| USTR Proposes Reducing
Barriers to Trade in Services |
7/1. The Office of the U.S.
Trade Representative (USTR) announced that it has proposed
liberalizing global trade in services, including information
technology, telecommunications, financial, and legal services.
The proposal is made in the World
Trade Organization (WTO) negotiating round recently
launched at a meeting in Doha. See, USTR
release.
IT Services. The USTR published a summary
of its proposal, but not the proposal, in its web site. The
summary states that "The United States is requesting
increased access for data processing services, software and
hardware related services, and other computer related
services."
Communications Services. The USTR summary also states
that the U.S. "is requesting increased access for
telecommunications services, including basic and value added
services. In addition, the United States requests that WTO
members adopt commitments in the WTO Basic Telecommunications
Reference Paper, which sets out a number of key
pro-competitive regulatory obligations. In addition, the
United States may urge members who have not fully privatized
their incumbent telecommunications carrier to do so in the
near future. The United States also is requesting commitments
in cable network services, defined as owning or leasing cable
facilities for the distribution of video programming
services."
Legal Services. The USTR summary also states that
"With the acceleration of world economic integration, law
firms have become increasingly important in advising clients
on a variety of business matters, including mergers and
acquisitions with foreign companies and business contracts
involving multiple jurisdictions. ... The United States is
requesting increased access to make it easier for these
professionals to serve clients internationally as foreign
legal consultants or fully licensed legal professionals (for
example, remove citizenship requirements for licensing and
remove restrictions on foreign ownership, form of organization
and association with local professionals)."
Transparency. The USTR summary also proposes
"transparent regulatory regimes", including
establishing "clear, publicly available domestic
procedures for application for licenses or authorizations, and
their renewal or extension" and "domestic procedures
providing for a standard formal process of informing the
public of regulations, or changes to existing regulations,
prior to their final consideration by the relevant authority
and entry into effect. Procedures should also provide
meaningful opportunities for comments and questions by
interested parties."
The Information Technology
Association of America (ITAA) praised the proposal. ITAA
President Harris Miller stated in a release
that "Services are a major contributor to the global $2.4
trillion information and communications technology marketplace
... We are gratified that the U.S. Trade Representative has
included services sectors critical to both the delivery and
the consumption of information technology products and
services in these deliberations."
The Competitive
Telecommunications Association (CompTel) also praised the
USTR's proposal. It stated in a release
that "CompTel's members are harmed by the trade barriers
maintained by our trading partners. This round of trade talks
is especially important to the U.S. economy in light of the
difficult market conditions currently faced by
telecommunications providers in the U.S. CompTel hopes that
international recognition of problems exacerbated by closed
telecommunications markets will spur negotiators and
regulators in the WTO member countries to expand or live up to
their market opening obligations and create an environment
where competition can succeed." |
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| 8th Circuit Rules in PSLRA
Pleading Standards Case |
7/1. The U.S. Court of Appeals
(8thCir) issued its opinion
[PDF] in In
Re Navarre Securities Litigation, a class
action securities case involving the pleading standards of the
PSLRA.
Navarre Corporation
provides distribution and related services to developers and
retailers of home entertainment content, including PC
software, audio and video titles, and interactive games.
Plaintiffs filed a complaint in U.S.
District Court (DMinn) against Navarre and certain of its
officers and directors alleging violation of Sections 10b and
20 of the Securities Exchange Act of 1934. The District Court
held that the plaintiffs' complaint failed to satisfy the
heightened pleading requirements of the Private Securities
Litigation Reform Act of 1995 (PSLRA), 15 U.S.C. §
78u-4(b)(1)-(2).
The Court of Appeals affirmed. The Court followed the
reasoning of the First Circuit in Greebel
v. FTP Software, 194 F.3d 185 (1999). |
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| 9th Circuit Affirms in
Broderbund TLC Securities Litigation |
6/28. The U.S.
Court of Appeals (9thCir) issued its opinion
[PDF] in In
Re Broderbund / Learning Company Securities Litigation,
a class action securities case involving the issue of damages.
The District Court concluded that plaintiff suffered no
damages, and dismissed. The Appeals Court affirmed.
Background. Plaintiff was a shareholder of Broderbund Software.
Broderbund was acquired by The Learning Company (TLC) in 1998.
He acquired stock in TLC at $17.6875 per share. TLC filed
registration statements with the SEC that plaintiff alleges
contained misstatements. TLC was acquired by Mattel in 1999. Plaintiff
received $33.45 worth of Mattel stock for each share of TLC
stock. Mattel stock subsequently fell to under $14 per share.
District Court. Plaintiff filed a complaint in U.S. District Court (CDCal)
against TLC and Mattel alleging violation of federal
securities laws in connection with alleged misstatements by
TLC. The District Court dismissed on the grounds that
plaintiff had not suffered damages within the meaning of §§
11 and 12 of the Securities Act of 1933, 15 U.S.C. §§ 77k
and 77l. Plaintiff appealed.
Appeals Court. The Appeals Court affirmed. It reasoned
that he acquired TLC stock at $17.69 per share, and disposed
of his TLC stock in a merger at $33.45 per share. The Court
concluded that the plaintiff "sues Mattel and TLC's
officers and directors because of alleged improprieties at and
before the date of his acquisition of the TLC stock. By use of
rather vermiculate logic, he now attempts to change his
$15.7625 per share gain into a loss. The perspicacious
district judge was not persuaded that gain is loss. Nor are
we." |
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| GAO Reports on IT in
Executive Office of the President |
7/1. The General Accounting
Office (GAO) released a report [PDF]
dated June 28 regarding the use of information technology by
the Executive Office of the President (EOP).
The GAO found that "the office is in the process of
developing an officewide blueprint for modernizing its
operations and supporting technology, commonly referred to as
an enterprise architecture. Thus far, it has developed parts
of the architecture, most notably the rules and definitions
governing the technical characteristics of IT investments and
explaining EOP-wide technical service categories (e.g.,
network services, security services, etc.). Moreover, the
steps it has taken to complete the architecture are consistent
with recognized best practices."
It further found that the "EOP has taken steps toward
defining an officewide IT capital planning and investment
control process that is to be used to implement the enterprise
architecture".
The report was prepared for Sen. Byron Dorgan (D-ND),
Sen. Ben Campbell
(R-CO), Rep. Ernest
Istook (R-OK), and Rep.
Steny Hoyer (D-MD), the Chairmen and ranking members of
the Senate and House appropriations subcommittees that handle
appropriations for the EOP. |
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| FCC Receives Comments on
Broadband Internet Access |
7/1. Monday, July 1, was the extended deadline to submit
reply comments to the FCC in response
to its Notice of Proposed Rulemaking (NPRM) titled "In
the Matter of Appropriate Framework for Broadband Access to
the Internet over Wireline Facilities".
BellSouth submitted a comment
[65 pages in PDF] in which it argued that the FCC "should
(1) adopt its tentative conclusion in the Notice that
broadband Internet access service is an information service
with the transmission offered via telecommunications and not a
telecommunications service; (2) find that to the extent an
ILEC offers a stand alone transmission service for broadband
services that it does so as private carriage and not common
carriage; and (3) eliminate the Computer Inquiry
requirements from BOCs for their provision of broadband
information services." It added the the FCC "must
act in the UNE Triennial Review to eliminate existing
unbundled network elements related to broadband."
Similarly, SBC submitted a comment
[71 pages in PDF]. It wrote that "Contrary to the
apocalyptic proclamations of some commenters, the deregulatory
initiatives that the Commission is considering in this
proceeding are neither extreme nor revolutionary.
Classification of wireline broadband Internet access services
as information services does not represent a departure from
the Commission's prior conclusions." See also, SBC
release.
In contrast, the Information
Technology Association of America (ITAA) submitted a comment
[PDF] in which it argued that the FCC "should decline the
Bell Operating Companies' invitation to completely dismantle
the pro-competitive regulatory regime governing their
participation in the broadband telecommunications and
information services markets."
The ITAA continued that "The foundation of the BOC's
proposals to eliminate the Commission's existing regulatory
regime is thier assertion that -- given the growth of cable
and other broadband transmission ``platforms´´ ILECs no
longer have either the incentive or the ability to
discriminate in the provision of broadband telecommunications
services to non-affiliated ISPs. This simply is not
true."
The ITAA elaborated that "While some retail customers may
have their choice of broadband Internet access providers, ISPs
remain critically dependent on the ILECs for wholesale
broadband telecommunications service necessary to serve their
subscribers. Cable systems are not yeat a viable alternative
source of local broadband transmissiono service for most ISPs.
The ITAA also argued that the FCC cannot permit the ILECs to
offer stand alone broadband telecommunications services on a
private carrier basis. The ITAA further argued that the FCC
cannot eliminate unbundling obligations imposed upon ILECs.
Sprint submitted a comment
[PDF] in which it asserted that the FCC "has for the
first time ... instituted a rulemaking proceeding in which the
ultimate issue is whether to eliminate Title II regulation of
bottleneck "last-mile" common carrier
facilities." This, wrote Sprint, is "contrary to
fact, law and the public interest".
Sprint stated that it has "no quarrel with the
Commission's tentative conclusion that the provision of
wireline broadband Internet access service is an information
service." However, it argued that ILECs "must
unbundle their basic common carrier wireline broadband
transmission facilities from their information services
and offer the transmission capacity on a standalone basis to
other information service providers ..."
Time Warner Telecom
Corporation submitted a comment
[PDF] in which it stated that "There is little question
that broadband Internet access provided by ILECs is currently
classified as an information service with a telecommunications
service transmission component and that there is no basis for
pursuing further the wholesale reclassification of broadband
transmission as ``telecommunications´´ or ``private
carriage.´´ All commenters, including the ILECs, agree that
the regulatory treatment of broadband should be determined
based on a market power analysis. That analysis must be
performed in the Non-Dominanceand Triennial Review proceedings.
The Commission should conclude in those proceedings that ILECs
continue to exercise market power in the provision of
broadband transmission for all relevant product markets, but
most especially for the high capacity end user circuits needed
to provide frame relay, ATM, and similar services demanded by
medium sized and large businesses. Given this market power,
reclassification of broadband transport would give ILECs the
opportunity to harm competition by denying inputs needed by
competitors."
The National Association of
Broadcasters (NAB) submitted a comment
[PDF] in which it stated that the "NAB emphasizes that
the Commission's failure to adopt access and nondiscrimination
requirements will inevitably produce a broadband marketplace
characterized by minimal competition, a lack of innovation,
and severely restricted consumer choice."
The NAB continued that however the FCC categorizes broadband
Internet access over wireline facilities, it must "insure
that consumers have meaningful choices among competing service
and content providers in the broadband environment."
Specifically, the FCC "should therefore retain the access
and nondiscrimination policies that have been consistently
applied in the narrowband Internet marketplace, and continue
to apply them to high speed Internet access services provided
over wireline facilities."
The Alliance of Local Organizations Against Preemption (ALOAP)
submitted a comment
[PDF] in which it argued that the FCC "should leave to
Congress the major questions of how to classify wireline
broadband internet access for purposes of Communications Act
oversight."
The State of New York submitted a comment
[PDF] in which it argued that the FCC "recognized long
ago that the underlying transmission facilities used to carry
and connect so-called enhanced services or information
services, when bundled by the incumbent local exchange carrier
(``ILEC´´), must be offered by their monopoly owners on an
unbundled and nondiscriminatory basis, as common carriage
under Title II of the Communications Act." New York
continued that "This NPRM threatens to unravel the
FCC's longstanding policy success, and to do so at the very
moment when unbundled nondiscriminatory access to monopoly
owned transmission facilities is necessary to the continued
growth and availability of high speed Internet services using
wireline facilities.
Universal Service Subsidies. The American Library Association
(ALA) submitted a comment
in which it argued that the FCC should include "broadband
providers among the entities that support universal
service". The FCC's e-rate program subsidizes both
schools and libraries, under the rubric of universal service.
The ALA wrote that "In order to effectively fulfill their
educational roles, libraries need to offer their patrons
broadband Internet access."
The National Cable and
Telecommunications Association (NCTA) submitted a comment
on the issue of contributions to the Universal Service Fund (USF).
It wrote that "Before the Commission extends the
universal service contribution requirement to all providers of
facilities based broadband Internet access services, it must
first determine whether such an extension is in the public
interest. In doing so, the Commission should evaluate the
current size of the USF, all potential contributors to the USF,
the effect that requiring USF contributions from all
facilities based broadband Internet access services would have
on the Commmission's goal of promoting broadband deployment,
whether potential contributors offer public switched service
or the functional equivalent, and the special circumstances
facing providers of cable modem services."
The ITAA also commented on universal service subsidies. It
wrote that the FCC cannot require ISPs to make payments to the
USF.
This is CC Docket No. 02-33. See, May 29 notice
[PDF] extending deadline from June 3 to July 1. See also, Order
[PDF] extending deadline from May 14 to June 3, and original
notice in Federal Register, February 28, 2002, Vol. 67,
No. 40, at Pages 9232 - 9242. |
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| FCC Seeks Comments on
Strategic Plan |
7/1. The Federal
Communications Commission (FCC) announced that "the
public is welcome to review and comment on a draft of its
revised strategic plan for 2003-2008." See, FCC
notice [PDF].
The draft strategic
plan [19 pages in PDF], which is prepared pursuant to the
Government Performance and Results Act (GPRA), states that the
FCC has core goals in six areas: broadband, spectrum, media,
homeland security, competition and modernizing the FCC.
The plan states that the FCC's goal regarding broadband is to
"Establish regulatory policies that promote competition,
innovation, and investment in broadband services and
facilities while monitoring progress toward the deployment of
broadband services in the United States and abroad." The
plan further states that it is an FCC goal to "Harmonize
regulation of competing broadband services that are provided
via different technologies and network architectures."
The plan states that the FCC's goal regarding broadband
spectrum management is to "Encourage the highest and best
use of spectrum domestically and internationally in order to
encourage the growth and rapid adoption of new
technologies." The plan also states that it is a goal to
"Develop and implement market oriented allocation and
assignment policies, where consistent with law."
The plan states that the FCC's goal regarding media is to
"Revise media regulations so that timely development and
delivery of new technologies is encouraged, media ownership
rules promote competition and diversity in a comprehensive,
legally sustainable manner, and the migration to digital modes
of delivery is facilitated."
The plan states that the FCC's goal regarding homeland
security is to "Provide leadership in evaluating and
strengthening the Nation's communications infrastructure, in
ensuring rapid restoration of that infrastructure in the event
of disruption, and in ensuring that essential public health
and safety personnel have effective communications services
available to them in emergency situations."
The plan states that the FCC's goal regarding competition is
to "Support the Nation's economy by ensuring there is a
comprehensive and competitive framework within which the
communications revolution can continue so that all consumers
can make meaningful choices among and have equal access to
communications services."
The plan states that the FCC's goal regarding modernization is
to "Emphasize performance and results through excellent
management, develop and retain independent mission critical
expertise, and align the FCC with dynamic and converging
communications markets." |
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| Publication Schedule |
| The Tech Law Journal Daily E-Mail Alert will not be
published on July 3, 4, or 5. |
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| Tuesday, July 2 |
Neither the House nor the Senate will meet Monday July 1
through Friday July 5, due to the Independence Day work
period.
President's Homeland Security Advisory Council (PHSAC) will
meet. The meeting is closed to the public. However, written
comments may be submitted Fred Butterfield at fred.butterfield
@gsa.gov. See, notice in the Federal Register. See also, order
establishing the PHSAC. Location: undisclosed. |
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| Wednesday, July 3 |
| Neither the House nor the Senate will meet Monday July 1
through Friday July 5, due to the Independence Day work
period. |
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| Thursday, July 4 |
Independence Day. The FCC and other government offices will
be closed. The National Press Club will be closed.
Neither the House nor the Senate will meet Monday July 1
through Friday July 5, due to the Independence Day work
period. |
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| Friday, July 5 |
| Neither the House nor the Senate will meet Monday July 1
through Friday July 5, due to the Independence Day work
period. |
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| Monday, July 8 |
10:00 AM. The House
Financial Services Committee will hold a hearing titled
"Wrong Numbers: The Accounting Problems at
WorldCom". Location: Room 2128, Rayburn Building.
10:00 AM. The U.S.
Court of Appeals (FedCir) will hear oral argument in Optical
Disc v. Del Mar Avionics, a patent infringement case
involving CD technology, No. 01-1606. Location: Courtroom 402,
717 Madison Place, NW.
10:00 AM. The U.S.
Court of Appeals (FedCir) will hear oral argument in Texas
Digital Systems v. Telegenix, No. 02-1032. Location:
Courtroom 402, 717 Madison Place, NW.
10:00 AM. The U.S.
Court of Appeals (FedCir) will hear oral argument in HM
Electronics v. 3M, a patent infringement case involving
wireless communications technology, No. 02-1037. Location:
Courtroom 201, 717 Madison Place, NW.
Deadline to file comments with the Federal Communications Commission's
(FCC) Spectrum Policy Task
Force in response to its request for comments on spectrum
policy, including taking steps toward market oriented
allocation and assignment policies, interference, efficient
use of spectrum, public safety communications, and
international issues. See, Public
Notice [PDF]. |
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