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Spectrum
FCC OKs Auction Rules Despite Split On 'Open Access'
by David Hatch
The wireless telecommunications industry underwent a tectonic shift Tuesday when federal regulators adopted ambitious rules designed to make it easier for consumers to switch carriers and for new competitors to emerge.
The FCC voted 5-0 for the overall rules and 4-1 to impose "open access" conditions on a portion of airwaves to be vacated by television broadcasters as they transition to digital signals. The auction must begin by Jan. 28.
The open-access conditions, a compromise championed by Chairman Kevin Martin, a Republican, divided much of the communications sector and Capitol Hill in recent months, prompting encouraging words from several Democrats and consternation from GOP members.
"This auction has the potential to unleash a new era in wireless technology," Martin said at the meeting, which was delayed by three-and-a-half hours due to last-minute negotiations. "The public interest is not about what any company wants. It's about serving the people."
Robert McDowell, one of three Republican members, was pleased that the FCC rules would create a nationwide wireless network for emergency responders to communicate across jurisdictions. But he said consumers could be "short-changed" by the open-access conditions, which fall short of what various potential bidders had wanted. He dissented on that issue.
Michael Copps, one of two Democratic FCC members, praised aspects of the rules but lamented that smaller players will have a lack of mandatory access to networks at wholesale rates. "This action might not be the stimulus" to create a "third" nationwide high-speed Internet service to compete with dominant telecom and cable providers, he complained.
Copps also warned that the rules are "tilted" to companies with "competition-killing" operations.
"While this item doesn't deliver everything that consumers and innovators wanted," it is a "positive step for consumers," said regulator Jonathan Adelstein, another Democrat. Nevertheless, he agreed that the lack of wholesale access is problematic. "At the end of the day, we may have missed an elusive opportunity to open that third channel into the home," he said.
Republican Deborah Taylor Tate, who usually allies with Martin, backed the public-safety components but was "lukewarm" about the open-access requirements. Tate said she hopes the FCC's decision will not result in less innovation and fewer consumer options.
Seeking to accommodate rural carriers, the FCC announced that frequencies will be auctioned in various geographic sizes to make some of the airwaves more accessible to small bidders.
The vote occurred amid a flurry of business deals by major carriers to bolster their rural wireless holdings, which Jessica Zufolo, a senior telecom analyst at the investment firm Medley Investment Group, said could strengthen the bidding positions of dominant firms.
On Monday, Verizon Wireless announced that it would spend $2.67 billion to acquire Rural Cellular, which operates in 15 states, including Maine, New Hampshire and Vermont. Verizon Communications is selling its traditional telephone assets in those three states to FairPoint Communications.
Earlier this month, AT&T said it would buy Dobson Communications, a rural wireless carrier with substantial operations in Alaska, for $2.8 billion.
For weeks, Google has been in the headlines for demanding four open-access conditions as a prerequisite for bidding on the spectrum. On Tuesday, the FCC granted two of the requests, permitting devices and software unaffiliated with any license holders to be used on a third of the airwaves to become available.
A Google spokesman said Monday that the search engine would take a "fresh look" if some of its requests were not met.
Industry reaction to the FCC action was not immediately available. AT&T recently endorsed the open-access concept, but the wireless association CTIA and Verizon have been strongly opposed.
While the FCC created parameters for a public-private nationwide network, it did not adopt all of the conditions sought by Frontline Wireless, a startup backed by former FCC Chairman Reed Hundt. In particular, Frontline failed to secure "designated bidding credits" that would have provided it with a 25 percent discount and mandatory leasing of spectrum on designated frequencies to smaller companies.
Despite not getting everything it wanted, the company vowed to press on. "We're planning on going forward and bidding -- period," spokeswoman Mary Greczyn said before the vote.
Public Knowledge, an advocacy group, had urged the FCC to impose additional conditions designed to benefit consumers and smaller competitors. At press time, the Open Internet Coalition, whose members include Free Press, Google and Public Knowledge, planned to hold an afternoon press briefing to respond to the decision.
Officials with the Information Technology Industry Council, whose members include Cisco Systems, Intel, Qualcomm, eBay-owned Skype and Texas Instruments, indicated on Monday that the group was pleased with the FCC's plans.
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Lobbying
House OKs Ethics Bill That Emphasizes Transparency
by Heather Greenfield
The morning after the home of Sen. Ted Stevens was raided in a federal investigation over his ties with lobbyists, the House on Tuesday voted 411-8 for a lobbying and ethics reform package.
House Speaker Nancy Pelosi, D-Calif., is touting the accomplishment as the fulfillment of an election promise to voters to clean up Congress. "Democrats are following through on our promise to change the way business is done in Washington," she said.
The bill, S. 1, would create greater transparency, with campaigns being required to disclose contribution "bundling" operations of more than $15,000. Corporate travel and parties paid for by lobbyists also would be limited, and lobbyists would have to disclose their activities twice a year in a searchable online database. House members would have to file personal financial disclosures and travel reports in a similar database.
The legislation further includes disclosure requirements for the first time on earmarks, money reserved for lawmakers' pet projects that usually are added in conference or committee reports rather than legislative language.
Bill Allison, a senior fellow at the Sunlight Foundation, said the current practice has made it difficult if not impossible to learn which members requested specific earmarks, the names of the project, the recipients and the amounts.
"We've never had that before," Allison said. "We just don't have it as easily searchable and transparent as we would like."
The earmarks would have to be disclosed online within 48 hours before Senate votes on the legislation. But the bill would not require the information to be disclosed in a searchable format. Conference reports would be available online to the public 48 hours before votes.
While the Sunlight Foundation is pleased with the "unprecedented disclosure" in the bill, Allison and other advocates of greater online transparency, like the online group Porkbusters, complain that the earmark disclosure provisions were watered down from the version of the measure the House passed in May before closed-door negotiations with the Senate.
Another less stringent feature of the compromise bill would allow the Senate majority leader, rather than the parliamentarian, to determine whether a conference report meets earmark disclosure rules. Sen. Tom Coburn, R-Okla., called that change "ludicrous."
The Senate is expected to vote on the final measure as early as Thursday.
Sen. Jim DeMint, R-S.C., is promising to seek an amendment to have the parliamentarian oversee earmark disclosures. "The culture of earmarks is what drives the culture of corruption, and if we don't fix the earmark rules in this bill, we will continue to have business as usual in Washington," DeMint said in a statement.
Conservative blogger Ed Morrissey of Captain's Quarters agreed, calling the allegations that led to the FBI and IRS raid of the home of Commerce Committee Chairman Stevens, R-Alaska, the "wages of pork."
Contractors have told a grand jury that oil company executives from Veco oversaw the remodeling of Stevens' home. He is under investigation for connections to Veco, which has received tens of millions of dollars in federal contracts.
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Education
Senate-Passed Tech Aspects Of Education Bill Praised
by Aliya Sternstein
Higher education legislation passed by the Senate last week generated praise in the academic community for its several technology provisions but also sparked fears over a proposed amendment that could have curbed legal file-sharing.
On July 24, the Senate passed a bill, S. 1642, primarily focused on reforming the student loan system. Folded into the bill was one program that would provide grants to minority-serving institutions for digital and wireless network technologies.
David Baime, the vice president for government relations at the American Association of Community Colleges, said "a significant number" of those minority-serving colleges are community colleges. "It's certainly a positive development."
Another provision would encourage students to file electronic versions of the federal student-aid applications and phase out the printing of the full paper version. Baime said he awaits the day when there will exist a "smart" financial aid form to automatically insert certain information based on the applicant's state.
The higher education bill further aims to help native Alaskan and Hawaiian students pursue studies that lead to careers in science, technology, engineering and mathematics, or STEM. Yet another provision would award funds to states for scholarships given to students who complete a rigorous high-school curriculum in math and science.
The bill also would expand eligibility for a grant program that helps students pay for degrees in math and science. Fifth-year students in predefined five-year programs and part-time students could apply. The bill does not discuss renewal of the program, which is set to expire in several years if not reauthorized.
Justin Wellner, associate director of policy and programs at the Business-Higher Education Forum, applauded the Senate for expanding eligibility. Matt Owens, the assistant director of federal relations for the Association of American Universities, said none of his members are concerned about the grant program expiring soon.
Rejected file-sharing language, meanwhile, would have charged the Education secretary with supervising illegal activities on campuses and would have required schools to install a "technology-based deterrent" to "prevent" such piracy. Some experts have said sufficient technology-based deterrents do not exist.
The language called for the secretary to annually report the top 25 institutions with the most unauthorized file-sharing based on entertainment industry data.
"We were very concerned about the file-sharing amendment as proposed," Baime said. "First of all, it got the secretary involved in policing something that the secretary is not equipped [to do]."
Terry Hartle, senior vice president for government and public affairs at the American Council on Education, said the amendment would have "made the secretary an agent of the entertainment industry." The secretary would have been forced to act on data that is "notoriously inaccurate."
Regarding a technological restraint, Hartle said: "There is no technology-based deterrent that will prevent downloading unless you simultaneously prevent all legal downloading." Peer-to-peer file-sharing is commonly used in data-intensive research.
But Hartle is not diminishing the issue of illegal file-sharing. "The amendment was poorly thought out," he said. "There is a problem, but it is much broader than simply colleges and universities."
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Intellectual Property
Lawmakers Weigh Fee System For Broadcast Radio
by Andrew Noyes
House lawmakers on Tuesday began their examination of whether musicians should be paid when their songs are broadcast over AM and FM radio, which is the norm when their work is played on satellite, cable and Internet radio.
Artists have not earned performance royalties for over-the-air radio because of the long-held idea that analog transmissions do not constitute duplications. But the Recording Industry Association of America and other industry groups want to change that.
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IP policy in a digital age
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Broadcasters have called such a move a "performance tax" on local radio and worry that updates to the law could upset the balance that Congress struck 80 years ago. The current model works because artists use radio as a free promotional vehicle, they argue.
Freshman Rep. Paul Hodes, D-N.H., himself a musician, testified that "this is an area of federal policy that has needed changing for a very, very long time." It is time to "correct the injustice" that has been in existence "for more years than I have been alive."
Folk musician Judy Collins said it is "a disgrace" that she and fellow witness soul singer Sam Moore are not compensated for their songs played on over-the-air radio. Every other developed country has public performance rights, they argued.
ICBC Broadcast Holding President Charles Warfield said he does not understand "why the recording industry is willing to essentially bite the hand that feeds it." If radio stations have to pay, they might have to air more advertisements or cut public-service announcements to recoup the costs, he warned.
The goal should be "leveling the playing field" because the marketplace has been "undermined by technology and new business models," Register of Copyrights Marybeth Peters said. The law should be broadened to include "all commercial transmissions, especially broadcast," she said.
Peters said she is "troubled" by broadcasters' portrayal of the royalty scheme as a "tax." For eight years, broadcasters have sought exclusive rights to their signals internationally "and they've never used the word tax" when it benefits them, she noted.
California Republican Darrell Issa said it is "clear that the status quo will no longer be accepted" and "broadcasters are on notice" that reform is on the horizon. They "should embrace this as an opportunity to create transparency" among their traditional terrestrial services and new ventures like online streaming and high-definition radio.
Subcommittee Chairman Howard Berman said it is time for Congress to re-evaluate the limitations of the current system. "That Patsy Cline's estate is not compensated for the over-the-air performance of her rendition of 'Crazy' seems crazy," the California Democrat said.
Rep. Howard Coble of North Carolina, the panel's ranking Republican, split the difference. "I am high on broadcasters. I'm also high on performers," he said. "I hope you can strike some kind of balance ... that will result in not too burdensome a conclusion."
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Intellectual Property
Copyright Crusade Spreads To Bars Across Nation
by Andrew Noyes
San Francisco's Skylark bar, the Snake Pit in Denver, Colo., Tequila Willie's in Melbourne, Fla. and other watering holes across the country have unwittingly become part of the music industry's ongoing copyright crusade.
The American Society of Composers, Authors and Publishers, one of the nation's three largest performance-rights organizations, announced this week that it filed 26 separate copyright-infringement lawsuits against bars, nightclubs and restaurants in 17 states.
In each of the cases filed Monday, the business was charged with publicly performing the copyrighted musical works of ASCAP's songwriter, composer and music publisher members without obtaining a license to do so.
The goal, according to ASCAP Senior Vice President Vincent Candilora, is to "create awareness among music users and the public that it is a federal offense to perform copyrighted music without permission." The group reportedly reached out to each of the establishments repeatedly before suing. In each instance, the nightspot refused to get a license and continued to play ASCAP members' music, officials said.
"Taking legal action is always ASCAP's last step," Candilora said. His organization tried to work with some of the establishments for more than a year, but they resisted. "They have had plenty of time to do the right thing," he said.
Had the Red Maple lounge in Baltimore, Md., licensed the songs it played, the business would have owed $1,400 per year, Candilora said. If the judge that hears the case finds the infringement was willful, damages could climb to $150,000 per infringed song, he said.
"All of them have thumbed their nose at the law," Candilora said of the defendants. "They really don't think there's going to be a consequence, but once you're on the radar screen, we have an obligation to our members."
ASCAP licenses cover the use of over 8.5 million copyrighted songs and compositions. Nearly 90 percent of fees collects are paid as royalties directly to songwriters, composers and music publishers, the group said.
Public Knowledge President Gigi Sohn, a staunch advocate of "fair use" of copyright content, sided with music industry. "If these folks are engaging in conduct for which they need a license and have not gotten one, ASCAP is well within its rights," she said.
Inquiries to the owners and operators of several businesses named in the suit were not returned by deadline.
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Security
House Panel Concerned About Emergency Readiness
by Chris Strohm
House lawmakers on Tuesday said they remain concerned that the Bush administration might not be as prepared as it should be to handle a major catastrophe or multiple disasters that occur simultaneously.
Members of the House Oversight and Government Reform Committee listed their concerns during a hearing to generally assess how prepared the Federal Emergency Management Agency and National Guard are to handle disasters.
"As we head into the heart of what is still predicted to be a very active hurricane season, we see troubling signs that key reforms have not yet taken hold and that FEMA may still be hobbled within the larger [Homeland Security Department] structure," said House Oversight and Government Reform Committee ranking Republican Tom Davis of Virginia. "Specifically, lines of authority still seem blurred and local officials remain frustrated over high-handed, indecisive and slow answers from Washington -- when they get any answers at all."
FEMA Director R. David Paulison said his agency is better prepared to handle disasters than it was when Hurricane Katrina struck the Gulf Coast almost two years ago. He also said the Bush administration will release a new national response plan "hopefully within a week."
The plan is the government's blueprint detailing how agencies will respond and coordinate during emergencies. It was supposed to be issued last month.
"We are not going to fight over responsibilities," Paulison said. "I can assure you we will work this out. ... We are one federal government and we're going to start acting like it."
Paulison cited a few areas that still need improved within FEMA. He said, for example, that FEMA is still overhauling its logistics system in order to have "an end-to-end view" of how emergency supplies are being delivered to disaster zones.
Government investigators testified at the hearing on other areas that FEMA still must improve. The Homeland Security Department's inspector general concluded, for example, that FEMA has yet to ensure that pre-negotiated contracts for goods and services are coordinated with federal, state and local governments.
FEMA also may not have anticipated all the pre-negotiated contracts it will need for a catastrophic event, and the agency may not have enough trained and experienced acquisitions personnel to manage contracts during an emergency, the IG added.
The Government Accountability Office reported that it is too early to evaluate the effectiveness of reforms FEMA has made since Hurricane Katrina, especially because none have been tested "on a scale that reasonably simulates the conditions and demand they would face following a major or catastrophic disaster."
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Security
Coalition Stands Firm In Support Of National ID Law
by Michael Martinez
A coalition that supports a 2005 law mandating nationwide standards for driver's licenses claims that it is not fazed by the wave of federal and state lawmakers who have turned against the statute during the past year.
More than a dozen states already have decided that they will not comply with the so-called REAL ID Act. Last week, the Senate also rejected a proposal to direct $300 million to help states meet the requirements of the law.
The Coalition for a Secure Driver's License, a nonprofit that was started by families affected by the 2001 terrorist attacks, is one of the few groups still rallying support for the implementation of REAL ID. Spokesman Neil Berro said in a Tuesday interview that he was not deterred by the Senate inaction.
President Bush did not reserve any money for REAL ID compliance in his February budget proposal. Sen. Lamar Alexander, R-Tenn., said in a floor speech that the federal government should be responsible for bearing some of the cost if it is going to impose such a mandate on the states. He tried to attach his funding proposal to the homeland security appropriations measure for fiscal 2008, which the Senate passed.
The Homeland Security Department estimated earlier this year that it will cost states as much as $23 billion to implement the law. The American Civil Liberties Union and others that oppose REAL ID called Alexander's amendment a "sucker money" proposal and argued that it would have done little to help states comply with a flawed statute.
Privacy advocates have charged that REAL ID effectively would create an invasive national ID system. State legislators who have rejected the law also call it an unfunded federal mandate.
Berro said those who oppose REAL ID have capitalized on fears about intrusions on civil liberties. But he said potential terrorist attacks are a more serious threat to those freedoms.
Legislation to repeal the law has been introduced in both chambers of Congress. A bill by Sens. Daniel Akaka, D-Hawaii, and John Sununu, R-N.H., would reinstitute a negotiated rulemaking process to develop federal driver's licensing standards.
According to Berro, the country cannot afford to move backward on the issue. He cited a Zogby poll conducted earlier this year that indicated the majority of Americans actually favor stronger ID standards.
"The common-sense sensibility of most Americans was reflected in that poll," he said.
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Today's Feature:
People Column
James LeMunyon usually advises U.S. technology companies on how to expand their businesses. Now the former tech executive and Commerce Department assistant secretary will advise the Computer and Communications Industry Association on industry relations.
Every Tuesday, read the People Column by Heather Greenfield.
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E-briefs
E-Government: Florida's optical-scan voting machines are still flawed despite efforts to fix them, and they could allow poll workers to tamper with the election results, according to a government-ordered study obtained Tuesday by AP. At the request of Secretary of State Kurt Browning, Florida State University's information technology laboratory reviewed a list of previously discovered flaws to see if the machines were still vulnerable to attack. "While the vendor has fixed many of these flaws, many important vulnerabilities remain unaddressed," the report said. The lab found, for example, that someone with only brief access to the machines could replace a memory card with one pre-programmed to read one candidate's votes as counting for another, essentially switching the candidates and showing the loser as winning. Gov. Charlie Crist recently signed a law requiring the use of e-voting machines that produce paper receipts.
Politics: National Republican Congressional Committee Chairman Tom Cole said Monday that he would advise Republican presidential candidates "to grab the opportunity to participate" in a planned CNN/YouTube debate. Cole, R-Okla., made the comments to conservative blogger Ed Morrissey of Captain's Quarters on BlogTalkRadio. CNN is currently negotiating to perhaps change the date after Republican frontrunners Rudy Giuliani and Mitt Romney declined the Sept. 17 debate citing scheduling conflicts. "This is an arena and medium in which we have not participated as fully and as forcefully as we should and it provides an opportunity," Cole said. "This is the medium that is driving the Democratic Party right now. To miss the opportunity to engage is a real mistake for any Republican candidate." Cole also noted that the main presidential story of the past week stemmed from comments at the Democratic CNN/YouTube debate July 23.
Domains: A joint venture by GoDaddy, a registrar for Internet addresses, and a global registry services corporation is making a bid to manage Web domains that end in .us. The contract awarded to NeuStar in 2001 to manage the .us registry expires this October, and bids were due Monday. A decision on the contract is expected by mid-August. The Domain Name Alliance Registry that involves GoDaddy would immediately reduce the price of .us domains by 25 cents, from $6 to $5.75, if granted the contract. The .us suffix currently ranks ninth globally in registrations, and it inhabits less than 3 percent of the volume for so-called country-code domains. The .us suffix "has not performed in the market because it has not been given a real opportunity to compete in the industry," said Brian Cute, director of .us activities for the new alliance. "It's time for that to change in our view."
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