Customs Duty

GENEVA -- The EC proposed wide-ranging renegotiation of the World Trade Organization Information Technology Agreement to address rising international concern about non-tariff trade barriers and possibly to reduce duties on electronic products that don’t qualify for exemption from them (CD May 29 p1). The proposal comes about a week before the WTO is expected to agree to a U.S., Japanese and Taiwanese request for a dispute resolution panel on the ITA case (WID May 29 p1) (CD May 29 p1) (SW June 2 p2) (CED May 29 p5). The EC proposal may be an attempt to salvage key voluntary agreements under negotiation in the Doha round of trade talks, we're told.

A California appeals court upheld a trial court’s dismissal of a class-action lawsuit against the former Cingular Wireless, bought by AT&T, that alleged the carrier misled customers by charging sales tax on the full list price of cellphones that were discounted as part of a bundled calling plan. The 2nd District Court of Appeal said the trial court acted correctly in tossing out the class-action suit led by Richard Yabsley. The suit alleged that the wireless carrier engages in unfair competition and misleading advertising by not informing customers that they'd have to pay sales tax on the undiscounted list price of their cellphone. The appeals court (Case B-198827) said the state tax code included a specific provision requiring that the sales tax on a wireless bundle comprised of phone and service be figured on the basis of the phone’s unbundled list price. The appeals court said the state legislature provided a “safe harbor” for the conduct at issue, and it can’t be overridden by the courts. Yabsley had also accused Cingular of breaking the law by failing to disclose that sales tax on the bundle would be figured on the full list price of the phone. But the court said vendors have a legal duty to figure the sales tax according to the method prescribed by the legislature. It said state law includes a presumption that the buyer by completing the sale had agreed to pay the amount of sales tax shown on the sales receipt.

Comcast and Free Press continue feuding at the FCC (CD July 21 p11) over whether the agency has authority to find that the cable operator violated commission net neutrality principles, as Free Press claimed in a filing on Comcast’s network management. In a Monday letter to the FCC Comcast said it meant its communique to “re-emphasize the fundamental legal flaw in Free Press’ demand” that the FCC act: “There is simply no law, and no lawful basis to promulgate any new legal standard to be enforced.” Section 230(b) of the Communications Act and 706(a) of the Telecom Act, both of which Free Press “now focuses” on, “confer no rights or enforceable duties on subscribers or broadband providers, and do not expand the agency’s statutory authority in any way,” said Comcast. “The absence of any potentially applicable law prevents the Commission from taking any action on the Complaint.” If it did act, the FCC could violate the Administrative Procedure Act and the due process clause of the Constitution, Comcast suggested. Friday, officials from Free Press and other network neutrality proponents met with Commissioner Jonathan Adelstein to discuss “the strongest jurisdictional bases for the Commission to issue a show-cause Order,” said an ex parte. “We also discussed several of the meritless arguments that Comcast and its allies have raised in its attempt to delay the Commission’s action.” Another letter from Comcast to the FCC said the cable operator’s network management, similar to that of other ISPs in the U.S. and other countries, isn’t discriminatory. Comcast broadband customers “can and do access any content, run any application, and use any service that they wish,” said the cable company.

Broadband providers sounded alarms over an FCC proposal to create a national broadband mapping program. In comments last week, phone carriers and cable operators expressed concerns about costs and confidentiality. Wireless and satellite providers argued that they should escape any data filing requirements. But the FCC proposals -- made last month in a further notice attached to an order on broadband data collection - received strong support from the National Association of Telecommunications Officers & Advisors and the American Library Association.

Major wireless and wireline associations and their carrier members asked the FCC to back off imposing a requirement that eligible telecommunications carriers send billing inserts or postcards to all subscribers explaining the DTV transition. The CTIA said there’s no “cognizable connection” between a consumer’s wireless service and TV service. A notice asking whether the FCC should expand digital TV consumer-education mandates (CD April 24 p6) faced by cable and satellite-TV providers and telcos getting government money drew no support. In comments on the rulemaking notice filed with the agency Friday, no one supported requiring eligible telecommunications carriers to include information on monthly customer bills or send postcards on the transition to all subscribers.

CompTel President Matt Salmon urged Congress to take an active role on a Qwest forbearance petition before the FCC. Qwest wants relief from loop and transport unbundling rules in Denver, Phoenix, Seattle and Minneapolis. Salmon sent letters to members of the House and Senate Commerce Committees and delegates from Arizona, Colorado, Minnesota and Washington. Salmon responded to letters sent by Qwest, which told Congress to back off and let the FCC handle the matter (CD June 13 p8). “Congress has the authority and public duty to ensure that federal agencies give sufficient weight to the expertise of state and local agencies, as well as the opinions of local customers, in matters that greatly affect consumer prices and choices,” Salmon said.

A California Senate committee plans June 17 hearings on a bill that would require telephone carriers and video providers to do background checks on any employee whose duties require access to customer premises or to critical network facilities such as switching centers. AB-2232, now before the Energy, Utilities and Communications Committee, also would require equivalent background checks for employees of contractors or vendors who supply goods or services on behalf of phone or video providers. Bill supporters said the increased number of phone and video providers have created an increased need for protection against dishonest or disgruntled employees.

The U.S. formally challenged EU tariffs on some information technology products, said U.S. Trade Representative Susan Schwab. The U.S. filed Wednesday in Geneva for World Trade Organization dispute-settlement consultations with the EU. Japan also filed. The U.S. initiated the proceedings because the EU violated WTO’s 1996 Information Technology Agreement by putting duties on products that should be duty-free, Schwab said. If a 60-day settlement proceeding fails, the U.S. will litigate, she said.

Five cable operators, CompTel, a state regulator and others want to lobby the FCC on a complaint that Verizon violated FCC porting rules. The proceeding involves allegations about actions by the Bell before moving a customer’s phone number to a new provider. The lobbying would depart from FCC practice and be inappropriate, Verizon said. The dispute is over whether those interested apart from formal parties may visit commissioners, their aides and Enforcement Bureau officials to weigh in on an action. Here, it’s the bureau’s April 11 recommended decision and the parties are the Bell and three cable operators. Verizon said it broke no rules, and the agency should say so and issue a notice on whether video and broadband customers can switch companies by having their new provider ask the old one to cut off service (CD April 15 p5).

Verizon’s use of information from cable operators to lure defecting phone customers back to the Bell broke no FCC number porting rules, the Enforcement Bureau said. In a recommendation to the full commission that was released at 7:45 p.m. Friday and that some found surprising, the bureau said three cable operators had failed to prove that Verizon marketing efforts violated sections 222(a) and (b) of the Communications Act. The provisions define what telecommunications carriers can do with information obtained from competitors. The bureau said it will judge later whether Verizon broke section 201(b) rules on customer retention practices. It asked commissioners to approve a broad notice seeking comment on that question.