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Executive Summary


Markey Floating Wireless Regulation Overhaul Bill

House Energy and Commerce Telecommunications and the Internet Subcommittee Chairman Edward Markey, D-Mass., is floating draft legislation that would overhaul the nation's laws governing the wireless industry, a committee aide confirmed this week. Speaking at a conference sponsored by the National Association of Regulatory Utility Commissioners, Energy and Commerce Senior Counsel Amy Levine acknowledged that a discussion draft is being floated of legislation that would pre-empt state regulation of the wireless industry -- a move backed by carriers -- while adding several new consumer protections. Levine said cooperation among consumer groups, mobile service providers and state regulators is needed for the measure to stand a chance. Nebraska Public Service Commission Chairwoman Anne Boyle warned, however, that pre-emption could make it tougher for wireless subscribers to solve disputes. The pre-emption issue stirred controversy at NARUC's winter meeting: The organization's telecom subcommittee voted in favor of a resolution calling for national wireless rules to be "established and interpreted by the FCC.'' But NARUC's board of directors decided to delay a vote on the measure after a debate in which critics argued that it ceded too much state authority over the industry to the FCC.



Groups List Markets Most Likely to Be Affected by DTV Shift

Consumers Union and the Leadership Conference on Civil Rights said this week that the five largest markets to be most affected by the nation's shift to digital television signals will be Salt Lake City, Houston, Dallas-Fort Worth, Fresno, Calif., and Minneapolis-St. Paul. In each of those markets, more than 20 percent of the television households rely exclusively on over-the-air analog reception. Several lawmakers and watchdog groups say they are concerned that consumers are ill-prepared for the transition set to occur in February 2009. Officials with both groups said minorities and seniors account for a large portion of analog-dependent households in all markets. "We're really calling on the federal government to designate a quarterback here and help consumers cut through the noise," said Joel Kelsey, policy advocate at Consumers Union.



Markey Seeks New Approach On Net Neutrality Bill

House Energy and Commerce Telecommunications and the Internet Subcommittee Chairman Edward Markey, D-Mass., learned the hard way in 2006 that network neutrality legislation -- designed to prevent communications giants from potentially acting as content gatekeepers -- will not easily pass Congress. He failed three times to amend telecom legislation with language that would have required strict safeguards. Now, Markey has teamed with Rep. Charles (Chip) Pickering, R-Miss., on a bill that omits provisions on enforcement and penalties for anti-competitive behavior by operators of high-speed Internet systems. Instead, the new bill would codify FCC principles barring anti-competitive behavior and require field hearings and a comprehensive report to Congress. While this softer approach is aimed at boosting the measure's prospects, several sources say its vague language and leeway it affords the FCC could provide a backdoor opportunity for tough restrictions if the agency falls under Democratic control in 2009. "The effect is clear even though they have masked what it really does," said Scott Cleland, chairman of The group represents cable and telecom firms, which oppose net neutrality legislation. He argued the legislation creates a new broadband policy that would trigger fresh regulations. Pickering said the bill would not spur additional requirements.


New Ag Secretary Pledges Action On Rural Broadband

Newly confirmed Agriculture Secretary Schafer has pledged to use the year he has in the job before the Bush administration leaves office to increase high speed Internet service in rural America. Schafer, who took office Jan. 28, devoted most of his speech at the Agriculture Department's annual Outlook Forum to the importance of rural broadband access. He said that high quality, high speed Internet service is vital for rural America to be equal with cities and suburbs -- and called for "a national conversation" on the issue of how to bring the service to rural areas that now lack it. Schafer noted that as North Dakota's governor, he focused on information technology and telephone issues to make the state "the most wired rural state in the nation." After leaving office in 2000, he founded Extend America, a company that delivers wireless voice and data to rural America. He contended that the high cost of building infrastructure has made it necessary for government to play a role in bringing services to rural areas. Schafer did not propose specific policies to increase Internet penetration, although he has said in the past he wants to ensure that the Rural Utilities Service broadband loan and grant applications are processed more quickly and efficiently than when his company made an application for such a loan.



Net Law Expert Weighs Bid For Lantos' House Seat

Stanford University Law School Professor Lawrence Lessig said this week that he would decide by March 1 whether to enter the race for the seat of the late Rep. Tom Lantos, D-Calif. Lessig, a former columnist for Wired magazine, has long been a well-known name within the Internet community. He is the founder of Creative Commons, an Internet licensing project designed to spell out the terms for reuse of creative works. Lessig released a video on his Web site -- - in which he asks members of Congress to form a coalition and pledge to refuse PAC money, ban earmarks and agree to public campaign financing. If he runs, Lessig would face an uphill race in the heavily Democratic district against former state Sen. Jackie Speier, a longtime officeholder who was endorsed by Lantos three weeks before Lantos' death from cancer. Lantos, who chaired the House Foreign Affairs Committee, announced before his death in early February that he would not seek re-election. An open primary will be held on April 8 for Lantos' seat. If no candidate receives more than 50 percent of the vote, the top vote getters from each party will compete in a special election on June 3. Besides Speier - who was severely injured in the 1978 Jonestown massacre in which her then-boss, Rep. Leo Ryan, D-Calif., was killed -- other lesser-known Democrats already in the race include Robert Barrows and Jason Lee Jones. Republican contenders include Mike Moloney, the 2006 GOP nominee, and Rodney Edenfield.


Prospects For Data Security Bill Dim But Not Dead

The window for advancing a comprehensive federal data security bill is closing, but stakeholders are holding out hope that narrowly crafted proposals to improve government information security compliance and fight cybercrime might still get traction this spring. The legislation, which House Oversight and Government Reform Chairman Waxman also has supported, would update the six-year-old Federal Information Security Management Act to establish requirements for securing personal or sensitive data. The bill proposes a broader definition of "personally identifiable information;" strengthened reporting and auditing requirements, and calls for privacy impact assessments for agency purchases of lists containing potentially sensitive information from commercial data brokers. Karen Evans, OMB's e-government administrator, said in written testimony for a recent hearing on the bill that it could "seriously impact established agency security and privacy practices while not necessarily achieving the outcomes of improved privacy or security." But Cyber Security Industry Alliance President Tim Bennett said OMB's guidance has been "uneven" and too focused on compliance with memoranda and circulars. Staffers for House Democratic Caucus Chairman Rahm Emanuel of Illinois and House Speaker Pelosi recently discussed the legislation with Cyber Security Industry Alliance Chairman John Thompson, who is chief executive officer of the computer security firm Symantec.


Official: FCC 'Miscalculated" On Public Safety Spectrum

A top FCC official acknowledged this week that the agency "miscalculated" in crafting rules for auctioning a critical chunk of spectrum that the nation's first responders are depending on for a nationwide, wireless emergency network. "It's looking pretty bleak for the D-block," FCC Commissioner Jonathan Adelstein said, referring to frequencies that are part of the agency's auction of airwaves being vacated as broadcasters shift to the digital spectrum. "It's very disappointing that public safety won't have that network available to them quickly," Adelstein, one of two Democrats on the FCC, said during a speech to the Alliance for Public Technology. Problems facing this swath of spectrum are casting a dark cloud over an otherwise successful auction that has raised $19.4 billion so far. The FCC will need to quickly review what went wrong, why it couldn't attract sufficient capital and how it should proceed, Adelstein said. The FCC set a minimum "reserve" price of $1.3 billion for the block that has not been met. The D-block is unusual in that the frequencies are available for a combination of public and private use. Under the FCC's plan, the winner would have provided commercial services in exchange for constructing a cutting-edge broadband infrastructure enabling communication among agencies and jurisdictions during crises. FCC Chairman Kevin Martin has repeatedly touted the auction's overall success and expressed hope that a last-minute D-block licensee would emerge.


Group Urges Justice To Block Sirius-XM Merger

The American Antitrust Institute this week urged the Justice Department to file a lawsuit and seek an injunction against the proposed merger of satellite radio providers Sirius and XM. The deal is being examined by both the Justice Department and the FCC. More than 12 months since the $14 billion merger was announced, regulators have "compiled an extensive factual record including substantial evidence of anticompetitive harm to consumers and other firms," AAI said. To prevent a monopoly, the think tank said a complaint should be filed under the Clayton Act, which deals with the anti-competitive impact of mergers and acquisitions. AAI President Albert Foer said "if there is any indecision because it seems to be a close call ... DOJ should try to block it." The firms and their supporters have argued that a number of services, including AM/FM broadcasting, Internet radio, MP3 players and other devices are part of the same market and provide competition. Critics such as AAI claim that none of the alternatives offer the unique nationwide coverage, content, and features of satellite radio. Several lawmakers including Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl, D-Wis., have sided with the National Association of Broadcasters in expressing opposition to the merger.

Intellectual Property

Progress Seen On 'Orphan Works' Legislation

Legislation aimed at reworking a portion of U.S. copyright law dealing with "orphan works," those musical tracks, writings, images or videos whose owners cannot be easily identified, will likely be a priority for the House Judiciary Courts, the Internet and Intellectual Property Subcommittee in the spring. Subcommittee staffers have held preliminary briefings on the issue and have brought in Copyright Office officials for discussions as recently as last week. A hearing is tentatively scheduled for March 13. The topic is a major concern among advocates of "fair use" of copyrighted content and many in the publishing field. An unsuccessful 2006 bill infuriated professional photographers and illustrators who rejected language to protect those who publish content after conducting "reasonably diligent" but unsuccessful searches for owners. While Senate Judiciary Chairman Leahy is more focused on moving patent legislation through the Senate, a committee aide said orphan works is "high on the list" and the panel hopes to consider a bill by spring. American Library Association copyright specialist Carrie Russell said her members are "excited about having orphan works legislation" move this session, but said she and others fear it could get lumped into the larger, more controversial IP package. Russell said the Senate effort is "so close to being a done deal that we're on the edge of our seats." A Professional Photographers of America official said the group's members still have concerns "but we're coming closer to agreement on many key issues."

Intellectual Property

CBO: Patent Bill Costs Will Exceed Revenues

Legislation making sweeping changes in patent law that is slated for Senate debate in the coming weeks would increase federal spending by $26.9 billion and boost revenue by $25.5 billion over a nine-year period beginning in 2009, according to a CBO analysis. The bill would alter the rule that prioritizes the award of a patent from the "first to invent" to the first inventor to file; increase the Patent and Trademark Office's authority to collect and spend fees; and institute a number of litigation-related changes. CBO said the sizable shift on the federal balance sheet would result from language to make permanent the PTO's authority to keep money collected from patent and trademark applications instead of diverting it for other government programs. Proponents of codifying that fee plan argue that a permanent funding stream would give the PTO more certainty in longer-term budgeting. CBO flagged another section that would eliminate remedies certain patent holders currently have with respect to financial institutions whose use of a "check collection system" constitutes patent infringement. That language could cost the government $1 billion if it were sued by patent holders over the issue, the report said. Meanwhile a coalition that supports the patent bill sent letters to Senate Majority Leader Reid, Minority Leader McConnell, Sen. Edward Kennedy, D-Mass., and a handful of other key lawmakers this week urging them to push for passage of the measure when the Senate returns from its Presidents Day recess. The letters sent by the Coalition for Patent Fairness, which includes Cisco, Hewlett-Packard, Microsoft and others, were signed by a number of small businesses headquartered in the senators' home states.

Intellectual Property

India To Host Summit on Piracy

Leaders of the U.S. intellectual property protection effort will visit India next week for a two-day summit on counterfeiting and piracy - and, while there, they plan to push India's government to do more to safeguard domestic intellectual property and U.S. imports.Executives from the Business Software Alliance, Microsoft, Pharmaceutical Research and Manufacturers of America, Time Warner and a range of intellectual property stakeholders from other countries will take part in the conference sponsored by the U.S. Chamber of Commerce and India's department of industrial policy and promotion. The event resembles one held last year in China. In both countries, there are "a lot of problems and also a lot of opportunities," said David Chavern, the Chamber's chief operating officer. Mass production of fake handbags and DVDs is only a portion of a larger problem, he said, citing "the broader and more disturbing trend of the expropriation of [American] IP" by foreign governments. The United States and India have worked since 2006 to lay a foundation for a plan to promote innovation, creativity and technological advancement by providing a vibrant IP rights regime, a recent Bush administration IP report to Congress said. India, however, was still on the Office of U.S. Trade Representative's 2007 "priority watch list" of countries with severe IP problems.


Think Tank: Export Controls Over Space Tech Ineffective

Tough export-control laws governing the sale of U.S. space technology overseas have done little to protect U.S. pre-eminence and often run counter to stated goals for more international cooperation on space programs, according to a report released this week by the Center for Strategic and International Studies. The study concluded that the overall state of the U.S. space industrial base is "good," but warns that export laws have hindered the ability of American firms to compete in the international market. Despite not having access to U.S. technologies, other countries, including China, are rapidly maturing their space assets and are beginning to challenge the United States in many technology areas, the report stated. Meanwhile, the current export-control policy is fostering a growing divide between U.S. space efforts and the emerging space programs in other countries. While the study recognized the importance of laws limiting foreign sales of sensitive U.S. space technology, it said the export control process could be improved without adversely affecting national security. In particular, CSIS recommended opening up U.S. commercial communications satellites, subsystems and components for foreign sale.

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