| FTC Approves Chevron Texaco
Merger |
| 9/7. The FTC approved a consent
order allowing the proposed merger of Chevron and Texaco, with
divestiture requirements. See, Agreement
Containing Consent Order. See also, Chevron
release, Texaco
release, and FTC release.
These are oil companies, not technology companies. However,
the FTC's disposition of this merger may be pertinent to
technology companies that are contemplating mergers and other
transactions. |
|
|
| Intel and Via Technologies
in Patent Dispute |
| 9/7. Intel filed a
complaint in U.S.
District Court (DDel) against Via Technologies
(Via) and S3 Graphics
alleging patent infringement. Intel alleges that Via's P4X266
and P4M266 chipsets infringe Intel patents. Meanwhile, Via
announced that it has filed a complaint with the Taiwan Fair
Trade Commission alleging anti competitive behavior by Intel.
Via also announced that it would file a patent infringement
action against Intel in the U.S. It states that Intel's
Pentium 4 infringes its patents. See, Via
release. |
|
|
| Senate Judiciary Committee
Chairman Comments on Microsoft Case |
9/6. Sen. Patrick Leahy
(D-VT), the Chairman of the Senate Judiciary
Committee, released a statement
regarding the Justice Department's (DOJ) announcement
that it would not seek the break up of Microsoft. The
Committee has both oversight authority over the DOJ and
jurisdiction over antitrust legislation.
Sen. Leahy wrote that "This decision avoids lengthy
additional trial time and is cause for cautious optimism that
this case will be resolved more quickly for the benefit of all
consumers. The Department's intention to pursue remedies
targeted at Microsoft's conduct may produce more immediate
results for consumers, competitors and computer sellers than
any structural solution could. But prosecutors should hold to
their original intention of securing a remedy that will
genuinely rectify the competitive problems revealed through
the trial process -- not just for the short term but over the
long haul. With the brisk pace of change in the computer and
high-tech industries, it will be no easy task to ensure that
the remedies proposed will be effective in the competitive
environment today as well as tomorrow. ..." |
|
|
| Evans Proposes Legislation
to Delay 3G Spectrum Auctions |
9/6. Commerce Secretary Donald Evans wrote a letter
to Vice President Dick Cheney in which he proposed delaying
"auction deadlines for spectrum bands that are candidates
for use in connection with third generation (3G) advanced
mobile wireless services." He also enclosed a proposed
bill to accomplish this purpose. The NTIA,
which is a part of the Commerce
Department, has management responsibilities for spectrum
assigned to government users. The FCC manages
spectrum used by the private sector.
Evans elaborated that "While the Federal Government is
committed to identifying spectrum for 3G services as
expeditiously as possible, the current statutory auction
deadline affecting certain of the bands under consideration
does not provide sufficient time to conclude the
identification process and conduct an auction before September
30, 2002. Accordingly, this legislative proposal shifts the
statutory deadlines originally established in the Balanced
Budget Act of 1997 for completion of the auctions of and
collection of receipts for spectrum licenses in the 1710-1755
MHz and 2110-2150 MHz bands from September 30, 2002, to
September 30, 2004." |
|
|
| JCS Chairman Testifies on
3G |
9/5. General
Henry Shelton, Chairman of the Joint Chiefs of Staff,
testified to the Senate
Appropriations Committee's Subcommittee on Defense on a
wide range of issues, including reallocating of spectrum
currently used by the military for use by Third Generation
(3G) wireless services. See, prepared
testimony.
He stated that "I am concerned that further reallocation
of frequency spectrum for commercial use, without comparable
spectrum to execute DoD's critical functions, will have a
major impact on our ability to execute our missions. Our
success on the battlefield largely depends on our ability to
use advanced communications technology to exchange vital
information between decision-makers, commanders, and deployed
forces."
One of the spectrum bands being proposed for reallocation is
the 1755-1850 MHz band, currently used by the military.
General Shelton stated that "this proposal is problematic
for two reasons. First, according to our analysis, sharing
with commercial users is not possible due to interference over
large geographical areas and metropolitan centers. Second,
moving DoD communications to a different, but comparable,
spectrum could be problematic due to the lengthy transition
period required."
His prepared testimony on 3G spectrum on September 5 was
identical to his prepared testimony on 3G spectrum to the
House Armed Services Committee on June 28, 2001. |
|
|
| Federal Reserve and
Technology |
8/31. Federal
Reserve Board Vice Chairman Roger
Ferguson gave a speech
at a conference sponsored by the Federal Reserve Bank of Kansas
City, in Jackson Hole, Wyoming. The speech was titled
"Technology, Information Production, and Market
Efficiency." The conference was titled "Economic
Policy for the Information Economy." See also, agenda,
with links to some of the presentations.
Ferguson reviewed a paper on the effects of information
technology on markets, which he summarized as follows:
"Improvements in information technology -- most notably,
the rapid growth of the Internet -- have made participating in
the market much easier and cheaper and, as a result, the
market has drawn in many new and unsophisticated investors.
These "noise traders" cannot differentiate between
accurate and distorted information about a given company.
Thus, company managers see greater opportunity to boost their
firm's stock price by fooling investors through the release of
distorted information -- and have a strong incentive to do so
because of the shift toward stock-based compensation and the
widespread use of equity financing in the "new
economy." In the end, according to the paper, more
information is available, but its quality has deteriorated,
which reduces the benefit from information technology for
market efficiency." See, paper
[PDF] titled "Technology, Information Production, and
Market Efficiency," by Gene D’Avolio, Efi Gildor, and
Andrei Shleifer.
Ferguson challenged the argument that "information
technology has greatly expanded the presence of uninformed
investors in the equity market." He stated that
"households have been reducing the portion of their
equities that they hold directly and have increasingly
invested through mutual funds and variable annuities ... That
is, households have been handing over more and more of their
equity portfolio to professional managers, who tend to be
relatively well informed investors."
He argued that instead, "The late 1990s were a period of
optimism about the prospects for the U.S. economy, reflecting
the pickup in productivity growth that was generated, in large
part, by information technology. The resultant optimism about
the economy's growth prospects was accompanied by a complacent
attitude toward risk ..."
On a related topic, he stated that new information
technologies have benefited consumers. He stated that
"new technologies have surely led to a general increase
in welfare. New delivery technologies, such as the Internet,
when combined with automated underwriting and credit scoring,
have given borrowers the opportunity to select from a broader
set of providers of credit cards, mortgages, and even some
types of small business loans ..." He also praised
"web sites to allow Internet banking and software to
permit PC banking."
However, he also cautioned that "the implications of
these newer delivery channels for banking products other than
mortgages and credit cards seem more potential than real for
the vast majority of bank retail customers." He cited the
statistic that "Only 6 percent of households reported
having used a computer to conduct business with a financial
institution in 1998."
9/4. Ferguson also gave a speech
at the Federal Reserve Bank
of Philadelphia titled "The Evolving Financial and
Payment System". He stated that "accelerating
changes in technology have created new financial products and
services as well as whole new ways of conducting financial
business." He stated that XML, or extensible
markup language, "is becoming increasingly important in
the financial markets and that it raises interesting
possibilities for the future." The Federal Reserve
Board's Payments System Development Committee held a one day
workshop in June on the implications of XML for the payment
system. |
|
|
|
| 10th Circuit Rules on
Scienter Requirement of PSLRA |
9/7. The U.S.
Court of Appeals (10thCir) issued its opinion
in Philadelphia
v. Fleming Companies, a class action securities
action involving application of the Private Securities
Litigation Reform Act (PSLRA). Congress passed the PSLRA, 15
U.S.C. § 78u-4, to insulate defendants, and especially info
and bio tech companies, from abusive class action law suits.
The PSLRA creates both a safe harbor for forward looking
statements, and a heightened pleading requirement. Plaintiffs
must "state with particularity facts giving rise to a
strong inference that the defendant acted with the required
state of mind." See, 15 U.S.C. § 78u-4(b)(2). The
Appeals Court affirmed the District Court's dismissal. Seven
circuits have now addressed the scienter requirement of the
PSLRA, but without consensus.
District Court. Plaintiffs filed a complaint in the U.S. District Court (WDOkla)
against Fleming Companies, and several of its officers,
alleging securities fraud under Section 10b of the Securities
Exchange Act of 1934. They sought class action status.
Defendants moved to dismiss pursuant to FRCP 12(b)(6).
Plaintiffs twice amended their complaint. The District Court
dismissed the complaint, stating that the second amended
complaint did not meet the pleading requirements for scienter
set forth in the PSLRA.
Other Circuits. Six other circuits have previously
addressed this issue, reaching various results. See, Janas v.
McCracken (In re Silicon Graphics Sec. Litig.), 183 F.3d
970 (9th Cir 1999); Novak
v. Kasaks, 216 F.3d 300 (2d Cir); In re Advanta
Corp. Sec. Litig., 180 F.3d 525 (3d Cir 1999); Bryant
v. Avado Brands, 187 F.3d 1271 (11th Cir 1999); Greebel
v. FTP Software, 194 F.3d 185 (1st Cir 1999); and Helwig
v. Vencor, (6th Cir 2001).
Holding. However, the 10th Circuit had not previously
ruled on this issue. The Appeals Court held that plaintiffs
can adequately plead scienter by setting forth facts raising a
strong inference of intentional or reckless misconduct. The
Court also held that "the most reasonable reading of the
PSLRA in regard to motive and opportunity pleadings is the
view adopted by the First Circuit in Greebel and the Sixth
Circuit in Helwig. The PSLRA was obviously intended to
eliminate frivolous securities litigation through its
heightened scienter pleading requirements. Allegations of
motive and opportunity, with nothing more, could allow
potentially frivolous lawsuits to go forward with only minimal
allegations of scienter. But evidence of motive and
opportunity may be relevant to a finding of scienter, and thus
may be considered as part of the mix of information that can
come together to create the "strong inference" of
scienter required by the PSLRA. When reviewing a plaintiff's
allegations of scienter under the PSLRA, a court should
therefore examine the plaintiff's allegations in their
entirety, without regard to whether those allegations fall
into defined, formalistic categories such as "motive and
opportunity," and determine whether the plaintiffs'
allegations, taken as a whole, give rise to a strong inference
of scienter."
Attorneys. The plaintiffs are represented by several
law firms, including Milberg
Weiss, a law firm based in San Diego that specializes in
bringing securities class action suits against technology
companies. Defendants are represented by several law firms,
including Brobeck Phleger. |
|
|
| USTR Zoellick Discusses
Trade Promotion Authority |
9/7. USTR Robert Zoellick
held a press conference in Mexico City at which he addressed
progress in the U.S. Congress on passing trade promotion
authority (formerly called fast track). See, transcript.
He stated that House
Ways and Means Committee Chairman Bill Thomas (R-CA)
"will probably try to push forward early in September.
He's been having discussions with some of his Democratic
colleagues, about how to try to do so in a way that deals with
environmental labor as well as trade issues in a positive
consentive based fashion, and that will be the process that
you will see unfold in the course of September." See, HR
2149.
He also stated that Sen.
Bob Graham (D-FL) and Sen. Frank Murkowski
(R-AK) have a bill in the Senate, and that Sen. Max Baucus (D-MT)
and Sen. Charles
Grassley (R-IA), the Chairman and ranking Republican on
the Senate Finance
Committee, have been "having discussions". See, S
1104.
He concluded that "the President and I, and Secretary
Evans, and Secretary Veneman, and our colleagues who will also
be spending a lot of time on trying to secure that authority
over the course of the next two months. President Bush is the
first President not to have that authority from the five prior
presidents, and one of the arguments that we made is that
frankly in many areas the United States has been falling
behind because we don't have that trade negotiating
authority."
Also on September 7, Zoellick issued a release
in which he stated that "Expanding our access to foreign
markets can help ignite economic recovery and expansion by
providing American farmers, workers and businesses new
opportunities to sell their products overseas. U.S. Trade
Promotion Authority is an important part of President Bush's
plan for opening markets and promoting American economic
prosperity. I look forward to continuing to work with the
Congress to get TPA enacted this fall." |
|
|
| USTR Zoellick Addresses PR
China Joining WTO |
| 9/7. USTR Robert Zoellick
released a statement
regarding the PR China's accession to the World Trade Organization (WTO).
He stated that "China made commitments on insurance as
part of its bilateral accession agreement with the United
States. These commitments will be incorporated into China's
WTO accession agreement, and therefore would be applicable for
all WTO members. We expect China to uphold all of its
commitments and obligations." |
|
|
| U.S. Jordan Free Trade
Agreement |
9/6. Sen. Max Baucus
(D-MT) gave a speech
in the Senate in which he advocated passage of S
643, a bill sponsored by Sen. Baucus that would implement
the U.S.
Jordan Free Trade Agreement (FTA) [PDF]. This FTA was
negotiated by the Clinton administration last year, but has
not yet been ratified by the Senate. Trade with Jordan is
minimal. However, controversy has arisen because many see this
FTA as a blueprint for future FTAs. The main dispute is
whether these FTA's should contain language addressing labor
and environmental issues, as does this FTA.
This FTA is also significant because it contains extensive
language pertaining to intellectual property and e-commerce.
This FTA addresses patents, trademarks, copyright, and
enforcement of IPR. It
also provides that the parties will not impose new customs
duties on electronic transmissions.
Sen. Baucus noted that the "Bush Administration supports
it and has no intention or renegotiating a new agreement. The
Jordanian Parliament ratified the Agreement last May. Our
colleagues in the House have already approved the implementing
legislation for the agreement." (See, HR
2603.) He urged swift passage without amendment. |
|
|
| FBI Executes Search Warrant
on Islamic ISP |
9/5. The FBI executed a sealed search warrant at the offices
of Internet service provider InfoCom Corporation, in a suburb
north of Dallas, Texas.
Several Islamic groups held a press conference to criticize
the action. The Council on
American Islamic Relations (CAIR) and others issued a release
in which they stated that "Early yesterday morning, more
than 80 agents from the FBI, INS, Customs Service, and other
federal agencies raided the offices of Infocom Corporation in
Richardson, Texas." It added that "Infocom hosts web
sites for some 500 companies worldwide", including a
number of Middle Eastern web sites. CAIR also described the
action as an "anti Muslim witch hunt."
On August 13 the Wall Street Journal published an opinion
piece by Daniel Pipes and Steven Emerson which stated that
"The very existence of both Hamas and Islamic Jihad is
largely attributable to organizing and funding from
individuals living in the U.S." The piece then went on to
discuss the use of web sites based in the U.S. |
|
|
| More News |
9/6. People for the American
Way, a liberal group based in Washington DC, released a report
titled "John Ashcroft's First Six Months at the Justice
Department: The Right Wing Dream Team Takes Over." While
the report harshly criticizes Attorney General Ashcroft on
numerous old social issues, such as abortion, school prayer,
gun control, and capital punishment, it contains no criticism
on new technology related issues, such as electronic privacy,
encryption rights, CALEA, and intellectual property rights.
9/7. The U.S. Court of
Appeals for the District of Columbia Circuit heard oral
argument in Fox v. FCC, No. 00-1222. Judges Ginsburg,
Edwards and Sentelle presided. The case is a challenge to the
FCC media ownership rules.
9/7. BellSouth
released a statement
in opposition to S
1364, the Telecommunications Fair Competition Enforcement
Act of 2001, introduced by Sen. Ernest Hollings
(R-SC) on August 3, 2001. |
|
|
|
| Monday, September 10 |
9:30 AM. The U.S.
Court of Appeals for the District of Columbia Circuit will
hear oral argument in High Plains Wireless v. FCC, No.
00-1292. Judges Ginsburg, Edwards and Sentelle will preside.
Location: 333 Constitution Ave., NW, Washington DC.
9:30 AM. Brown University will host a press conference titled
"Report Card on E-Government." For more information,
contact Mark Nickel at (401) 863-2476. Location: National Press Club, Murrow
Room, 529 14th St. NW, 13th Floor, Washington DC.
11:00 AM. Several groups will hold a press conference on the
War on Drugs and its impact on privacy and other civil
liberties. The groups will urge the Senate Judiciary Committee
to examine these issues at its hearing on September 11 on the
nomination of John Walters to be Director of National
Drug Control Policy. The speakers will be Bradley Jansen (Free Congress Foundation),
Tom DeWeese (American Policy Center), Eric Sterling (The
Criminal Justice Policy Foundation). Location: J.W. Marriott
Hotel, Salons J&K Ballroom level, 1331 Pennsylvania Ave.,
NW, Washington DC.
First day of a two day conference hosted by the International Trademark
Association (INTA) and the National Bar Association
(NBA) titled "Basics of Trademark Law Forum". See, INTA
brochure [PDF] for regisration information, prices, and
agenda. Location: Grand Hyatt Washington, 1000 H Street NW,
Washington DC.
FCC Wireless Telecom. Bureau
(WTB) fees changes go into effect. See, WTB
release.
Deadline to submit comments to the FCC regarding SBC's Section 271 application
to provide interLATA service in the states of Arkansas and
Missouri. (CC Docket No. 01-194.) See, FCC
notice [PDF]. |
|
|
| Tuesday, September 11 |
The Judicial Conference of the U.S., which makes policy for
the federal courts, will meet to consider the recommendations
contained in the report
[PDF] titled "Report on Privacy and Public Access to
Electronic Case Files." This report was prepared by the Administrative Office of U.S.
Courts' Committee on Court Administration and Case
Management. It recommends that most civil and bankruptcy cases
should be made available in electronic format, with redactions
of some personal data identifiers, but that criminal cases
should not be made available. See also, AOUSC release
[PDF].
Second day of a two day conference hosted by the International Trademark
Association (INTA) and the National Bar Association
(NBA) titled "Basics of Trademark Law Forum". See, INTA
brochure [PDF] for regisration information, prices, and
agenda. Location: Grand Hyatt Washington, 1000 H Street NW,
Washington DC.
9:00 AM - 12:00 NOON. The USTR's Industry Sector
Advisory Committee on Services for Trade Policy Matters
(ISAC-13) will hold a meeting. It will be open to the public
from 9:00 - 9:45 AM. It will be closed to the public from 9:45
AM to 12:00 NOON. Location: Conference Room 6057, Department
of Commerce, 14th Street between Pennsylvania and Constitution
Avenues, NW, Washington DC. See, notice
in Federal Register, September 7, 2001, Vol. 66, No. 174, at
Page 46861.
9:00 AM - 5:00 PM. The Computer
System Security and Privacy Advisory Board (CSSPAB) will
hold the first session of a three day meeting. The CSSPAB
advises the Secretary of Commerce and the Director of NIST on
security and privacy issues pertaining to federal computer
systems. All sessions will be open to the public. See, notice
in Federal Register, August 27, 2001, Vol. 66, No. 166, at
Pages 45009 - 45010. Location: National Security Agency's
National Cryptologic Museum, Colony 7 Road, Annapolis
Junction, Maryland.
10:30 AM. The Senate
Judiciary Committee will hold a hearing on the nomination
of John Walters to be Director of National Drug Control
Policy. Several groups which advocate privacy rights have
urged the Committee to examine the impact of the War on Drugs
on privacy rights. Sen. Joe
Biden (D-DE) will preside. Location: Room 226, Dirksen
Building.
2:00 PM. The Senate
Commerce Committee will hold a hearing on E-911
issues. Location: Room 253, Russell Building.
2:00 PM. The Congressional Internet Caucus Advisory Committee
will host three panel presentations on e-learning, an
e-learning technology fair, and a cocktail reception. RSVP to RSVP@netcaucus.org or
Danielle at 202-637-4370. Location: Room 902, Hart Building,
Washington DC. The schedule is as follows:
• 2:00 PM. Grades K-12 Panel.
• 3:00 PM. Higher Education Panel.
• 4:00 PM. Workforce Training Panel.
• 5:00 PM. Cocktail Reception and E-Learning
Technology Fair.
6:00 - 8:00 PM. The Federal
Communications Bar Association (FCBA) will host a
reception for new NTIA
chief Nancy
Victory. The price to attend is $35 for private sector
people, and $20 for government employees and students. RSVP to
Wendy Parish at fcba@fcba.org
by Friday, September 7, at 10:00 AM. Location: Capital Hilton
Hotel, 16th & K Streets NW, Washington DC. |
|
|
| Wednesday, September 12 |
9:00 AM - 5:00 PM. The Computer System Security
and Privacy Advisory Board (CSSPAB) will hold the second
session of a three day meeting. The CSSPAB advises the
Secretary of Commerce and the Director of NIST on security and
privacy issues pertaining to federal computer systems. All
sessions will be open to the public. See, notice
in Federal Register, August 27, 2001, Vol. 66, No. 166, at
Pages 45009 - 45010. Location: National Security Agency's
National Cryptologic Museum, Colony 7 Road, Annapolis
Junction, Maryland.
10:00 AM. The House
Commerce Committee's Subcommittee on Telecommunications
and the Internet will hold a hearing titled "Transition
to Digital Television: Progress on Broadcaster Buildout
and Proposals to Expedite Return to Spectrum." Location:
Room 2322, Rayburn Building.
2:00 PM. The Senate
Judiciary Committee's Technology, Terrorism, and
Government Information Subcommittee will hold a hearing on S
1055, sponsored by Sen.
Dianne Feinstein (D-CA), and requiring the consent of an
individual prior to the sale and marketing of such
individual's personally identifiable information. Sen.
Feinstein will preside. Location: Room 226, Dirksen Building.
Deadline to submit comments to the FCC in response to its
Notice of Proposed Rulemaking (NPRM) regarding implementation
of the local competition provisions of the Telecom Act of
1996. This NPRM invites parties to update and refresh the
record on issues pertaining to the rules the FCC adopted in
the First Report and Order in CC Docket No. 96-98. See, notice
in Federal Register, August 13, 2001, Vol. 66, No. 156, at
Page 42499. |
|
|
| People |
9/7. September 7 was Gloria Tristani's last day as an FCC
Commissioner. See, Tristani's farewell
address.
9/6. The law firms of Latham
& Watkins (LW) and Stibbe Paris announced that they
will combine, giving the firm 95 lawyers in Paris and over 200
attorneys throughout Europe. Olivier Delattre will be the
Managing Partner of LW's Paris office. The office will focus
on mergers and acquisitions, capital markets, project finance,
banking and finance, intellectual property and information
technology, European Union competition, labor and tax. See, LW release.
9/4. Kenneth
Wilson joined the Menlo Park office of the law firm of
Perkins Coie (PC) as
a partner in the firm's intellectual property practice. Wilson
handles patent, copyright, trademark, trade secret and other
technology related litigation, and counsels high tech
companies on intellectual property matters. Wilson was
previously a partner in the Palo Alto office of the law firm
of Wilson Sonsini.
See, PC
release.
9/6. Gregory Jenner joined the Venable law and lobbying
firm as a partner in the firm's Tax and Legislative and
Regulatory groups, the firm announced today. Mr. Jenner is a
former partner in the Price
Waterhouse Coopers national office where he was the
national office leader for InfoComm. See, release. |
|
|
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