Background. 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 proceeded 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. This is Supreme Court Nos. 01-653 and 01-657.

Statute. Section 525(a) provides, in part, that "a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act, or another person with whom such bankrupt or debtor has been associated, solely because such bankrupt or debtor is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of the case under this title, or during the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act."

Holding. Justice Antonin Scalia wrote the opinion of the Court. It was an 8-1 decision. Justice Stevens joined in part, and Justice Breyer dissented. While the whole slip opinion is 34 pages in PDF, most of this is devoted to the facts, dissent, and response to the dissent. The portion of Scalia's opinion that is devoted to holding that the FCC violated Section 525 is short and simple.

He wrote that "In these cases, we decide whether §525 of the Bankruptcy Code, 11 U.S.C. § 525, prohibits the Federal Communications Commission (FCC or Commission) from revoking licenses held by a debtor in bankruptcy upon the debtor’s failure to make timely payments owed to the Commission for purchase of the licenses."

"The Administrative Procedure Act requires federal courts to set aside federal agency action that is ``not in accordance with law,´´ 5 U. S. C. § 706(2)(A) -- which means, of course, any law, and not merely those laws that the agency itself is charged with administering."

Justice Scalia then recited the relevant words of Section 525: "[A] governmental unit may not ... revoke ... a license ... to ... a person that is ... a debtor under this title ... solely because such ... debtor ... has not paid a debt that is dischargeable in the case under this title ..."

He continued that "No one disputes that the Commission is a ``governmental unit´´ that has ``revoke[d]´´ a ``license,´´ nor that NextWave is a ``debtor´´ under the Bankruptcy Act. Petitioners argue, however, that the FCC did not revoke respondent’s licenses ``solely because´´ of nonpayment, and that, in any event, NextWave’s obligations are not ``dischargeable´´ ``debt[s]´´ within the meaning of the Bankruptcy Code. They also argue that a contrary interpretation would unnecessarily bring §525 into conflict with the Communications Act. We find none of these contentions persuasive ..."

Justice Scalia then concluded, "There being no inherent conflict between §525 and the Communications Act, ``we can plainly regard each statute as effective.´´ J. E. M., supra, at 144. And since §525 circumscribes the Commission's permissible action, the revocation of NextWave's licenses is not in accordance with law."

Reaction. FCC Chairman Michael Powell stated in a release [MS Word] that "The Supreme Court's decision brings much needed certainty to an unsettled area of the law. We are in the process of examining all of the ramifications of the Court's decision. The Commission will faithfully implement the Court's mandate and looks forward to facilitating the provision of service in these bands to the American people as soon as practicable."

Tom Wheeler, P/CEO of the Cellular Telecommunications & Internet Association (CTIA), stated in a release that "Finally, this Gordian legal knot has been cut. This valuable spectrum, tied up in the courts and thus left fallow for far too long, can now be put to use delivering wireless service to America's consumers."

The two companies entered into an agreement to allocate markets. NT agreed to shut down a newspaper in Los Angeles, and in return, Village Voice agreed to shut down a newspaper in Cleveland. The complaint alleges that "The agreements contained essentially identical ``Non-Competition´´ clauses in which each Defendant agreed not to publish an alternative newsweekly in the other Defendant's market for at least ten years. Each Defendant also agreed not to solicit or attempt to induce advertisers to advertise in a competing publication over the next decade."

The parties also agreed to use the web sites of the closed publications to redirect Internet traffic to the web sites of the former competitors. The complaint alleges that "The written agreements further required each Defendant to redirect traffic on its closed newsweekly's website to the other Defendant's website for one year, and to state prominently on its website that its alternative newsweekly was no longer in circulation."

Hewitt Pate, the Acting Assistant Attorney General in charge of the ATR, stated in a release that "Rather than letting the marketplace decide the winner, these companies chose to corrupt the competitive process by swapping markets, thereby guaranteeing each other a monopoly and denying consumers in Los Angeles and Cleveland the continued benefits of competition ... The Sherman Act clearly prohibits these types of allocation schemes between competitors."

The DOJ and the publishers also agreed to a proposed consent decree, which, if approved by the Court, would settle the lawsuit. See, Hold Separate Stipulation and Order and proposed Final Judgment.

The next step is for the DOJ to file a Competitive Impact Statement (CIS) with the Court. Then, the DOJ will publish this CIS and proposed Final Judgment in the Federal Register, and elsewhere. The public then has sixty days to submit comments to the DOJ, after which time, the DOJ files with the Court and publishes in the Federal Register the comments and its responses. Then, the DOJ may ask the Court to enter final judgment. See, the procedural requirements of 15 U.S.C. § 16. See also, the United States' Explanation of Consent Decree Proceedures.

The states of California and Ohio also filed, and simultaneously settled, state antitrust actions.

The federal case has been assigned to Judge Dan Polster.

Hewitt Pate, the Acting Assistant Attorney General in charge of the ATR stated in a release that "The available evidence suggests that generally, Verizon has succeeded in opening its local telecommunications markets in Maryland, Washington, D.C., and West Virginia to competition ... In particular, competitors have made progress in penetrating the business markets in those three jurisdictions. However, questions remain about Verizon's pricing and directory listings processes that merit close review by the FCC."

He stated that "we will continue our efforts to encourage freedom through trade. This year, the Finance Committee is likely to take up legislation to implement free trade agreements with Chile and Singapore. We will continue our strong oversight over trade negotiations to make sure that new negotiations are conducted in the way Congress intended when we passed Trade Promotion Authority last year. And we will work to make sure that we practice what we preach -- that we too follow the golden rule -- that we do unto other nations as we would have them do unto us."

He also stated that "we may have to make changes to our laws when trade decisions go against us, including bringing our tax system and other laws into compliance with WTO rules. We also hope to take care of some unfinished business from the last Congress, such as the miscellaneous trade bill and confirmation of some International Trade Commission nominees."

He also discussed the NAFTA and trade in conflict diamonds.

This NPRM states that "In the Commission's DTV proceeding (MM Docket No. 87-268), we stated our intention to hold periodic reviews of the progress of the digital conversion and to make any adjustments necessary to our rules and policies to ``ensure that the introduction of digital television and the recovery of spectrum at the end of the transition fully serves the public interest.´´ In our first DTV periodic review, begun in March 2000, we addressed a number of issues important to the transition. In this second periodic review, we revisit, as we indicated we would, several issues addressed in the first periodic review, and also seek comment on a number of additional issues that we consider essential to resolve in order to ensure continued progress on the digital transition."

This NPRM addresses transition progress in specific areas, channel elections, replication and maximization for in-core channels, and interference protection of analog and digital television service in TV channels 51-69. It also addresses pending DTV construction permit applications, noncommercial educational television stations, simulcasting, and other issues.

Comments are due by April 14, 2003. Reply comments are due by May 14, 2003. This is MB Docket No. 03-15, RM 9832, and MM Docket Nos. 99-360, 00-167, and 00-168. See also, FCC release.

1/27. Shelley Parratt was named to the new position of second Deputy Director of the Securities and Exchange Commission's (SEC) Division of Corporation Finance. She will be responsible for disclosure operations. See, SEC release.

1/27. Paula Dubberly was named Associate Director (Legal) of the Securities and Exchange Commission's (SEC) Division of Corporation Finance. She will oversee the Offices of Chief Counsel and Rulemaking, and the Division's Enforcement liaison program. See, SEC release.

1/27. The Supreme Court denied the motion of appellees for divided argument in USA v. American Library Association, No. 02-361. See, Order List [8 pages in PDF] at page 1.

1/27. The Supreme Court denied certiorari in Arrow Communication Labs v. Eagle Comtronics, No. 02-800, a patent case involving the doctrine of equivalents. See, opinion of the U.S. Court of Appeals (FedCir).

1/27. Broadcom filed a complaint in the U.S. District Court (NDCal) against Microtune alleging patent infringement. Broadcom alleges that tuners, power amplifiers and Bluetooth products made by Microtune infringe its U.S. Patent No. 6,445,039B1, titled "System And Method For ESD Protection", U.S. Patent Nos. 5,682,379 titled "Wireless Personal Local Area Network" and U.S. Patent No. 6,359,872 titled "Wireless Personal Local Area Network." Last summer Broadcom filed a complaint in U.S. District Court (EDTex) against Microtune alleging infringement of its U.S. Patent No. 6,377,315 titled “System And Method For Providing A Low Power Receiver Design.” See, Broadcom release.

1/27. The National Association of State Utility Consumer Advocates (NASUCA) released a report pertaining to the Federal Communications Commission's (FCC) review of rules regarding unbundled network elements (UNEs). This report states that "Many of the popular residential service plans that new local service competitors have introduced, such as those with unlimited local and long distance calling, are now threatened by a proceeding currently before the FCC that would deny competitive carriers the right to access the full functionality of the incumbent phone company’s local network. Competitive carriers rely upon this access as the only economically feasible means of providing competitive services while building enough market share to justify investing in their own facilities. Without the “UNE-P” serving arrangement, entrants' share of the residential local service market could drop by as much as 77% in some states, effectively killing any nascent local residential competition that presently exists, harming competition in the long distance market, and paving the way for the eventual remonopolization of the local and long distance residential telephone business by the incumbent phone companies."

1/27. The House returned from its two week adjournment.

He specializes is industrial organization, including telecommunications policy, the theory of tying and bundling, and vertical relationships. Before going to the University of Texas, he was head of the Economics Research Group at Bell Communications Research. And before that, he was a researcher at Bell Laboratories. See, DOJ release.

PM KeyPoint. Sibley is also a Principal of PM KeyPoint LLC, a firm that provides economic research and consulting services, specializing in antitrust, finance, intellectual property, and regulation. His PM KeyPoint biography states that "During the last twenty years, Professor Sibley has carried out extensive research in the areas of regulation, industrial organization, and microeconomic theory. He is co-author of the textbook The Theory of Public Utility Pricing, now in its fourth printing. He currently serves as Associate Editor of the Journal of Regulatory Economics. He has testified on a variety of antitrust and regulatory matters. He served as a consultant to the U.S. Department of Justice in the Microsoft antitrust case and to the Federal Trade Commission in the proposed merger of Barnes & Noble and Ingram Book Company."

His PM KeyPoint bio further states that he works with the computer hardware, software, and telecommunications industries.

The corporate clients of PM KeyPoint have included Airtouch Communications, Ameritech, AT&T, Atmel, Bell Atlantic, Bell Canada, BellSouth, Dell Computer, Digital Equipment, Electronic Data Systems, Fujitsu, GTE Service, Hewlett Packard, Intergraph, Network Associates, Octel Communications, Pacific Bell, Pacific Telesis Group, Packard Bell Electronics, Qualcomm, RSA Data Security, Seiko Epson, Sharper Image, Silvaco Data Systems, Southwestern Bell, Storage Technology, and Telecom Italia. It list of law firm clients reads like a who's who of large law firms that represent telecom and technology companies in antitrust matters. See, client list.

Selected Writing of Sibley. On May 14, 2002, he participated in a panel on titled "Antitrust Analysis of Specific Intellectual Property Licensing Practices: Bundling, Grantbacks and Temporal Extensions" at the Federal Trade Commission and Department of Justice joint hearing on antitrust and intellectual property law. See, prepared text [PDF].

He also submitted testimony to the U.S. District Court (DC) in the Microsoft case, both in 1998 and 2002. See, Declaration dated February 27, 2002, submitted in the Tunney Act phase of US v. Microsoft.

Sibley's book, The Theory of Public Utility Pricing, currently has an Amazon sales rank of 748,709.

Day two of a two day conference titled "First International Conference on the Economic and Social Implications of Information Technology". The scheduled speakers include Secretary of Commerce Don Evans, John Marburger (President’s Science Advisor), Floyd Kvamme (Co-Chairman of the President’s Council of Advisors on Science and Technology, or PCAST), Sam Bodman (Deputy Secretary of Commerce), Nancy Victory (NTIA Directory), Phil Bond (Under Secretary for Technology), and Bruce Mehlman (Assistant Secretary for Technology Policy). See, notice and schedule. The price to attend is $100, and $60 for government, academic, and nonprofit personnel. Location: Main Auditorium, Department of Commerce, 14th St. and Constitution Ave.

Day two of three day COMNET Conference & Expo. See, conference web site. Location: Washington Convention Center.

9:30 AM. The Senate Judiciary Committee will hold a hearing on pending judicial nominations. See, notice [PDF]. Location: Room 226, Dirksen Building.

TIME AND ROOM CHANGE. 9:30 AM. The Senate Finance Committee will hold a hearing on the nomination of John Snow to be Secretary of the Treasury. Location: Room 216, Hart Building.

10:00 AM. Region 20 (District of Columbia, Maryland, and Northern Virginia) Public Safety Planning Committees (NPSPAC) on 800 MHz  and 700 MHz will meet. Location: Potomac Community Public Library, Woodbridge, VA.

1:15 - 2:15 PM. Panel discussion titled "The Low Down on High-Tech Communications Policy and Regulation" at the COMNET Conference & Expo. The panelists will be Richard Wiley (Wiley Rein & Fielding), Kevin Kayes (Democratic Staff Director, Senate Commerce Committee), Michael Gallagher (Deputy Director of the NTIA), James Ramsay (General Counsel of NARUC), and Bryan Tramont (Senior Legal Advisor to FCC Chairman Michael Powell). See, conference web site. Location: Washington Convention Center.

President Bush will deliver the annual State of the Union Address.

12:15 PM. The FCBA's Online Communications Committee will host a brown bag lunch. The topic will be "Digital Rights Management & Development". For more information, contact Aileen Pisciotta at apisciotta@kelleydrye.com. RSVP to bviera@kelleydrye.com. Location: Cole, Raywid & Braverman, 1919 Pennsylvania Ave., NW, Suite 200.

1:00 PM. The House Commerce Committee will meet. The agenda will include adoption of the rules, subcommittee jurisdictions and ratios, and the appointment of subcommittee Chairmen, Vice Chairmen and members. The agenda also includes the mark up of nine bills. The sixth item on the mark up agenda is "HR ___, a bill to authorize the Federal Trade Commission to collect fees to fund the Do-Not-Call registry". Location: Room 2123, Rayburn Building.

4:00 PM. The Cato Institute will host a book forum on Rethinking the Network Economy: The True Forces that Drive the Digital Marketplace, by Stan Liebowitz. John Lott (American Enterprise Institute) and Tom Lenard (Progress and Freedom Foundation) will comment. Webcast. A reception will follow. See, Cato notice. Location: Cato, 1000 Massachusetts Ave., NW.

Day three of three day COMNET Conference & Expo. See, conference web site. Location: Washington Convention Center.

Deadline to submit comments to the Federal Trade Commission (FTC) regarding the consent agreement that it entered into with Quicken Loans Inc. On December 30, 2002, the FTC filed an administrative Complaint [8 pages in PDF] against Quicken Loans, an online lender, alleging that it violated the Fair Credit Reporting Act (FCRA). The FTC and Quicken Loans also settled the matter. See, Agreement Containing Consent Order [7 pages in PDF]. See also, story titled "FTC Charges Quicken Loans with Violation of FCRA" in TLJ Daily E-Mail Alert No. 575, January 3, 2003. See, notice in the Federal Register, January 21, 2003, Vol. 68, No.  13, at Pages 2775-2776.

9:30 AM. The Senate Judiciary Committee will hold a business meeting to consider pending calendar business. See, notice. Location: Room 226, Dirksen Building.

9:30 AM. The Senate Armed Services Committee will hold a hearing to examine the nominations of Paul McHale to be an Assistant Secretary of Defense for Homeland Security, and Christopher Henry to be Deputy Under Secretary of Defense for Policy. Location: Room 216, Hart Building.

10:00 AM. David Dorman, CEO of AT&T, will speak on the future of the telecommunications industry. Location: National Press Club, Zenger Room, 529 14th St. NW, 13th Floor.

4:00 PM. The Cato Institute will host an event titled "Who Are the Real Free Traders in Congress?" to release a study of voting records on trade issues. The speakers will be Rep. Tom Petri (R-WI), Sen. Sam Brownback (R-KS), and Dan Griswold (Cato). See, notice and registration page. Location: Cato, 1000 Massachusetts Ave., NW.

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) on whether it should change its rules restricting telemarketing calls and facsimile advertisements. This is CG Docket No. 02-278. See, original notice in the Federal Register, earlier notice of extension [PDF], and further notice in Federal Register of extension.

Deadline to submit applications to the Federal Communications Commission (FCC) for membership on the FCC's Consumer Advisory Committee. For more information, contact Scott Marshall at 202 418-2809 smarshal@fcc.gov.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Notice of Inquiry (NOI) in the proceeding titled "In the matter of Facilitating the Provision of Spectrum Based Services to Rural Areas and Promoting Opportunities for Rural Telephone Companies To Provide Spectrum Based Services". This is WT Docket No. 02-381. For more information, contact Robert Krinsky at 202 418-0660. See also, notice in the Federal Register, January 7, 2003, Vol. 68, No. 4, at Pages 723 - 730.

EXTENDED TO FEBRUARY 18. Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking, (FNPRM), released last month, regarding whether providers of various services and devices not currently within the scope of the FCC's 911 rules should be required to provide access to emergency services. This is CC Docket No. 94-102 and IB Docket No. 99-67. See, notice in the Federal Register, January 23, 2003, Vol. 68, No. 15, at Pages 3214 - 3220. See also, notice of extension.

Deadline to submit comments to the Copyright Office (CO) in response to its notice of proposed rulemaking (NPRM) regarding the form, content, and manner of service of notices of termination under Section 203 of the Copyright Act. 17 U.S.C. § 203 pertains to the termination of transfers and licenses granted by the author. See, notice in the Federal Register, December 20, 2002 Vol. 67, No. 245, at Pages 77951 - 77955. For more information, contact David Carson, CO General Counsel, at 202 707-8380.

Deadline to submit comments to the Federal Trade Commission (FTC) regarding MSC.Software's December 30, 2002, petition [8 page PDF scan] for approval of its proposed divestiture of Nastran software to EDS. The petition is titled "Petition of MSC.Software Corporation for Approval of Proposed Divestiture". It was filed in the FTC's administrative proceeding titled "In the Matter of MSC.Software Corporation". This is FTC Docket No. 9299. In August 2002, the FTC and MSC also entered into an Agreement Containing Consent Order [22 pages PDF] which provides that MSC must divest at least one copy of its current advanced Nastran software, including the source code. The divestiture will be through royalty free, perpetual, non-exclusive licenses to one or two acquirers who must be approved by the FTC. For more information, contact Daniel Ducore of the FTC's Bureau of Competition at 202 326-2526.

Tech Law Journal is instituting several new practices and procedures with the New Year. All of these changes have one central purpose -- protecting the rights of the author, David Carney.

The Tech Law Journal web site and the Tech Law Journal Daily E-Mail Alert (TLJ Alert) are both authored and published by David Carney. This is a business. The sole source of revenue for this business is subscription payments for the TLJ Alert. Yet, it is currently being widely infringed. This is undermining the financial viability of the business.

See, Letter from the Publisher, which summarizes the new practices and procedures.

See, Subscription Information page for price schedule, methods of payment, and related matters.

See, Memorandum regarding "E-Mail Monitoring".

See, Memorandum regarding "Disclosure of Information to Third Parties".

See, Memorandum to law students explaining why free subscriptions for law students will end after the January 17 issue.

See, Memorandum regarding "Termination of state officials' subscriptions" explaining why free subscriptions for state government officials will end after the January 17 issue.

See, Subscription Form and Contract (for firms, companies, groups, and other entities), or the shorter Subscription Form and Contract (for persons subscribing individually). These contracts are for new paying subscribers, and paying subscribers renewing their subscriptions. Persons receiving free subscriptions (journalists and government officials) should not sign a contract. Paying subscribers whose subscription term has not expired should not sign a contract, until their existing subscription term expires and they resubscribe.

And finally, see revised Privacy Policy.