PK’s Plate Fills Quickly As Congress Returns

Congress came back to town this week from its winter holiday break, and even though the economy, the war, the environment and the election will take center stage over the next year, Public Knowledge will have its hands full with a variety of technology, communications, copyright and patent matters. Here is a rundown of the specific issues that are likely to be addressed in 2008, in Congress and at the agencies with which PK works:

Copyright Enforcement. Just before Congress left town in December, I testified on H.R. 4279, the “PRO-IP Act of 2007.” This bill includes increases in penalties for a variety of copyright and counterfeiting crimes, and seeks to beef up government oversight of copyright enforcement by creating new positions and rearranging others. As we have discussed previously, there are a number of provisions in the bill that cause us concern, including those which would 1) treat infringement of a compilation of works as infringement of each individual work in that compilation, for example, infringing a CD would entitle a copyright holder to 10 or more times the damages he would have otherwise been entitled to under the current law; 2) mandate the forfeiture of all property related to the commission of copyright infringement (including personal computers, homes, etc.); and 3) remove the requirement that works be registered before a criminal copyright action could be commenced. The compilation provision was the subject of a Copyright Office-led roundtable held January 25, which Sherwin has eloquently documented here.

While the tech industry is united with PK in opposition to the compilation provision, the more intriguing issue is the Bush Administration’s opposition to the government oversight provisions. For an Administration that has arguably done more to increase IP related prosecutions than any other, it is seen as a slap in the face for industry to suggest rearranging its bureaucracy. And, as Assistant Attorney General Sigal Mandelker testified, the Administration is very uncomfortable with the proposed creation of an executive branch IP office, fearing that it would undermine the independence of the Justice Department and politicize criminal enforcement. A Democratic Congress that has assailed the Administration for over-politicizing the Justice Department should be very sensitive to that concern.

Mandatory Copyright Filtering for ISPs. It is an open secret that the content industry would like to see the DMCA modified to require ISPs and websites to filter their networks and websites for copyright violations, but for now, the legislative efforts center around forcing institutions of higher education to do so. H.R. 4137, the “College Opportunity and Affordability Act, includes a provision in a 750-page bill that would require colleges and universities to employ filtering technologies. The bill will be voted on in the House this month, and the hope is that either 1) an amendment removing the language will pass on the floor of the House; or 2) the language will be removed when the Senate and House try to reconcile their bills in conference. The Senate bill contains language that simply requires colleges and universities to inform their students about the dangers of illegal downloading.

Orphan Works. A little over two years ago, the Copyright Office issued its recommendations to Congress to solve the problem of the liability that arises when a creator wants to use a work under copyright but cannot find the copyright holder – the “orphan works” problem. The Copyright Office recommended that if the user could show that he or she has engaged in a “reasonably diligent search” for the copyright holder, then he or she would be required only to pay “reasonable compensation” should the copyright holder reappear, rather than be hit with a huge damage award so common to infringement cases. Despite agreement by 99% of the stakeholders on 99% of the recommendations, movement on an “orphan works” bill has languished. A new house orphan works bill is expected shortly, followed by a Senate bill. The main opponents of the bill are photographers, graphic designers, and textile manufacturers, but as we have argued, many of their concerns would be resolved if the legislation would authorize the development of visual registries that would allow creators to find their works more readily.

Net Neutrality. There will be a bevy of activity related to net neutrality this year. First and foremost, the FCC has put out for public comment two Public Knowledge-Free Press petitions; one asking that the Commission declare that Comcast violated its consumer broadband principles by interfering with Bit Torrent Traffic; and another asking the FCC to declare illegal the blocking of text messages by wireless companies. Vuze, a content provider that uses Bit Torrent to deliver movies and other licensed content, also has a petition similar to the Comcast petition, and which the FCC has also put out for comment. The comment period will end in early spring, and we are hoping for a decision soon thereafter. FCC Chairman Kevin Martin has been hinting that he favors PK’s positions, but it is far too early to declare victory.

Congress will also get involved in the net neutrality debate, although the extent of their action will likely depend a great deal on what the FCC does on the petitions. Net neutrality hero Ed Markey (D-MA) is expected to introduce a bill soon, and hopefully after he has secured a Republican co-sponsor. Reps. Chip Pickering (R-MS) and Heather Wilson (R-NM), who have long been friends on this issue, are the two most likely candidates. In the Senate, hearings related to the petitions are the most likely outcome, at least for the next several months.

Open Devices and Open Applications. At the end of last year, there were a lot of announcements by carriers about how, after years of closing off their networks to third party devices and applications, they were now convinced that opening up those networks to any and all devices and applications were the way to go.

But talk is cheap. Despite Verizon’s grand announcement last November, we still haven’t seen the details, and we are also not sure that if they win the 700 MHz “C” block auction (see discussion below) they won’t still try to sell their own subsidized crippled devices in addition to allowing open devices. So PK, as part of its Bring Your Own Phone Campaign will be watching the carriers to see if their actions match their rhetoric, and to ensure that the winner of the C block auction complies with the mandate to make the network open to all devices and applications.

700 MHz Spectrum Auction. The FCC is still in the middle of its 700 MHz spectrum auction, which as readers of this blog already know, will sell the valuable public airwaves now occupied by broadcasters. Our hope is that Google or some other competitive broadband provider will win the big C block, which constitutes one-third of the spectrum for auction, but a more likely outcome is that Verizon will be the winner. Regardless of the outcome, the winner will have to make its network available to all devices and applications.

The D block is another story entirely. It seems unlikely that the D block will garner the “reserve” price the FCC has set for it, and as a result, the FCC will have to reauction it. As Harold discusses, financing for Frontline, the main competitor for the D block, was likely stifled by strict conditions on the license, most specifically the requirement to enter into an agreement with the Public Safety Spectrum Trust, run by Cyren Call, an entity that had at one time sought spectrum to build an interoperable public safety network. Allegedly, Cyren Call told Frontline’s financial backers that such an agreement would cost about $500 million over 10 years.

Under what conditions the FCC reauctions the D block will be the next great spectrum battle, and depending on what the FCC decides, we may have not seen the last of Frontline.

Broadband Mapping. PK believes that policymakers cannot develop smart policies to increase broadband deployment, adoption and competition if it has no real idea about who has broadband in this country, at what speed and at what price. Both the House (where it is part of a huge Agriculture bill) and the Senate have languishing bills that would require the FCC to update its definition of “broadband” (now a poky 200 Kbps) and revise its methodology for determining who has broadband. These bills are opposed by the Bell companies, who probably don’t want the country or the world to know how far behind the U.S. is in broadband deployment, adoption and value. These efforts may be superseded in part by Chairman Martin’s plans to reform the way the FCC defines and maps broadband.

White Spaces. The effort to free up the “white spaces” between the new digital TV channels for unlicensed uses continues. This battle pits the Wireless Innovation Alliance, of which PK, other public interest groups and perhaps the entire hardware and software tech sectors are a part, against TV broadcasters, who claim potential interference, but really want to control as much spectrum as possible. They have been joined by wireless microphone users like churches and theaters. The FCC is going to undergo a new round of testing white spaces devices after Microsoft devices malfunctioned in the first round.

XM-Sirius Merger. The clock continues to tick on the XM-Sirius merger, which we support subject to four conditions: (pdf) 1) a three-year price freeze; 2) a la carte or tiered pricing; 3) a 5% set-aside for noncommercial educational programming; and 4) an open receiver requirement. Rumors have swirled around the merger, for example, that the Justice Department staff wants to deny it, but the political appointees don’t; and that unless the authorities decide by March, the deal may fall apart as a contractual matter. If I was with one of the companies, I would be getting very nervous.

Patent Reform. A patent reform bill has passed the House, and a similar bill remains in the Senate. We have supported both bills, although we are increasingly concerned with efforts to 1) water-down the parts of the bill that would ensure that a patent owner receives damages commensurate with the value of his patent; and 2) prevent public interest groups or individuals from challenging the validity of a patent at the PTO.

There have been reports that the Senate will bring a revised bill to the floor in February, but there still remain very powerful opponents, both among industry (particularly pharmaceutical and biotech interests) and among Senators themselves.

Stay tuned here as these and other issues progress.

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