On July 14, 2004, the House of Representatives passed H.R. 4418, the Customs Border Security and Trade Agencies Authorization Act of 2004.
Iomega has pulled the plug on development of its digital capture technology (DCT) after failing to secure a licensee, CEO Werner Heid said. DCT, a small form factor magnetic storage drive with a 1.5 GB capacity, was unveiled in 2003 as Iomega sought to offset flagging sales of its Zip drives. But an initial lead customer -- a camcorder manufacturer -- scrapped plans last fall. At CES in Jan., Iomega executives expressed hope of having DCT designed into 6 products by mid-summer including digital audio players, USB drives and handheld PCs. But DCT’s future hinged on Iomega’s landing a “significant” OEM customer among CE manufacturers, an effort that proved unsuccessful, Heid said. Iomega didn’t have “sufficient funds” to pursue development of both DCT and removable rigid disk (RRD) technologies, the latter being positioned as a replacement for tape drives in corporate applications, Heid said. RRD, which is marketed under the REV brand, has a 35 GB capacity that can be increased to 90 GB by using Iomega’s backup pro compression software. REV shipped in May and generated net sales of $7.4 million during the 2nd quarter, interim CFO Thomas Kampfer told analysts in an earnings conference call. In dropping its own plans for DCT, Iomega is “very focused” on licensing or selling the technology to a 3rd party, Heid said. It has had “positive and productive” discussions with 3rd parties in the 2nd quarter, Kampfer said. Iomega reached a licensing agreement for IP surrounding DCT’s ASIC with a unidentified N. America semiconductor manufacturer, Heid said. The DCT products were to be manufactured by Citizen Watch Co. and use discs supplied by Fuji Photo Film, the latter also being a licensee for Zip drives. Iomega spent $4.4 million of DCT in the 2nd quarter -- $3.4 million and $1 million on operating expenses and capital costs, respectively, Kampfer said. In other product news, Iomega also is setting up a network of regional hubs for distribution of hard disc, CD-RW and DVD drives that will allow it to reduce inventory levels to 1-2 weeks from the current 6-8 weeks, Heid said. “This will allow us to deliver products in real time, on demand,” he said. During the 2nd quarter, Iomega swung to a $19.8 million loss from a $4.4 million profit a year earlier as sales plunged 23% to $78 million. Zip product sales fell 51.4% to $32.3 million. Revenues from flash, floppy, hard disk and optical drives rose to $32.7 million from $29.2 million.
RELM Wireless rejected a takeover offer by Ontario-based Wireless Age Communications. “We have concluded that the interests of RELM and its shareholders and other stakeholders will be best served by the company remaining independent and pursuing the strategy already in place for enhancing future growth and profitability… RELM is not for sale,” Chmn. George Benjamin wrote in a 3-paragraph letter Wed. Fla.- based RELM manufactures and markets wireless equipment including land mobile radios and base station systems.
The N.H. Supreme Court said cities can impose real estate taxes on telecom utilities that install poles, wires and other outside plant equipment in city-maintained rights of way along public roadways. The court (Case 2003-572) was ruling on Verizon’s appeal of a real estate tax levy by the city of Rochester. The case had wandered up and down the state judicial circuits since the city first levied the real estate tax in 1996, including a prior remand by the Supreme Court. In the latest ruling, the state’s top court concluded that state law is “unambiguous” regarding cities’ rights to impose real estate taxes based on the assessed value of the public land being occupied. But it wasn’t a total loss for Verizon. It won a remand to the lower courts on its claim that its rights to equal protection of the laws were violated because it was the only entity billed for ROW property taxes. The Supreme Court directed the lower courts to consider whether real estate taxes should also be levied on the gas, electric, cable and other entities that occupy city rights of way.
Telenor Satellite Services will expand its teleport gateway services using New Skies Satellites’ Perth Australia mediaport, the companies said. Due to a new agreement, Telenor’s available leased and on-demand services will increase for users on land and in both ocean regions. Terms of the agreement were unannounced.
U.S. Customs and Border Protection (CBP) has posted to its Web site the Spring 2004 issue of its "ACE Modernization Monitor" newsletter.
The new FCC all-or-nothing rule adopted last week (CD July 9 p3) is restricted to interconnection agreements approved under Sec. 252 of the Communications Act and doesn’t address how the new rule will apply to new commercial agreements, according to the text released Wed. One reason is that commercial agreements came under scrutiny after the Commission launched the further NPRM revising its interpretation of Sec. 252(i), we were told. The order will apply to all effective interconnection agreements, including those approved and in effect before the date the new rule goes into effect, the Commission said in the order, which will become effective 30 days after publication in the Federal Register. The new rules will equally apply to arbitrated and negotiated agreements, the FCC said. It found that Sec. 252(i) did “not differentiate between negotiated and arbitrated agreements.” It said the primary purpose of Sec. 252(i) was to prevent discrimination, and in the context of arbitrated interconnection agreements, requesting carriers were “protected from discrimination primarily by the arbitration process itself. Continuing to apply the pick- and-choose rule to arbitrated agreements, therefore, is an overly broad means of fulfilling the statutory purpose of protecting against discrimination.” Moreover, the Commission said, maintaining separate regimes for negotiated and arbitrated agreements would be difficult to administer. It stressed, however, that “parties are under a statutory obligation to negotiate in good faith.” The FCC also concluded in the order that it “does indeed have the legal authority” to reinterpret Sec. 252(i). Specifically, it said Congress hadn’t directly addressed the degree to which interconnection, service or network element provisions from a state-approved interconnection agreement must be made available to other requesting carriers. “We reach this conclusion because the plain meaning of the section’s text gives rise to 2 different, reasonable interpretations, and because the Supreme Court expressly recognized that the Commission has leeway to reinterpret section 252(i),” the order said. It also said the language in Sec. 252(i) didn’t limit the Commission to a single construction. On another issue raised by the competitive industry, the FCC said it found that Sec. 252(i) was “ambiguous” from the Supreme Court’s decision in AT&T v. Iowa Utilities Board, which, it said, held that the Commission had the expertise to determine a reasonable interpretation of Sec. 252(i). Several competitors had argued the Commission shouldn’t eliminate its pick-and-choose rule, which according to the Supreme Court “tracks the pertinent language almost exactly,” and is the “most readily apparent reading.” Comr. Copps, who dissented on the order, has also pointed at the highest court pronouncement, saying “this is a strong stuff for a Commission whose policy pronouncements do not always pass muster with the courts of land.” But the FCC said in the order the Supreme Court “did not hold that the Commission’s current interpretation of section 252(i) is compelled by the statute.” It said the Supreme Court had “routinely recognized that government agencies have discretion to change interpretations of ambiguous statutes, and that an agency is not stopped from changing its view.” The Commission also said “the order does not take a position on any issue outside the scope of the FNPRM.” Several parties participating in the proceeding have asked the Commission to address issues beyond those raised in the FNPRM. For example, Verizon has asked for a declaration that agreements governing network elements no longer subject to mandatory unbundling aren’t subject to Sec. 252(i) or the pick-and-choose rule; Birch has proposed structural separation of ILECs into wholesale and retail operations; and T-Mobile has urged the Commission to adopt a procedure for federal arbitration of national interconnection agreements. Those issues weren’t addressed in the order.
The FCC adopted an all-or-nothing rule for interconnection agreements before its meeting Thurs. The Commission required that competitive carriers seeking to adopt terms of another carrier’s interconnection agreement “adopt the agreement in its entirety, taking all rates, terms and conditions from the adopted agreement.” Comr. Copps dissented and Comr. Adelstein dissented in part.
Congress faces a choice between acting quickly to preempt states from regulating VoIP or taking more time to tackle the Internet service in a broader rewrite of the Telecom Act, House Telecom Subcommittee members said Wed. At a hearing on VoIP, industry witnesses disagreed. The preference seemed to be what some committee members considered impossible: A more comprehensive Telecom Act rewrite done quickly. House Commerce Subcommittee on Commerce Chmn. Stearns (R-Fla.) told us after the hearing, however, that the debate is more complicated than that. “Some of them [Commerce Committee members] don’t want to do anything at all,” he said. Full Committee Chmn. Barton (R- Tex.) didn’t take a position on the best approach, but he did predict “VoIP is going to be huge. I think it’s going to make cell phone expansion look like wagon trains.” Barton told the witnesses Congress will preempt states on VoIP regulation: “There should be only one, federal set of rules that apply to VoIP.”
On June 18, 2003, the House of Representatives passed H.R. 4567, the fiscal year (FY) 2005 appropriations bill for the Department of Homeland Security (DHS), including the Bureau of Customs and Border Protection (CBP).