Children’s safety advocates were dissatisfied with privacy provisions released Wed. by MySpace. The company said the tools will help keep predators from approaching minors on its site. Heightened security for users 14-16, curbs on ad placements and options for privacy settings for all members will be in place next week, MySpace said.

The Internet raises consumer protection issues govts. must consider, the U.K. Office of Communications (Ofcom) said Wed. In tandem with legitimate Web use, fraud and crime have risen, Ofcom said. Its survey of international and U.K. protection efforts studied ways to regulate key matters, including privacy, security and protection from outlaw content or malicious software. Ofcom noted 4 aspects of effective Internet and online service oversight: (1) Varying success in consumer protection, international or national. When national ISPs act effectively, or consumers have access to educational tools, efforts at protection can succeed. But that often is less likely, since it requires cooperation among many levels of the Internet value chain. (2) Successful protection generally involves much more self- and co-regulation than other media. A self-regulatory tack by the Internet Watch Foundation -- it runs a hotline for reporting illegal content and issues take-down notices to hosting ISPs in the U.K -- resulted in only 0.4% of possibly illegal child abuse images being found hosted in the U.K. But the international problem remains. (3) For protection to work, international cooperation must increase. Global efforts tend to lack adequate enforcement, and perpetrators rarely are pursued due to political and cultural barriers. (4) The Internet “inevitably” puts more onus on consumers to guard themselves from unwanted content and services or from cybercrime. Ofcom’s report is the first in a series of surveys on international approaches to regulation and the Internet. The regulator also is assessing the impact of increased communications market convergence to see if its methods should change. “While we do not draw specific policy recommendations from this survey, we hope it will open a debate with and amongst interested parties on the appropriate response to the consumer protection challenges posed by the Internet,” Ofcom said. It won’t try to paste existing regulatory structures onto the Internet, it said.

The first thing we must do is kill all the lawyers -- or just limit their profits on verdicts obtained for veterans whose personal data were abused in the Dept. of Veterans Affairs (VA) breach, House Judiciary Committee Republicans said in a markup Wed. Democrats shot back that HR-5220’s 10% limit on fees would keep lawyers from representing vets, owing to low returns on cases with payouts that could be less than $1,000 per victim. A slew of amendments failed, but none so dramatically as Rep. Weiner’s (D-N.Y.), which blamed the Bush administration for the incident, sparking a vitriolic exchange between him and Rep. Lungren (R-Cal.).

The Universal Service Fund (USF) has grown more than 50% since 2000, much of the growth in the high-cost program that supports rural telephone companies, the Congressional Budget Office said in a report. Spending on the high-cost program doubled in the past 6 years and could more than double again in the next few years, “depending on the outcome of various legislative and regulatory changes that are under discussion,” CBO said in a report on “Factors that May Increase Future Spending from the Universal Service Fund.” The report was released Tues., a day before CBO Acting Dir. Donald Marron was to testify at a House Telecom Subcommittee hearing on universal service reform. USF outlays grew from $4 billion to $6.3 billion between 2000 and 2005, while revenue grew from $4.5 billion to $7 billion, CBO said. Revenues are a better gauge of the USF’s impact on the economy “since they take into account commitments that have been made but not yet paid for,” the report said. The report attributed much of the growth in the high-cost program to the advent of “cell phone companies that are new competitive entrants to rural markets.” CBO said demands for USF outlays could continue to rise depending on how policymakers treat the increase of competitors in rural areas, intercarrier compensation (ICC) reform and demands for the use of USF money to support broadband connections. The first 2 factors -- a growth in payments to wireless competitors and ICC changes -- could raise outlays by as much as $4 billion a year, CBO said. Increased spending for broadband can’t be measured, the report said, because it probably would result from legislative action “which CBO has no basis for predicting.” Raising the USF contributions fee could drive consumers to services that aren’t subject to USF fees, such as e-mail and instant messaging, the report said. On the other hand, there are several options for curtailing growth of USF spending such as limiting USF support in high-cost areas to one connection per household and basing support on each carrier’s own costs rather than the incumbent’s cost, moves that rural telephone companies have pushed. ICC reform could be structured in a way that would ease the pressure on the USF, the CBO said. Finally, budget pressures caused by speeding the deployment of broadband in rural areas could be eased by funding the new service outside the USF as “part of discretionary spending,” the study said.

The sweeping telecom legislation scheduled for markup Thurs. appeared to be in peril, with senators on both sides of the aisle concerned about preemption language that would free wireless carriers from most state regulation, sources said Tues. According to some groups working the issue, state preemption in recent days replaced net neutrality as the most important issue in the legislation (CD June 20 p3).

The N.J. legislature passed a bill to shift video franchising from the state’s 526 municipalities to the Board of Public Utilities (BPU). The bill (AB-804/SB- 192) actually passed last month but had to be returned to the Assembly to comply with a parliamentary technicality requiring that any bill to raise taxes must originate in the Assembly. This bill raised technical concerns because it would increase municipal franchise fees to 4% from 2% when competitive cable service is available to 60% of households. But the Assembly quickly approved the measure without change and sailed it back to the Senate for the final 31-5 vote that sent it on to Gov. Jon Corzine (D). The governor didn’t indicate whether he'd sign it; he has until early Aug. to act. The bill requires new BPU-franchised video entrants to offer service within 3 years in all county seats in their service area, plus any municipality with a population density exceeding 7,111 per square mile. If the entrant is a telephone company, its video service area would be the same as its telephone service area. New entrants would have to extend service to all households in a municipality within 6 years from the date they first offered service in that community. The bill also would prohibit income-based redlining at any time. Redlining complaints would be heard by the BPU. The bill’s passage came after long and costly lobbying campaigns by cable companies, municipalities and phone carriers. Phone companies and their supporters said it would lower bills, provide more entertainment choices and better service quality through competition. But cable and municipal interests, along with some southern N.J. lawmakers, contended the bill would raise prices statewide, while leaving many suburban and rural areas in southern counties without any offsetting competitive benefits. Verizon applauded the bill’s passage and urged Corzine to sign it, saying it “brings long-needed updates to the state’s 34-year- old cable franchise laws -- laws that were out of date with technology, out of touch with consumer demands, and served only to delay choice and competition.” Construction interests also hailed the measure, saying they expect an economic boost from what they predict could be up to $1 billion in Verizon network spending on network upgrades for video service.

In Cricket Hosiery, Inc. et al. v. U.S. et al., the Court of International Trade (CIT) dismissed the challenge to the Cotton Research and Promotion Act of 1996, as amended (Cotton Act) and the regulations implementing the Cotton Act (Cotton Order) brought by certain importers who contend that the Cotton Act and Cotton Order violate certain constitutional rights.

In a surprise move, a new draft of a telecom bill by Sen. Stevens (R-Alaska) contains language sharply limiting state controls on wireless service (CD June 17 Special Report). Though carriers view this as a potential win, it has raised consumer group and state regulator ire. State regulators said Mon. the wireless language will be controversial and could keep the bill from progressing this year.

ComTek doesn’t expect a shutdown of BPL service in Manassas, Va., as a result of a pending FCC interference proceeding, a spokesman said: “We don’t anticipate that happening. ComTek is confident that it can address the concerns outlined” in the FCC Enforcement Bureau’s communique concerning complaints from ham radio operators and emissions in excess of Commission limits. In a June 16 letter, the FCC asked Manassas and ComTek to let it know within 20 days what steps it would take to notify customers of a possible shutdown if the city-owned BPL system isn’t able to resolve a pending interference complaint of a ham radio operator (CD June 19 p13). ComTek already has started the process of replacing overhead Main.net BPL equipment in the city with 2nd-generation apparatus, the spokesman said, and it would be “accelerated to the extent that it can.” The change in equipment goes “substantially beyond what’s called for” by the FCC, he added. Accusing the American Radio Relay League (ARRL) of seeking to “shut down BPL in Manassas and anywhere it can shut it down,” the spokesman said ComTek is “focused on doing whatever mitigation is necessary” to address concerns raised by the FCC. The events in Manassas won’t affect the BPL industry outside Manassas, said Brett Kilbourne, regulatory dir. of the United Power Line Council: “ It’s clearly just the case of one technology and one deployment. It’s not clear anything has happened yet.” There aren’t any “ongoing” interference complaints outside Manassas, he added. Asked if he saw the FCC getting more aggressive in enforcing its rules, Kilbourne said the agency has been acting on interference complaints in the past. As for whether it would help the ARRL’s lobbying for a new FCC BPL study on Capitol Hill, he said the FCC’s actions showed the rules are being enforced and are effective in mitigating interference.

ComTek doesn’t expect a shutdown of BPL service in Manassas, Va., as a result of a pending FCC interference proceeding, a spokesman said: “We don’t anticipate that happening. ComTek is confident that it can address the concerns outlined” in the FCC Enforcement Bureau’s communique concerning complaints from ham radio operators and emissions in excess of Commission limits. In a June 16 letter, the FCC asked Manassas and ComTek to let it know within 20 days what steps it would take to notify customers of a possible shutdown if the city-owned BPL system isn’t able to resolve a pending interference complaint of a ham radio operator. ComTek already has started the process of replacing overhead Main.net BPL equipment in the city with 2nd-generation apparatus, the spokesman said, and it would be “accelerated to the extent that it can.” The change in equipment goes “substantially beyond what’s called for” by the FCC, he added. Accusing the American Radio Relay League (ARRL) of seeking to “shut down BPL in Manassas and anywhere it can shut it down,” the spokesman said ComTek is “focused on doing whatever mitigation is necessary” to address concerns raised by the FCC. The events in Manassas won’t affect the BPL industry outside Manassas, said Brett Kilbourne, regulatory dir. of the United Power Line Council: “It’s clearly just the case of one technology and one deployment. It’s not clear anything has happened yet.” There aren’t any “ongoing” interference complaints outside Manassas, he added. Asked if he saw the FCC getting more aggressive in enforcing its rules, Kilbourne said the agency has been acting on interference complaints in the past. As for whether it would help the ARRL’s lobbying for a new FCC BPL study on Capitol Hill, he said the FCC’s actions showed the rules are being enforced and are effective in mitigating interference.