Source: http://www.techlawjournal.com/alert/2004/06/02.asp
Timestamp: 2017-11-20 21:05:27
Document Index: 644733143

Matched Legal Cases: ['§ 114', '§ 112', '§ 272', '§ 271', '§ 272', '§ 272', '§ 272', '§ 271', '§ 272', '§ 272', '§ 272', '§ 272', '§ 272', '§ 272']

TLJ Daily E-Mail Alert No. 909, June 2, 2004.
June 2, 2004, 9:00 AM ET, Alert No. 909.
U.S. and Mexico Settle Telecom Dispute
6/1. The Office of the U.S. Trade Representative (USTR) announced that "The United States and Mexico reached an agreement today to resolve their ongoing WTO dispute over international telecommunications services." See, USTR release [PDF].
In February of 2002 the U.S. submitted its complaint to the World Trade Organization's (WTO). On April 2, 2004, the WTO's Dispute Settlement Body released its panel ruling [256 pages in PDF]. The panel ruled that Mexico's current regime for international telecommunications violates Mexico's WTO obligations. For example, the panel found that Mexico breached its commitment to ensure that U.S. carriers can connect their international calls to Mexico's major supplier, Telmex, at cost-based rates.
The USTR stated that the agreement announced on June 1 provides that "Mexico will remove the provisions of Mexican Law relating to the proportional return system, uniform tariff system, and the requirement that the carrier with the greatest proportion of outgoing traffic to a country negotiate the settlement rate on behalf of all Mexican carriers for that country. Both countries believe that the elimination of these provisions will allow the competitive commercial negotiations of international settlement rates."
The USTR added that the agreement provides that "Mexico will allow the introduction of resale-based international telecommunications services in Mexico by 2005, in a manner consistent with Mexican law."
GAO Reports on Economic Arrangements Among Small Webcasters
6/1. The General Accounting Office (GAO) released a report [47 pages in PDF] titled "Intellectual Property: Economic Arrangements among Small Webcasters and Third Parties and Their Effect on Royalties".
This report was required by the Small Webcaster Settlement Act of 2002, which was enacted late in the 107th Congress. This was HR 5469. The House passed the bill on October 8, 2002. The Senate passed it on November 15, 2002. President Bush signed it on December 4, 2002. It is now Public Law 107-321.
In 1995, the Congress enacted the Digital Performance Right in Sound Recordings Act. This Act created an intellectual property right in digital sound recordings. That is, it provided that royalties are due when copyrighted sound recordings are digitally transmitted. In 1998, the Congress enacted the Digital Millennium Copyright Act (DMCA). This Act clarified that webcasters are covered, and provided webcasters with a compulsory license, with royalty rates to be determined by a Copyright Arbitration Royalty Panel (CARP) at the Library of Congress.
On June 20, 2002, the Librarian of Congress issued his final rule regarding webcasting rates. It provides the terms for the statutory license for eligible nonsubscription services to perform sound recordings publicly by means of digital audio transmissions, also known as webcasting, pursuant to 17 U.S.C. § 114, and to make ephemeral recordings of sound recordings for use of sound recordings under the statutory license set forth in 17 U.S.C. § 112.
The Librarian also released a summary stating that he "accepted the recommendation of the Register of Copyrights and rejected the rates and terms recommended by a Copyright Arbitration Royalty Panel (CARP) ... The most significant difference between the CARP's determination and the Librarian's decision is that the Librarian has abandoned the CARP's two tiered rate structure of 0.14¢ per performance for ``Internet only´´ transmissions and 0.07¢ for each retransmission of a performance in an AM/FM radio broadcast, and has decided that the rate of 0.07¢ will apply to both types of transmission."
The Small Webcaster Settlement Act of 2002 provided relief for small webcasters. For example, rather than paying on a per performance formula, the Act provide a percentage of revenue option.
The GAO report states that "During the debate on the Small Webcaster Settlement Act, copyright owners also raised concerns about the economic arrangements that small webcasters have with third parties, arguing that these arrangements could produce revenues or expenses that might not be included in the calculation of royalties that the small webcasters owed to them. To provide more information on such arrangements, the Congress mandated that GAO, in consultation with the Register of Copyrights, prepare a report on (1) the economic arrangements between small webcasters and third parties and (2) the effect of those arrangements on royalties that are based on a percentage of the webcaster’s revenues or expenses."
Consequently, Section 6 of the Act required the GAO to prepare a report "concerning the economic arrangements among small commercial webcasters covered by agreements entered into pursuant to section 114(f)(5)(A) of title 17, United States Code, as added by section 4 of this Act , and third parties, and the effect of those arrangements on royalty fees payable on a percentage of revenue or expense basis."
The GAO report finds that "Small webcasters have a variety of economic arrangements with third parties, such as bandwidth providers, businesses seeking or selling advertising space, and merchandise providers. Virtually all of the webcasters that we interviewed -- the 30 that had agreed to the royalty terms in the small webcaster agreement and the 28 that had not -- reported having arrangements with bandwidth providers from 1998 through 2003."
The report also finds that "Forty webcasters reported arrangements for selling advertising space either directly or through advertising firms. However, advertising sales have remained low, according to industry analysts, in part because of the collapse of the high technology business sector since 2000 and the relative novelty of the Internet as an advertising medium."
Also, "Twenty-five, or 44 percent, of the small webcasters that we contacted also reported arrangements with businesses to sell merchandise, such as T-shirts and coffee mugs, through their Web sites. Less commonly reported arrangements included those with companies that help small webcasters manage or obtain advertising for their Web sites such as by inserting ads on the Web site or into the webcast itself or selling advertising based on the aggregate audiences of multiple webcasters."
Finally, the GAO report concludes that the data "suggest that the overall effect of economic arrangements between small webcasters and third parties on royalties owed to copyright owners has been minimal to date."
It elaborates that "Of the 30 small webcasters we interviewed that had agreed to the terms of the small webcaster agreement, 27 provided us with financial data. Nineteen of the 27 reported revenue and expense estimates that were below the levels that would result in royalty payments at an amount greater than the minimum fee for either or both of the time periods for which payments were to be made. The remaining 8 owed royalties that exceeded the minimum fee. In addition, 2 of the 13 small webcasters that reported receiving free or reduced-price goods or services did not report the free service they received as revenue in their calculations of royalties."
However, GAO report adds that "these data may not be reflective of conditions that may develop as the industry matures. Specifically, revenues and expenses of small webcasters might increase as they attract more listeners, and advertising opportunities and rates may also increase as the webcasting industry matures and advertisers rely more on the Internet as part of their advertising efforts, according to industry analysts."
The report was prepared for Sen. Orrin Hatch (R-UT) and Sen. Patrick Leahy (D-VT), the Chairman and ranking Democrat on the Senate Judiciary Committee, and Rep. James Sensenbrenner (R-WI) and Rep. John Conyers (D-MI), the Chairman and ranking Democrat on the House Judiciary Committee.
GAO Reports on Spectrum Management
6/1. The General Accounting Office (GAO) released a report [42 pages in PDF] titled "Spectrum Management: Better Knowledge Needed to Take Advantage of Technologies That May Improve Spectrum Efficiency".
The report was prepared for Rep. Tom Davis (R-VA), the Chairman of the House Government Reform Committee, and Rep. Adam Putnam (R-FL), the Chairman of the Subcommittee on Technology, Information Policy, Intergovernmental Relations, and the Census. Hence, it is primarily about spectrum management as it affects government agency users.
The report finds that federal agencies have little incentive to use spectrum efficiently. The report also finds that current management of spectrum impedes efficient use, such as by compartmentalized allocation of spectrum. The report dismisses market based solutions for government users as "difficult". Rather, it contains six recommendations for action. Basically, it recommends further study by the Federal Communications Commission (FCC) and the National Telecommunications and Information Administration (NTIA).
The GAO report finds that "The agencies that we reviewed have made some investments in technologies that provide improved spectrum efficiency. However, these investments have been primarily driven by the imperatives of their individual missions -- not by an underlying, systematic consideration of spectrum efficiency."
The report also finds that current management of spectrum impedes efficient use. It states that "The current structure and management of spectrum use in the United States may limit the development and use of some spectrum efficient technologies. Because the spectrum allocation structure largely compartmentalizes spectrum by types of services (such as aeronautical radio navigation) and users (federal, nonfederal, and shared), the capability of emerging technologies that are designed to use spectrum in different ways is often diminished." (Parentheses in original.)
The report elaborates that, for example, "technologies like software-defined cognitive radios can be adapted to operate in virtually any segment of spectrum and, in the future, may be able to adapt to realtime conditions and make use of underutilized spectrum in a given location and time. Currently the spectrum allocation system, however, may not provide the freedom needed for these technologies to operate across existing spectrum designations."
The report adds that "defining new rules to accommodate these emerging technologies requires knowledge about spectrum use that is not currently available."
The report also finds that "there are few federal regulatory requirements and incentives for agencies to use spectrum more efficiently. While NTIA is responsible for managing the federal government’s use of spectrum and ensuring spectrum efficiency, NTIA primarily relies on individual agencies to ensure that the systems they develop make as efficient use of the spectrum as possible. Agencies' guidance and policies, however, do not require systematic consideration of spectrum efficiency in their acquisitions. The lack of economic consequence associated with the manner in which spectrum is used has also provided little incentive to agencies to pursue opportunities proactively to develop and use technologies that would improve spectrum efficiency governmentwide."
It also states that "agencies have little or no economic incentive to use the radio-frequency spectrum more efficiently because they pay only small administrative fees for its use. Once it is allocated and users gain access to the spectrum, there are generally no financial incentives for them to consider accommodating other users, or in many cases, even to move to more efficient technologies."
The report then addresses market based approaches to spectrum management. It finds that "creating viable economic incentives to achieve spectrum efficiency in the U.S. federal government may be difficult. ... NTIA could face several challenges if it decides to use such incentives. First, implementing a market-based approach may be difficult for some agency functions that are critical and unique, such as public safety and national defense. Second, incentives that would require greater flexibility among license holders of spectrum may ultimately result in problems of interference. ... Third, it is unclear whether licensees would have the right to buy and sell spectrum, and what rights would be conferred and under what circumstances rights would be granted. Finally, while it may be possible to impose fees on federal agencies' use of assigned spectrum, it is far from obvious how such fees or other economic incentives could be applied to agencies’ opportunistic use of white and gray spaces in the spectrum -- as would be the case with software-defined cognitive radios, which adapt their use of the spectrum in real time."
Finally, the report offers three recommendations for the NTIA and FCC, and three for the NTIA. It recommends NTIA and FCC jointly "assess and determine the feasibility of redefining the spectrum allocation system to build in greater flexibility where appropriate to facilitate emerging technologies; develop and implement plans to gain a more thorough and on-going understanding of the current spectrum environment; and strengthen efforts to develop jointly accepted models and methodologies to assess the impact of new technologies on overall spectrum use and increase opportunities to permit testing of those technologies."
It also recommends that the NTIA "establish guidance for agencies to determine and report their future spectrum requirements; strengthen NTIA’s spectrum certification process to more directly address spectrum efficiency; and determine approaches, where appropriate, for providing incentives to agencies to use spectrum more efficiently and then pilot and measure the effectiveness of those approaches."
DC Circuit Dismisses AT&T's Petition for Review of Public Notice of § 272 Sunset
6/1. The U.S. Court of Appeals (DCCir) issued its opinion [16 pages in PDF] in AT&T v. FCC, a case regarding Bell Operating Companies' applications to provide in region interLATA services pursuant to 47 U.S.C. § 271, and regulatory safeguards under 47 U.S.C. § 272. The Court held the § 272 safeguards automatically sunset under § 272(f)(1) by operation of law, and therefore, the FCC need not engage in any reasoned decision making before issuing a public notice of a sunset date.
The Federal Communications Commission (FCC) granted Verizon's § 271 application to provide long distance service in the state of New York on December 22, 1999. It issued a public notice on December 23, 2002, stating that Verizon reached the automatic sunset date under § 272(f)(1) with respect to its long distance operations in New York.
AT&T filed a petition for review challenging the issuance of this public notice. It argued that Verizon retains significant market power, that this justifies the need for continued application of the § 272 safeguards, and that the FCC failed to engage in reasoned decision making by issuing this public notice.
The Court dismissed the petition for review. The Court wrote that "As the Commission indicated in its public notice, the § 272 safeguards sunset ``by operation of law,´´ not by Commission action. The FCC's public notice did not purport to be an order or rule addressing the continued need for § 272 safeguards, and the Act does not require any decision from the Commission in order for the sunset provision under § 272(f)(1) to take effect. Therefore, the Commission was not obligated to engage in ``reasoned decisionmaking´´ when it issued the public notice. Finally, AT&T’s claims regarding the need for alternative safeguards, covering BOC provision of interLATA services after sunset of the § 272 structural and related requirements, remain under consideration by the FCC. Therefore, those claims are not ripe for review."
However, the Court also noted that the FCC has issued a related notice of proposed rulemaking, and "it remains an open question as to whether the Commission will adopt alternative safeguards covering BOCs authorized to provide in-region, interLATA service."
This case is AT&T, petitioner v. FCC and USA, respondents, Verizon, intervenor, U.S. Court of Appeals for the District of Columbia, App. Ct. No. 03-1035, a petition for review of a final order of the FCC.
6/1. The Department of Homeland Security (DHS) announced that Accenture has been selected to be the prime contractor for the US-VISIT program. See, DHS release.
5/28. The U.S. and the E.U. signed an agreement that will allow U.S. Customs and Border Protection to collect airline passenger name record (PNR) information relating to flights between the U.S. and E.U. See, DHS release.
5/28. The Department of Homeland Security (DHS) announced that the deadline for submitting applications for grants for homeland security related information technology demonstration projects is June 30, 2004. See, DHS release.
6/1. The Supreme Court returned from a one week recess. It issued one opinion in a criminal case (Yarborough v. Alvarez), and released an order list in which it granted no petitions for writ of certiorari.
6/1. The Supreme Court denied certiorari in Santa Barbara News-Press v. Leonard Ross, No. 03-1338, a case regarding libel and public figures. See, Order List [8 pages in PDF] at page 7.
6/1. The Supreme Court announced that "The Court will take a recess from today until, Monday, June 7, 2004."
The Senate will meet at 9:45 AM for morning business. It will then resume consideration of S 2400, the Department of Defense authorization bill for FY 2005.
The Supreme Court is on recess until Monday, June 7.
10:00 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a hearing titled "Advancing the DTV Transition: An Examination of the FCC Media Bureau Proposal". The witnesses will be Ken Ferree (Chief of the FCC's Media Bureau), Edward Fritts (P/CEO of the National Association of Broadcasters), Robert Sachs (P/CEOfficer of the National Cable & Telecom Association), Richard DalBello (Satellite Broadcasting & Communications Association), Gary Shapiro (P/CEO of the Consumer Electronics Association), Gloria Tristani (United Church of Christ), and Thomas Lenard (Progress & Freedom Foundation). The hearing will be webcast. Press contact: Jon Tripp (Barton) at 202-225-5735 or Sean Bonyun (Upton) at 202-225-3761. Location: Room 2123, Rayburn Building.
10:45 AM - 1:30 PM. The Federal Communications Commission (FCC) and the Department of Homeland Security (DHS) will sponsor a public forum on how "the relationship between local media and government can be strengthened to support local market operational readiness to cope with terrorist attacks, natural disasters or other similar occurrences". Press contact: Meribeth McCarrick at 202 418-0654 or Meribeth.McCarrick@fcc.gov. See, notice [PDF]. Location: FCC, Commission Meeting Room, 445 12th Street, SW.
12:00 NOON. The Progress and Freedom Foundation (PFF) will host a luncheon program titled "The Supreme Court and the Future of the Telecom Act of 1996". The speakers will be Kenneth Starr (Kirkland & Ellis), Christopher Wright (Harris Wiltshire & Grannis), and Randolph May (PFF). Lunch will be served at 12:00 NOON. The program will begin at 12:30 PM. See, notice and registration page. Press contact: David Fish at 202 289-8928 or dfish@pff.org. Location: First Amendment Room, National Press Club, 529 14th St. NW, 13th Floor.
1:30 PM. (or 2:00 PM?) The House Government Reform Committee's Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census will hold an oversight hearing titled "Who Might be Lurking at Your Cyber Front Door? Is Your System Really Secure? Strategies and Technologies to Prevent, Detect and Respond to the Growing Threat of Network Vulnerabilities." The witnesses will be Karen Evans (Office of Management and Budget), Robert Dacey (General Accounting Office), Amit Yoran (National Cyber Security Division, Department of Homeland Security), Dawn Meyerriecks (Defense Information Systems Agency), Daniel Mehan (Federal Aviation Administration), Dubhe Beinhorn (Juniper Federal Systems), Scott Culp (Microsoft), Louis Rosenthal (ABN AMRO Services Company), Marc Maiffret (eEye Digital Security), Steve Solomon (Citadel Security Software). Press contact: Bob Dix at 202 225-6751. Location: Room 2154, Rayburn Building.
2:30 PM. The Senate Commerce Committee will hold a hearing on several nominees, including Deborah Majoras (to be Chairman of the Federal Trade Commission), Jon Leibowitz (to be a Commissioner of the FTC), Brett Palmer (to be Assistant Secretary for Legislative and Intergovernmental Affairs at the Department of Commerce), and Benjamin Wu (to be Assistant Secretary for Technology Policy at the Department of Commerce). See, notice. Press contact: Rebecca Fisher at 202 224-2670. Location: Room 253, Russell Building.
Day two of a four day conference and expo hosted by the Wireless Communications Association International (WCA) titled "WCA 2004". At 8:30 - 9:20 AM, Federal Communications Commission (FCC) Commissioner Jonathan Adelstein, and NTIA acting Director Michael Gallagher will participate on a panel titled "VoIP As A Frontier For Wireless Growth". At 9:50 - 10:10 AM, FCC Commissioner Kathleen Abernathy will speak on "FCC Spectrum Policy Perspective". At 11:30 AM - 12:45 PM, Ed Thomas (Chief of the FCC's Office of Engineering and Technology), Tom Hazlett (a former Chief Economist of the FCC), and others will participate on a panel titled "The FCC's Interference Temperature Plan: Threat or Opportunity?" At 3:10 - 3:50 PM, Julius Knapp (Deputy Chief of the FCC's Office of Engineering & Technology), John Branscome (FCC's Wireless Telecommunications Bureau) and others will participate on a panel titled "Regulatory Impacts On License Exempt WISP Business Plans". See, agenda. Location: Marriott Wardman Park Hotel, 660 Woodley Park Road, NW.
10:00 AM. The House Financial Services Committee will meet to markup four bills. The fourth item on the agenda is HR 3574, the "Stock Option Accounting Reform Act". See, story titled "Capital Markets Subcommittee Approves Stock Options Bill" in TLJ Daily E-Mail Alert No. 897, May 13, 2004. Location: Room 2128, Rayburn Building.
1:00 PM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold an oversight hearing titled "Oversight of the Operations of the U.S. Copyright Office". The hearing will be webcast. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.
10:00 AM. The Senate Judiciary Committee will hold a hearing on judicial nominees. See, notice. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. Location: Room 226, Dirksen Building.
The Federal Communications Bar Association's (FCBA) Wireless Committee will host a luncheon event. The speaker will be Ed Thomas, Chief of the Federal Communications Commission's (FCC) Office of Engineering and Technology (OET). The price to attend is $15.00. RSVP by Tuesday, June 1 to wendy@fcba.org. Location: Sidley Austin, 1501 K Street, NW, 6th Floor.
Day four of a four day conference and expo hosted by the Wireless Communications Association International (WCA) titled "WCA 2004". See, agenda. Location: Marriott Wardman Park Hotel, 660 Woodley Park Road, NW.
Deadline to submit comments to the Federal Trade Commission (FTC) in response to its notice of proposed rulemaking (NPRM) regarding its Hart Scott Rodino premerger notification rules. See, notice in the Federal Register, April 8, 2004, Vol. 69, No. 68, at Pages 18685 - 18721.
Deadline to submit comments to the Executive Office of the President's (EOP) Office of Management and Budget (OMB) on the Small Business Paperwork Relief Act Task Force draft report that makes recommendations concerning the improvement of electronic dissemination of information collected under federal requirements, and a plan to develop an interactive government wide internet program to identify applicable collections and facilitate compliance. See, notice in the Federal Register, May 5, 2004, Vol. 69, No. 87, at Pages 25147 - 25157.
Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding the provision of international telecommunications service. This NPRM is FCC 04-40 in IB Docket No. 04-47. See, notice in the Federal Register, March 22, 2004, Vol. 69, No. 55, at Pages 13276 - 13278.
? 10:00 AM. The Senate Judiciary Committee will hold an oversight hearing "on activities of the Department of Homeland Security, focusing on terrorism and other related topics". Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. Location: Room 226, Dirksen Building.