WASHINGTON—Sen. Ted Stevens, R-Alaska, told eWEEK on June 22 that he does not want any sort of net neutrality legislation to be part of the telecom bill currently being debated by the Senate Commerce, Science and Transportation Committee.

“Until somebody tells me what net neutrality means, until they can give me a definition, I don’t want it in there,” Stevens said to eWEEK June 22.

“Right now, nobody knows what it means, so why put it in the bill?”

Stevens has previously said that he was opposed to legislation that would put common-carrier-like provisions into the bill. Earlier he told eWEEK, “The Internet should be free.”

The committee held a markup session on Senate Bill 2686, the Communications, Consumers’ Choice and Broadband Deployment Act of 2006 on the afternoon of June 22.

A markup session is when the Senate committee considers amendments to the current version of a bill before it goes before the full Senate for a vote.

The June 22 meeting was the first in what promises to be a long series of meetings extending over the course of several days or weeks.

The bulk of the debate was aimed at two areas: funding communications initiatives for the War on Terrorism and for VOIP (voice over IP) legislation.

Net neutrality, if it is considered at all, will not be debated before Tuesday, June 27. Only two events of substance took place at the June 22 markup session. The first was to adopt an amendment to accelerate the spending of money for interoperability solutions for first responders.

Also voted on today was an amendment to limit local regulation of VOIP services, and to preempt local and state limits on VOIP carrier operations, with the exception of consumer protection, child pornography or privacy laws.

The amendment, introduced by Sen. John Sununu, R-N.H., would prevent states from taxing interstate calls or raising financial barriers to entry for VOIP carriers.

A number of committee members expressed concerns about the need for net neutrality legislation in their opening statements.

While it’s likely that committee members will have the chance to express their opinions on net neutrality, and to offer their thoughts on what it actually means, it’s unlikely that any such provision will make it into the current bill.

The chairman of a Senate committee has great power to control the content of legislation, and it’s highly unlikely that provisions a Senate committee chairman opposes will see the light of day.

However, the current version of the bill is notable in its bipartisan support.

Over the 18 months that the bill has been in process, members from both parties contributed.

“This is a product of all members from both sides of the aisle,” Stevens said in his opening remarks.

Stevens noted that much of the bill’s content was crafted by members from both sides, and a large number of amendments were incorporated by consensus.

Sen. Barbara Boxer, D-Calif., said that the committee should add a strong provision for net neutrality to ensure that Internet access is not subject to discrimination.

Sen. Olympia Snowe, R-Maine, said that any net neutrality provisions must protect the free, unfettered environment that has characterized the Internet to date.

A total of 216 amendments were introduced for inclusion into the Senate version of the bill. The U.S. House of Representatives has already passed a similar bill.

If the Senate version passes the full Senate, the two bills will be reconciled in a conference committee.

http://www.eweek.com/article2/0,1759,1983064,00.asp?kc=EWRSS04069TX1K0000701

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WASHINGTON (Reuters)—Verizon Communications Inc. filed a lawsuit on Thursday to invalidate a Maryland county’s licensing process to offer subscription television service, arguing it was illegally delaying its expansion plans.

In what the No. 2 U.S. telephone company described as its first lawsuit of this kind, Verizon argued Montgomery County’s franchising process violated U.S. antitrust and communications laws as well as free speech rights under the Constitution.

“We would prefer to reach agreement on a franchise that would offer Montgomery County consumers more choice for their cable services, but after a year of essentially fruitless negotiations, we are at an impasse,” said John Frantz, Verizon vice president and associate general counsel.

The lawsuit marks a new tactic as Verizon tries to rapidly expand into the subscription TV business and compete with cable operators, such as Comcast Corp., which already has a license in Montgomery County, an affluent suburb outside Washington, D.C.

Verizon already has 13 franchises in the Washington metropolitan area and about 100 agreements nationwide.

Cable companies have expanded aggressively into the telecommunications and high-speed Internet businesses, challenging the traditional telephone carriers.

A representative for Montgomery County’s office of cable and communication services was not immediately available for comment.

Verizon asked the U.S. District Court for Maryland to invalidate the county’s cable franchising law and order local authorities to negotiate a lawful agreement within 60 days.

Verizon alleged that the county illegally made demands including the right to collect fees on phone and high-speed Internet services, that the company set aside about 65 channels for public, educational and government programming and that it pay additional cash.

The lawsuit comes as the company presses Congress to simplify the process to obtain cable franchises so it can offer video service to compete against cable operators. However, it is unclear whether U.S. lawmakers will act this year.

http://www.eweek.com/article2/0,1759,1983976,00.asp?kc=EWRSS04069TX1K0000701

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Imagine you are a decision maker at a very large U.S. ISP. You are annoyed because your once-lucrative phone business is slowly being eroded by a new wave of VOIP providers such as Vonage, Skype and Net2phone.

These parasitic phone services are running on your high speed data circuits without paying a connection charge or royalty of any kind, but constantly offering dial tone at a lower cost than you, essentially stealing from your profitable consumer and business phone plans.

Well what are you going to do? The answer is simple—just swat these blood sucking leeches and be done with them before they grow too big! You call all your henchmen together for a meeting, stomp your foot, just like something right out of a Hollywood script. “I want these buggers taken care of!” you’d shout.

That’s a dramatic scenario—and perhaps one that consumers don’t question. Believe it or not, however, the operators of large telco companies, though profit driven, do not run roughshod over the consumer. Below we’ll detail some of the more likely scenarios and trade-offs being made in the face of this new competition.

Cultivating a reputation of trust is foremost with the service providers. Despite the bumps in the road, these folks know you have some choices as a consumer and are sensitive. Yes, I’ll concede that large providers do cycle through periods of poor service followed by corrections like any other business. Keep in mind this is due to the normal apathy that creeps into any large organization and not some far flung conspiracy to rape consumers. There is enough competition, and consumer-based political pressure, that the last thing any provider wants to do is bring on a self induced firestorm of criticism for an unsustainable short-term gain.

You might ask how would I know this? Well the facts are that blocking Skype, Vonage, etc., has not happened yet despite the fact that the technology has been available for a while, and there are no clear regulations governing data networks and the rights of third parties to broadcast. This shows that providers are exercising constraint in the US market.

My connections at several small service providers and one very large provider have told me directly that blocking VOIP services is not going to be their strategy.

So what is their strategy: just take it on the nose and go out of business?

http://www.eweek.com/article2/0,1759,1981822,00.asp?kc=EWRSS04069TX1K0000701

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NEW YORK (Reuters)—Internet phone company Vonage Holdings Corp. is expected to unveil as early as Wednesday a plug-in device that will turn a computer into a phone, The Wall Street Journal reported.

The device, dubbed the V-phone, would allow users to make calls through software embedded on a memory drive that can plug into a USB slot on a laptop or desktop computer, the Journal said. The software will launch when the device is plugged in.

The phone, which is similar to products made by other companies, will launch this week and will be aimed at business travelers, said Vonage Chairman Jeffrey Citron, according to the Journal.

The product will cost $40, excluding promotions, and will be available to people who have signed up for a Vonage calling plan, the Journal said, citing a person familiar with the situation.

Vonage was not immediately available for comment.

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Two subsidiaries of Verizon Communications have sued Vonage in federal court, saying that seven basic voice over IP patents have been infringed upon by Vonage.

The subsidiaries, Verizon Services of Arlington, Va., and Verizon Laboratories of Waltham, Mass., say that holds patents for how calls are completed, monitored and authenticated.

The suit, filed today in the United States District Court for the Eastern District of Virginia, in Alexandria, Va., alleges that Vonage Holdings and Vonage America are using Verizon’s inventions on a continuing basis.

According to a copy of the complaint, which was provided to eWEEK by Verizon, the suit asks for the court to issue an injunction against Vonage that would prevent the company from using the patented technologies, and it asks for financial damages for past use.

The suit points out that Verizon not only invented the technologies, but has commercialized them in its VoiceWing product line that competes with Vonage.

A few patent suits have been criticized recently because the companies holding the patents were not actively using them.

The technologies Verizon claims Vonage is infringing include gateway interfaces between VOIP (voice over IP) networks and the PSTN; billing and fraud detection; call services including call forwarding, follow-me functions and voicemail; and VOIP over Wi-Fi.

The suit also points out that Vonage does not currently hold any patents for this technology.

“It’s interesting that this happened after Vonage went public,” said attorney Timothy C. Meece of the Chicago intellectual property law firm of Banner & Witcoff.

Meece said that he has a significant amount of experience in defending and asserting cases like this one.

“This is the first company that Verizon has asserted these VOIP patents against,” Meece said.

Meece added that he’s not sure how much success Verizon will have with its suit.

“Twenty-one to 24 percent are won by patent owners,” Meece said, noting that there are at least 28 different defenses that can be fatal to Verizon. “It’s more likely that Verizon will lose,” he said.

On the other hand, Meece said that Verizon has a lot going for it.

For one, he said, the company has very deep pockets, and for another, they have a lot of patents.

“Going in its favor are the number of patents, different aspects of VOIP,” he said, “and they have a lot of money, so they can afford to assert their patents.”

Neither Verizon nor Vonage will comment on the details of the suit, although Vonage has admitted in a press release that it has been sued.

The company has also said that it believes that it’s not infringing on any patents.

http://www.eweek.com/article2/0,1759,1978871,00.asp?kc=EWRSS04069TX1K0000701

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DETROIT (Reuters)—A federal judge on Monday deferred making an immediate decision on a request that the Bush administration’s domestic eavesdropping program be halted as a violation of law.

The American Civil Liberties Union, which filed the lawsuit in January, asked U.S. District Judge Anna Diggs Taylor to stop the White House from intercepting international phone calls and e-mails without a warrant in its fight against terrorism, saying it violates Americans’ free speech and privacy rights.

But the government responded that the program is key to helping protect U.S. security.

Taylor deferred any ruling. Another hearing is scheduled for July 10.

“Our clients have suffered concrete harm,” Ann Beeson, the ACLU’s associate legal director, told the court, saying lawyers now have to travel overseas to gather information they would have previously received on the phone and journalists are beginning to lose sources.

“The framers (of the U.S. Constitution) never intended to give the president the power to ignore the laws of Congress even during wartime and emergencies,” she said.

The case was filed in Detroit because the area is home to one of the largest Arab populations outside the Middle East.

Nazih Hassan, a Lebanese-American, and a member of the ACLU, said the wiretapping had instilled fear in the Arab community.

“There is such a blurry line between talking about the things you care about such as the war in Iraq or the situation in Lebanon and ’supporting terrorism’ that I and many of my friends have just stopped talking on the phone,” he told Reuters outside the court.

The Justice Department, which represents the National Security Agency, argued that the program is legal and a key weapon in the administration’s war on terror.

VIOLATING THE LAW?

Anthony Coppolino, the lead attorney for the case, told the court the NSA was only intercepting calls to detect and prevent another terrorist attack.

“The government is quite confident that the President’s actions are directly and narrowly focused on al Qaeda and terrorist threats,” he said.

The government in May asked federal judges in Detroit and New York to throw out challenges to the eavesdropping, invoking a doctrine known as the “state secrets privilege” it has used to head off other court action on its spy programs.

“We are confident that information related to this case must not be disclosed,” Coppolino said in court.

The ACLU’s suit contends that U.S. officials have already disclosed enough for judges to rule that the recent wiretapping skirted the requirements of a 1978 surveillance law.

“We don’t believe we need any more facts to prove the president has violated the law,” Beeson told reporters after the hearing.

President George W. Bush in December said he authorized the eavesdropping without a court order shortly after the September 11 attacks, to track suspected communication from al Qaeda operatives.

U.S. officials have since declined to provide details on how widely the NSA wiretaps have been used or what communications have been intercepted.

Several individuals and groups—including the National Association for the Advancement of Colored People, the American-Arab Anti-Discrimination Committee, the Asian American Legal Defense and members of Congress—have filed briefs on the case.

A fuller, classified version of the government’s argument for dismissal is being held in a secure location in Washington awaiting review by the courts, the Justice Department said last month.

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SAN FRANCISCO—Vonage Holdings Corp. said Friday that the Federal Trade Commission had not yet ended its investigation into the Internet telephone service provider’s emergency 911-related compliance.

After saying Thursday that the FTC had finished its investigation without taking any formal action, Vonage issued a correction that said the investigation was officially still going on because the company had not yet received a closure letter from the FTC.

The industry regulating Federal Communications Commission requires that Internet-based phone services such as Vonage ensure that customers who dial 911 are connected to a dispatcher who receives the caller’s location and phone number.

The FTC opened its investigation into Vonage in January 2005, saying it was looking into how the company complied with federal emergency services rules.

Vonage shares have fallen 30 percent since their market debut last month at $17. The stock closed at $11.88 in New York Stock Exchange trading Friday, up 0.8 percent.

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SAN FRANCISCO—Vonage Holdings Corp. said Friday that the Federal Trade Commission had not yet ended its investigation into the Internet telephone service provider’s emergency 911-related compliance.

After saying Thursday that the FTC had finished its investigation without taking any formal action, Vonage issued a correction that said the investigation was officially still going on because the company had not yet received a closure letter from the FTC.

The industry regulating Federal Communications Commission requires that Internet-based phone services such as Vonage ensure that customers who dial 911 are connected to a dispatcher who receives the caller’s location and phone number.

The FTC opened its investigation into Vonage in January 2005, saying it was looking into how the company complied with federal emergency services rules.

Vonage shares have fallen 30 percent since their market debut last month at $17. The stock closed at $11.88 in New York Stock Exchange trading Friday, up 0.8 percent.

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NEW YORK (Reuters)—Telecommunications infrastructure company Level 3 Communications Inc. said on Monday it agreed to buy Looking Glass Networks Inc., a privately held provider of metropolitan fiber optic networks, for $96 million in stock and cash.

Level 3 will pay $87 million in unregistered shares of its common stock and $9 million in cash. At closing, it will pay liabilities—primarily senior secured debt—of about $69 million.

For full year 2006, Looking Glass is expected to generate revenue of about $75 million to $80 million, about 25 percent higher than in 2005. Gross margin is expected to be over 70 percent, the companies said.

Level 3 Chief Financial Officer Sunit Patel formerly served as CFO of Looking Glass Networks.

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