Posted by Richard Whitt, Washington Telecom and Media Counsel

Later this year, the federal government plans to auction off spectrum -- the invisible airwaves that have brought us radio and television service -- as part of the ...Read More

Posted by Richard Whitt, Washington Telecom and Media Counsel

Later this year, the federal government plans to auction off spectrum -- the invisible airwaves that have brought us radio and television service -- as part of the transition from analog to digital TV broadcasts. The Federal Communications Commission is right now developing rules for how that auction will proceed. As the LA Times recently editorialized:

The FCC's goal for the auction should be to encourage the development of more broadband Internet services. So much of the economy's potential depends on high-speed Internet access, yet the U.S. lags many Asian and European countries in the percentage of broadband users.

We couldn't agree more. In the United States, spectrum traditionally has been allocated in a fragmented, inefficient manner. As a result, entities find it increasingly difficult to secure the spectrum they need to provide end users with advanced Internet applications over fixed and mobile broadband networks. Google has joined together with several other technology companies in the "Coalition for 4G in America" to advocate a few basic auction rules that would help foster national market entry by innovative new players. As the Times put it:

The commission should heed recommendations from high-tech and satellite TV firms, which say a 10% increase in the size of the current plan's blocks would allow for more types of wireless broadband technology. Having more sources of broadband is particularly important in rural areas, where high-speed Internet service has been scarce. The rules should also allow bidders to offer a premium for a national set of licenses, which would encourage the creation of national broadband networks while deterring present broadband suppliers from hoarding the airwaves in a single region. Those suppliers might still try to buy national licenses and offer services that don't compete with their DSL offerings.

By structuring the upcoming auction in this way, the FCC could take a big step forward to promoting both competition and high-tech innovation...steps that one day could make broadband much more affordable and readily available to consumers across the country.

Posted by Adam Kovacevich, Manager, Global Communications and Public Affairs

Remember the Coke and Pepsi TV ads from the " cola wars" of the 80s and 90s, when the cola giants sponsored taste tests, hired rock stars, and spent a lot of time arguing that one formula of sugar water was better than the other? How about the Bounty paper towel ads, in which one towel picked up what appeared to be a gallon of liquid spills while the competitor's towel seemed to have the absorption capacity of a rock? Though these comparative ads are good for consumers, promote competition, and symbolize free speech, Utah last week passed a misguided law attempting to prevent consumers from seeing these kind of ads online.Read More

Posted by Adam Kovacevich, Manager, Global Communications and Public Affairs

Remember the Coke and Pepsi TV ads from the "cola wars" of the 80s and 90s, when the cola giants sponsored taste tests, hired rock stars, and spent a lot of time arguing that one formula of sugar water was better than the other? How about the Bounty paper towel ads, in which one towel picked up what appeared to be a gallon of liquid spills while the competitor's towel seemed to have the absorption capacity of a rock? Though these comparative ads are good for consumers, promote competition, and symbolize free speech, Utah last week passed a misguided law attempting to prevent consumers from seeing these kind of ads online.

According to the Electronic Frontier Foundation, the law -- which was passed and signed into law without any hearings or notice -- would "allow trademark owners to prevent their marks from being used as keywords to generate comparative ads. If this law takes effect, a company like Chevrolet couldn't purchase 'sponsored link' space on the Google results page when a user types 'Toyota' as part of a search query -- at least if the latter term is registered in Utah as an 'electronic registration mark.'" But don't just take EFF's word for it. Utah's own general counsel told legislators that the bill was probably unconstitutional because it would disrupt interstate commerce. (Constitutional Law 101: the regulation of interstate commerce is the responsibility of the U.S. Congress.)

The law clearly runs counter to both trademark law and capitalism, both of which embrace comparative advertising. For years, federal courts have upheld the right to use trademarked terms in comparative ads. And competition -- which generally helps lower prices and benefits consumers -- is fueled in part by companies being able to use advertising to draw contrasts with their competitors.

Aside from its obvious constitutional flaws, the bill presents other problems. It lets individuals and companies register "electronic registration marks" even if they don't actually own the trademark. So this new law so it could cause a free-for-all in which any individual or company could claim another company's trademark as their own "electronic registration mark." Maybe the Utah legislature was looking for ways to create a 21st century gold rush.

The bill also isn't limited to online uses. Any use of a trademark in connection with comparative advertising would be a violation -- including a supermarket checkout coupon that gives you a discount for Huggies next time if you bought Pampers this time. It also does away with two critical components of federal trademark law -- that a trademark be protectable and that infringement occurs only when there is a likelihood of confusion. That could open the door for generic or descriptive terms (i.e., "water," "food," "supermarket") to be registered, preventing anyone from using them in connection with advertising.

Finally, this law could also infringe on free speech, by preventing an advocacy group from placing an ad in protest of a company's business practices.

The new law is very likely to be challenged in court, and we believe it will be struck down. We'll certainly be working with other Internet companies to help educate officials in Utah about the consequences of this bad piece of legislation.