STANFORD, Cal. -- While acknowledging that releasing White House cybersecurity report in draft form Wed. (CD Sept 18 p1) was “unprecedented,” White House Cybersecurity Czar Richard Clarke defended its lack of conclusions by telling high-tech audience here that now “everyone in the country can tell us what they think it [the nation’s cybersecurity strategy] should be.” More than 200 pages were excised from earlier drafts of National Strategy to Secure Cyberspace as it circulated among hundreds of companies and trade associations in recent weeks. That approach to plan’s formation reflected Clarke’s oft-stated point that nearly 90% of nation’s critical infrastructure was held by private sector, but it also reflected Administration position that cybersecurity was not area in need of immediate regulation.
Court of International Trade activity
Foreign investors seeking to acquire U.S. communications assets could hasten completion of such transactions if they consulted with FBI before filing formal applications with govt., an agency official told Federal Communications Bar Assn. (FCBA) Wed. Advance consultations make applicants aware of need for law enforcement and intelligence agencies to conduct electronic surveillance “in a way that there’s no legal or technical impedance,” FBI Asst. Gen. Counsel Allen McDonald said at an FCBA Transactional Practice Committee workshop at FCC hq.
International Trade Commission (ITC) upheld ruling by administrative law judge that EchoStar didn’t infringe on patents of Gemstar, EchoStar announced. ITC also said Gemstar’s patent was unenforceable. EchoStar still has patent infringement case pending against Gemstar in U.S. Dist. Court. Gemstar also lost patent infringement case against Scientific-Atlantic in U.S. Dist. Court, Atlanta, S-A said. Court granted motion Fri. after Scientific-Atlantic won ruling at ITC Thurs. Court also rejected Gemstar’s cross-motion for summary judgment.
Merrill Lynch analyst Jessica Cohen downgraded Gemstar TV Guide to buy from strong buy, saying “recent negative legal decisions… will no doubt delay or stall the national rollout of Gemstar’s IPG [Interactive Program Guide].” She lowered EBITDA estimates for year and estimates for 2nd quarter net sales. She said adverse decisions from judges with International Trade Commission and U.S. Dist. Court, Asheville, N.C., may require Gemstar to take accounting write-downs of receivables and intangible assets. In both cases, judges ruled Gemstar patents weren’t infringed upon.
Investors said Adelphia either failed to make good on interest payments that came due this week, or made payments and then quickly pulled them back, official with Moody’s Investors Service told us Thurs. As result, credit rating firm lowered its ratings of Adelphia notes again on $19 billion in debt and preferred securities and was telling its clients company may have already run out of cash. Company could file for bankruptcy within couple of months, said Moody’s Senior Vp-Corp. Finance Russell Solomon. “We now believe that the prospect of a potential bankruptcy filing is more likely and may ultimately be unavoidable,” Moody’s said in written statement. That left potential bidders for cable system assets Adelphia put up for sale last week (CD May 10 p8) in position of having to decide whether they would get better deal now -- when company is in desperate need of cash -- or wait until assets are in hands of bankruptcy court judge who might auction them off at bargain price. Systems on sale include 1.2 million basic subscribers in southern Cal., 750,000 in Fla., and 225,000 in other parts of Southeast. Potential bidders could include Charter and Cox. Charter spokesman declined to comment. Cox spokeswoman didn’t immediately return phone message seeking comment.
Commercial Alert Exec. Dir. Gary Ruskin last week in Italy addressed issue of TV consumption and child target- marketing at World Health Organization Conference on Health Marketing & Youth. Ruskin said it was critical “to quit blaming parents for failing to keep the toxic commercial culture out of their kids’ lives,” and instead shift focus to how to contend with sophisticated delivery of ads to children: “Much of the child-targeted advertising is painstakingly researched and prepared… Ad agencies retain people with doctorates in marketing, psychology and even child psychology for the purposes of marketing to youth. Advertisers are so successful at marketing to children that they sometimes discuss it in terms of the battle over what the chillingly call ‘mind share.'” Ruskin said rather than airing govt.-funded counter-ads to address unhealthy commercial messages, govts. should consider: (1) Placing limits on corporate marketing to youth. (2) Holding corporations accountable in court and legislatures “for damage they do to youth.” (3) “Carving out” marketing and sale of harmful products to kids from international trade agreements. Separately, group of public health organizations is urging consumers to participate in eighth annual TV- Turnoff Week 2002, in which Americans are encouraged to shut off their TVs April 22-28 and engage in “screen-free activities.” American Medical Assn., American Academy of Pediatrics and 8 other health entities said consumers should treat TV-Turnoff Week “not just as a standalone event, but as a springboard” to increase reading and spending time with family.
After “sleepless night,” CEA Pres. Gary Shapiro said he would begin meeting with CEA members on possibility of compromise on FCC Chmn. Powell’s DTV plan. CEA had indicated DTV tuner portion of plan would be unacceptable because of cost of adding tuners to low-priced TVs. However, Shapiro, in Mon. keynote at MSTV meeting during NAB convention in Las Vegas, indicated CEA was caught partly by surprise by Powell announcement and might have to “modify our initial reaction a bit.” Shapiro wouldn’t discuss possible shape of compromise, saying only that he would discuss issue with members and “see what we can do.” He told us later some members might find including tuner easier than others: “There is some room for discussion.” There were other indications at convention that CEA might seek stronger commitment on cable compatibility issues in return for agreeing to some version of tuner plan, although timing of tuner adoption also remained issue. -- MF
Industry and govt. spectrum users agreed on need for more regulatory certainty and flexibility in govt. spectrum policy at NTIA Spectrum Management & Policy Summit Thurs. But at start of 2-day summit, panels struggled with how to define spectrum property rights, incumbent relocation, global harmonization, incentives for efficient spectrum use, accurate forecasts of future demand. FCC Chmn. Powell and NTIA Dir. Nancy Victory stressed renewed commitment of both agencies to engage in regular spectrum planning meetings. While overarching govt. goal is to develop national spectrum policy and improve spectrum management policy, Victory said NTIA was in “listening mode” to assess what was and wasn’t working under current policies. “This is clearly a significant moment in spectrum management,” she said, noting spectrum review outcome could involve changing “slightly or drastically” way bands are managed. Much of day-long discussion focused on thorny transitional issues that face govt. policymakers in areas such as how incumbents are treated when more flexible spectrum policies like sharing and leasing are introduced. “Our challenge is this: How do we fit new world-leading technologies into the U.S.’s own cramped spectrum allocation,” Commerce Secy. Donald Evans said.
U.S. Trade Representative’s (USTR) 2002 review of foreign compliance with telecom trade agreements emphasized wireless interconnection rates in European Union (EU) and Japan and raised continued competition concerns in Mexico. Report, which lays out govt.’s telecom trade enforcement priorities for year, also cites concerns over provisioning and pricing of leased telecom lines in EU member states and Switzerland. “It is more important than ever that U.S. telecom operators follow through on our trading partners’ commitments to open markets,” U.S. Trade Representative Robert Zoellick said. While USTR’s report in past has cited telecom competition barriers concerning EU, this year it contained stronger language on interconnection complaints in EU member states. But unlike last year, report shied away from setting deadlines for deciding on whether to take new steps at World Trade Organization to enforce telecom market- opening commitments of U.S. trading partners.
Canada’s broadcasters urged govt. to change its broadcasting rules so more Canadian content would be aired and marketed abroad. “When we are able to serve our communities well, provide quality programming, turn a profit and go head-to-head with the ever-growing foreign and domestic competition, we can achieve the government’s public policy and cultural objectives,” Canadian Assn. of Bcstrs. (CAB) Pres. Glenn O'Farrell told Canadian Heritage, the department charged with reforming copyright laws. CAB’s presentation March 21 covered range of reforms group believes are needed to keep country’s broadcasting system competitive globally.