statement [PDF], Commissioner Kevin Martin's separate statement [PDF], and Commissioner Jonathan Adelstein's separate statement [PDF].
2/12. The Federal Communications Commission (FCC) adopted, but did not release, a Report and Order pertaining to interstate access charges and the universal service support system for rate of return incumbent local exchange carriers (ILECs). This item is FCC 04-31 in CC Docket No. 00-256. The FCC issued a press release summarizing this item.
2/12. The Federal Communications Commission (FCC) released a Memorandum Opinion and Order [21 pages in PDF] granting the applications of NextWave to assign PCS licenses to Cingular Wireless. This proceeding is titled "In the matter of Applications for Consent to the Assignment of Licenses Pursuant to Section 310(d) of the Communications Act from NextWave Personal Communications, Inc., Debtor-in-Possession, and NextWave Power Partners, Inc., Debtor-in Possession, to subsidiaries of Cingular Wireless LLC". The MO&O also denies the Petition to Deny filed by Eldorado Communications and NY Telecom. The MO&O is FCC 04-26 in WT Docket 03-217.
2/12. President Bush nominated William Duane Benton to be a Judge of the U.S. Court of Appeals for the 8th Circuit. See, White House release.
2/12. Federal Communications Commission (FCC) Chairman Michael Powell announced at the FCC's February 12 meeting that Yvonne Hughes, is leaving the FCC. She is a member of Powell's staff. She is Special Assistant to the Chief of Staff and is responsible for scheduling appointments and travel arrangements, and providing administrative assistance to the FCC's Homeland Security Policy Council.
2/12. Robert Zoellick, the U.S. Trade Representative (USTR), held a press conference in Beijing, PR China. See, transcript [10 pages in PDF]. He was asked about China's non-compliance with its World Trade Organization (WTO) obligations regarding protection of intellectual property rights. Zoellick stated that he did not discuss this issue on this trip. Nevertheless, he added that "Intellectual property rights is clearly a very important one that we discussed at length with the Chinese on a number of occasions. There’s issues about whether one is using value-added taxes, for example in the area of semiconductors, in a way that is not consistent with WTO rules."
2/11. Federal Reserve Board Chairman Alan Greenspan testified before the House Financial Services Committee regarding the Federal Reserve's Monetary Policy Report to the Congress.
Spending on Technology. Greenspan (at right) stated that "A strengthening in capital spending over 2003 contributed importantly to the acceleration of real output. In the first quarter of the year, business fixed investment extended the downtrend that began in early 2001. Capital spending, however, ramped up considerably over the final three quarters of 2003, reflecting a pickup in expenditures for equipment and software. Outlays for high-tech equipment showed particular vigor last year. Even spending on communications equipment, which had been quite soft in the previous two years, accelerated." See, prepared testimony.
The Monetary Policy Report (MPR) elaborates that "Outlays for high-technology items -- computers and peripherals, software, and communications equipment -- which had risen a moderate 4-1/2 percent in 2002, posted a significantly more robust increase of more than 20 percent in 2003. That gain contributed importantly to the pickup in overall business outlays for equipment and software and pushed the level of real high-tech outlays above the previous peak at the end of 2000. The increase in spending last year on computing equipment marked the sharpest gain since 1998, and investment in communications equipment, which had continued to contract in 2002 after having plummeted a year earlier, turned up markedly."
Technology Based Productivity Gains. Greenspan said that "The productivity performance of the past few years has been particularly striking in that these increases occurred in a period of relatively sluggish output growth. The vigorous advance in efficiency represents a notable extension of the pickup that started around the mid-1990s. Apparently, businesses are still reaping the benefits of the marked acceleration in technology."
The MPR adds that "Prospects for sustained high rates of increase in productivity are quite favorable. Businesses are likely to retain their focus on controlling costs and boosting efficiency by making organizational improvements and exploiting investments in new equipment."
Tech Stocks. Greenspan also referenced the performance of tech stocks. "Broad measures of equity prices rose 25 percent in 2003, and technology stocks increased twice as quickly. The rally has extended into this year."
The MPR states that "For the year as a whole, the Russell 2000 index of small-cap stocks and the technology-laden Nasdaq composite index, which rose 45 percent and 50 percent, respectively, noticeably outpaced broader indexes. To date in 2004, equity markets have continued to rally."
Trade. The MPR states that "Exports of goods rose about 6-3/4 percent over the course of the year -- considerably faster than in 2002. Exports increased in all major end-use categories of trade, with particularly strong gains in capital goods and consumer goods. Reflecting the global recovery in the high-tech sector, exports of computers and semiconductors picked up markedly in 2003, particularly in the second half."
2/11. The Senate Commerce Committee held a hearing titled "Protecting Children from Violent and Indecent Programming".
Sen. John McCain (R-AZ), the Chairman of the Committee, wrote in his opening statement that "This discussion should remind us that broadcasters have been given spectrum -- for free. As Americans who own that spectrum, we have every right to expect something in return. We call it the public interest. We expect broadcasters to make the best use of that spectrum by providing news and information about our society and political campaigns, children’s programming, and even, entertainment."
Sen. McCain also raised the subject of indecent content on cable and direct broadcast satellite television. He noted that if Congress were to require cable and DBS operators to offer a la carte programming, parents would be better able to protect their children from programming that they find offensive.
See also, prepared testimony [PDF] of Federal Communications Commission (FCC) Chairman Michael Powell, prepared testimony of FCC Commissioner Kathleen Abernathy, prepared testimony of FCC Commissioner Jonathan Adelstein, and prepared testimony of FCC Commissioner Kevin Martin.
2/11. The U.S. Court of Appeals (4thCir) issued its opinion [PDF] in Invention Submission Corporation v. Rogan, regarding what constitutes a final agency action, so as to be reviewable by a court. The Appeals Court held that an agency advertising campaign that is facially neutral, and does not identify any party, is not a final agency action.
Invention Submission Corporation (ISC) filed a complaint in U.S. District Court (EDVa) against James Rogan, the former Director of the U.S. Patent and Trademark Office (USPTO), in his official capacity, alleging violation of the Administrative Procedure Act (APA). ISC alleged that the USPTO's advertising campaign in 2002 to alert the public about invention promotion scams was aimed at ISC and harmed ISC. ISC alleged that this ad campaign was an illegal final agency action that was arbitrary and capricious, and that exceeded the statutory authority of the USPTO.
The District Court dismissed the complaint, pursuant to Rule 12(b)(6), for failure to state a claim upon which relief can be granted.
The Court of Appeals vacated and remanded with instructions that the District Court dismiss pursuant to Rule 12(b)(1), for lack of subject matter jurisdiction, on the grounds that the ad campaign was not a final agency action.
The Appeals Court wrote that "the issue presented is whether the PTO's advertising campaign, allegedly aimed at Invention Submission to penalize it, constituted final agency action under the APA so as to be reviewable in court."
The Court reviewed the relevant provisions of the APA, and applicable precedent.
5 U.S.C. § 704 provides that "final agency action for which there is no other adequate remedy in a court" is "subject to judicial review."
5 U.S.C. § 551 provides that ''``agency action´´ includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act".
The Court, quoting from Bennett v. Spear, 520 U.S. 154 (1997), wrote that "at bottom, a final agency action as used in § 704 must be the ``consummation of the agency's decisionmaking process . . . [and] must be [an action] by which rights or obligations have been determined, or from which legal consequences will flow.´´"
The Court then applied the facts of this case to the law. It first noted that "In this case, the advertising material published by the PTO under the Inventors' Rights Act did not name or single out Invention Submission or any other invention promoter. The advertisements were facially neutral, aimed at all invention promotion scams -- scams that the advertisements asserted were causing the public to lose $200 million each year."
The Court concluded that the APA "does not provide judicial review for everything done by an administrative agency", and that the USPTO's ad campaign "is not the type of conduct that constitutes agency action that is reviewable in court under the APA".
The Court added that "Other than the administrative decision to conduct an advertising campaign at all -- a decision that Invention Submission has not challenged -- the content of the campaign was not the consummation of any decision-making process that determined rights or obligations or from which legal consequences flowed."
Whether ISC engaged in invention promotion scams was not at issue in this appeal. However, the Federal Trade Commission (FTC) sued ISC in 1993 for misrepresenting the nature, quality, and success rate of the invention promotion services. ISC settled that case for $1.2 Million in consumer redress. See, FTC release.
This case is Invention Submission Corporation v. James Rogan, U.S. Court of Appeals for the 4th Circuit, No. 02-2461, an appeal from the U.S. District Court for the Eastern District of Virginia, D.C. No. CA-02-1038-A, Judge Leonie Brinkema.
Go to News from February 6-10, 2004.

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