Telecom
FCC Launches Proceedings Addressing Digital Transitions
     The FCC launched separate proceedings on the transition to digital devices. The first proceeding will explore the issue of mandatory digital copyright-protection technologies related to the transition to digital television. The agency launched a proposed rulemaking to study whether a technology called a broadcast flag would protect content, whether it would work for cable or satellite, and whether an FCC mandate is necessary. The FCC said it must act because industry has not found an answer to the problem of copyright violations. The FCC also issued a rulemaking that would mandate that consumer electronics manufacturers incorporate digital tuners into TVs. The Consumer Electronics Association intends to sue over that initiative. And the FCC voted to phase out the requirement that wireless carriers provide analog services, freeing up more spectrum.

Intellectual Property
Microsoft, Intel Reject DVD Watermark Proposal
     Microsoft and Intel set back a technology strongly favored by Hollywood studios as a means of controlling online piracy when the two firms rejected a proposal to embed watermarks in all digital videodiscs (DVDs). Their votes of disapproval caused the board of the DVD Copy Control Association, which licenses the technology used to encrypt DVDs, to reject two separate watermark proposals by the Aug. 1 expiration date. The vote was important because it could halt momentum on a technology that the Motion Picture Association of America wants the government to mandate.

Courts
Justice Defends Congressional Role In Copyright Terms
     Congress has the power to decide the proper length of "limited" copyright terms, the Justice Department argued in a Supreme Court brief Monday. The 1998 Copyright Term Extension Act is at the core of the case, Eldred v. Ashcroft. The law added 20 years to both existing and future copyright terms, and former Internet publisher Eric Eldred contends that the statute is unconstitutional. But Solicitor General Ted Olson's brief said Congress has the prerogative to extend copyrights. Eldred, Olson wrote, "wish[es] to displace Congress' preference for copyright-based dissemination of works ... and instead allow indiscriminate exploitation by public-domain copyists. But the Constitution assigns such policy choices to Congress, not the courts."

White House
Panel Endorses Security Slot For Science, Tech Expert
     The President's Council of Advisors on Science and Technology recommended that the proposed Homeland Security Department include a post for an undersecretary of science and technology to coordinate and manage research and development within the new department. The panel, which issued its recommendations in a report requested by President Bush on how technology can be used to combat terrorism, said an undersecretary would be needed because most senior managers in the department are unlikely to have the scientific or technical backgrounds needed to strategically manage a homeland security R&D program. The report also suggests that R&D be centralized within the department rather than dispersed throughout.

Trade
Bush Signals New Trade Deals With Negotiating Authority
     President Bush signed into law legislation renewing presidential trade-negotiating authority. The authority -- originally called "fast track" because it allows the president to submit trade deals to Congress under rules that prohibit amendments -- expired in 1994. U.S. business leaders had bemoaned the loss as they watched other countries strike trade deals while U.S. trade officials cooled their heels on the sidelines. "With each passing day, America has lost trading opportunities and the jobs and earnings that go with them," Bush said when signing the law. "Starting now, America is back at the bargaining table in full force."

Net Governance
ICANN Contract Deadline Sparks Last-Minute Lobbying
     An impending deadline to renew an agreement between the U.S. government and the Internet Corporation for Assigned Names and Numbers (ICANN) has spurred a major lobbying effort. The Commerce Department will decide in September whether to renew the agreement for overseeing the Internet. VeriSign, the former monopoly in the domain-name market, has been a vocal critic of ICANN's reform plan. VeriSign and Register.com officials met in July with the staff of the Senate Republican High-Tech Task Force, which wrote to Commerce Secretary Donald Evans last week to air its concerns about ICANN. The retail sellers of domains, on the other hand, have been quietly supporting the proposed restructuring and urging Commerce officials to do the same.

Lobbying
Andrew Grove's Crusade Against Liability For Board Chairmen
     Intel Chairman Andrew Grove successfully lobbied lawmakers not to hold corporate chairmen liable for the certification of their companies' financial data. Beginning July 12, when the House and Senate were preparing to reconcile their versions of an accounting reform bill, H.R. 3763, Grove sent letters and made personal phone calls urging lawmakers not to retain language that would have held independent chairmen, like Grove, personally liable for company financial information filed with the government. By the time the final legislation was drafted, the bill no longer contained the liability language. "Andy was really helpful in getting the language changed," said John Palafoutas, senior vice president at the tech industry group AeA.

Lobbying
Software Firms Ask Key Chairman For Overseas Tax Break
     Software companies are quietly lobbying House Ways and Means Committee Chairman Bill Thomas to change a portion of his international tax reform bill in order to provide more favorable treatment for software sales generated overseas. Gary Sprague, an attorney with Baker & McKenzie representing about a dozen of the nation's software companies, is pushing Thomas, R-Calif., to include royalty revenue for active software as part of tax provisions that are slated for repeal under the bill.

Campaigns
Local Telecom Firms Pleased With Michigan Primary Outcome
     Many local telecommunications companies breathed a sigh of relief after one of their biggest Democratic allies, Rep. John Dingell of Michigan, beat fellow Democratic Rep. Lynn Rivers in a primary challenge. At least one recent poll had shown Dingell and Rivers in a surprise dead heat. Dingell is the ranking Democrat on the House Energy and Commerce committee and the lead co-sponsor, with committee Chairman W.J. (Billy) Tauzin, R-La., on legislation that aims to expand the rollout of high-speed data services. The local Bell companies strongly support that bill. "Rep. Dingell is an important member in Congress who has a very good understanding of the issues facing the telecom industry," said Susan Butta of Verizon Communications, which supports the Tauzin-Dingell bill. "This makes his continued service in Congress extraordinarily important to the whole industry, to Verizon and to the customers we serve."