| WorldCom: Rep. Tauzin
Requests Information From SEC |
7/2. Rep. Billy
Tauzin (R-LA) and Rep. Jim Greenwood
(R-PA) wrote a letter
to Securities and Exchange
Commission (SEC) Chairman Harvey
Pitt requesting information and documents pertaining to
the SEC's investigations of the accounting practices of
WorldCom, Tyco, Global Crossing, Xerox, and Qwest
Communications.
For example, they asked, "For the period from January
1998 through the date upon which the SEC began its current
formal inquiry into the company, did the SEC review any of the
10-Qs or 10-Ks filed by the company? If so, identify the
filings reviewed, provide a brief description of the reviews
conducted, and provide all records relating to such
reviews."
Rep. Tauzin is Chairman of the House Commerce Committee.
Rep. Greenwood is Chairman of its Subcommittee on Oversight
and Investigations. |
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| WorldCom: Sen. Grassley
Questions SEC and WorldCom About Bonuses |
7/2. Sen. Charles
Grassley (R-IA) wrote two letters
[PDF] to Securities and Exchange
Commission (SEC) Chairman Harvey
Pitt and WorldCom
President John Sidgmore asking for information about large
bonuses paid recently to WorldCom officers, directors and
employees.
Sen. Grassley stated to Pitt: "I commend you for taking
action that bars WorldCom from paying its officers, directors
or employees more than $100,000 in severance. It appears that
many top executives viewed WorldCom as their personal piggy
bank, and that practice must be stopped. While these recent
actions hopefully shut the barn door, a lot of questionable
bonuses and payments were made earlier by WorldCom. For
example, Bernard J. Ebbers, the chief executive of WorldCom,
got a $10 million bonus, as did Scott Sullivan, the chief
financial officer."
Sen. Grassley also asked for "the dollar figure, name and
title of every employee, director or officer of WorldCom who
received a bonus (in any form) with a value of greater than
$100,000 (at the time it was awarded) for any year since
January 1, 1999."
He asked for the same information from WorldCom. He also asked
Sidgmore to inform him of "what actions that WorldCom has
taken, or is considering taking, to have bonuses returned (or
to not provide a bonus) to the company to improve its
financial situation." |
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| WorldCom: Representatives
Write FCC Re Continuity During Bankruptcy |
7/2. Rep. Ed Markey
(D-MA) sent a letter
[PDF] to Federal Communications
Commission (FCC) Chairman Michael Powell
regarding a possible WorldCom
bankruptcy.
Rep. Markey, who is the ranking Democrat on the House Telecom
Subcommittee, wrote that "I am concerned that any
decision by WorldCom management to seek bankruptcy protection
could prove disruptive to essential communications as well as
economic activity in our country."
He also stated that "I believe it wise, however, for the
Commission to prepare adequately for such an event in order to
minimize any harm to the public and to ensure that
telecommunications services continue if bankruptcy does
occur."
Rep. Markey continued. "While the Commission chose not to
intervene directly to ensure continuity of service when
Excite@Home and Northpoint Communications went bankrupt last
year and cut-off Internet access for ten of thousands of
Americans, I hope you agree that the hazards posed to the
public if WorldCom were to go bankrupt go to the core of the
Commission's responsibilities. In addition to the millions of
Americans who subscribe to WorldCom for traditional telephone
service, WorldCom is also responsible for carrying a vast
portion of the nation's email traffic. In fact, some analysts
calculate WorldCom's email traffic carriage to be as high as
70 percent of those emails that travel within that Unites
States and 50 percent of all such traffic worldwide."
Rep. Markey cited 47 U.S.C.
§ 214(a), which provides, in part, that "No carrier
shall discontinue, reduce, or impair service to a community,
or part of a community, unless and until there shall first
have been obtained from the Commission a certificate that
neither the present nor future public convenience and
necessity will be adversely affected thereby."
Rep. Billy Tauzin
(R-LA) and Rep. Fred
Upton (R-MI) also wrote to Chairman Powell. They wrote
that "In the wake of recent revelations regarding
WorldCom's accounting improprieties and given the distinct
possibility that WorldCom may soon file for bankruptcy, we
urge that all necessary steps should be taken to ensure that
our nation's telecommunications infrastructure and consumers
are protected from disruptions in service and degradation of
service quality which could result from such an
occurrence."
They also stated that "WorldCom owns MCI, the nation's
second largest long distance carrier, and it is the world's
largest Internet backbone provider, carrying approximately 50%
of the Internet's total traffic and 70% of e-mail in the
United States."
However, unlike Rep. Markey, they did not suggest that Section
214 covers Internet backbone or e-mail service, or that
regulating Internet services is a "core"
responsibility of the FCC. |
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| Incoming EU Competition
Director General Addresses Antitrust |
| 7/1. Philip Lowe, who will take office as the EU Competition
Director General on September 1, gave a speech
to the American
Antitrust Institute in Washington DC. He discussed the
principles underlying EU competition policy, aids provided by
national governments, different standards employed by the EU
and the US in merger reviews, efficiencies, economic analysis,
and other topics. |
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| Rep. Berman to Advocates
Self Help to Combat P2P Piracy |
6/25. Rep. Howard
Berman (D-CA) gave a speech
regarding solutions to peer to peer piracy. He said he intends
to introduce legislation to create a safe harbor for copyright
owners who employ technological self help measures to thwart
peer to peer piracy.
Rep. Berman, who is the ranking Democrat on the House Judiciary
Committee's Court, Internet and Intellectual Property
Subcommittee, stated that the "future and fate of the
technology sector is also inextricably tied to that of the
entertainment industry". He also stated that the
"next growth cycle for many technology companies depends,
to a certain extent, on the availability of media products and
services". Moreover, "Internet piracy threatens to
undermine the symbiosis between the technology and media
industries". And hence, "P2P piracy must be cleaned
up".
He advocated "the use of strong DRM technologies",
but not "government mandates on technology". He also
said the "Copyright infringement lawsuits against
infringing P2P users have a role to play, but are not viable
or socially desirable options for addressing all P2P
piracy".
He then advocated "technological self help
measures". He elaborated that "Copyright owners
could employ a variety of technological tools to prevent the
distribution of copyrighted works over a P2P network.
Interdiction, decoy, redirection, file blocking, and spoofing
technologies can help prevent unauthorized P2P
distribution."
Rep. Berman added that "When deployed to thwart P2P
piracy, however, such technological self-help may run afoul of
common law doctrines and state and federal statutes, including
the federal Computer Fraud and Abuse Act. In other words,
while P2P technology is free to innovate new, more efficient
methods of P2P distribution that further exacerbate the piracy
problem, copyright owners are not equally free to craft
technological responses."
Hence, he argued that "Congress should free copyright
creators and owners to develop and deploy technological tools
for addressing P2P piracy. We could do this by creating a safe
harbor from liability for copyright owners that use
technological means to prevent the unauthorized distribution
of their copyrighted works via P2P networks."
He added that "Such legislation should not allow a
copyright owner to damage the property of a P2P file trader or
any intermediaries, including ISPs. For instance, a copyright
owner shouldn't be allowed to introduce a virus that disables
the computer from which infringing works are being made
available to a decentralized, P2P network."
He concluded by stating that "I intend to introduce
legislation creating such a safe harbor for technological self
help measures." |
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| Shakeup at Qwest |
7/5. Drake Tempest, Qwest
Communications EVP and General Counsel, stated in a release
that "We have no reason to believe that we are the
subject of any investigation by the U. S. Department of
Justice ... It's outrageous that we would learn about such an
investigation through the media. We have disclosed everything
asked of us and have cooperated fully with the Securities
Exchange Commission and Congress".
7/7. Qwest announced the replacement of Robin Szeliga
as Chief Financial Officer. Oren Shaffer, who was
formerly CFO of Ameritech, joined Qwest as Vice Chairman and
CFO. See, Qwest
release.
7/7. Qwest also announced that Gary Lytle will replace Pete
Belvin as VP for Policy and Law. Lytle was interim
President of the U.S. Telecom
Association (USTA) in 2000 and 2001. Before that, he was
VP for federal relations at Ameritech. |
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| DC Circuit Rules on Waiver
of Attorney Client Privilege in FTC v. GSK |
7/2. The U.S.
Court of Appeals (DCCir) issued its opinion
in FTC
v. Glaxo Smith Kline, a case regarding the
scope of the attorney client privilege in a drug patent
related proceeding. The District Court held that the privilege
was waived because GSK had distributed the documents subject
to the claim of privilege to various attorneys, consultants
and third parties, and thus, not kept the documents
confidential. The Appeals Court reversed.
Background. Glaxo Smith
Kline (GSK) makes paroxteine hydrochloride hemihydrate, a
drug used in the treatment of depression and panic disorder.
It markets this drug under the brand name Paxil. Other companies
applied to the Food and Drug
Administration (FDA) for permission to sell generic
versions of Paxil when GSK's patents expire.
FTC Proceeding. The Federal
Trade Commission (FTC) commenced an investigation into
whether GSK, in an attempt to prevent or delay competition
from generic versions of Paxil, abused the process for listing
its patents in the FDA's compilation of "Approved Drug
Products with Therapeutic Evaluations." The FTC issued a
subpoena requesting documents from GSK, including documents
that it had been ordered to disclose in a previous patent
infringement lawsuit against generic manufacturers, and
documents related to the manufacturing and marketing of Paxil,
the listing and use of any patents regarding Paxil, and any
filings with the FDA regarding Paxil. GSK did not produce all
requested documents.
District Court. The FTC filed a complaint in U.S. District Court (DC) to
enforce its subpoena. The dispute was reduced to whether GSK
must produce 91 documents. GSK raised both the attorney client
privilege and work product privilege. The FTC argued that GSK
had forfeited its claim to confidentiality by disseminating
the documents widely both within GSK and to consultants and
other third parties. The FTC also belatedly argued that the
documents lacked confidential content. The District Court
ordered GSK to produce the 91 documents. It reasoned that GSK
had failed to meet its burden with respect to two requisite
elements of the attorney client privilege: that the documents
were kept confidential, and that the documents contained
confidential information. It wrote that GSK had "not
sustained its burden of demonstrating that the relevant
documents were distributed on a 'need to know' basis or to
employees that were 'authorized to speak or act' for GSK".
It also rejected the work product argument. GSK appealed.
Court of Appeals. The Court of Appeals reversed. It
wrote that the District Court had placed an overreaching
burden on GSK. It wrote that "The Company's burden is to
show that it limited its dissemination of the documents in
keeping with their asserted confidentiality, not to justify
each determination that a particular employee should have
access to the information therein. Not only would that task be
Herculean -- especially when the sender and the recipient are
no longer with the Company -- but it is wholly unnecessary.
After all, when a corporation provides a confidential document
to certain specified employees or contractors with the
admonition not to disseminate further its contents and the
contents of the documents are related generally to the
employees' corporate duties, absent evidence to the contrary
we may reasonably infer that the information was deemed
necessary for the employees' or contractors' work."
The Appeals Court also reversed the District Court's
determination regarding lack of confidential content, but on
procedural grounds. (The FTC did not raise this argument until
its reply brief for the District Court, thereby depriving GSK
an opportunity to respond.) The Appeals Court did not address
the work product privilege issue, because it reversed on other
grounds. |
|
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| IIPA Comments on Copyright
and Andean Trade |
7/1. The International
Intellectual Property Alliance (IIPA) submitted comments
[PDF] to the U.S.
International Trade Commission (ITC) regarding copyright
issues associated with the Andean Trade Preferences Act (ATPA).
The IIPA wrote that the "ATPA is not solely an
anti-narcotics program."
The ITC, among other things, makes determinations in
investigations involving unfair practices in import trade
involving allegations of infringement of U.S. patents and
trademarks by imported goods. The ITC may order the exclusion
of the imported product from the United States. The ITC
requested comments to assist it in the preparation of its 2001
annual ATPA report to Congress.
The IIPA commented that "Inadequate and ineffective
copyright enforcement continues to inflict significant trade
distortions in the Andean region. High levels of piracy of
music, audiocassettes and compact discs, business,
entertainment and multimedia software on all platforms, films,
television programs, videocassettes, textbooks, tradebooks,
reference and professional publications and journals, all hurt
U.S. creators."
It continued that "Business software piracy appears in
various formats, including counterfeiting, resellers, mail
order houses, bulletin boards, other internet based
distributions and end user piracy. The greatest threat comes
from end user piracy ..."
The IIPA also wrote that "as the forms of piracy shift
from hard goods and more toward digital media, the challenges
faced by the copyright industries and national governments to
enforce copyright laws grow exponentially. Fundamentally, the
Internet transforms copyright piracy from a mostly local
phenomenon to a global plague. It makes it cheaper and easier
than ever for thieves to distribute unauthorized copies of
copyrighted materials around the globe. Modern copyright laws
must respond to this fundamental change by providing that
creators have the basic property right to control distribution
of copies of their creations. Copyright owners must be able to
control delivery of their works, regardless of the specific
technological means employed. Criminal and civil justice
systems must work in a transparent and expeditious manner and
result in deterrent penalties and remedies." |
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| People and Appointments |
7/2. President Bush announced his intent to nominate Daniel
Pearson to be a Commissioner of the International Trade Commission
for a nine year term expiring in 2011. Pearson has worked for Cargill since 1987. Before
that he worked for former Sen. Rudy Boschwitz (R-MN). See, White
House release.
7/3. Greg Jenner was named Senior Advisor and Acting
Deputy Assistant Secretary for Tax Policy at the Department of
the Treasury, effective July 8, 2002. Jenner was a partner in
the Tax and Legislative Groups at the Venable law firm. Prior to
that, he was a partner with Price Waterhouse Coopers.
Before that, he worked in the Treasury Department in the first
Bush administration. And before that, he worked for the Senate
Finance Committee. See, Treasury
release.
7/1. Scott Ford became the President and Chief
Executive Officer of Alltel.
See, release.
6/28. Brad Sonnenberg was named SVP and General Counsel
of Covad. He was Deputy
General Counsel. He replaces Dhruv Khanna. See, Covad
release.
6/25. Mark Slaven was named Chief Financial Officer of 3Com Corporation. He was
previously Vice President and Treasurer of 3Com. He replaces Mike
Rescoe. See, 3Com
release. |
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| About Tech Law Journal |
Tech Law Journal publishes a free access web site and
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to the TLJ Daily E-Mail Alert is $250 per year. However, there
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subscriptions are available for law students, journalists,
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Contact: 202-364-8882; E-mail.
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Privacy
Policy
Notices
& Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All
rights reserved. |
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| Monday, July 8 |
The House will return from its Independence Day work period.
It will meet at 2:00 PM for legislative business. No votes
expected before 6:30 PM.
The Senate will return from its Independence Day work period.
It will meet at 2:00 PM to begin consideration of S
2673, the accounting reform bill.
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.
12:30 PM. Sen. Paul
Sarbanes (D-MD), Chairman of the Senate Banking
Committee, will hold a press conference regarding
corporate financial reporting, investor confidence, and the
economy. Also participating will be Margaret Blair (Georgetown
University), Jeff Faux (Economic Policy Institute), Gary
Gensler, and Larry Mitchell (George Washington University).
Press contact: Jesse Jacobs at 202 224-1654. Location: Room
SC-6, Capitol Building.
TIME CHANGE. 1:00 PM. The House Financial
Services Committee will hold a hearing titled The
Accounting Problems at WorldCom. The scheduled witnesses
are Bernard Ebbers (former CEO of WorldCom), Scott Sullivan
(former CFO), David Myers (former SVP and Controller), John
Sidgmore (P/CEO), and Bert Roberts (Chairman), Melvin Dick
(former Senior Global Managing Partner, Technology, Media, and
Communications Practice, Arthur Andersen), and Jack Grubman
(Salomon Smith Barney). Press contact: Peggy Peterson at 202
226-0471. Location: Room 2128, Rayburn Building.
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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| Tuesday, July 9 |
The House will meet at 10:30 AM for morning hour and 12:00
NOON for legislative business. It will consider a number of
measures under suspension of the rules.
9:00 AM. The House
Commerce Committee's Subcommittee on Oversight and
Investigations will hold a hearing on the proposal to create a
Department of Homeland Security. See, notice.
Webcast. Press contact: Ken Johnson or Jon Tripp at 202
225-5735. Location: Room 2123, Rayburn Building.
9:30 AM. FCC
Commissioner Kathleen
Abernathy will hold a press briefing. RSVP to Ann Monahan
at amonahan @fcc.gov or
202 418-2535. Location: FCC, Room 8B-115, 445 12th St., SW. |
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| Wednesday, July 10 |
The House will meet at 10:00 AM for legislative business.
9:30 AM. The House
International Relations Committee will meet to mark up HR
5005, the Homeland Security Act of 2002. Location: Room 2172,
Rayburn Building.
9:30 AM - 4:30 PM. The FTC and DOJ
will continue their series of events titled Competition and
Intellectual Property Law and Policy in the Knowledge Based
Economy. This event will be a panel of speakers addressing
"Federal Circuit Jurisprudence: Substantive Trends and
Analysis". The first session, running from 9:30 AM to
12:00 NOON, will address "Trends in Federal Circuit
Jurisprudence". The second session, running from 1:30 PM
to 4:30 PM, will address "Patent Law Analysis in Federal
Circuit Jurisprudence". For more information, call Gina
Talamona at 202 514-2007. See, FTC
notice. Location: Room 432, FTC Main, 600 Pennsylvania
Ave, NW.
10:00 AM. The House
Commerce Committee's Subcommittee on Telecommunications
and the Internet will hold a hearing titled Corporation for
Public Broadcasting Oversight and a Look Into Public
Broadcasting in the Digital Era. Press contact: Ken
Johnson or Jon Tripp at 202 225-5735. Location: Room 2322,
Rayburn Building.
10:00 AM. The House Armed
Services Committee will hold a hearing on HR 5005, a bill
to establish a Department of Homeland Security. Location: Room
2118, Rayburn Building.
10:00 AM. The Senate
Judiciary Committee will hold an executive business
meeting. See, notice.
Location: Room 226, Dirksen Building.
10:00 AM. The U.S.
Court of Appeals (FedCir) will hear oral argument in Reiffin
v. Microsoft, No. 01-1380, a patent case. Location:
Courtroom 402, 717 Madison Place, NW.
12:00 NOON. Treasury Secretary Paul
O'Neil will give a luncheon speech titled "The
Economy, Investors and Corporate Governance". The price
to attend is $45 for members and $90 for non members. See, online
registration page. Location: U.S. Chamber of Commerce,
1615 H Street, NW.
2:00 - 3:30 PM. The FTC's Bureau of
Competition will hold a public workshop on merger
investigation best practices. This is the last workshop of a
seven part, five city, series. This event will focus on
accounting and financial data. See, FTC release.
Location: FTC, Room 332, 600 Pennsylvania Ave., NW.
6:00 - 8:00 PM. The FCBA will
host a Continuing Legal Education seminar titled Global
Telecom Markets: Issues and Strategies for Representing
Clients Abroad. This seminar will cover (1) telecom trade
and market access issues, (2) transaction financing and
approval, and (3) the International Telecommunications Union
(ITU).
Deadline to submit comments to the Bureau of Industry and Security
(BIS), formerly known as the Bureau of Export Administration
(BXA), in response to its Notice of Inquiry (NOI) regarding
"the current limit for use of License Exception TSR for
exports and reexports of technology and software on the
Commerce Control List (CCL) of the Export Administration
Regulations (EAR) under Export Classification Control Numbers
(ECCNs) 4D001 and 4E001". BIS states that "These
ECCNs control technology and software that can be used for the
development, production, or use of computers. The goal of this
notice of inquiry is to collect information from industry that
will assist BIS in evaluating whether the current TSR
eligibility level of 33,000 Millions of Theoretical Operations
per Second (MTOPS) for exports and reexports to most countries
should be adjusted, taking into consideration the control
level for the export of computer equipment and the control
policies of other member countries of the Wassenaar
Arrangement." See, notice
in the Federal Register. |
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| Thursday, July 11 |
The House will meet at 10:00 AM for legislative business.
10:00 AM - 4:00 PM. The FTC and DOJ
will continue their series of events titled Competition and
Intellectual Property Law and Policy in the Knowledge Based
Economy. This event will be a panel of speakers addressing
"Federal Circuit Jurisprudence: Jurisdiction, Choice of
Law, and Competition Policy Perspectives". The first
session will run from 10:00 AM to 12:30 PM. The second session
will run from 2:00 PM to 4:00 PM. For more information, call
Gina Talamona at 202 514-2007. See, FTC
notice. Location: Room 432, FTC Main, 600 Pennsylvania
Ave, NW.
12:00 NOON. Sen. John
McCain (R-AZ), the ranking Republican on the Senate Commerce
Committee, will hold a press conference regarding
"corporate governance reform". Location: First
Amendment Room, National Press
Club, 529 14th St. NW, 13th Floor.
Deadline to submit comments to the FCC regarding
its Declaratory Ruling and Second Further Notice of Proposed
Rulemaking clarifying that providers of Internet protocol
telecommunications relay services are eligible for
reimbursement from the Interstate TRS Fund. See, FCC
notice [PDF]. |
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| Friday, July 12 |
The House will meet at 9:00 AM for legislative business. No
votes are expected after 6:00 PM.
10:00 AM. Hearing before the U.S.
District Court (EDVa) in Washington Post v. Gator
on the Washington
Post's motion for preliminary injunction. Plaintiffs
allege web based copyright infringement in their complaint
[99 pages in PDF] and Memorandum
in Support of Plaintiffs' Motion for Preliminary Injunction
[35 pages in PDF]. Tape recorders and cameras are prohibited
in the courtroom. Location: Room 800, 8th Floor, Albert Bryan
Courthouse, 401 Courthouse Square, Alexandria, VA.
12:00 NOON. The Cato Institute
will host a briefing titled Profiling and National IDs:
Security and Freedom in a Free Society. The speakers will
be Charlotte Twight (author of Dependent on D.C.: The Rise of
Federal Control over the Lives of Ordinary Americans), Robert
Levy (Cato), and Timothy Lynch (Cato). See, registration
page. Lunch will follow. Location: Room B-354, Rayburn
Building.
12:00 NOON - 2:00 PM. The Progress
and Freedom Foundation (PFF) will host a panel discussion
titled When Wireless Grows Up: Mandates vs. Markets for a
‘Mature’ Industry. The scheduled speakers include Rudy
Baca (Precursor Group), Steven Berry (CTIA)
and Kevin Krufky (office of Sen. Sam Brownback).
See, PFF
notice. To register, contact Rebecca Fuller at 202
289-8928 or rfuller@pff.org.
Location: Room B340, Rayburn Building. |
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