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Telecom/IT Policy Highlights

Volume: 4.07
July/August 2004

Microsoft Word version / July/August 2004 (279kB)

Adobe PDF version / July/August 2004 (152kB)

Contents:
Overview
Policy / Legislative Activities
Regulatory Activities
Judicial Activities
Research / Reports
Items of Interest
Events
Newsletter Info
  • Overview

    The Advanced Internet Communications Services Act, was introduced on the House floor on the same day the subject was discussed at a Senate subcommittee hearing. Congressional leaders admit that election year politics make the likelihood of enacting new telecom legislation before 2005 next to zero; members nonetheless discussed the issue at length, wishing to influence the debate in the next Congress. Meanwhile, the Solicitor General announced the government would appeal the Ninth Circuit’s “Brand X” decision to the Supreme Court, hoping the courts could clarify the confusing way in which Telecom Act classifications have been applied to Internet technologies. In either case, the regulatory status of cable modem services is unlikely to be resolved until spring of 2005 at the earliest.

    Federal Communications Commission (FCC) Chairman Michael Powell made headlines at a conference held by The Progress & Freedom Foundation when he said the current telecommunications laws are “broken.” [Source: http://news.com.com/2100-1028_3-5321042.html]. This is the strongest language that has emerged from Chairman Powell in recent years, increasing speculation that a new Telecommunications Act will be written by the 109th Congress. The FCC has been putting the summer months to good use, working to use market solutions to promote broadband adoption and competition. The Commission adopted a number of spectrum proposals that Commissioners hope will improve the quality of services available to consumers.

    A new report from Nielsen//NetRatings shows that broadband now constitutes the majority of Internet connections, although slower narrowband connections are more prevalent among older users. Also, wireless services are expected to grow immensely in the next five years, according to market research by In-Stat/MDR. More details are available in the Research/Reports section below.


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  • Policy / Legislative Activities

    House Bill Considers VoIP Regulation
    07.07.04 – Reps. Cliff Stearns (R-FL) and Rick Boucher (D-VA) introduced a bill [HR 4757] entitled the Advanced Internet Communications Services Act of 2004. The bill is one of several floating through Congress that deal with VoIP, although it is unlikely, given the lateness of the year and electoral politics, that VoIP-related legislation will be passed this year. In a statement, Rep. Boucher said “Mr. Stearns and I are seeking to frame the debate on advanced Internet communications regulation, including VoIP regulation, in anticipation of a broader telecommunications overhaul in the Congress beginning in 2005.” [Statement: http://www.house.gov/boucher/docs/voipstatement.htm].

    Most of the VoIP-related bills have the goal of exempting VoIP from regulation by the states and ensuring a certain level of market competition. The Stearns/Boucher bill works towards these goals by reclassifying all IP-enabled services into their own regulatory category: “advanced Internet communications services.” This would solve the current regulatory confusion over IP services, which evade easy classification as either “information services” or “telecommunications services” under the Telecom Act. The bill would also create a subclass called “advanced Internet communications voice service” for VoIP systems, and it would give the FCC exclusive jurisdiction over these services. FCC regulation would only be allowed for four purposes: to ensure the availability of E-911, to provide for access by persons with disabilities, to contribute to the universal service fund, and to provide compensation for use of the public switched telephone network. A copy of the bill can be found at [http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.4757:].

    The Stearns/Boucher bill was referred to the Energy and Commerce Subcommittee on Telecommunications and the Internet. On the same day the bill was introduced in the House, that subcommittee held a hearing entitled “Voice over Internet Protocol Services: Will the Technology Disrupt the Industry or Will Regulation Disrupt the Technology?” Information about the hearing is available at
    [http://energycommerce.house.gov/108/Hearings/07072004hearing1347/hearing.htm]. [Sources: Library of Congress, House Committee on Energy and Commerce, Office of U.S. Representative Richard Boucher]

    President Signs Identity Theft Penalty Enhancement Act
    07.15.04 – As expected, President Bush signed the Identity Theft Penalty Enhancement Act into law, saying “we’re taking an important step today to combat the problem of identity theft.” As noted in previous editions of Telecom/IT Policy Highlights, the Act imposes mandatory two-year minimum prison sentences for aggravated identity theft, which involves unlawfully using another person’s personal information in the commission of certain felonies. To view a copy of the president’s remarks, see [http://www.whitehouse.gov/news/releases/2004/07/20040715-3.html]. Text of the law [PL-108-275] can be found at [http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_public_laws&docid=f:publ275.108]. [Sources: Library of Congress, The White House]

    RFID Technology Examined By House Committee
    07.14.04 – The House Commerce Subcommittee on Commerce, Trade, and Consumer Protection held a hearing on the future of radio frequency identification (RFID) technology to investigate its effects on businesses and on personal privacy. RFID technology enables supply-chain managers to track their products much better than they can with simple barcodes, which require line-of-sight scanning. Several witnesses testified about what companies were doing to create global standards for RFID technology so that they could achieve gains in efficiency, quality, and security. However, privacy advocates testifying at the hearing warned that the hidden nature of RFID tags increases the chances that people will be surveilled without their knowledge. One witness, Paula Bruening of the Center for Democracy and Technology, said “the privacy concerns raised by RFID can be addressed, but they must be handled early.” The Federal Trade Commission (FTC) held a workshop on RFID in June; proceedings from that workshop as well as public comments can be viewed at[http://www.ftc.gov/bcp/workshops/rfid/]. Testimony from experts and other information from the subcommittee hearing can be found at [http://energycommerce.house.gov/108/Hearings/07142004hearing1337/hearing.htm]. [Sources: House Committee on Energy and Commerce, Federal Trade Commission]

    Senate Commerce Committee Amends and Approves Telecom/IT Bills
    07.22.04 – Meeting for the last time before the summer recess, the Senate Committee on Commerce, Science, and Transportation approved several bills previously tracked by Telecom/IT Policy Highlights. The following is an update on the status of these bills:
    —Junk Fax Prevention Act of 2004 [S. 2603] – this bill was approved by the Committee without amendment. This bill is similar to legislation [H.R. 4600] that passed in the House on July 20. Both bills would reverse an FCC decision and allow companies to send faxes to people with whom they have established business relationships. Compare the Senate bill [http://thomas.loc.gov/cgi-bin/query/z?c108:S.2603:] and the House bill [http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.4600:].
    — VoIP Regulatory Freedom Act of 2004 [S. 2281] – as reported in the previous edition of Telecom/IT Policy Highlights, the VoIP Regulatory Freedom Act of 2004 addresses important issues such as intercarrier compensation, universal service, public safety, law enforcement access, and accessibility to people with disabilities. The Commerce committee held a hearing on this issue in June, and it adopted a number of changes at its July executive meeting. The new version of the bill would allow the FCC to delegate some regulatory authority over VoIP to the states, and it also provides six exceptions to the prohibition on state regulation. The new language of the bill would allow states to tax and regulate VoIP services with respect to 911 and E-911, intercarrier compensation, and universal service. It would also allow for some regulation of VoIP for consumer protection, for prohibition of criminal activity, and to outlaw deceptive or unfair trade practices. The bill’s new language sets aside the question of CALEA (Communications Assistance for Law Enforcement Act) requirements pending the outcome of a study by the Government Accountability Office (GAO). With the new amendments, the VoIP Regulatory Freedom Act may seem ironically titled. However, action on VoIP legislation has stalled in the House and is unlikely to be voted on by the Senate when it returns from recess in September, so the battle over VoIP regulation is far from over.
    — S. 2505 (Relating to Low-Power FM) – This unnamed bill was introduced in June to repeal restrictions on the FCC’s ability to grant licenses for low power FM (LPFM). The bill passed the Committee with the addition of an amendment.[Sources: Senate Commerce Committee, Library of Congress]

    California: Bill Would Force Employers to Disclose Email Surveillance
    08.23.04 – The California legislature approved a bill [SB 1841] that would require employers to give notice to their workers before monitoring them electronically. The law states that the notices must be “clear and conspicuous,” describing the form of communication or activity that will be monitored and the kinds of information to be obtained. Simply placing signs up in the workplace is not sufficient notice. California law already prohibits monitoring employees in certain situations without a court order, although employers will be allowed to monitor without notice if they suspect their employees are engaged in unlawful conduct and believe electronic surveillance will reveal illicit activity. Violation of the law would be a misdemeanor. Governor Arnold Schwartzenegger is expected to sign the legislation shortly. A copy of the bill’s text is available at [http://info.sen.ca.gov/pub/bill/sen/sb_1801-1850/sb_1841_bill_20040823_enrolled.html]. [Source: California State Legislature]


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  • Regulatory Activities

    Board Wants Comments on High-Cost Universal Service Support
    08.04.04 – The FCC Federal-State Joint Board on Universal Service issued a Public Notice [FCC 04J-2] seeking comment on a number of issues related to universal service support in high-cost areas. The Joint Board on Universal Service was established in 1996 to help implement the universal service requirements of the 1996 Telecommunications Act and determine how to allocate universal funds to pay for service in high-cost areas. The Commission implemented a five-year plan in 2001 to address these cost issues, and the Joint Board is now seeking comment on how to replace that plan, due to expire in 2006.

    Since rural areas do not benefit from a dense subscriber base and are typically small, they do not benefit from economies of scale. Previously, support for universal service in these high-cost areas had been based on their embedded, or historic, costs. The current interim plan uses a modified form of this cost calculation. The Commission decided in 1997, however, that universal service support should be based instead on forward-looking costs, and the Joint Board seeks comment on structuring that plan. However, the Board also notes that given the rapid changes in technology since decisions on universal service were first made in 1997, it is charged with undertaking a “thorough review of how to preserve and advance universal service.” Specifically, the Board wants comments on the definition of “rural” for universal service purposes and on the cost calculations that must be made in the future. Comments are due on October 15, 2004. To read the Notice, see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04J-2A1.txt]. [Source: Federal Communications Commission]


    08.04.04 – Fulfilling its obligations under the CAN-SPAM Act passed by Congress last December, the FCC issued an Order [FCC 04-194] adopting rules that protect wireless consumers from receiving unsolicited commercial messages on their phones and pagers. The rules require marketers to obtain explicit permission from wireless device users before they can send any commercial email. The rules cover email services that send messages directly to consumers’ phones or PDAs, but they do not apply to services that simply forward email messages or to services that connect a wireless device to a computer-based email account. Phone to phone text messaging is also not covered by the rule. To assist the senders of unsolicited messages from mistakenly sending email to wireless-system users, the FCC is requiring that commercial mobile radio service (CMRS) providers submit the domain names they use on their system for inclusion in a list that will be publicly available. Individual subscriber addresses will not be made available. To view a copy of the Order, see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-194A1.txt]. [Source: Federal Communications Commission]

    FCC Expands Secondary Spectrum Market
    07.08.04 – The FCC took steps to expand the secondary spectrum market at its July 8th meeting, adopting a Second Report & Order, Order on Reconsideration, and Second Further Notice of Proposed Rulemaking [FCC 04-167]. Secondary spectrum markets allow rights-holders to lease their spectrum to third parties. FCC Commissioner Kathleen Q. Abernathy said that “fostering such secondary markets for unused spectrum furthers our overall spectrum management responsibility by ensuring that spectrum is utilized efficiently.” [Statement: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249427A3.txt]. The FCC’s Order expands the secondary market by streamlining the leasing process and by creating a “private commons” option that will allow license-holders to provide spectrum access to individuals or groups using advanced devices. The FCC also seeks comments on future actions to expand secondary markets, which the Commission sees as an essential part of its broader move towards free-market solutions. For more information, see the FCC’s ruling at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-167A1.txt]. Comments are due November 17, with reply comments due December 17, 2004.

    The FCC has been aggressively investigating new ways to allocate spectrum for more commercial benefit. In addition to a series of rulemakings that have changed sharing rules or opened up additional spectrum, the FCC’s Spectrum Policy Task Force has been taking a comprehensive approach to the Commission’s goal of increasing spectrum efficiency. The Commission recently announced a new database of information tracking the Task Force’s activities, available on the Task Force website at [http://www.fcc.gov/sptf/]. [Source: Federal Communications Commission]

    FCC Takes Steps Towards Digital Television Transition
    08.04.04 – The FCC issued a Report & Order [FCC 04-192] to implement steps on the road to digital television (DTV). The Order includes a number of actions, including an open channel election process beginning in November 2004 to finalize digital channel allotments. The Order also sets deadlines for stations increasing digital broadcast power, eliminates some simulcast requirements, and establishes new rules for v-chips. The FCC hopes that these rules will hasten the transition to DTV and increase the quality of digital output in the short run. The FCC’s release (PDF) can be found at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-250542A1.pdf]. [Source: Federal Communications Commission]

    FCC Scrambles to Write New Unbundling Rules
    07.21.04 – After network sharing rules struck down by federal courts expired in June (see the previous issue of Telecom/IT Highlights for a thorough discussion), the FCC issued an Order and Notice of Proposed Rulemaking [FCC 04-179] to impose interim rules and solicit comments on alternative final unbundling rules for incumbent local exchange carriers (ILECs). Section 251(c)(3) of the Telecommunications Act requires each incumbent local exchange carrier to provide “nondiscriminatory access to network elements on an unbundled basis,” but the FCC’s attempts to implement this provision have been nullified on three occasions by federal courts.

    The Order and NPRM is the FCC’s fourth attempt. There are two parts to the FCC’s action: a 12-month interim plan and a long-term plan. The interim plan requires the ILECs to continue providing unbundled access to certain components under the rates established by the old rules unless they reach voluntary agreements with competitors. The Commission is seeking comment on the long-term plan, asking how to respond to the D.C. Court’s decision in USTA v. FCC [Opinion (PDF): http://pacer.cadc.uscourts.gov/docs/common/opinions/200403/00-1012b.pdf]. Specifically, the FCC is asking how it should define relevant markets and how it should relate market impairment (the language of the Telecom Act) to uneconomic entry (the Commission’s previous basis for regulation). View the Order and NPRM at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-179A1.pdf]. [Source: Federal Communications Commission]

    FCC Seeks Comment on Improving the Emergency Alert System
    08.04.04 – Following the terrorist attacks of September 11, 2001, the FCC created the Media Security and Reliability Council (MSRC) to investigate safeguards for the nation’s information systems. In May of 2003, that committee released a report on potential changes to emergency communications and public warning systems. Guided by recommendations from the MSRC and the Partnership for Public Warning, a public-private partnership, the FCC issued a Notice of Proposed Rulemaking [FCC 04-189] this month asking how it could improve the Emergency Alert System (EAS), used to notify the public in the event of an emergency such as a natural disaster or terrorist attack.

    Currently, EAS only mandates the delivery of a “Presidential message” for public warning. Controlled by the Federal Emergency Management Agency (FEMA), EAS use at the local or state level is voluntary. The FCC wants comment on “whether permissive state and local EAS participation is appropriate in today’s world.” The Notice also asks whether the EAS is outdated since it transmits almost exclusively over analog radio and television broadcast and cable systems. “Should it be phased out in favor of a new model? …Alternatively, should EAS requirements be extended to other services (e.g. cellular telephones)?” The FCC is especially interested in hearing from local emergency planning organizations and all telecommunications industries. Text of the Notice can be found at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-189A1.txt].

    Both the MSCR and the Partnership for Public Warning recommended upgrading the EAS. Their recommendations from can be found on their websites at [http://www.mediasecurity.org/index.html] and [http://www.partnershipforpublicwarning.org/ppw/]. Comments on the FCC’s proposal are due October 29, 2004 (reply comments due November 29, 2004). [Source: Federal Communications Commission, Partnership for Public Warning]

    IRS Proposes Expanding Telephone Tax to New Technologies
    07.02.04 – The Internal Revenue Service published an Advance Notice of Proposed Rulemaking [REG-137076-02] regarding the Communications Excise Tax, a three-percent tax on telephone service that has been in existence since 1965. The IRS is considering expanding its application of the tax to include new technologies such as VoIP. The ANPRM seeks comment on how the IRS should treat new technologies under Section 4252 of the Internal Revenue Code. Comments are due September 30, 2004. View the Notice at [http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/04-15125.htm]. [Source: Internal Revenue Service, Federal Register]

    Law Enforcement Access Required For Internet Services, Thinks FCC
    08.04.04 – The FCC adopted a Notice of Proposed Rulemaking and Declaratory Order [FCC 04-187] establishing a framework for implementing the Communications Assistance for Law Enforcement Act (CALEA), specifically addressing Internet broadband services. Adopted in 1994, CALEA requires telecommunications service providers to make their networks accessible to law enforcement agencies for surveillance purposes. At the Senate Commerce Committee hearing in June on VoIP, Deputy Asst. Atty. General Laura Parsky testified that current exemptions in the law do not give federal authorities the ability to wiretap VoIP networks and said that “CALEA requirements can and should apply to VoIP and other IP-enabled service providers, even if these services are ‘information services’ for purposes of the Communications Act.” [Testimony: http://commerce.senate.gov/hearings/testimony.cfm?id=1230&wit_id=3537].

    In the Notice of Proposed Rulemaking, the FCC tentatively agrees with the Justice Department, requiring facilities-based providers of any broadband Internet services or VoIP services to follow CALEA standards because they are “a replacement for a substantial portion of the local telephone exchange service.” The Commission seeks comment on the technical standards for compliance and on cost recovery. The Commission also requests comment on what timelines are appropriate for implementation. In the companion Declaratory Ruling, the FCC clarified that “push to talk” services are subject to CALEA.

    Perhaps the most interesting aspect of the FCC’s proposal is its determination that no further determinations about what services are subject to CALEA will be necessary. The NPRM suggests that only managed Internet services be covered, which means that “disintermediated” VoIP and instant messaging services would not. The FCC’s release says that the Commission “anticipates that the Report and Order in this proceeding will provide substantial clarity sufficient to resolve Law Enforcement’s and industry’s uncertainty about future compliance obligations.” See the FCC’s press release at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-250547A3.txt]

    This action by the Commission is not uncontroversial. Whether the Commission actually has the authority to interpret CALEA as applying to Internet services is an active question. Commissioner Kathleen Q. Abernathy, in a separate statement, said that CALEA “explicitly exempts information services from its reach” and that moving forward with this approach without Congressional guidance “would be fraught with legal risk.” [Statement: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-250547A2.txt]. Commissioners Adelstein and Copps agreed that the Commission is on shaky legal footing, but all Commissioners concurred in the judgment. View the FCC’s Notice and Ruling at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-187A1.txt]. Comments will be due 45 days after publication in the Federal Register. [Source: Federal Communications Commission]

    Public Safety Interference Problems Addressed with New 800 MHz Band Plan
    07.08.04 – The FCC took steps to solve interference problems experienced by public safety radio systems operating in the 800 MHz band by designating a new band plan and implementing short- and long-term solutions. The plan, adopted by Report and Order, Fourth Report and Order, Memorandum Opinion and Order, and Order [FCC 04-168], “is a Commission-derived solution that represents the most comprehensive and effective means of solving the 800 MHz public safety interference problem,” said Chairman Michael Powell. [Statement: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-168A2.txt].

    Since being designated for dedicated public safety use in 1980, the 800 MHz band has grown in importance. However, increased commercial activity in neighboring spectrum has created interference problems for public safety communications. The significance of this issue was brought to the FCC’s attention in 2001 by Nextel Communications, Inc. (Nextel), which owns the rights to spectrum used for “Enhanced” Specialized Mobile Radio (ESMR) in the 800 MHz band. The cellular-architecture multi-cell systems utilized by ESMR and by cellular telephone licensees is what causes the interference with high-site non-cellular systems used by public safety agencies and others.

    The FCC’s solution has both short-term and long-term components. The short term plan implements technical standards for “unacceptable interference” and establishes procedures outlining what parties are responsible and what actions to take to abate the interference. The long-term solution involves a reconfiguration of the 800 MHz band such that ESMR is separated from non-cellular operations. The FCC’s action requires Nextel to relinquish its spectrum in the lower part of the 800 MHz band and to relocate its operations to higher frequencies. Additionally, Nextel will relinquish its current spectrum rights in the 700 MHz band and will be compensated for its losses with the rights to ten MHz of spectrum in the 1.9 GHz band, conditional upon its meeting transitional requirements. The transitions will occur over a thirty-six month period beginning with a public notice.

    The Commission’s plan involves minimal disruption to public safety agencies since most of them already operate in the spectrum set aside in the new 800 MHz band plan. Nextel will be required to fund the transition for public safety licensees as part of the agreement. The Commission’s plan also increases the spectrum available for public safety and other non-cellular users by 4.5 MHz, a move that will accommodate growth and alleviate congested markets where spectrum shortages exist. Public safety agencies should be more secure and stable in the future as a result of this action. For more information on the FCC’s actions, see [http://wireless.fcc.gov/publicsafety/800MHz/bandinterference.html]. [Source: Federal Communications Commission]

    Rural Wireless Development Targeted By FCC Actions
    07.12.04 – Seeking to facilitate the adoption of more advanced wireless technologies, the FCC issued a Report & Order [FCC 04-165] allowing more efficient antennas to be used with unlicensed devices. These so-called “smart” antennas focus their radio transmissions on specific geographic locations, which means more spectrum is available for re-use. The commission hopes that the new rules will allow wireless Internet service providers (WISPs) to better serve their customers, especially in rural areas. View the Report & Order at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-165A1.txt].

    The FCC has been heavily promoting wireless broadband in recent months, which it believes will be one solution (another is broadband over power lines, or BPL) for expanding Internet access to rural America. The Consumer and Governmental Affairs Bureau recently launched an outreach program called “Lands of Opportunity: Building Rural Connectivity” to target regions where the Internet has not penetrated. [Release: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249411A1.txt].

    Finally, the FCC issued a Report & Order and Further Notice of Proposed Rulemaking [FCC 04-166] to establish new procedures for targeting rural areas and seek comment on what more can be done. Under the Order, the FCC determined that “additional steps are still needed to promote greater deployment of wireless services in rural areas, such as eliminating disincentives to serve or invest in rural areas, and helping to reduce the costs of market entry, network deployment and continuing operations.” [Release: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-249405A1.txt] [Source: Federal Communications Commission]

    Telecommunications Relay Service Rulemaking Comments Due
    08.31.04 – In June, the FCC issued a Further Notice of Proposed Rulemaking [FCC 04-137] seeking comment from the disability community on new rules for the IP relay and Video Relay Service components of the Telecommunications Relay Service (TRS). (See the June edition of Telecom/IT Highlights for background.)
    Comments will be due on October 18, with reply comments due November 15, 2004. The Notice is available at [http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/04-18551.htm]. [Source: Federal Communications Commission]

    Georgia: PSC to Investigate BellSouth’s DSL/Voice Bundling Practices
    08.17.04 – The Georgia Public Service Commission (PSC) initiated a proceeding to investigate the provision of Digital Subscriber Line (DSL) service after receiving a large number of complaints from BellSouth customers. The customers complained that BellSouth terminated or refused to offer them DSL service once they chose to buy voice telephone service from a competing carrier. The PSC ruled in 2003 [Docket No. 11901-U] that requiring voice service for the provision of DSL violated Georgia law. According to a release by the Commission, the upcoming proceeding will investigate the service bundling practices of all telecommunications providers, and it will look into all types of voice service including VoIP. View release at [http://www.psc.state.ga.us/newsinfo/releases/2004/081704.pdf]. [Source: Georgia Public Service Commission]


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  • Judicial Activities

    Appeals Court Says Internet Service Providers Can Read Customer Emails
    06.29.04 – The U.S. Court of Appeals for the First Circuit handed down an opinion that has privacy advocates concerned about the sanctity of email. The case, United States v. Councilman, involves an Internet book dealer called Interloc that also provided email service to customers. Attempting to gain information about its rival Amazon.com, Interloc used a filtering program to sort through clients’ accounts for emails from Amazon.com while stored on its server, which it then copied and stored separately for viewing. Interloc was then indicted for violation of the Wiretap Act, which is part of the Electronic Communications Privacy Act (ECPA). The court threw out the indictment.

    The rationale behind the court’s decision is complex. It has to do with the distinction between “wire” and “electronic” communications under federal law. Specifically, the Wiretap Act prohibits electronically storing intercepted wire communications, but makes no separate provision for electronic communications. Thus, maintaining a copy of an email is not a Wiretap Act violation. The activity would be unlawful if Interloc were intercepting emails while they were being transmitted. However, since the emails were copied while being stored on the company’s server, Interloc was not technically “intercepting” the communication. Therefore, its activities were not unlawful. The Court’s opinion is available online at [http://www.ca1.uscourts.gov/cgi-bin/getopn.pl?OPINION=03-1383.01A]. [Source: U.S. Court of Appeals for the First Circuit]

    Solicitor General Joins FCC Appeal of “Brand X” Cable Modem Decision
    08.31.04 – Acting Solicitor General of the United States Paul D. Clement announced that the Bush administration would appeal a decision by the 9th Circuit Court of Appeals last October that put the status of cable modem services in legal limbo. The case, Brand X Internet Services v. FCC [No. 02-70518], posed a central question for the Court: is Internet service provided by cable companies classified as a “cable service,” an “information service,” or a “telecommunications service?” The Court of Appeals decided that it was part information service and part telecommunications service.

    That stands in contrast with the FCC’s determination that cable modems provide information services, which means cable companies do not have to share their lines with rivals. FCC Chairman Michael Powell reacted to the Solicitor General’s decision by saying “this is about ensuring that high-speed Internet connections aren’t treated like what they’re not: telephones.”
    [Statement: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-251527A1.txt]. The FCC is also appealing the case. The Supreme Court is expected to hear the case in order to clarify the regulatory confusion that has resulted from Brand X and similar cases. A copy (PDF) of the 9th Circuit’s decision can be found at
    [http://www.ca9.uscourts.gov/ca9/newopinions.nsf/58AF00C2122345DD88256DB7005BFAA3/$file/0270518.pdf]. [Source: Office of the Solicitor General of the United States, Federal Communications Commission, U.S. Court of Appeals for the 9th Circuit]


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  • Research / Reports

    Broadband Connections Now the Majority, Report Says
    08.18.04 – According to a new report by the Internet analysis firm Nielsen//NetRatings, 51% of the online population were using broadband connections in July 2004. This marks the first time that broadband connections have outnumbered “narrowband” connections, a sizeable increase from July 2003, when only 38% of connections were broadband. Growth in broadband connections has continued despite slowed growth in new Internet connections overall. Higher speeds aren’t spread evenly throughout the population, however. The report indicates that younger populations have faster connections, noting that seniors over the age of 65 had a broadband penetration rate of 34%. More information about the report can be found at [http://www.nielsen-netratings.com/pr/pr_040818.pdf]. [Source: Neilsen//NetRatings]

    Electronic Voting Report Shows Challenges, Opportunities
    07.20.04 – The Government Accountability Office (GAO) issued a report on the opportunities and challenges of electronic voting, commissioned for the House Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census. The report discusses the two main forms of electronic voting: optical scan and direct recording electronic (DRE). These systems are replacing older voting systems across the country due to provisions of the Help America Vote Act. The GAO report outlines some of the problems faced by these systems, noting concerns about security and costs, but also citing improved potential for ease of use and accessibility. The report emphasizes that voting systems are only one aspect of the elections process, and they should be managed along with the people and processes needed to implement successful elections. Full text of the report is available at [http://www.gao.gov/atext/d04975t.txt]. [Source: GAO]

    German Digital TV Transition Compared to U.S. Efforts
    07.21.04 – The Government Accountability Office (GAO) released a report entitled “Telecommunications: German DTV Transition Differs from U.S. Transition in Many Respects, but Certain Key Challenges Are Similar.” In Berlin, Germany, analog TV transmission ended in 2003, but the U.S. for all-digital TV is unlikely to occur at the deadline of 2006. The report analyzes the German television market, how the DTV transition occurred, and what relevance the German experience has for the United States. The report finds that the problem faced by Congress and the FCC is encouraging consumers to buy digital TV equipment. The full report can be viewed at [http://www.gao.gov/atext/d04926t.txt]. [Source: GAO]

    Subscriber Surge Predicted for Global Wireless Market
    07.29.04 – A report released by high tech market research firm In-Stat/MDR projects the number of wireless subscribers worldwide will jump from 1.5 billion in 2004 to more than 2.5 billion in 2009. The firm predicts that through 2007, the Global System for Mobile communications (GSM) standard will continue to see steady expansion as consumers move away from older airlink technology. GSM is already very popular in Europe. From 2008 onwards, Code Division Multiple Access (CDMA), the cell phone standard that has become popular in the Americas and parts of Asia, will surpass GSM and claim the largest market share. The study found that China continues to lead the world in overall subscriber growth, and that countries like India are seeing rapid subscriber growth. The subscriber growth in the United States is expected to rise at a compounded annual growth rate of 5.6 percent through 2009. Summary on the In-Stat/MDR report, titled “Growth Returns-Worldwide Mobile Subscriber Forecasts 2004-2009,” is available at [http://www.instat.com/press.asp?ID=1035&sku=IN0401276GW]. [Source: In-Stat/MDR]


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  • Items of Interest

    GAO Keeps Initials, Gets New Name
    07.07.04 – The General Accounting Office (GAO), the agency responsible for policy analysis, program evaluation, and auditing of government activities, has changed its name to the Government Accountability Office. Comptroller General David M. Walker said that the old name “had not kept pace with GAO’s evolving role in government,” leaving many with the impression that GAO is simply the federal government’s accounting firm. But while GAO does do some accounting, the vast majority of its work is focused on program evaluations, policy analyses, and legal opinions about federal government activities. To learn more about GAO, see [http://www.gao.gov/]. [Source: GAO]

    Presidential Candidate John Kerry Proposes Merging NTIA, TA
    08.04.04 – Senator John Kerry (D-MA), citing the convergence of telecommunications and technology, proposed merging the National Telecommunications and Information Administration (NTIA) and the Technology Administration (TA), both located in the Commerce Department. The Democratic candidate for President says it is part of his plan to “eliminate wasteful offices” and “improve efficiency” in government. Kerry’s campaign says that the proposal will “promote a more efficient and effective operation, while ensuring that we move forward to bridge the digital divide.” See Sen. Kerry’s plan at [http://www.johnkerry.com/pdf/pr_2004_0803.pdf]. [Source: John Kerry for President]

    Wired News Announces the End of the “I”nternet
    08.17.04 – Wired News, one of the pioneering news outlets of the Internet age, has decided not to capitalize the words “Internet,” “Web,” or “Net.” Wired News copy chief Tony Long wrote “there is no earthly reason to capitalize any of these words. Actually, there never was.” Long suggests the words may have been capitalized by marketers and enthusiasts in order to hype the new technology, but said it is time for “a stylistic reality check.” See Wired News’s comments at
    [http://www.wired.com/news/culture/0,1284,64596,00.html]. [Source: Wired News]


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  • Events

    APPAM Conference To Be Held In Atlanta
    10.28-30.04 – The Association for Public Policy Analysis and Management (APPAM) is holding its fall conference at the Omni Hotel at CNN Center from October 28-30, 2004. The theme of the conference is “Creating and Using Evidence in Public Policy Analysis and Management.” Relevant panel sessions include “Info & Telecom Policy,” “E-voting Policy and Perils,” and “E-government Inputs, Users, and Impacts.”
    See [http://www.appam.org/conferences/fall/atlanta2004/] for more information. [Source: Association for Public Policy Analysis and Management]

    National Summit on Broadband Deployment in October
    10.24-26.04 – The National Association of Regulatory Utility Commissioners (NARUC) and the National Exchange Carrier Association (NECA) are sponsoring a National Summit on Broadband Deployment III on October 24-26, 2004 in Arlington, VA. The summit will provide a forum for federal and state policymakers, industry participants, and consumer groups to discuss the future of broadband and its deployment. For more information about the schedule and for registration information,
    see [http://broadband.narucmeetings.org/]. [Source: National Exchange Carrier Association, National Association of Regulatory Utility Commissioners]


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  • Newsletter Info

    Center for Advanced Communications Policy
    Telecom/IT Policy Highlights Volume 4.07
    July/August 2004
    Alan Bakowski, Editor

    Telecom/IT Policy Highlights presents legislative, regulatory, legal, and other items of interest pertinent to information, telecommunications, and related technology policy and research. For additional information regarding the information provided in this report, or if there are newsworthy items that should be included in future editions, please contact , Research Specialist, or , Associate Director of Research.
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