10/1. The U.S. Court of Appeals (7thCir) issued its opinion [7 pages in PDF] in Chicago v. Comcast, a case regarding the ability of local governments, which have authority to license cable operators, to extract rents from cable companies for providing internet access services. The District Court held that 47 U.S.C. § 542 preempts state and local law, and provides that cable operators do not have to make 5% payments on revenues from cable modem service. The Court of Appeals vacated, but not on its interpretation of the substantive law. Rather, it held that there is no federal question jurisdiction. It vacated the District Court opinion, and instructed the District Court to remand to the state court.

Section 542(b) provides, in part, that "For any twelve-month period, the franchise fees paid by a cable operator with respect to any cable system shall not exceed 5 percent of such cable operator’s gross revenues derived in such period from the operation of the cable system to provide cable services."

The City of Chicago and Comcast entered into a contract that provides that Comcast must pay 5% of their gross revenues from any service, including cable modem service.

Then, on March 14, 2002, the Federal Communications Commission (FCC) adopted a Declaratory Ruling and Notice of Proposed Rulemaking [75 pages in PDF]. The Declaratory Ruling (DR) component of this item states that "we conclude that cable modem service, as it is currently offered, is properly classified as an interstate information service, not as a cable service, and that there is no separate offering of telecommunications service." This is FCC 02-77 in Docket No. 00-185 and Docket No. 02-52.

Also, on October 6, 2003. The U.S. Court of Appeals (9thCir) issued its opinion [39 pages in PDF] in Brand X Internet Services v. FCC, vacating the FCC's declaratory ruling. See, story titled "9th Circuit Vacates FCC Declaratory Ruling That Cable Modem Service is an Information Service Without a Separate Offering of a Telecommunications Service" in TLJ Daily E-Mail Alert No. 754, October 7, 2003

Following the FCC's 2002 declaratory ruling, Comcast stopped making payments to Chicago for revenues based upon cable modem service.

Chicago filed a complaint in Circuit Court of Cook County against Comcast seeking a declaratory judgment, based upon a contract between Chicago and Comcast, and Chicago municipal ordinances. Comcast removed the action to U.S. District Court (NDIll), asserting federal question jurisdiction. Comcast asserts that this action arises under 47 U.S.C. § 542.

The District Court found that it had jurisdiction, and ruled in favor of Comcast. Chicago brought this appeal.

Judge Frank Easterbrook wrote the opinion, in which Judges Manion and Wood joined. He did not construe Section 542(b). Nor did he address the issues discussed in the FCC's declaratory ruling, or the Ninth Circuit's opinion in the Brand X case. He vacated on jurisdictional grounds. This is a

Easterbrook wrote that this contract dispute, which is a matter of state law. He explained that under the well pleaded complaint doctrine, whether a case is one arising under the Constitution or a law or treaty of the United States is to be determined from what appears in the plaintiff’s complaint, and not from defenses that the defendant may raise; Section 542 is a defense to a contract claim.

The case will thus be remanded to the circuit court in Cook County -- to decide national internet and communications law and policy.

This case is City of Chicago v. Comcast Cable Holdings, LLC, U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 03-3815, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 02 C 7517, Judge David Coar presiding.

9/29. The U.S. District Court (SDNY) issued its opinion [122 page PDF scan] in ACLU v. Ashcroft, holding unconstitutional 18 U.S.C. § 2709, which provides that the Federal Bureau of Investigation (FBI) may issue National Security Letters (NSL) to phone companies and internet service providers (ISP) to certain obtain customer records. The Court held that the statute violates the Fourth Amendment because its allows the FBI to issue the order without any judicial involvement or review. The Court also held that it violates the First Amendment free speech clause because it bars the phone company or ISP from disclosing that it has received the NSL. The Department of Justice (DOJ) announced that it will appeal.

In April of this year the American Civil Liberties Union (ACLU) disclosed that it had filed a complaint in the District Court on behalf of itself and an undisclosed ISP. See, heavily redacted complaint [14 page PDF scan]. The just released opinion still does not identify the ISP. Nor does it reveal other details about the facts alleged, and causes of action plead, in the complaint.

The named defendants are Attorney General John Ashcroft, FBI Director Robert Mueller, and FBI Senior Counsel Marion Bowman. See also, story titled "Lawsuit Challenges Constitutionality of Law Allowing FBI to Obtain Records from Electronic Communication Service Providers" in TLJ Daily E-Mail Alert No. 887, April 29, 2004.

18 U.S.C. § 2709 was enacted as part of Title II of the Electronic Communications Privacy Act of 1986 (ECPA).

The statute has been amended several times since 1986. Most recently, the 2001 USA PATRIOT Act amended it to remove the requirement that there be a nexus to a foreign power. It expanded the scope to cover anything "relevant to an authorized investigation to protect against international terrorism or clandestine intelligence activities".

The Court wrote that "Generally speaking, Title II (as amended) allows the Government to obtain stored electronic communications information without the subscriber's permission only through compulsory process, such as a subpoena, warrant, or court order. Section 2709 is a notable exception to these privacy protections because it permits the FBI to request records upon a mere self-certification -- issued to the ISP or telephone company, not to the subscriber or to any court -- that its request complies with the statutory requirements." (Parentheses in original. Footnote omitted.)

§ 2709(a) provides that "A wire or electronic communication service provider shall comply with a request for subscriber information and toll billing records information, or electronic communication transactional records in its custody or possession made by the Director of the Federal Bureau of Investigation under subsection (b) of this section."

§ 2709(c) provides that "No wire or electronic communication service provider, or officer, employee, or agent thereof, shall disclose to any person that the Federal Bureau of Investigation has sought or obtained access to information or records under this section."

§ 2709(b)(2) provides that the FBI may "request the name, address, and length of service of a person or entity if the Director (or his designee) certifies in writing to the wire or electronic communication service provider to which the request is made that the information sought is relevant to an authorized investigation to protect against international terrorism or clandestine intelligence activities, provided that such an investigation of a United States person is not conducted solely upon the basis of activities protected by the first amendment to the Constitution of the United States." (Parentheses in original.)

The Court concluded that "S 2709 violates the Fourth Amendment because, at least as currently applied, it effectively bars or substantially deters any judicial challenge to the propriety of an NSL request. In the Court's view, ready availability of judicial process to pursue such a challenge is necessary to vindicate important rights guaranteed by the Constitution or by statute. On separate grounds, the Court also concludes that the permanent ban on disclosure contained in § 2709(c), which the Court is unable to sever from the remainder of the statute, operates as an unconstitutional prior restraint on speech in violation of the First Amendment."

The Court also enjoined the government "from using S 2709 in this or any other case as a means of gathering information from the sources specified in the statute." However, the Court stayed enforcement of its judgment for 90 days, to enable the DOJ to appeal.

The Department of Justice announced that it will appeal. Mark Corallo, the DOJ's Director of Public Affairs, stated in a release that "The New York district court has struck down as unconstitutional an important act of Congress, the 1986 National Security Letter statute (18 USC 2709). That decision takes away a tool for fighting terrorism that the Congress has authorized. The Department of Justice Department will appeal that decision."

He added that "The Justice Department will continue to defend our ability to protect the American people from our terrorist enemies."

He also stated that "We will also work with the Congress to clarify, improve and, where necessary, enhance our legal tools to fight the terrorists and prevent another attack."

This case is John Doe, American Civil Liberties Union, and American Civil Liberties Union Foundation v. John Ashcroft, Robert Mueller, and Marion Bowman, U.S. District Court for the Southern District of New York, D.C. No. 04-2614, Judge Victor Marrero presiding.

10/1. The Department of Justice (DOJ) announced that it will appeal the decision of the U.S. District Court (NDCal) in U.S. v. Oracle.

On February 26, 2004, the U.S. and several states filed a complaint against Oracle Corporation alleging that its proposed acquisition of PeopleSoft, Inc. would lessen competition substantially in interstate trade and commerce in violation of Section 7 of the Clayton Act, which is codified at 15 U.S.C. § 18. The plaintiffs sought an injunction of the proposed acquisition. See, story titled "Antitrust Division Sues Oracle to Enjoin Its Proposed Acquisition of PeopleSoft" in TLJ Daily E-Mail Alert No. 846, March 1, 2004.

On September 9, 2004, following trial, the District Court issued its Findings of Facts, Conclusions of Law and Order Thereon [164 pages in PDF]. It held that the government failed to meet its burden of showing by a preponderance of the evidence that the proposed merger is likely substantially to lessen competition in a relevant product and geographic market. See, story titled "DOJ Loses Oracle Case" in TLJ Daily E-Mail Alert No. 974, September 10, 2004.

Hewitt Pate (at right), the Assistant Attorney General in charge of the DOJ's Antitrust Division stated in a release that "We have decided not to appeal the district court's decision. The evidence, including the testimony of numerous customers, strongly supported our case against this proposed transaction."

Pate continued that "While we disagree with the district court's disappointing decision, we respect the role of the courts in the United States merger review process. Similarly, while we disagree with some of the legal observations in the district court's opinion, the ultimate outcome rested on detailed factual findings that would appropriately receive great deference in the appellate process. I commend the efforts of the fine Antitrust Division lawyers and economists who worked so hard to protect competition in this case, as well as the efforts of the 10 state attorneys general who joined us in this effort."

This case is United States of America, State of Texas, et al. v. Oracle Corporation, U.S. Court of Appeals for the Northern District of California, D.C. No. C 04 0807, Judge Vaughn Walker presiding.

10/1. Amit Yoran, the Director of the Department of Homeland Security's (DHS) National Cyber Security Division, resigned.

Yoran (at right) had held the position for just over one year. See, story titled "Amit Yoran Named Head of Cyber Security Division" in TLJ Daily E-Mail Alert No. 740, September 16, 2003.

Rep. Zoe Lofgren (D-CA) stated in a release that "I am very disappointed to learn of the departure of Amit Yoran from the Department of Homeland Security. Mr. Yoran brought years of solid Silicon Valley experience to the DHS. This is yet another setback in the effort to protect our nation's cyber infrastructure. Last year, the Bush Administration eliminated the position of Senior Advisor to the President on Cybersecurity, and demoted the job to a mid-level position within the Department of Homeland Security. Now, the Administration finds itself without a person to lead the National Cyber Security Division at the DHS."

She added that "This development only reinforces the need to elevate the position of Director of the NCSD to an assistant secretary within the DHS. Congressman Thornberry and I introduced the Cybersecurity Enhancement Act (HR 5068) to do just that." See, HR 5068 and story titled "Representatives Introduce Bill to Increase Authority of DHS's Top Cyber Security Officer" in TLJ Daily E-Mail Alert No. 977, September 15, 2004.

Rep. Lofgren alleged that "The Bush Administration is failing to provide the leadership necessary to secure cyberspace. Their cybersecurity efforts are in complete disarray, much like the rest of the DHS.  The record is abysmal. We cannot afford to sit back and do nothing."

Harris Miller, President of the Information Technology Association of America (ITAA), stated that Yoran earned the "respect and enthusiasm of many in the private sector, who were seeing the prospect for substantial progress in a number of cyber security areas." Miller added that the DHS should elevate the cyber security position and move quickly to appoint a successor.

10/1. Senate Judiciary Committee staff, Copyright Office staff, and representatives of supporters and opponents of S 2560, the "Inducing Infringement of Copyrights Act of 2004", met on Friday, October 1 regarding revisions to the bill. Friday's session lasted until about 8:15 PM. Negotiations are scheduled to resume on Monday afternoon, October 4. The Committee has scheduled a business meeting for Tuesday, October 5, at which the bill could be considered.

9/30. The House Judiciary Committee amended and approved HR 3143, the "International Consumer Protection Act of 2003", a bill pertained to Federal Trade Commission (FTC) authority with respect to cross border fraud. HR 3143, which is sponsored by Rep. Cliff Stearns (R-FL) and Rep. Janice Schakowsky (D-IL) has already been approved by House Commerce Committee; it was also jointly and sequentially referred to the Judiciary, Financial Services, and International Relations Committees, for a period expiring on October 1, 2004. On October 1, these Committees were granted an extension for further consideration ending not later than November 19, 2004. The House Judiciary Committee on September 30 approved an amendment in the nature of a substitute offered by Rep. James Sensenbrenner (R-WI), the Chairman of the Committee, that consists of the substantive language from HR 4996, which is Rep. Stearns' and Rep. Schakowsky's revised version of the bill.

9/30. The Senate Judiciary Committee held over consideration of HR 2391, the "Cooperative Research and Technology Enhancement (CREATE) Act of 2004", at its September 30, 2004 business meeting. The House and Senate have both passed their own versions of this bill. The two versions are identical, so the only dispute is over who ultimately claims sponsorship.

9/30. The Senate Judiciary Committee amended and approved S 1635 the "L-1 Visa (Intracompany Transferee) Reform Act of 2003", at its September 30, 2004 business meeting.

9/30. The Senate Judiciary Committee approved S 2373 at its September 30, 2004 business meeting. This bill modifies the prohibition on recognition by U.S. courts of certain rights relating to certain marks, trade names, or commercial names, in the case of confiscations by the communist government of Cuba.

9/30. Sen. Joe Biden (D-DE) introduced S 2874, a bill to authorize appropriations for international broadcasting operations and capital improvements, in order to expand U.S. broadcasting to Arab and Muslim audiences. The bill was referred to the Senate Foreign Relations Committee.

The House will meet at 12:30 PM for morning hour, and at 2:00 PM for legislative business. It will consider numerous non-technology related items under suspension of the rules. Votes will be postponed until 6:30 PM.  See, Republican Whip Notice.

The Senate will meet at 10:00 AM for morning business. It will then resume consideration of S 2845, the "National Intelligence Reform Act of 2004".

The Supreme Court will hear the first oral arguments of its October 2004 Term.

Day one of a two day event hosted by the Department of Commerce's Bureau of Industry and Security titled "17th Annual Update Conference on Export Controls and Policy". Location: Washington DC.

10:00 AM. Federal Communications Commission (FCC) Chairman Michael Powell will hold a press conference on "transition to digital television (DTV)". This press conference will be followed by two panel discussions. The first is titled "High Definition Content, Now and in the Future". The second is titled "How Consumers Can Take Advantage of the Digital Content". The event will be webcast. For more information contact Rebecca Fisher at 202 418-2359. Location: FCC, Commission Meeting Room, 445 12th St. SW.

3:00 - 4:00 PM. The Federal Communications Commission's (FCC) Advisory Committee on Diversity for Communications in the Digital Age will meet by teleconference. See, FCC notice [PDF], and notice in the Federal Register, September 24, 2004, Vol. 69, No. 185, at Pages 57293 - 57294.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to it Public Notice [PDF] requesting interested parties to provide comments on filings by AT&T and TracFone Wireless regarding eligible telecommunications carrier (ETC) designations and the Lifeline and Link-Up universal service support mechanism. This is CC Docket No. 96-45 and WC Docket No. 03-109.

The House will meet at 9:00 AM for morning hour, and at 10:00 AM for legislative business. The agenda includes consideration, under suspension of the rules, of HR 2929, the "Safeguard Against Privacy Invasions (SPY) Act". The is the House Commerce Committee's spyware bill. The agenda also includes consideration, subject to a rule, of S 878, a bill to create numerous additional federal judgeships. See, Republican Whip Notice.

The Supreme Court will hear oral argument in KP Permanent Makeup v. Lasting Impressions, No. 03-409. The U.S. Court of Appeals (9thCir) issued its opinion [20 pages in PDF] on April 30, 2003. The Supreme Court granted certiorari on January 9, 2004. See, story titled "Supreme Court Grants Cert in Trademark Case" in TLJ Daily E-Mail Alert No. 813, January 12, 2004. This case is No. 03-409.

8:30 AM - 5:30 PM. The President's Council of Advisors on Science and Technology (PCAST) will host a meeting titled "Enhancing International Mobility for European and American Researchers". At 9:00 - 10:30 AM there will be a panel titled "Enhancing International Mobility for European and American Researchers". At 10:45 AM -12:15 PM there will be a panel titled "Funding Collaborative Research". At 1:30 - 3:00 PM there will be a panel titled "Negotiating Differences in Legal and Regulatory Approaches". At 3:15 - 4:45 PM there will be a panel titled "The Future of Trans-Atlantic Science Collaborations -- Success Stories and Trends". See, agenda and notice in the Federal Register, September 23, 2004, Vol. 69, No. 184, Pages 57029 - 57030. Location: Horizon Ballroom, Ronald Reagan Building and International Trade Center, 1300 Pennsylvania Ave., NW.

9:00 AM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property (CIIP) will hold a oversight hearing titled "Peer-to-Peer Piracy (P2P) on University Campuses: An Update". The hearing will be webcast by the Committee. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. The agenda may include consideration of S 2560, "Inducing Infringement of Copyrights Act of 2004". See, notice. Press contact: Margarita Tapia (Hatch) at 202 224-5225 or David Carle (Leahy) at 202 224-4242. Location: Room 226, Dirksen Building.

9:30 AM. The Senate Commerce Committee will hold a hearing to examine issues relating to the Federal Communications Commission's (FCC) e-rate subsidy program. See, notice. The hearing will be webcast by the Committee. Press contact: David Wonnenberg at 202 224-2670 or david_wonnenberg @commerce.senate.gov. Location: Room 253, Russell Building.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in NCR v. Palm. This is No. 04-1093. Location: Courtroom 203, 717 Madison Place, NW.

10:00 AM - 12:00 NOON. The World Radiocommunication Conference (WRC-07) Advisory Committee's Informal Working Group 5: Regulatory Issues will meet. See, FCC notice [PDF]. Location: FCC, Room 6-B516 (6th Floor South Conference Room).

11:45 AM - 1:45 PM. The New America Foundation (NAF) will host a panel discussion titled "The Trade Adjustment Assistance Reform Act: Two Years Later". The speakers will be Sen. Max Baucus (D-MT), Sen. Norm Coleman (R-MN), Rep. Phil English (R-PA), Howard Rosen (Executive Director of the Trade Adjustment Assistance Coalition), and Greg Mastel (TAAC). RSVP to Jennifer Buntman at 202 986-4901 or to buntman@newamerica.net. Lunch will be served. See, notice. Location: Room 902, Hart Senate Office Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Engineering & Technical Practice Committee will host a brown bag lunch. The topic will be "activities for the coming year". RSVP to Deborah Wiggins at dwiggins@g2w2.com. Location: Goldberg Godles Wiener & Wright, 1229 19th St., NW.

Day two of a two day event hosted by the Department of Commerce's Bureau of Industry and Security titled "17th Annual Update Conference on Export Controls and Policy". Location: Washington DC.

The House will meet at 10:00 AM. The agenda for Wednesday and the remainder of the week includes consideration, under suspension of the rules, of HR 4661, the "Internet Spyware (I-SPY) Prevention Act of 2004", the House Judiciary Committee's spyware bill. See, Republican Whip Notice.

8:30 AM - 12:15 PM. The U.S. Chamber of Commerce will host a conference, and release a report, both of which are titled "Sending the Right Signals: Promoting Competition Through Telecommunications". The speakers will include Thomas. Donohue (P/CEO of the U.S. Chamber), John Kneuer (National Telecommunications and Information Administration), Lisa Sutherland (Sen. Ted Stevens' Appropriations Committee staff), Harry Alford (National Black Chamber of Commerce), Tom Hazlett (Manhattan Institute), William Smith (CTO of Bell South), Joseph Waz (Comcast), and Hank Hamilton (AIG). See, notice and agenda [PDF]. Press registration: press@uschamber.com or 202-463-5682. Prices vary. Location: U.S. Chamber of Commerce, 1615 K Street, NW.

9:00 AM - 4:00 PM. The Federal Communications Commission (FCC) will host a one day symposium titled "Unleashing the Educational Power of Broadband". See, notice and agenda [PDF]. The event will be webcast. Location: FCC, 445 12th Street, SW.

RESCHEDULED FOR OCTOBER 14. 12:15 PM. The Federal Communications Bar Association's (FCBA) International Telecommunications Committee will host a brown bag lunch titled is "Planning Meeting to Discuss Proposed Programs and Obtain Suggestions for the Upcoming Year". RSVP to Evelyn Zamora at zamorae@coudert.com. Location: Coudert Brothers, 1627 I Street, NW, 11th Floor.

Day one of a two day conference hosted by the National Institute of Standards and Technology (NIST), Department of Homeland Security (DHS) and the National Cyber Security Partnership's (NCSP) Coordinating Committee titled "Common Criteria Users' Forum". The event is free for government employees. The price to attend is $100 for non-government employees. See, notice [PDF]. See also, the NCSP's April 2004 report [104 pages in PDF] containing recommendations regarding common criteria. Location: L'Enfant Plaza.

6:00 - 8:00 PM. The DC Bar Association's Intellectual Property Law Section and Litigation Section will host a continuing legal education (CLE) program titled "What You Need to Know About Copyright Damages". The speaker will be Terence Ross (Gibson Dunn & Crutcher). See, notice. Prices vary from $80 to $115. For more information, call 202 626-3488. Location: D.C. Bar Conference Center, B-1 Level, 1250 H Street, NW.

The House will meet at 10:00 AM. See, Republican Whip Notice.

8:45 AM - 5:00 PM. The Cato Institute will host a conference titled "Trade and the Future of American Workers". At 9:30 - 10:15 AM, Roger Ferguson (Vice Chairman of the Federal Reserve Board) will give the keynote address. At 1:15 - 2:00 PM, Sen. Chuck Hagel (R-NE) will speak. At 3:15 PM, Rep. Cal Dooley (D-CA) will speak. See, notice. Location: Cato, 1000 Massachusetts Avenue, NW.

9:30 AM - 12:00 NOON. The World Radiocommunication Conference (WRC-07) Advisory Committee's Informal Working Group 4: Broadcasting and Amateur Issues will meet. See, FCC notice [PDF]. Location: Shaw Pittman, 2300 N St., NW.

9:30 AM - 4:30 PM. The Federal Communications Commission's (FCC) Office of Engineering and Technology (OET) will host an event titled "Radio Frequency Identification Workshop". See, notice and agenda [PDF]. The scheduled speakers include Chairman Michael Powell, Commissioners Kathleen Abernathy, Ed Thomas (Chief of the OET), and Julius Knapp (Deputy Chief of the OET). For more information, contact Bill Lane at william.lane@fcc.gov or voice: 202-418-0676. The event will be webcast. Location: FCC, Commission Meeting Room (TW-C305), at 445 12th Street, SW.

The National Institute of Standards and Technology's (NIST) Computer Security Division will host a workshop titled "Personal Identity Verification of Federal Employees/Contractors ". See, NIST notice, and notice in the Federal Register, September 15, 2004, Vol. 69, No. 178, at Page 55586. Location: Hilton Hotel, Gaithersburg, MD.

Day two of a two day conference hosted by the National Institute of Standards and Technology (NIST), Department of Homeland Security (DHS) and the National Cyber Security Partnership's (NCSP) Coordinating Committee titled "Common Criteria Users' Forum". The event is free for government employees. The price to attend is $100 for non-government employees. See, notice [PDF]. Location: L'Enfant Plaza.

The House may meet at 9:00 AM. See, Republican Whip Notice.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in PC Connector v. SmartDisk. This is No. 04-1180. Location: Courtroom 203, 717 Madison Place, NW.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding its proposal to eliminate paper filings and require applicants to file electronically filings related to international telecommunications services. This NPRM is FCC 04-133 in IB Docket No.04-226. See, notice in the Federal Register, August 9, 2004, Vol. 69, No. 152, at Pages 48188 - 48192.

Deadline to submit comments to the Department of Homeland Security's (DHS) Transportation Security Administration (TSA) regarding its notice of proposed rulemaking (NPRM) in which its proposes to exempt the Registered Traveler Operations Files from several provisions of the Privacy Act. See, notice in the Federal Register, September 8, 2004, Vol. 69, No. 173, at Pages 54256 - 54258.

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