Center for Advanced Communications Policy | Archives

Telecom/IT Policy Highlights

Volume: 4.11
November 2004

Overview

Policy / Legislative Activities

Regulatory Activities

Judicial Activities

Research / Reports

Items of Interest

Newsletter Info

Overview
Historically, the period after a presidential election is a quiet one for policymakers in Washington , D.C. ; lame-duck Congresses usually lack the political authority to complete significant legislation. However, the re-election of President George W. Bush and Republican gains in the U.S. Senate left the power structure relatively unchanged. And with appropriations bills left uncompleted, Capitol Hill was busier than usual this November trying to complete the people's business. House and Senate leaders worked especially hard on the 9/11 commission reform legislation, but negotiations broke down at the last minute, delaying even uncontroversial components relating to public safety and emergency communications until the 109th Congress. Appropriations bills were passed, however, and Congress managed to include a provision increasing the number of foreign high-tech workers allowed under the H-1B visa program.

Meanwhile, the Federal Communications Commission (FCC) issued its much-anticipated opinion in the Vonage voice over Internet Protocol (VoIP) case. The Commission preempted VoIP services from state regulation, settling a jurisdiction question that has riddled telecommunications regulators for over a year. However, the FCC did not rule on many substantive issues related to VoIP regulation. Instead, it is waiting until later to issue a broad ruling related to IP-enabled services.

In emerging technology news, the Food and Drug Administration announced guidelines for pharmaceutical companies to use radio frequency identification (RFID) tags to more safely secure the nation's drug supply, and the FCC approved the first software defined radio platform. Motorola Inc. also announced this month it would acquire MeshNetworks, which enhances the firm's ability to provide support for wireless data networks.

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Policy / Legislative Activities
Adelstein Appointed to New Five-Year Term on Commission
11.20.04 - Federal Communications Commissioner Jonathan Adelstein was confirmed by the U.S. Senate for a new five-year term that will expire on June 20, 2008. Adelstein was originally appointed to the FCC by President Bush in 2002 to complete the remainder of the term served by former Commissioner Gloria Tristani. That term expired in June 2003, but Adelstein was allowed by law to continue serving on the Commission until the 108th Congress adjourns. Adelstein's renomination was in question until President Bush submitted his name to the Senate on November 16. Prior to serving on the Commission, Adelstein served as a legislative assistant to former Senate Minority Leader Tom Daschle (D-SD). The President may soon have another seat to fill on the FCC. Commissioner Kathleen Abernathy's term expired in June, and some in the industry expect her to return to the private sector in lieu of seeking reappointment. She is entitled to serve on the Commission until 2006 or until her successor is confirmed by the Senate.
[Sources: Library of Congress, FCC]

Congress Approves Omnibus Appropriations Bill
11.20.04 - Congress approved a $388 billion omnibus appropriations bill [ H. R. 4818 ] that included nine separate bills and fiscal year 2005 spending for a number of federal agencies (including most of the technology-related executive branch agencies). Legislators set aside extra time to work on stalled intelligence reform and possible telecom reform legislation in a second lame-duck session beginning December 7. Issues pending include E-911 funding, the spectrum relocation trust fund, and adjustments to accounting procedures for E-rate and the universal service fund (USF). The FCC's FY 2005 appropriation was set at $293 million, $7 million more than its FY 2004 appropriation. The agency had originally requested $293 million. The overall spending bill will not be sent to the President for signature until Congress can reconvene to remove a provision that allows members of Congress to review individuals' tax filings. This is the third year in a row in which lawmakers have neglected to pass spending bills until the last minute and then rolled them into an omnibus appropriations bill.
[Sources: House Appropriations Committee, Library of Congress, Communications Daily, The New York Times]

Dept. of Agriculture Awards $8.8 Million in Community Broadband Grants
10.29.04 - U.S. Department of Agriculture (USDA) Secretary Ann Veneman announced that $8.8 million in grants would be awarded to 16 communities for broadband connectivity in rural areas. The program, called Broadband Community Connect, is in its third year, having distributed over $30 million in funding to 90 communities across the country. Communities receiving funding must provide at least ten computers with broadband access for public access.
[Source: USDA Rural Development]

H1-B Visas for High-Tech Workers Expanded
11.23.04 - With demand for high-tech workers as great as ever, Congress included in a spending bill a provision to increase the number of foreign citizens allowed to work in the United States . The provision expands the number of H-1B visas, which are granted for foreigners working in fields such as engineering, medicine, biotechnology, and computing. The H-1B visa program requires employers to pay workers the prevailing wage in the industry and demonstrate that Americans are not being passed over for jobs. Congress was prompted to increase the number of visas after the Department of Labor announced it had reached the annual limit of 65,000 after the first day of the fiscal year. The provision tucked into the Consolidated Appropriations Act [ H. R. 4818 ] allows visas to be granted to an additional 20,000 foreign students who earn graduate degrees at U.S. universities. Final passage of the bill should occur after last-minute funding details are negotiated by the conference committee, but the H-1B visa provision is expected to remain in place. This should help firms in the information technology sector hire the technical assistance they need to be competitive in the global marketplace.
[Sources: The Washington Post, Library of Congress]

Internet Access Tax Ban Finally Approved By Congress
11.19.04 - After more than a year of negotiations, the House and Senate both agreed to a compromise on the Internet Tax Nondiscrimination Act [ S. 150 ], which extends a moratorium on Internet access taxes until November 1, 2007. The original moratorium expired in 2003, opening the door for cash-strapped states to levy taxes on Internet services. Although there was widespread support for extending the moratorium, three issues emerged as sticking points for negotiators. The first was how to deal with states that were exempted by the original ban. Under the Internet Tax Freedom Act of 1998, approximately a dozen states that had already begun to charge taxes on Internet access were allowed to continue. House leaders wanted to eliminate the exemptions but were met by opposition in the Senate from several former governors, most notably Sen. Lamar Alexander (R-TN), who were concerned about eroding state revenues. The compromise bill passed this month gives those states three years to phase out their taxes on Internet access.

A second issue was whether to make the moratorium permanent or merely extend it. The House of Representatives passed a permanent ban on September 17, 2003 [ H. R. 49 ], but it failed to receive support in the Senate. The compromise reached extends the ban by four years to 2007, settling the issue until it can be readdressed by the 110th Congress. A third issue that emerged in the debate was the distinction between Internet access and telephone services. In particular, voice-over-Internet Protocol (VoIP) acts as a phone service but is run over high-speed Internet lines. The Internet Tax Nondiscrimination Act solves this distinction with a functional approach, rather than a technological approach, to taxation. States may continue to tax telecommunications services, including VoIP, regardless of the technology with which they are provided. Additionally, states are prohibited from taxing Internet access, regardless of the technology used to provide it. The new moratorium prohibits taxes on services such as voice-capable email or instant messaging, which are described as "incidental to Internet access."

The legislation directs the Government Accountability Office (GAO) to conduct a study of the impact of the Internet tax moratorium on broadband deployment and adoption. The study, to be completed by November 2005, will compare adoption rates between states that have access taxes and those that do not, especially focusing on rural and underserved areas. One of the arguments against Internet access taxation is that it keeps prices low and encourages more people to subscribe to online services. The GAO study will attempt to quantify the magnitude of that effect. The bill passed the Senate in April by a vote of 93-7, and with minor modifications it passed with voice votes in both chambers as of November 19. The president is expected to sign the bill shortly. To view a copy of the legislation, go to [http://thomas.loc.gov/cgi-bin/query/z?c108:S.150:].
[Sources: Library of Congress]

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Regulatory Activities
Consumer Advisory Committee Rechartered, Reviews Services for Blind
11.19.04 - The FCC Consumer Advisory Committee (CAC) met to discuss issues involving homeland security, consumer complaints, and digital television, and it was briefed by industry representatives on telecommunications services available to people who are blind or visually impaired. Technologies that increase accessibility were displayed, including voice-activated and -controlled cell phones, software that transforms text to speech, and accessible text websites for screen readers. The CAC is an advisory panel of citizens that makes recommendations to the Commission on a number of important issues, including telecommunications access for people with disabilities (as required by Section 255 of the Telecom Act), consumer protection, emerging technologies, and the rulemaking process. FCC Consumer & Government Affairs Bureau Chief K. Dane Snowden announced that the CAC had been rechartered for a new two-year period and that applications for positions on the new committee would be solicited in December. Information about the CAC can be found on the FCC website at [http://www.fcc.gov/cgb/cac/].
[Source: FCC]

FCC Exempts VoIP From State Regulation, Declares Service "Not Traditional"
11.09.04 - The FCC declared exclusive regulatory authority over certain IP-enabled telecommunications services, issuing a Memorandum Opinion and Order [ FCC 04-267 ] exempting Voice over Internet Protocol (VoIP) services from state regulation. The Commission issued its order in reaction to actions taken last year by the Minnesota Public Utilities Commission (MPUC), the agency that regulates telecommunications within the state of Minnesota . The Minnesota Commission had ruled that Vonage Holdings Corp. was required to obtain a license to operate as a Minnesota telephone service provider for its "DigitalVoice" VoIP service. Vonage petitioned the FCC to preempt the MPUC ruling, arguing that Minnesota could not regulate DigitalVoice because it could not be broken down into "intrastate" and "interstate" components, a requirement for dual Federal-state regulation.

The FCC agreed with this opinion in its Order, concluding that "DigitalVoice cannot be separated into interstate and intrastate communications for compliance with Minnesota 's requirements without negating valid federal policies and rules." In other words, the FCC did not think it feasible or possible to allow states to regulate VoIP services without creating a "patchwork" of regulation that would inhibit the rollout of VoIP services. In a statement accompanying the decision, Commission Chairman Michael Powell wrote, "To subject a global network to disparate local regulatory treatment by 51 different jurisdictions would be to destroy the very qualities that embody the technological marvel that is the Internet."
[Statement: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-254112A2.txt]
This is a sentiment that has been echoed by many in Congress in recent years. In October, sixty-two Representatives sent a letter to Chairman Powell requesting the FCC take action to preempt state regulation. Additionally, several bills [H. R. 4129 , S. 2281] were introduced this year which would have precluded states from regulating VoIP. The Commission's Order settles the jurisdiction question, although Congress may still act so as to prevent a court from overturning the FCC's decision.

The Memorandum Opinion and Order does not address the question of whether VoIP should be treated as a telecommunications service or an information service under the 1996 Telecommunications Act. The distinction is important because the Commission has no authority to regulate information services (such as the Internet). The FCC released a Notice of Proposed Rulemaking (NPRM) [ FCC 04-28 ] in February addressing this critical issue but has yet to rule on the subject. The Commission's Vonage ruling merely addresses the question of jurisdiction, and it defers all other questions about VoIP regulation to the broader IP-enabled services NPRM. That proceeding, which is ongoing, covers questions related to public safety, emergency 911, law enforcement access, consumer protections, and disability access. It is not known when the Commission will issue a ruling on these issues. To read the FCC's opinion about Vonage's DirectVoice service, see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-267A1.txt].
[Source: FCC]

FCC Sends A La Carte Cable Pricing Study to Congress
11.19.04 - The FCC's Media Bureau submitted a report to Congress on the impact of proposals to require cable companies to offer their customers to subscribe on a channel-by-channel, or a la carte basis. The report was requested by Rep. Joe Barton, Chairman of the House Committee on Energy and Commerce. Many consumer advocates have been pushing for a la carte cable pricing as a way to reduce costs by preventing consumers from having to pay for channels they do not watch. Additionally, the scheme would allow parents to have more control over their children's television-watching behavior by blocking content they find objectionable from entering the home in the first place. The report put together by the Media Bureau, however, suggests that a la carte pricing would not result in lower rates for most households. In fact, the report suggests that only customers who purchase less than 9 networks would see a reduction in their bill, whereas customers who purchase more than 9 networks would see rates increase. (The average cable household watches 17 channels.) The report suggests that bundling channels into tiers of service is an economically efficient way pricing and makes a series of recommendations for improving service and lowering prices in the retail and wholesale cable markets. To read the "Report on the Packaging and Sale of Video Programming Services to the Public," see
[http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-254432A1.txt].

FDA Encourages RFID Tags for Prescription Drugs
11.15.04 - The Food and Drug Administration (FDA) took a major step to integrate radio frequency identification (RFID) into prescription drug security and safety by releasing a guide for implementing pilot programs and feasibility studies. The FDA has made a commitment to promote the use of RFID tags in the nation's drug supply chain by 2007. FDA officials noted that RFID tags can help pharmaceutical companies combat counterfeit medications and avoid abuse. "Today's actions were designed with one goal in mind: to increase the safety of medications consumers receive by creating the capacity to track a drug from the manufacturer all the way to the pharmacy," said Acting FDA Commissioner Lester Crawford. Although RFID tags are currently costly to produce and monitor, the expense of often-counterfeited drugs such as OxyContin make pharmaceutical companies ideal early adopters of the technology. The FDA hopes to encourage more development in the technology by issuing guidelines and recommendations. The Compliance Policy Guide is available online at [http://www.fda.gov/oc/initiatives/counterfeit/rfid_cpg.html].
[Source: FDA]

First Anniversary of Wireless Local Number Portability
11.24.04 - November 24th marked the end of the first year wireless phone customers have been able to change carriers and "port" (keep) their phone numbers. Wireless local number portability (LNP) began last year in the country's 100 largest markets and reached the entire country six months later. During this year, more than 8.5 million consumers have chosen to use LNP and just fewer than 10 percent of them moved a landline number to a wireless phone. The FCC considers LNP a great success in eliminating "a barrier to full competition in mobile telephone services and between landline and wireless services." Consumers who would like to take advantage of LNP are encouraged to bring their current wireless phone bill to a new carrier. Ports between wireless carriers should take approximately 2.5 hours; those to or from landline carriers will likely take several days to complete.
[Source: FCC]

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Judicial Activities
Software Defined Radio Receives Approval from FCC
11.19.04 - The FCC's Office of Engineering and Technology has approved the first software defined radio (SDR) equipment, granting certification to the software development firm Vanu, Inc. for a cellular base station transmitter. Software defined radios have the ability to change frequency ranges, modulation modes, or power levels without changing hardware components. To gain FCC approval, software defined radios must demonstrate that they cannot be manipulated to operate outside FCC guidelines. The Commission is expected to issue a ruling soon streamlining SDR requirements. Commission officials are optimistic that SDR can create new opportunities and enhanced flexibility to airwaves. To read the Commission's release, see [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-254463A1.txt].
[Source: FCC]

Two Found Guilty of Felony Spamming in Virginia Case
11.04.04 - Two defendants in a Virginia court case were convicted on three counts of felony spamming. The defendants, both North Carolina residents, were found guilty of violating Virginia 's anti-spam law when they used false email addresses to send bulk advertisements through an AOL server in Loudoun , Virginia . Jurors in the case recommended nine years in prison and a $7,500 fine as punishment for the crimes. Virginia 's anti-spam law criminalizes the use of false information to send unsolicited bulk email, and it is described by many as one of the toughest spam laws in the nation. The federal Can-Spam Act did not apply to this case.
[Source: The Washington Post]

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Research / Reports
Bellman, Steven; Johnson, Eric J.; Korbin, Stephen J., and Gerald L. Lohse. 2004. "International Differences in Information Privacy Concerns: A Global Survey of Consumers." The Information Society , vol. 20(5), pp. 313-324.
This article examines the motivations behind different nations' Internet privacy regulations, suggesting that countries may choose different levels of information security based on their experience with the Internet, their philosophy of government, or their cultural values. After administering a survey to Internet users in 38 countries, the researchers conclude that cultural differences do have a significant impact on consumers' concerns about information privacy. Additionally, consumers in countries that have a history of strong protections for personal information desire much stronger online privacy protections. The survey also indicated that privacy concerns generally diminish as users become more experienced with the Internet. The article discusses the implications of culture-based privacy concerns for globally competitive firms.
[Source: The Information Society]

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Items of Interest
European Commission Setting IT Policy Agenda for 2010
11.19.04 - The European Commission, the bureaucratic arm of the European Union, is asking for public input on a strategy for addressing information and communication technology needs over the course of the decade. The Commission's Information Society Directorate-General is the agency that is responsible for implementing the "eEurope" agenda that was adopted by EU countries in Lisbon , Portugal in 2000. The goals of the "eEurope 2005 Action Plan" include expanding broadband access throughout Europe and increasing the delivery of public services over the web. As the Commission completes its goals in the 2005 action plan, the Information Society Directorate-General is preparing a new EU strategy. A communication released by the Commission identifies key topics such as eInclusion and access for people with disabilities, interoperability of systems, nurturing information technology as an industry sector, and providing public services electronically. The Commission is soliciting comments about these issues via email before January 16, 2005.
[Source: European Commission Information Society Directorate-General]

Motorola Acquiring MeshNetworks for Wireless Broadband Networks
11.16.04 - Motorola Inc. announced it would buy MeshNetworks, Inc., a leading private developer of mobile mesh networking and position location technologies. Mesh networks can be used to develop high-speed wireless broadband networks, and Motorola is expected to use this acquisition to bolster its next generation of networking products. The two companies already had an agreement to distribute network architecture for the 802.11 wireless standard used in "hot spots" around the country. The acquisition will enable Motorola to become more involved in mesh networking, which does not rely on centrally-controlled network support but instead allows mobile users to create a self-forming network. The acquisition is scheduled to be completed by the beginning of 2005. Read Motorola's press release at
[http://www.motorola.com/mediacenter/news/detail/0,,4882_4172_23,00.html].
[Source: Motorola Inc.]

Verizon Reaches Agreement with Nextel to End Spectrum Dispute
11.03.04 - Verizon Wireless and Nextel Communications, Inc. came to an agreement over a long-standing battle involving an FCC spectrum allocation and the phrase "push to talk," both of which have embroiled the companies in lawsuits. In July, Nextel was ordered by the FCC to relinquish spectrum in the 800 MHz band for public safety uses and was awarded spectrum in the 1.9 GHz band as compensation. Verizon Wireless challenged this deal, arguing that Nextel was unfairly receiving a bargain on valuable airwaves. Verizon Wireless had also been challenging Nextel's attempt to trademark the phrase "push to talk," which Nextel features prominently on its walkie-talkie style cell phones. In the agreement, Verizon Wireless will stop challenging Nextel's spectrum deal and Nextel will drop its trademark suit. The agreement will settle all legal disputes between the two firms, although not all terms of the settlement were made public. Read the companies' joint release at [http://news.vzw.com/news/2004/11/pr2004-11-02.html].
[Source: Nextel Communications, Inc., Verizon Wireless]

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Newsletter Info

Center for Advanced Communications Policy

Telecom/IT Policy Highlights Volume 4.11
November 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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Volume: 4.11 November 2004

Contents:

Volume: 4.11
November 2004