| Senators Introduce MVDDS
Licensing Bill |
9/10. Sen. Mary
Landrieu (D-LA) and others introduced S 2922,
the Emergency Communications and Competition Act of 2002 (ECCA).
The bill would provide for the licensing, without auction, of
Multichannel Video Distribution and Data Services (MVDDS).
MVDDS could provide high speed Internet access to unserved and
underserved populations.
Sen. Landrieu stated in the Senate that "The ECCA
provides that MVDDS applicants will be licensed in the same
manner as satellite companies who applied on the same day to
share the same spectrum. Currently, the FCC plans to subject
only MVDDS applicants to an auction process. This would impose
a discriminatory tax on an innovative new technology.
Unfortunately, this is more of the same burdensome regulation
that I believe has contributed to the collapse of the
telecommunications sector."
She added that "We must ensure that our laws and
regulations are technologically neutral so that government
policies don't replace the role of the marketplace in
determining the fate of consumer products and services."
See, Cong. Rec., Sept. 10, 2002, at Pages S8463-4.
 Sen. Conrad Burns (R-MT)
is a sponsor of the bill, stated in the Senate that
"unless we pass this legislation, we may never see the
deployment of this new service. The FCC has determined that
licenses for this new service should be auctioned. I
appreciate the FCC's effort to help generate new revenues for
the Federal Treasury, but we must never let that consideration
override good public policy judgments. The public interest is
best served when the spectrum is licensed promptly to
applicants that are ready to deploy service."
Sen. Burns continued that "We are now confronted with a
case of first impression in which the FCC has determined to
issue licenses to both terrestrial and satellite applicants
that share the same spectrum. Previously this was thought to
be technologically impossible, as I mentioned, the FCC has now
determined that the terrestrial based MVDDS can share with
satellites. In my judgment, the same Federal resource must be
licensed in the same manner to all applicants, regardless of
the technology they will employ. To do otherwise is to pick
industry winners and losers. This bill corrects this
problem." See, Cong. Rec., Sept. 10, 2002, at Page S8468.
The bill would require that the Federal
Communications Commission (FCC) "shall assign
licenses in the 12.2-12.7 GHz band for the provision of fixed
terrestrial services using the rules, policies, and procedures
used by the Commission to assign licenses in the 12.2-12.7 GHz
band for the provision of international or global satellite
communications services in accordance with section 647 of the
Open-market Reorganization for the Betterment of International
Telecommunications Act (47 U.S.C. 765f)."
Moreover, the bill would require the FCC to grant licenses
"not later than six months after the date of the
enactment of this Act."
The bill would require licensees to "allocate 4 percent
of its capacity for services that promote the public interest
... , such as -- (i) telemedicine; (ii) educational
programming, including distance learning; (iii) high speed
Internet access to unserved and underserved populations; and
(iv) specialized local data and video services intended to
facilitate public participation in local government and
community life."
In addition, the bill would require that "Each licensee
... shall disseminate Federal, State, and local Emergency
Alert System warnings to all subscribers of the
licensee". In particular, "Each licensee ... shall
provide immediate access for national security and emergency
preparedness personnel to the terrestrial services covered by
the license ... Whenever the Emergency Alert System is
activated [or] Otherwise at the request of the Secretary of
Homeland Security."
The bill is also cosponsored by Sen. Trent Lott (R-MS), Sen.
Judd Gregg (R-NH), Sen. Barbara Mikulski (D-MD), Sen. Patrick
Leahy (D-VT), Sen. Max Baucus (D-MT), Sen. John Kerry (D-MA),
and Sen. Chris Dodd (D-CT). The bill was referred to the Senate Commerce
Committee. |
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| Rep. Stearns Addresses
NextWave Spectrum Auctions |
9/9. Rep. Cliff
Stearns (R-FL) spoke in the House on September 9 regarding
the re-auction of spectrum which NextWave previously obtained
in an FCC auction.
Rep. Stearns is the sponsor of HR 4738,
an untitled bill that would provide that the Federal Communications Commission
(FCC) "shall return to the winning bidders of auction 35
the full amount of all deposits and downpayments made by such
winning bidders for licenses that the Commission has not by
that date delivered to such winning bidders."
NextWave obtained
spectrum licenses at FCC auctions in 1996. The FCC permitted
NextWave to obtain the licenses, and make payments under an
installment plan, thus creating a debtor creditor relationship
between NextWave and the FCC. NextWave did not make payments
required by the plan, and filed a Chapter 11 bankruptcy
petition. The FCC cancelled the licenses. It then proceeding
to re-auction the disputed spectrum. The U.S. Court of Appeals (DCCir)
ruled in its June 22, 2001, opinion
that the FCC is prevented from canceling the spectrum licenses
by § 525
of the Bankruptcy Code. The FCC petitioned the Supreme Court
for writ of certiorari. The Court granted certiorari. Oral
argument is scheduled for October 8. (This is Supreme Court
Nos. No. 01-653 and 01-657.)
In addition, the FCC is scheduled to hold an open meeting on
Thursday, September 12. The agenda
for the meeting published in the FCC web site does not list
this matter. However, various recently published news stories,
citing no sources, have reported that the FCC may announce
that it is providing relief to the winning bidders, such as
Verizon Wireless and Deutsche Telekom's T-MobileUSA, in the
January 2001 re-auction.
Rep. Stearns stated that "Although the FCC recently
returned most of the down payment funds previously deposited
by all these successful bidders, it continues to hold, without
interest, Mr. Speaker, substantial sums, equal to 3 percent of
the total amount of the winning bids. It apparently intends to
hold these sums indefinitely."
"Despite the lengthy delay in delivering the licenses,
moreover, the FCC takes the position that the successful
bidders remain obligated, on a mere 10-day notice, to pay the
full amount of their successful bids if and when the FCC, at
some unknown future date, establishes its right to deliver
those licenses."
Stearns said that "this is grossly unfair" and
"adversely affects their capacity to serve the needs of
their customers, because they must have this capital always on
hand and they cannot use it for long-term benefits for
business."
Rep. Stearns offered this explanation of his bill.
"First, it requires the FCC promptly to refund to the
winning bidders the full remaining amount of their deposits
and their down payments. Second, it gives each winning bidder
an opportunity to elect, within 15 days after enactment, to
relinquish its rights and to be relieved of all further
obligations under Auction No. 35. Those who choose to retain
their rights and obligations under Auction No. 35 will
nonetheless be entitled to a return of their deposits and down
payments in the interim period. If and when the FCC is in a
position to deliver the license at issue to those who remain
obligated, they will be required to pay the full amount of
their bid in accordance with the FCC's existing regulations.
Those who elect to terminate their rights and obligations
under this auction will be free to pursue their business
interests without the burdens under which they must
labor."
Rep. Stearns' bill has 40 cosponsors, including broad
bipartisan support from members of the House Commerce
Committee, the committee which oversees the FCC. |
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| Tech Crime Report |
9/9. The U.S. Attorney's Office (USAO) for the Central
District of California announced that Richard Dopps, a former
employee of The Berman Companies, plead guilty in U.S. District Court (CDCal)
to "one felony count of obtaining information from a
protected computer". The USAO stated in a release
that he accessed the computer system of his former employer
and read the e-mail messages of company executives for the
purpose of gaining a commercial advantage at his new job at a
competitor." See also, CCIPS
release.
9/9. A grand jury of the U.S. District Court (EDCal)
returned an indictment against four individuals involved in a
bank fraud scheme. The USAO stated in a release
[PDF] that the scheme "involved the use of a computer to
create fraudulent checks using account information which was
wrongfully obtained from various victims."
9/9. The U.S. Attorney for the Northern District of California
charged Yervant Lepejian by criminal information
[7 pages in PDF] with one count of wire fraud in violation of 18
U.S.C. § 1343. Lepejian is a former Ch/CEO of HPL
Technologies, a Silicon Valley software maker. The USAO stated
in a release
that Lepejian "engaged in a scheme to defraud" HPL,
its shareholders and the Securities
and Exchange Commission (SEC). It further stated that
"as part of the scheme the defendant caused false and
illusory sales to be recorded as revenue by HPL in violation
of Generally Accepted Accounting Principles (``GAAP´´) and
HPL's own internal revenue recognition policies; that he made
and caused to be made material false statements to HPL's
auditors, to the SEC, and the public regarding HPL's revenue
and profits; and that he deprived his employer, HPL
Technologies, of its right to his honest and faithful services
by creating false sales, causing those false sales to be
recognized as revenue, and making and causing to be made
material false statements to HPL, its auditors, the SEC."
In addition, on September 11, the SEC filed a civil complaint
in U.S. District Court
(NDCal) against Lepejian alleging violation of §17(a) of
the Securities Act (15 U.S.C. § 77q(a)), §10(b) of the
Exchange Act (15 U.S.C. §78j(b)) and Rule 10b-5 thereunder,
as well as §§13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of
the Exchange Act. |
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| 9th Circuit Rules on
Priority of Security Interests in Unregistered Copyrights |
9/11. The U.S.
Court of Appeals (9thCir) issued its opinion
[PDF] in Aerocon
Engineering v. Silicon Valley Bank, a
bankruptcy case involving the question of whether federal or
state law governs priority of security interests in
unregistered copyrights. The Appeals Court's holding (that
state law governs), as well as its discussion, may be of
interest to lenders who obtain security interests in software
copyrights as collateral for their loans.
Background. Three companies which designed and sold
products for modifying airplanes obtained financing from the Silicon Valley Bank (SVB). It
took a security interest in, among other things, all
"copyright rights, copyright applications, copyright
registrations, and like protections in each work of authorship
and derivative work thereof, whether published or unpublished,
now owned or hereafter acquired." SVB perfected its
security interest under the California Uniform Commercial Code
(UCC). The borrowers did not register the copyrights at issue.
Proceedings Below. The borrowers went into bankruptcy.
Another creditor, Aerocon, purchased the copyrights from the
bankruptcy trustee. SVB obtained relief from the bankruptcy
stay, and foreclosed on the copyrights, pursuant to its state
security interest. SVB and Aerocon both claimed priority of
security interests in the borrowers' copyrights in the
drawings, technical manuals, blueprints, and computer software
used to make modifications to civilian aircraft. The
Bankruptcy Court ruled, on summary judgment, in favor of SVB.
The District Court affirmed. This appeal followed.
Appeals Court. The Appeals Court affirmed. It wrote
that "this is a bankruptcy contest over unregistered
copyrights between a bank that got a security interest in the
copyrights from the owners and perfected it under state law,
and a company that bought the copyrights from the bankruptcy
trustees after the copyright owners went bankrupt."
The Court concluded, "Regarding perfection and priority
of security interests in unregistered copyrights, the
California U.C.C. has not stepped back in deference to federal
law, and federal law has not preempted the U.C.C. Silicon
Valley Bank has a perfected security interest in the debtors'
unregistered copyrights, and Aerocon, standing in the
bankruptcy trustees' shoes, cannot prevail against it."
The Court first noted that the Copyright Act protects original
works of authorship, and provides for registration of
copyrights; however, registration is permissive, not
mandatory, and in fact, most copyrights are not registered.
Moreover, the Act further provides for the transfer of
copyright interests, and for priority between conflicting
transfers, based upon constructive notice. However, one who
obtains a security interest in an unregistered copyright
cannot record with the Copyright Office a transfer that would
give constructive notice because there is no underlying
registration that would provide a title and registration
number. And also, the security holder cannot register the
copyright, because he is not the author or owner of the
copyright. And hence, the holder of a security interest in an
unregistered copyright cannot preserve his priority by filing
anything at the Copyright Office.
The Court wrote that SVB perfected its security interest under
California state law. State law also provides priority to
perfected over non perfected security interests. Hence, if
state law controls, SVB has priority.
On the other hand, Aerocon argued that the Copyright Act's
recordation and priority scheme exclusively controls
perfection and priority of security interests in copyrights,
under either of two arguments: the step back provisions of the
California UCC, or that the Copyright Act preempts the
California UCC on this issue. The Appeals Court rejected both
arguments.
Under this analysis, the Appeals Court rejected several
District Court opinions that have held that security interests
in unregistered copyrights can not be perfected under the UCC,
and that perfection can be obtained only by registering the
copyrights and recording the security interest with the
Copyright Office.
The Court reasoned that "Though Congress must have
contemplated that most copyrights would be unregistered, it
only provided for protection of security interests in
registered copyrights. There is no reason to infer from
Congress’s silence as to unregistered copyrights an intent
to make such copyrights useless as collateral by preempting
state law but not providing any federal priority scheme for
unregistered copyrights. That would amount to a presumption in
favor of federal preemption, but we are required to presume
just the opposite. The only reasonable inference to draw is
that Congress chose not to create a federal scheme for
security interests in unregistered copyrights, but left the
matter to States, which have traditionally governed security
interests." (Footnote omitted.) |
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| House Committee Approves
Federal Agency Protection of Privacy Act |
9/10. The House
Judiciary Committee approved and reported HR 4561,
the Federal Agency Protection of Privacy Act, by a unanimous
voice vote, without amendment.
The bill, which is sponsored by Rep. Bob Barr (R-GA),
would require federal agencies to prepare and make available
for public comment an initial privacy impact analysis when it
proposes new regulations. |
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| TDA Awards e-Learning Grant
to China |
9/10. The U.S. Trade and
Development Agency (TDA) awarded a feasibility study grant
for e-learning to the Chinese Ministry of Foreign Trade and
Economic Cooperation.
The TDA stated that the grant "provides $417,000 to
establish an E-Learning program in China focused on the World
Trade Organization (WTO). The project will use E-learning
technology combined with traditional teaching methods to
facilitate WTO learning via the Internet, enabling government
officials at various levels, entrepreneurs and the general
public to have a comprehensive understanding of the WTO and
its legal instruments." See, State Department release. |
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| About Tech Law Journal |
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Contact: 202-364-8882; E-mail. P.O. Box
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Privacy
Policy
Notices
& Disclaimers
Copyright 1998 - 2002 David Carney, dba Tech Law Journal. All
rights reserved. |
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| Thursday, September 12 |
The House will meet at 10:00 AM for legislative business.
The House is scheduled to consider HR 5193,
the Back to School Tax Relief Act of 2002.
8:00 AM - 5:30 PM. Day one of a two day conference hosted by
the International Intellectual
Property Institute (IIPI) titled "Specialized
Intellectual Property Courts". See, IIPI
release and online
registration form. Location: George Washington University
Law School, Moot Court Room, 2000 H Street, NW.
9:30 AM. The FCC will hold a
meeting. The FCC will consider a Notice of Proposed Rulemaking
(NPRM) concerning its media ownership rules, pursuant
to Section 202(h) of the Telecommunications Act of 1996. It
will also consider a NPRM and Memorandum Opinion and Order
concerning possible revisions to the rules on unsolicited
advertising over the telephone and facsimile machine and the
possible establishment of a national do not call list.
This is CC Docket No. 92-90. Location: FCC, 445 12th Street,
SW, Room TW-C05 (Commission Meeting Room).
10:00 AM. Federal
Reserve Board Chairman Alan
Greenspan will testify to the House Budget Committee.
Location: Room 210, Cannon Building.
10:00 AM. The House
Judiciary Committee's Subcommittee on the Constitution
will hold an oversight hearing titled "Privacy
Concerns Raised by the Collection and Use of Genetic
Information by Employers and Insurers". Audio web
cast. Location: Room 2237, Rayburn Building.
12:30 - 2:00 PM. The American
Society of International Law (ASIL) will host a panel
discussion titled "International Cyberspace:
Convergence or Conflict?". RSVP by 5:00 PM on
September 10 to cborgen@asil.org
or by fax to 202 797-7133, attn: Chris Borgen. Lunch will be
served. Location: ASIL, 2223 Massachusetts Avenue, NW.
2:00 PM. The Senate
Banking Committee will hold a hearing on the nomination of
Wayne Abernathy to be Assistant Secretary of the
Treasury for Financial Institutions. Location: Room 538,
Dirksen Building.
2:30 PM. The Senate
Commerce Committee's Subcommittee on Science, Technology,
and Space Subcommittee will hold a hearing to examine S 2537,
the Dot Kids Implementation and Efficiency Act of 2002, and HR 2417,
the Dot Kids Domain Name Act of 2001. These bills would
facilitate the creation of a new second level Internet domain
within the U.S. country code domain that would provide a safe
online environment for children. The House has already passed
another version -- HR 3833.
Location: Room 253, Russell Building.
Deadline to submit comments to the FCC regarding WorldCom's August 8, 2002,
petition for a declaratory ruling pursuant to 47 C.F.R.§ 1.2,
that requesting carriers are entitled to access ILEC Line
Information Database data at cost based rates when they use
such data to provide interexchange and exchange access
service. This is CC Docket No. 01-338. See, FCC
notice [PDF]. |
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| Friday, September 13 |
The House will meet at 9:00 AM for legislative business. No
votes are expected past 2:00 PM.
9:00 AM - 5:00 PM. Day two of a two day conference hosted by
the International Intellectual
Property Institute titled "Specialized
Intellectual Property Courts". See, IIPI
release and online
registration form. Location: Markey National Courts Bldg.,
717 Madison Place, NW.
10:45 AM. Press conference associated with the International Intellectual
Property Institute's conference titled "Specialized
Intellectual Property Courts". Location: Court Room
203, Markey National Courts Bldg., 717 Madison Place, NW.
10:00 AM. The FCC's Network Reliability and
Interoperability Council (NRIC) will hold a meeting.
Location: FCC, 445 12th Street, SW, Commission Meeting Room.
Deadline to submit comments to the FTC
regarding its proposed consent agreement with MSC Software Corporation.
See, Agreement
Containing Consent Order [22 pages PDF]. See, notice
in Federal Register. |
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| Monday, September 16 |
Yom Kippur.
Deadline to submit comments and notices of intention to
participate to the Copyright
Office in response to its notice
in the Federal Register directing "all claimants to
royalty fees collected in 1999, 2000 and 2001 for the
distribution of digital audio recording devices and media to
submit comments as to whether a controversy exists as to the
distribution of the royalty fees in the 1999, 2000 and 2001
Musical Works Funds."
Deadline to register for the FCC's September
18 auction seminar for Auction No. 46. This is for the
1670-1675 MHz band auction, scheduled for October 30, 2002.
See, notice
with registration form [PDF]. |
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| Tuesday, September 17 |
9:00 AM - 5:00 PM. Day one of a three day meeting of the Computer System Security
and Privacy Advisory Board (CSSPAB). The agenda includes
(1) discussion of a CSSPAB privacy report, (2) discussion of a
CSSPAB baseline standards report, (3) updates on computer
security legislation, (4) an update by the OMB on privacy and
security issues, (5) an agency briefing on compliance with the
Government Paperwork Elimination Act (GPEA), (6) and a
discussion of DMCA issues. Location: General Services
Administration, 7th and D Streets, SW, 5700.
9:00 AM. The Bureau of
Industry and Security's (BIS) Regulations and Procedures
Technical Advisory Committee (RPTAC) will hold a partially
open meeting. The agenda for the open portion of the meeting
includes a presentation of papers or comments by the public,
an update on pending regulations, a discussion of TSR MTOP
limit comments, a discussion of the Unverified List, a review
of SNAP 2002 status, a discussion of AES regulations & SED
recordkeeping requirements, a discussion on implementation of
CCL User Friendliness recommendations, and updates from
working groups. See, notice
in the Federal Register. Location: Room 3884, Department of
Commerce, 14th Street between Constitution and Pennsylvania
Avenues, NW.
9:30 AM. The U.S.
Court of Appeals (DCCir) will hold an en banc hearing in Ruggiero
v. FCC, No. 00-1100. On February 8, a three judge panel
issued its split opinion
holding unconstitutional the ban on issuance of low power FM
radio broadcast licenses to anyone who has previously engaged
in an unlicensed operation. The set of people who have engaged
in unlicensed broadcasting who may seek low power FM licenses
is a very small and insignificant group. However, this case
could have a broader impact. The en banc panel may provide an
analysis of the application of the First Amendment to
broadcast speech that affects a wider range of speakers.
Location: Courtroom 20, 333 Constitution Ave., NW.
12:00 NOON - 4:30 PM. The Cato
Institute will host an event titled "The Supreme
Court: Past and Prologue. A Look at the October 2001 and
October 2002 Terms". Location: 1000 Massachusetts Avenue,
NW. |
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| Wednesday, September 18 |
9:00 AM - 5:00 PM. Day two of a three day meeting of the Computer System Security
and Privacy Advisory Board (CSSPAB). The agenda includes
(1) discussion of a CSSPAB privacy report, (2) discussion of a
CSSPAB baseline standards report, (3) updates on computer
security legislation, (4) an update by the OMB on privacy and
security issues, (5) an agency briefing on compliance with the
Government Paperwork Elimination Act (GPEA), (6) and a
discussion of DMCA issues. Location: GSA, 7th and D Streets,
SW, 5700.
9:00 AM. FCC
Commissioner Kevin Martin
will speak at an Alliance for
Public Technology event. Location: Loew's L'Enfant Plaza
Hotel.
9:30 AM - 1:00 PM. The FCC will hold
an auction seminar for Auction No. 46 applicants. This is for
the 1670-1675 MHz band auction, scheduled for October 30,
2002. See, notice
with registration form [PDF]. Registration starts at 9:30
AM. The seminar begins at 10:00 AM. Location: FCC, 445 12th
Street, SW, Room 8-C245.
10:00 AM - 3:00 PM. The FCC's
Technological Advisory Council will hold a meeting. See, notice
in Federal Register. Location: FCC, 445 12th St., SW., Room
TW-C305.
10:00 AM. The Senate
Judiciary Committee will hold a hearings to examine
pending judicial nominations. Location: Room 226, Dirksen
Building.
12:15 PM. The FCBA's
Transactional Practice Committee will host a brown bag lunch.
The topic will be FBI and CFIUS
issues that arise in telecommunications transactions. The
scheduled speakers are Richard Salgado (FBI) and Gay Sills and
Jack Dempsey (CFIUS). RSVP to wendy@fcba.org.
Location: FCC, 445 12th Street, SW, Room 8-B411.
6:00 - 8:00 PM. The FCBA will
host a CLE seminar titled "The Wake-Up Call --
Telecommunications Policies One September Later". The
scheduled speakers include Marsha
MacBride (FCC Chief of Staff ), Howard Waltzman (Counsel
to House Commerce Committee), Owen Wormser (DOD), Mike
Gallagher (NTIA),
Jeffery Goldthorp (FCC). For more information contact Laura
Phillips at 202 842-8891 or Lauren Van Wazer at 202 418-0030.
RSVP to wendy @fcba.org.
Location: Sidley Austin,
Conference Room 6-E, 1501 K Street NW.
6:00 - 8:00 PM. The FCBA's
Young Lawyers Committee will host an event titled Career
Night.
TIME? The Trade Policy Staff Committee (TPSC) will hold a
hearing on China's compliance with the commitments it made in
connection with its accession to the WTO.
See, USTR's notice
in the Federal Register.
TIME? The FTC has scheduled a
hearing in the matter of its administrative complaint
against Rambus alleging
anti competitive behavior in violation of Section 5 of the
Federal Trade Commission Act (FTCA) in connection with its
participation in a standard setting body for dynamic random
access memory products. See also, FTC release.
Location: FTC.
Day one of a two day Homeland Security Technology Expo
hosted by the Department of
Commerce's Technology Administration and Bureau of
Industry and Security. See, BIS
notice. For more information contact Cheryl Mendonsa at
202 482-8321 or cheryl.mendonsa
@ta.doc.gov. Location: D.C. Armory.
Deadline for the FCC to act on BellSouth's application
to provide in region interLATA services in the states of
Alabama, Kentucky, Mississippi, North Carolina, and South
Carolina. |
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