The Wall Street Journal states that the Department of Homeland Security (DHS) is declaring a temporary hiring freeze at U.S. Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) due to a potential $1.2 billion budget shortfall. According to the article, the exact cause of the budget shortfall is unclear and may simply be a computer glitch. (WSJ, 03/26/04, www.wsj.com )

It was billed by sponsor Progress & Freedom Foundation as a battle royal, with PFF Senior Fellow James DeLong, outspoken intellectual property advocate, squaring off against Stanford U. Prof. Lawrence Lessig, who Thurs. released his latest book. Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture and Control Creativity argues in favor of free flow of information -- including file transfers on P2P networks, a technology DeLong has denounced for promoting theft. But they agreed Thurs. at a National Press Club debate that copyright reform was necessary in light of the Internet.

FCC 8th-floor wireless advisers stressed the complexity of the pending 800 MHz proposals at the FCC, at a CTIA panel, although several noted they were heartened by the level of economic analysis in data submitted to the FCC in the proceeding. “The FCC needs data to do its job,” said Paul Margie, aide to FCC Comr. Copps: “The reason this has taken so long is because we had to figure out is there interference, how much interference is there, where is the interference, what is the delta between the interference we have now versus the two different plans, how much is it going to cost. And all of this took a certain amount of time because we didn’t know it beforehand.” Asked by CTIA Asst. Vp-Regulatory Policy Christopher Guttman-McCabe how spectrum overlays could be “policed,” Margie said most of the time it’s good to have additional flexibility. “But the more flexibility you give to somebody to operate in different ways, the more chance you have that those ways are going to conflict with one another. Across the band we've been adding more flexibility to people’s licenses. May we -- by doing that -- be creating other 800 [MHz-type] issues at other places around the spectrum? There’s a possibility we might be doing that.” Among the concerns that have surfaced repeatedly at the CTIA show here this week is the possibility of a patchwork of new state regulations to address issues such as service quality. Asked by Guttman-McCabe what role the FCC could play in this area, Jennifer Manner, adviser to Comr. Abernathy, said “unfortunately, we don’t have preemption authority, which is a problem.” The industry’s voluntary code of best practices, addressing issues such as trial periods for new service and billing, has been a “good response.” Manner said: “Your success should guide the states. You have to do a lot of education and be responsive. That’s not really something the Commission could step in and do.” Asked about the extent to which the FCC does cost- benefit analysis of the financial impact of rulemakings it considers, Sheryl Wilkerson, Chmn. Powell’s wireless aide, said it’s “one of the first things we look at when an item does come up to us.” Industry has been helpful in providing data on the costs of proposals such as those under consideration to mitigate public safety interference at 800 MHz and a recent International Bureau item on orbital debris, Wilkerson said. Barry Ohlson, aide to Comr. Adelstein, said the record assembled at the FCC on the 800 MHz proceeding has been among the better ones before the agency “in terms of economic analysis.” While there has been different information submitted by competing sides in the 800 MHz proceeding, Ohlson said the data submitted still has been helpful. Separately, FCC Chief of Staff Bryan Tramont asked what the regulatory implications were of wireline company ownership of wireless companies. “The wireless industry is incredibly competitive,” said Cingular Wireless Vp-Federal Regulatory Affairs Brian Fontes. “With respect to any wireline affiliation that any wireless carrier would have, if there’s any opportunities to behave irrationally in the marketplace, I think that would be remedied very quickly just by the competitive nature of the marketplace.” -- MG

ATLANTA -- A wireless CEO panel at the CTIA convention Wed. turned into an industry rally for federal preemption of state wireless regulations in a Telecom Act rewrite. Still, Sprint CEO Len Lauer acknowledged the prospects for quickly overhauling the 1996 law were slim: “The reality of the Telecom Act being rewritten is pretty low.” Citing a May deadline that will bring wireless local number portability to all markets, several company heads also bemoaned the lack of wireline cooperation on intermodal porting.

FCC Comr. Abernathy said Wed. she has some concern about a plan that would give Nextel spectrum at 1.9 GHz, along with doing in-band realignment, to fix public safety interference at 800 MHz. At a press breakfast, she said she has long favored the in-band realignment but would prefer that the solution not include spectrum outside the 800 MHz band. However, while her first choice would be an 800 MHz-only solution, she said she hasn’t “foreclosed” the idea of moving outside of the 800 MHz band, including to 1.9 GHz, if it’s deemed necessary.

Saying it would have been “highly desirable” to let the issues of DTV content protection “rest in the hands of an open and international standardization process,” the European Commission (EC) told the FCC its Nov. broadcast flag order “raises a number of questions and potential concerns.”

A European Commission (EC) antitrust ruling set for release March 24 is likely to force Microsoft to let computer makers install alternatives to its Media Player system for streaming online content, an EC spokesman said Wed. The software giant wouldn’t be required to spin off Media Player, the spokesman said, but it would have to give hardware manufacturers alternate media software programs they could install next to the Windows version if demand exists, he said. An order barring Microsoft from selling its operating system with Media Player would have been too Draconian to address the antitrust concerns raised by RealNetworks, Apple and others, the spokesman said.

FCC officials said Wed. they expected the rollout of wireless local number portability (LNP) to the rest of the country May 24 to be smoother than it was in the top 100 markets 6 months earlier. Wireless Bureau Assistant Chief David Furth, at a CTIA forum on LNP, cited more-extensive testing for the approaching deadline and resolution of technical glitches since Nov.

FCC Chmn. Powell told Rep. Fossella (R-N.Y.) whether Nextel benefits from contiguous spectrum at the upper end of 800 MHz “depends on a number of variables.” Fossella joined 22 other House members who wrote to Powell recently urging him not to give Nextel spectrum outside the 800 MHz band without an auction under Sec. 309(j) of the Communications Act (CD March 5 p1). Since then, a staff draft item has begun circulating on the 8th floor proposing a plan that would reconfigure spectrum at 800 MHz and give Nextel 10 MHz at 1.9 GHz, but at a price (CD March 11 p1). The point of the plan is to mitigate interference public safety users encounter at 800 MHz. Fossella’s letter had posed questions to Powell about how to mitigate public safety interference, raising concerns about Nextel getting spectrum outside an auction. Powell’s response, sent this week, said Nextel’s iDEN technology “would not benefit by operating in contiguous spectrum: it is a system designed specifically to operate in noncontiguous spectrum.” Powell said that “were Nextel to elect to abandon this technology and change to a technology that requires contiguous spectrum, we would need to assess the cost of the conversion against the benefit gained thereby.” On fitting an auction into a plan to fix interference at 800 MHz, Powell told Fossella that the obligation to auction spectrum comes up in the context of mutually exclusive applications: “The Commission, when the public interest so dictates, may employ ‘engineering solutions, negotiation, threshold qualifications, service regulations and other means to avoid mutual exclusivity.'” The FCC will weigh this and “issue a decision within the bounds of its statutory authority,” he said. Because of public safety implications, the FCC plans to “resolve this matter as expeditiously as possible,” he said. Meanwhile, wireless companies and the United Telecom Council (UTC) ratcheted up pressure on Capitol Hill Wed., voicing concerns at a briefing about the item under consideration on the 8th floor. Fossella said he stood “shoulder-to-shoulder with public safety in my support of rebanding the 800 MHz spectrum and enhancing the communications systems of law enforcement, fire departments and others.” While he said he supported that part of the consensus plan, he shared concerns with some states that the plan has “major flaws.” Fossella said his big concern was that the plan backed by Nextel, the Assn. of Public Safety Communications Officials and others, didn’t provide enough money for public safety retuning at 800 MHz. In an FCC filing this week CTIA criticized parts of recent Nextel presentations before the FCC, charging the numbers don’t “add up.” Nextel has said that under the consensus plan it would receive spectrum at 1.9 GHz worth $3.33 billion, but that it would make $5.4 billion in spectrum and cash contributions to make the plan work. CTIA argued, “Nextel’s encumbered, non-contiguous non-nationwide spectrum (on a per MHz-pop basis) is worth over 60% more” than “relatively unencumbered spectrum” at 1.9 GHz. At the briefing, Cingular Vp-Federal Relations Brian Fontes cited language in a 1990 waiver the FCC granted to Nextel’s predecessor company that made the company responsible for any interference experienced by public safety systems. The FCC has an obligation to resolve such interference cases, he said: “In large part, where has the FCC been? I think quite frankly they have failed to remedy the problem early on.” Among concerns raised at the briefing by Fontes and others was how the value of spectrum that would be part of a rebanding plan could be determined outside an auction. Meanwhile, UTC, CTIA, the American Gas Assn., the National Rural Electric Cooperative Assn. and 3 other groups wrote President Bush Wed. raising concerns about the consensus plan. They told Bush the plan would allow Nextel “to ’swap’ its patchwork set of channels, enabling it to gain clear and contiguous spectrum nationwide in the 800 MHz band plus 10 MHz of bonus spectrum at 1.9 GHz.” They asked Bush to back an alternative to the consensus plan that “will better serve our nation’s interests.”

A European Commission (EC) antitrust ruling set for release March 24 is likely to force Microsoft to let computer makers install alternatives to its Media Player system for streaming online content, an EC spokesman said Wed. The software giant wouldn’t be required to spin off Media Player, the spokesman said, but it would have to give hardware manufacturers alternate media software programs they could install next to the Windows version if demand exists, he said. An order barring Microsoft from selling its operating system with Media Player would have been too Draconian to address the antitrust concerns raised by RealNetworks, Apple and others, the spokesman said.