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Executive Summary: Week of April 21, 2008 Executive Summary: Week of April 21, 2008

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Executive Summary: Week of April 21, 2008


Commerce Panel Backs Bill To Overturn FCC Media Rule

The Senate Commerce Committee backed legislation this week that would block a controversial FCC decision – made last December -- to relax the nation’s media ownership limits. The “resolution of disapproval” sponsored by Sen. Byron Dorgan, D-N.D., faces an uphill battle because it would require passage by both chambers and President Bush’s signature to take effect — a tall order since the Bush administration has endorsed the FCC’s changes. The rule change, spearheaded by FCC Chairman Kevin Martin, permits newspapers and TV or radio stations to consolidate in the nation’s top 20 markets. Martin said following the committee’s vote that the FCC’s revisions were necessary to aid struggling newspapers. He noted that Congress instructed the FCC to periodically review its media rules. “There is nothing mentioned in the FCC law about newspapers,” Dorgan responded following the markup, adding, “There is nothing in [Martin’s] job saying he is the newspaper referee in America.” A National Association of Broadcasters spokesman said his group supports the changes adopted by the commission. Dorgan also took a swipe at media mogul Rupert Murdoch’s proposed purchase of Tribune Co.’s Newsday in the New York market, saying, “It’s another example of concentration that I think is unhealthy.”



FCC Prepares For New ‘D-Block’ Auction

The FCC is preparing another attempt to sell a critical slice of broadcast spectrum to benefit police, fire and rescue squads after an agency auction earlier this year failed to attract a commercial licensee for the frequencies. Under a public-private partnership envisioned by the FCC, the winner would construct a state-of-the-art wireless, high-speed Internet system for first responders across the country — costing upward of $10 billion — in exchange for commercial use of the so-called D-block airwaves. The frequencies are part of a larger chunk of spectrum being vacated by analog television broadcasters as they shift to digital signals in February. At the FCC’s scheduled May 14 public meeting, the five commissioners plan to vote on proposed rules governing the new auction. “We’re just beginning the review process,” FCC Chairman Kevin Martin said. He emphasized that every aspect of the original auction plan is being re-evaluated, including whether the minimum “reserve price” of $1.3 billion should be lowered. Critics have suggested that the high minimum and strict build-out requirements may have dissuaded bidders in the initial auction, which ran from January to March. On another front, Martin said he lacks a crucial third vote on the five-member FCC to impose an interim cap on the multibillion-dollar universal service fund -- in an effort to curb its growth while a broader overhaul is explored.



Bill Would Give Border Stations More Time For DTV Shift

The Senate Commerce Committee backed legislation this week aimed at ensuring that residents along the southern U.S. border would continue to have access to over-the-air television after the transition to digital television. The bill, introduced by Sen. Kay Bailey Hutchison, R-Texas, would allow broadcasters within 50 miles of the U.S. border with Mexico to apply to the FCC for permission to continue broadcasting in both analog and digital signals for up to five years after the transition to digital on Feb. 17. After that date, those who rely on over-the-air broadcast television will have to buy a new digital television, subscribe to a pay television service such as cable or satellite, or acquire a digital converter box for their analog television. Given the slow pace of the DTV education efforts and the cost of upgrading, many households along the border may opt to rely on free analog television originating from Mexico -- which is not part of the transition, Hutchison said. She and other lawmakers said they are concerned that those U.S. viewers that decide to rely on Mexican television after the transition will not have access to important emergency announcements from local U.S. broadcast stations.

Intellectual Property

Bill Introduced To Update ‘Orphan Works’ Law

House and Senate intellectual property policy leaders this week reintroduced legislation aimed at updating laws governing “orphan works,” copyrighted content whose owners cannot be easily identified. A similar 2006 proposal died after it was incorporated into a larger package that attempted to streamline digital music licensing. Senate Judiciary Chairman Patrick Leahy and House Judiciary Courts, the Internet and Intellectual Property Subcommittee Chairman Howard Berman, D-Calif., sponsored the pair of bills, which would protect those who use images, music, and video after conducting unsuccessful searches for owners of the copyrighted material. Under the bills, which contain slight differences, if copyright owners make themselves known and if users have performed a diligent search, owners would be entitled to reasonable compensation.

A user would not be liable for full statutory damages in those cases, but if a “good faith” search is not performed, they could face up to $150,000 in fines. A safe-harbor provision is included for libraries and archives. The Association of American Publishers and others in the publishing field have pushed for congressional action for several years and Register of Copyrights Marybeth Peters has championed the effort. Leahy stressed that his bill does not create “a license to infringe” nor does it alter the basic premise of copyright law. Photographers and illustrators have opposed the changes.



Bill Would Target ‘Phantom Phone Traffic’

Senate Commerce ranking member Ted Stevens announced this week that he will introduce legislation addressing a longtime problem plaguing telecommunications carriers: phantom phone traffic that cannot be identified for billing purposes. Under regulations known as inter-carrier compensation, the telecom carriers are supposed to compensate each other when calls originating on one provider’s network are completed on another’s infrastructure. But roughly 20 percent of telecom traffic cannot be identified, sometimes due to technical reasons -- although often because it has been disguised, creating daunting challenges for carriers that have nowhere to turn to recoup lost revenue. During a committee hearing, Stevens said the problem is particularly acute for small phone companies because they usually do not have agreements with large players to receive compensation based on estimated levels of unidentified calls. Industry witnesses disagreed on the severity of the situation and whether legislation is needed. A Sprint Nextel executive said his firm does not think congressional action is warranted. But testifying on behalf of the National Telecommunications Cooperative Association, Raymond Henagan, general manager at Rock Port Telephone Co. in Missouri -- which has only nine employees -- urged action. He said 11 percent of the traffic on his system cannot be traced, resulting in revenue losses totaling $500,000 over the last 10 years.


Commerce Panel Reprises Battle Over Network Neutrality

Senate Commerce Committee members reprised their battle over network neutrality legislation this week at a hearing with FCC Chairman Kevin Martin and technology experts. Commerce Chairman Daniel Inouye lauded telecommunications companies’ recent steps to mitigate instances of blocking or filtering online activity, while Commerce ranking member Ted Stevens said that any anti-discrimination legislation is “entirely unwarranted” and could “interfere with the dynamics of this Internet and its future.” Sen. Byron Dorgan, D-N.D., introduced a bill last year that would bar broadband providers from blocking, degrading or prioritizing content and applications on their networks. The debate over net neutrality raged in the 109th Congress as members wrangled with a broad telecommunications reauthorization bill, but it has gotten less attention this session. “The creation and the development of the Internet is a remarkable thing in our lives and it occurred under rules of nondiscrimination,” Dorgan said. Martin reiterated his belief that the commission has the ability to adopt and enforce existing neutrality principles and no additional regulations are needed. He said the FCC is investigating one such alleged blocking instance involving Comcast. “You say you have the authority, but you may well not have the authority,” Dorgan countered, citing recent complaints and FCC filings. Meanwhile, Writers Guild of America-West President Patric Verrone and “Family Ties” actress Justine Bateman urged lawmakers during a separate hearing to support Dorgan’s legislation. Verrone, whose members recently ended a 100-day strike over how writers are paid for their work in the digital era, attributed his union’s successful stand-off with studios to the power of e-mail, blogs, Web sites, podcasts and video clips, which informed the world about their cause. Without legislation to preserve open and free speech online, the Internet could become “a walled garden of content control,” he said.

Homeland Security

Leahy Pushes For Safeguards On Security Letters

Senate Judiciary Chairman Patrick Leahy this week pressed for passage of a bill that would provide new statutory safeguards for FBI terrorist investigations while protecting sensitive personal data, calling it “a real check on and independent oversight of national security letters.” The security letters, which are administrative subpoenas that let the FBI analyze telephone, computer and bank records without warrants, have been the focus of intense congressional scrutiny in the wake of a pair of Justice Department reports that showed widespread misuse. The bill in question was introduced by Sen. Russell Feingold, D-Wis., in September. It would require the government to determine that each record sought with an NSL relates to someone with a connection to terrorism or espionage, and it would place a time limit on the gag order tied to each subpoena. The FBI has acknowledged misuse and has created new NSL guidelines, as well as a new integrity and compliance office. Leahy said those actions were not sufficient. Feingold agreed, saying the problem lies with the 2006 reauthorization of the USA PATRIOT Act, which he said granted the FBI “a blank check to obtain sensitive information about innocent Americans.” Sen. Jeff Sessions, R-Ala., while saying that the criticism for not managing NSLs is appropriately deserved, noted that FBI Director Robert Mueller has promised to do better – and pointed to the latest report from the Justice Department’s inspector general showing the agency has complied.


Boehner: Colombia Trade Deal Has Votes To Pass

House Minority Leader Boehner said late this week the Colombia Free Trade Agreement would be approved if House Speaker Pelosi allowed a vote on the pact. “I believe there is a majority of the House of Representatives that are in favor of the Colombia Free Trade Agreement,” Boehner said at a news conference with Commerce Secretary Gutierrez, Senate Minority Leader McConnell and other top Republicans. Pelosi wrote to Boehner earlier this week saying the two parties must first come together on a new economic stimulus plan before she would consider bringing up the Colombia pact. Earlier this month, she held a vote to switch off the “fast-track” timetable for consideration of the bill, giving her the discretion to hold a vote when she sees fit. Appearing with Boehner, Gutierrez said “we find that this is an outrage” that the measure has not come up for a vote, noting that it is costing U.S. exporters $2 million a day in higher tariffs over the 520 days since the agreement between the two countries was signed. Pelosi has said repeatedly that action on a package of aid to displaced workers and other measures to help stimulate the economy is a prerequisite for action on Colombia. Pelosi said she would reach out to Treasury Secretary Paulson and Republicans again to try to reach an agreement. Paulson told Reuters he was willing to work with Pelosi. And House Ways and Means ranking member Jim McCrery said this week that he thought Pelosi was serious about trying to hammer out a deal.

McCrery said he has discussed with House Ways and Means Chairman Charles Rangel and others how to restructure federal aid programs for displaced workers, such as Trade Adjustment Assistance, unemployment insurance and job training. “We still have hope this will come to the floor by the end of the year,” McCrery said.


Officials Question E-Mail Retention Bill

A House bill to force the White House and federal agencies to improve e-mail retention received general support this week from the National Archives, GAO and public advocacy groups, but the organizations diverged on whether the measure is too strong or toothless. Many experts agreed that with executive branch officials increasingly making decisions through online collaboration, an outdated hodgepodge of paper-based systems that agencies use to keep key e-mails threatens the ability of historians to reconstruct important deliberations. How aggressively Congress should push remains in question.

Introduced last week by three House Oversight and Government Reform Committee Democrats, the bill would update the Federal Records Act by mandating that agencies create systems for storing e-mail electronically. Many now use “print and file systems,” deemed inadequate by the committee and GAO. The measure takes aim at the Bush White House’s inability to locate hundreds of days’ worth of e-mail. The bill would hand National Archives power to set standards for White House e-mail retention. At a House Oversight and Government Reform subcommittee hearing, National Archives officials backed the bill’s goals, but urged reining it in, while public advocacy groups want the bill beefed up.


U.S. Export Control Process Criticized

The process by which the government seeks to control the export of sensitive military or dual-use technology was described as a relic, cumbersome, vulnerable and broken by outside experts and lawmakers this week. Officials from the three departments involved in the process acknowledged inherent tensions between the system’s multiple purposes and difficulties keeping up with a rapidly growing demand. But the Commerce, Defense and State department officials said they are making progress in correcting the problems that have plagued the export control process for decades. The sharpest criticism came from witnesses representing exporters and a foreign policy consulting group and from GAO, which repeated previous findings that a lack of resources and coordination in the three departments “has created vulnerabilities” for national security. Senate Homeland Security and Governmental Affairs Government Management Subcommittee Chairman Daniel Akaka, D-Hawaii, said the process “struggles against the challenges of a globalized world,” occasionally allowing technology to fall into the wrong hands or obstruct U.S. commerce. Akaka said he wanted to consider changes that included revising the international arrangements to control weapons proliferation, “addressing the weaknesses” in the U.S. interagency process, considering alternative bureaucratic structures and ensuring there are enough qualified officers to handle the explosion in the number of export license requests. Subcommittee ranking member George Voinovich, R-Ohio, pressed the agency officials on their plans to improve the system and how the State Department intended to implement the substantial improvements President Bush has ordered without increased funding. A State Department official said the improvement would be “self financed.” The State Department has reduced its backlog from more than 10,000 applications last year to about 3,500, and in most cases is meeting the president’s mandate of decisions within 60 days, an official said.

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