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Telecom/IT Policy Highlights

Volume: 5.03
March 2005

Contents:
Overview
Policy / Legislative Activities
Regulatory Activities
Judicial Activities
Research / Reports
Newsletter Info
  • Overview

    March was a period of transition for the Federal Communications Commission (FCC), when Michael K. Powell, a Commissioner for over seven years and Chairman for four, stepped down. President Bush subsequently announced that current Commissioner Kevin Martin would succeed Powell as Chairman, avoiding the need for Senate confirmation. Powell’s departure leaves one vacancy on the Commission, although the President is expected to soon name a replacement for Commissioner Kathleen Q. Abernathy, who is expected to step down this year. At Powell’s last open FCC meeting, the Commission opened more spectrum for wireless broadband and expanded truth-in-billing rules to cover wireless phones. Both these actions typified Powell’s tenure as Chairman, as he sought to encourage development of broadband and wireless technologies and make technology options more attractive for consumers. Additionally, the FCC ruled in favor of BellSouth in a dispute between state regulatory commissions (including Georgia’s) that were requiring DSL to be unbundled from voice service. The Commission said that states do not have the authority to determine whether DSL should be offered as a stand-alone service.

    In this month’s issue of Telecom/IT Policy Highlights, we offer a summary of relevant legislation moving through the 109th Congress. Bills tracked include anti-spyware legislation, protections for personal electronic information, and spending authorization bills for telecommunications projects. See “Federal Legislative Tracking” below for more information.

    At the state level, the Georgia General Assembly completed its historic legislative session in 39 days, one day earlier than required. The legislators passed an anti-spam law, an anti-spyware law, a bill requiring notification and consent for listing in a wireless phone directory, and a bill authorizing electronic health records in Georgia. See “Georgia Legislative Tracking” below for details.


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  • Policy / Legislative Activities

    Federal Legislative Tracking: Bills Relating to Telecom/IT Policy
    03.31.05 – The 109th Congress has been in session for nearly three months, and a number of bills relating to telecommunications and information technology have already been introduced. Below is a summary of relevant legislation, along with the status of the bills at the time of publication.

    H.R. 29 – “SPY ACT.” This anti-spyware bill makes it unlawful for a person to, without authorization: take control of, modify settings on, collect information from, or install software on another person’s computer. It also would prohibit transmitting a computer program (spyware) that takes those actions. The bill gives the Federal Trade Commission (FTC) authority to prosecute these actions as unfair or deceptive trade practices. The same bill passed the House during the 108th Congress. Passed House Energy and Commerce Committee (43-0). [http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.29:]

    H.R. 84 – “Online Privacy Protection Act of 2005.” This bill instructs the FTC to write regulations for Internet websites dealing with the security and privacy of personal information. The regulations would have to require website operators to allow customers to limit the disclosure of their information. Referred to House Subcommittee on Commerce, Trade, and Consumer Protection.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.84:]

    H.R. 102 – “Children’s Access to Technology Act.” This bill would allow unspent universal service funds to be used for purchasing technology equipment for low income schools. Referred to House Subcommittee on Telecommunications and the Internet.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.102:]

    H.R. 144 – “Rural America Digital Accessibility Act.” This bill authorizes the Commerce Department spend up to $100 million in loans or grants for private sector broadband development in rural or underserved areas. It also establishes tax credits for bondholders of technology projects. Referred to House Subcommittee on Telecommunications and the Internet.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.144:]

    H.R. 214 – “Advanced Internet Communications Services Act of 2005.” This bill would define advanced Internet services as interstate in nature and forbid regulation of rates or services by the FCC, except to provide for emergency services, access by people with disabilities, universal service, and compensation to the public switched telephone network for VoIP services. Referred to House Subcommittee on Telecommunications and the Internet.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.214:]

    H.R. 744 – “Internet Spyware Prevention Act of 2005.” This is another anti-spyware bill that takes a different approach from H.R. 29 (see above), which has passed out of the Commerce Committee. Instead of defining spyware as a deceptive trade practice for the FTC to investigate, H.R. 744 defines unauthorized access of a protected computer for the purpose of impairing its security or stealing personal information as Federal crime, punishable by up to two years in prison. Referred to House Judiciary Committee.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.744:]

    H.R. 1099 – “Anti-phishing Act of 2005.” This bill, identical in content to its Senate counterpart, S. 472, is aimed at eliminating “phishing,” the practice of creating fraudulent websites that resemble genuine ones in order to collect financial or personal information from consumers. The bill adds “phishing” to the statute of fraud. Referred to House Judiciary Committee.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.1099:]

    H.R. 1189 – “Personal Pictures Protection Act of 2005.” This bill makes it a Federal crime to post sexually explicit photographs of individuals without their permission on the Internet. Referred to House Judiciary Committee.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.1189:]

    H.R. 1323 – “Public Safety Interoperability Implementation Act.” This bill would establish a grant program to fund the interoperability of public safety communications. Referred to House Energy and Commerce Committee.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.1323:]

    S. 115 – “Notification of Risk to Personal Data Act.” Requires any person or agency that maintains electronic databases of personal information to notify individuals whose information may have been accessed by unauthorized persons. Allows for civil penalties and state enforcement by attorneys general. Referred to Senate Judiciary Committee. [http://thomas.loc.gov/cgi-bin/query/z?c109:S.115:]

    S. 284 – “Rural Universal Service Equity Act of 2005.” This bill would redefine the formula for universal service funds by ensuring a more equitable distribution across the states. Referred to the Senate Commerce Committee.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:S.284:]

    S. 312 – “Local Community Radio Act of 2005.” This bill is targeted at FCC rules that impose certain restrictions on Low-power FM radio station licensees. The bill would allow for more local community radio stations by easing licensing and operating requirements. Referred to Senate Commerce Committee.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:S.312:]

    S. 432 – “Minority Serving Institution Digital and Wireless Technology Opportunity Act of 2005.” This bill would establish an office in the National Science Foundation to award grants and contracts for digital and wireless technologies to certain minority-serving educational institutions such as historically Black colleges and universities. Referred to Senate Commerce Committee.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:S.432:]

    S. 497 – “Broadband Rural Revitalization Act of 2005.” This bill would establish a “Rural Broadband Office” in the Department of Commerce to coordinate the expansion of broadband Internet access into rural areas. It would allow the IRS to recognize special expenditures related broadband. Referred to Senate Finance Committee.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:S.497:]

    S. 535 – “Native American Connectivity Act.” This bill would create a block grant program within the National Telecommunications and Information Administration to provide funding to Indian tribes and organizations for telecommunications. Referred to Senate Committee on Indian Affairs.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:S.535:]

    S. 687 – “SPY BLOCK Act.” This lengthy bill deals with spyware by explicitly listing a series of offenses as deceptive trade practices to be regulated by the FTC. Referred to Senate Commerce Committee.
    [http://thomas.loc.gov/cgi-bin/query/z?c109:S.687:]

    Georgia: Telecom/IT Policy Legislative Tracking
    03.31.05 – In last month’s edition of Telecom/IT Policy Highlights, we reported on 21 bills in the Georgia General Assembly relevant to telecommunication or information technology. As the 2005 legislative session winds down, a handful of these bills have advanced far enough to become law. Below is an updated list of legislation that passed or came close to passing both chambers before the legislature adjourned. The status of each bill is listed in bold; bills that did not pass during this session will be returned to their committees for the 2006 session.

    HB 194 – Provides a tax credit for teleworking in the Atlanta area. The credit would cover up to $1,500 in teleworking-related expenses for each new employee who teleworks. Passed House (152-0); Senate Finance Committee Substitute, Favorably Reported.
    [http://www.legis.state.ga.us/legis/2005_06/sum/hb194.htm]

    HB 669 (SB 91) – This bill allows the Public Service Commission to offer equipment for blind and visually-impaired individuals to have universal access to public information services provided by the state. This bill originated as SB 91, passing the Senate by a vote of 51-0, and it had previously passed the House during the 2003-4 session. However, due to special legislative procedural issues, the bill could not pass during this session in that form. As a result, the language was inserted into HB 669, an unrelated bill dealing with open meetings and public schools. The open meeting language was stripped from the bill and the text from SB 91 was inserted instead. Passed Senate (52-0); Passed House (149-0); Awaiting Governor’s Signature.
    [http://www.legis.state.ga.us/legis/2005_06/sum/hb669.htm]

    SB 46 – “Wireless Privacy Act.” As reported in the December-January edition of Telecom/IT Policy Highlights, the Wireless Privacy Act would require wireless phone companies to obtain consent from subscribers before listing their numbers in a wireless phone directory. Consumers could opt out of the directory at any time. This bill is part of Governor Sonny Perdue’s legislative agenda. Passed Senate (48-0); Passed House (139-0) by Substitute; Senate agrees to House Substitute; Awaiting Governor’s Signature.
    [http://www.legis.state.ga.us/legis/2005_06/sum/sb46.htm]

    SB 62 – “Slam Spam Email Act.” The Georgia Slam Spam Email Act would create serious penalties for false and misleading practices that result in unsolicited commercial email. This bill is part of Governor Sonny Perdue’s legislative agenda. Passed Senate (50-3); Passed House (161-0); Awaiting Governor’s Signature.
    [http://www.legis.state.ga.us/legis/2005_06/sum/sb62.htm]

    SB 127 – “Georgia Computer Security Act.” Would make it a felony (1-3 yrs in prison) to take possession of another’s computer, to divert Internet browsers to unauthorized websites, modify settings, collect personally identifiable information through keystroke logging, interfere with downloads, install or uninstall software without authorization, falsify an identity to obtain personal information, or mislead computer users in other ways. The bill requires specific warnings in programs that transmit personal information, and it exempts service providers from liability. Passed Senate (46-0); Passed House (144-0) by Substitute; Senate agrees to House Substitute; Awaiting Governor’s Signature.
    [http://www.legis.state.ga.us/legis/2005_06/sum/sb127.htm]

    SB 204 – Gives permission to create electronic health records, with the stipulation that they must be secure, readable/retrievable, and backed up on a regular basis. The bill does not require the separate keeping of a hard copy, and it applies the same legal rights to electronic records as paper ones. Passed Senate (54-1); Passed House (155-1) by Substitute; Senate agrees to House Substitute; Awaiting Governor’s Signature.
    [http://www.legis.state.ga.us/legis/2005_06/sum/sb204.htm]


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  • Regulatory Activities

    Comments Sought on Spectrum Needs of Emergency Response Providers
    03.29.05 – The FCC has issued a Public Notice [FCC 05-80] announcing that it is seeking the input of “federal, state, local and regional emergency response providers regarding the operation and administration of a potential nationwide interoperable broadband mobile communications network.” The 2004 Intelligence Reform Act requires the FCC to conduct a study to assess the short-term and long-term spectrum needs of emergency response providers and to report its findings to Congress by December 2005. The FCC was instructed to “consider the use of commercial wireless technologies to the greatest extent practicable.” The FCC is interested in receiving comment on specific wireless devices that could satisfy the communications needs of emergency response personnel. All filings are due April 28 and instructions are available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-80A1.txt].
    [Source:CC]

    DSL Can Be Bundled with Telecom Services, FCC Rules
    03.25.05 – In a 3-2 decision, the FCC issued an Memorandum Opinion and Order [FCC 05-78] prohibiting states from requiring phone companies to provide DSL Internet access to customers who buy their phone service from another provider. Several southeastern states, including Georgia, had issued regulations stopping BellSouth from “tying” its provision of DSL service to phone service subscription. The FCC’s Order said that the states were overstepping their authority to implement unbundling (line-sharing) rules, which had been set at the Federal level.

    This case raises a number of issues that have been plaguing telecommunications regulation for years. The most direct problem is the unbundling rules that were established by the Commission to promote competition in telecommunications. Under the FCC’s regulations, incumbent carriers like BellSouth must open parts of their network to competitors such as MCI. However, DSL is not defined as traditional telecommunications under the Telecom Act, so the FCC has had to answer the question of whether unbundling rules apply to that service. The FCC has not said that they do, which left the states in the position of determining the issue. However, the three Commissioners in the majority argued that the states were creating unbundling rules that were inconsistent with existing Commission regulations and declared them invalid.

    Commissioners Adelstein and Copps issued a dissenting statement calling the Order a “slap to federal-state relations” and an “ominous precedent for consumers.”
    [Statement: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-78A2.txt]. The Commissioners asked what would happen to service opportunities for individuals who only wanted Internet access without having to pay for a phone. The Commission will investigate these issues with a Notice of Inquiry into the competitive consequence of “tying” phone and Internet service together. The Commission is seeking comment on “whether competition is providing sufficient incentives for providers to disaggregate bundles to maximize consumer choice” and “whether such bundling behavior is harmful to competition,” especially to providers of other services such as VoIP. Comments will be due sixty days after publication in the Federal Register, which is pending. A copy of the Order and Notice of Inquiry is available at
    [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-78A1.txt].
    [Source: FCC]

    Michael Powell Ends Tenure as FCC Chairman; Kevin Martin Named Replacement
    03.17.05 – Michael K. Powell concluded his term as Chairman of the FCC, stepping down after four years as Chairman and over seven years as a Commissioner. Powell was praised by his colleagues at his final meeting for his understanding of technology issues and his efforts to expand telecommunications services for all Americans. For more on Powell’s tenure as Chairman, policy highlights prepared by the FCC are available (PDF) at
    [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-256206A2.pdf]. Powell has accepted a position as a senior fellow at the Aspen Institute Communications and Society Program for three months, following the tradition of his two predecessors as Chairman.

    On March 18, President Bush designated FCC Commissioner Kevin J. Martin as the new Chairman. Martin was appointed to the Commission in 2001 by President Bush after serving as a Special Assistant to the President for Economic Policy. He also previously worked as a legal advisor to FCC Commissioner Harold Furchtgott-Roth and practiced telecommunications law in Washington, D.C. More information about Chairman Martin can be found at [http://www.fcc.gov/commissioners/martin/]. Because he had already been confirmed by the Senate in 2001, his designation as Commission Chairman was effective immediately. With Michael Powell’s departure, the FCC currently has only four commissioners. Commissioner Kathleen Abernathy has also indicated she will step down shortly, allowing President Bush to nominate two new Commissioners in the coming months, both Republicans. By law, the President cannot appoint more than three members of the same party to serve on the Commission.
    [Source: FCC, Aspen Institute]

    SBC-AT&T Merger Under Regulatory Review
    03.11.05 – The FCC has formally started the clock on its review process for approving SBC Communications’ proposed acquisition of AT&T. The move began March 11 and should take approximately 180 days, according to the FCC’s timeline. The Commission is seeking stakeholder comment regarding the transaction. Such comments are due April 25, with follow-up responses and opposition filings due May 10. Interested parties may discuss pertinent issues at meetings scheduled by the Commission on April 21 and May 9. FCC Documents regarding the SBC/AT&T merger are available at [http://www.fcc.gov/transaction/sbc-att.html].
    [Source: FCC and Telecom Web]

    Spectrum Opened for Wireless Broadband
    03.10.05 – The FCC issued a Report and Order and Memorandum Opinion and Order [FCC 05-56] that opened up 50 MHz of spectrum in the 3650-7000 MHz band for potential use by wireless Internet service providers (WISPs). This spectrum is currently occupied by Federal radar stations and satellite stations. Consequently, the new rules will prohibit new operations in locations with incumbent stations. The FCC is adopting a hybrid licensing scheme wherein WISPs will have to obtain a license for operation, and licenses will not be exclusive, enabling competition for service in rural areas. FCC Chairman Michael Powell said that Commission was adopting new, hybrid approach designed especially for the unique characteristics of the 3650-7000 MHz band. A copy of the Order is available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-56A1.txt].
    [Source: FCC]

    Truth-in-Billing Rules Extended to Wireless Phones
    03.10.05 – The FCC issued a Second Report and Order [FCC 05-55] extending to wireless phone customers consumer protection rules intended to clarify billing procedures. The so-called “truth-in-billing” rules were originally written in 1998, and they required telephone bills be clearly organized, explain all charges in non-misleading ways, and disclose information needed for consumers to contest their charges. However, mobile phone carriers were exempted from some of these rules. In its Order, the FCC removed these exemptions, meaning that wireless phone bills will now be required to contain brief, clear, and non-misleading descriptions of charges. Also in the Order, the Commission ruled that discretionary line-item charges cannot be labeled in any way that gives the impression that they are taxes or government-mandated charges.

    In an accompanying Second Further Notice of Proposed Rulemaking, the Commission is seeking comment on the distinction between “government mandated” charges and other charges. For example, the Commission wants comment on whether charges identified as “regulatory assessment fees” or “Federal cost recovery charges” are sufficiently clear enough to comply with truth-in-billing requirements. Comments will be due thirty days after publication in the Federal Register, which is pending. A copy of the Commission’s action is available at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-55A1.txt]
    [Source: FCC]


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  • Judicial Activities

    Supreme Court Hears Arguments in Cable Internet Case
    03.29.05 – The U.S. Supreme Court heard oral arguments in a case that should decide the regulatory status of cable broadband services. The case, National Cable & Telecommunications Association v. Brand X Internet Services and FCC v. Brand X (cases consolidated), centers on a ruling made by the FCC in 2002 that cable modems provide “information services” that cannot be regulated under the Telecom Act. However, the Ninth Circuit Court of Appeals ruled in 2003 that the FCC erred and should have classified cable modem service as a “telecommunications service,” subject to the same common-carrier regulations faced by phone companies.

    At the hearing, justices questioned the lawyers over the definition of “information service” and its applicability to cable Internet. If the Ninth Circuit’s decision is upheld by the Court, cable companies could be required to lease their lines to Internet service providers (ISPs) such as Earthlink in order to promote competition of services. However, the outcome is uncertain. The FCC could attempt to write new unbundling rules that would protect cable companies, or Congress could act to deregulate the industry. A decision is expected early this summer.
    [Sources: U.S. Supreme Court, USA Today]


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  • Research / Reports

    E-Rate Program Plagued by Poor Organizational Structure, Oversight
    03.11.05 – The FCC’s E-rate program, designed to equip public schools and libraries with Internet access and telecommunications services, has been poorly administered by the organization established to disburse the funds, according to a report from the Government Accountability Office (GAO). The report finds fault with the private not-for-profit corporation that was established to implement the E-rate program, which has no contract or memorandum of understanding with the FCC. Additionally, the program’s funds are maintained outside the U.S. Treasury, making auditing and accountability for money difficult. GAO said that this structure is unusual for the Federal government, and recommends a comprehensive review of the accountability standards required to prevent waste and abuse.

    Since 1998, the E-rate program has disbursed over $13 billion to service providers for library and school Internet connections. In recent years it has been criticized for fraud and wasteful spending. In May 2004, “one service provider pleaded guilty to bid rigging and wire fraud and agreed to pay more than $20 million in criminal fines, civil payments, and restitution.” Congress has held several hearings on the subject, and the GAO report was commissioned for testimony before the House Energy and Commerce Subcommittee on Oversight and Investigations. GAO is recommending that meaningful goals be established for E-rate and its backlog of appeals be eliminated. The FCC has indicated it is taking steps to resolve these issues. The report [GAO-05-439T] is available online at [http://www.gao.gov/htext/d05439t.html].
    [Source: GAO]

    Paper Proposes New Direction for Communications Policy
    03.10.05 – Former FCC Chairman Reed E. Hunt and former FCC Deputy Chief Economist Gregory L. Rosston have co-authored a discussion paper entitled “Communications Policy for 2005 and Beyond,” recommending the establishment of an independent commission to create a complete overhaul of American communications law and policy. Hunt and Rosston argue for price deregulation in competitive markets, technology-neutral tax policies, and a firm decision about unbundling, revamped universal service programs, clear division of local, state, and federal jurisdiction, and increased availability of spectrum. The authors call on Congress and the Bush Administration to create a bipartisan and independent commission by mid-2005 to review these proposals. The discussion paper was written at the Stanford Institute for Economic Policy Research, and is available for download at [http://siepr.stanford.edu/papers/pdf/04-07.html].
    [Source: Stanford Institute for Economic Policy Research]

    Wireless Broadband Access Task Force Report Released, Comments Sought
    03.08.05 – The FCC’s Wireless Broadband Access Task Force has released a report entitled “Connected and on the Go: Broadband Goes Wireless.” In the report, the Task Force concludes that the FCC should remain proactive in identifying and understanding emerging wireless technologies and ensuring that existing regulatory policies do not get in the way of advancements in the field. The Task Force is seeking comments on the report, which can be viewed at the Task Force website at [http://www.fcc.gov/wbatf/]. Comments are due April 22 and reply comments are due May 23.
    [Source: FCC]


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  • Newsletter Info

    Center for Advanced Communications Policy
    Telecom/IT Policy Highlights Volume 5.03
    March 2005
    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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