12/3. The Supreme Court issued an order [1 page in PDF] in which it granted petitions for writ of certiorari in NCTA v. Brand X Internet Services, No. 04-277, and FCC v. Brand X Internet Services, No. 04-281. The Court also consolidated the two cases. This decision to hear the case is a victory for Federal Communications Commission (FCC) Chairman Michael Powell, and the majority on the FCC.

Powell (at right) stated in a release [PDF] that "High-speed Internet connections are not telephones, and I'm glad the Supreme Court has agreed to review the 9th Circuit’s ruling that they are. The 9th Circuit's decision would have grave consequences for the future and availability of high-speed Internet connections in this country. As the Commission is uniquely charged with the task of promoting the deployment of such advanced services to the public, we look forward to our opportunity to present our case before the high court."

Treating broadband internet access providers, including cable modem service, as an information service is a critical part of Powell's strategy for promoting broadband deployment, competition, innovation, and the digital migration. He is supported in this by Republican Commissioners Kevin Martin and Kathleen Abernathy. If cable modem service were a telecommunications service, then it would be subject to the economic regulatory regime that applies to telecommunications services.

On March 14, 2002, the 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 item is FCC 02-77 in Docket No. 00-185 and Docket No. 02-52.

On October 6, 2003, a three judge panel of the U.S. Court of Appeals (9thCir) issued its opinion [39 pages in PDF] (which is also published at 345 F.3d 1120) 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; and story titled "Reaction to 9th Circuit Opinion in Brand X Internet Services v. FCC" in TLJ Daily E-Mail Alert No. 756, October 9, 2003.

The FCC obtained the critical support of  the Department of Justice's (DOJ) Office of the Solicitor General (OSG). The Supreme Court Justices place great weight on the recommendation of the OSG when deciding whether or not to grant certiorari petitions. On September 1, 2004, the DOJ's OSG and the FCC filed a Petition for Writ of Certiorari [37 pages in PDF] with the Supreme Court. See, story titled "Office of the Solicitor General Backs FCC in Brand X Case" in TLJ Daily E-Mail Alert No. 968, September 2, 2004.

On the other hand, Powell may have paid a price for obtaining the backing of the DOJ's OSG. That is, the DOJ may have leveraged its power in the Supreme Court certiorari process to obtain from the FCC the NPRM pertaining to CALEA. In this arrangement, the DOJ got the CALEA interpretation and rule making proceeding that it wanted, while the FCC majority got the petition for writ of certiorari in the Brand X case that it wanted.

On August 9, 2004 the Federal Communications Commission (FCC) released a Notice of Proposed Rulemaking and Declaratory Ruling (NPRM & DR) [100 pages in PDF] regarding imposing Communications Assistance for Law Enforcement Act (CALEA) obligations upon broadband internet access services and voice over internet protocol (VOIP) services. See, story titled "Summary of the FCC's CALEA NPRM" in TLJ Daily E-Mail Alert No. 960, August 17, 2004.

See also, story titled "Rep. Pickering Suggests Relationship Between the DOJ's Brand X Cert Petition and the FCC's CALEA NPRM" and story titled "House Subcommittee Holds Hearing on CALEA and the Internet" in TLJ Daily E-Mail Alert No. 974, September 10, 2004.

If the DOJ gets what it seeks in the CALEA proceeding, this could undermine Powell's strategy for promoting broadband deployment, competition, innovation, and the digital migration.

National Cable & Telecommunications Association (NCTA) P/CEO Robert Sachs praised the Supreme Court's decision to take the case. He wrote in a release that "We are pleased by the Supreme Court's decision to review this significant case and are optimistic that the Court will affirm the FCC's decision that cable modem service is an interstate information service, fostering a deregulatory environment for cable high-speed Internet access. Establishing a deregulatory environment for cable modem service is critical to the universal deployment in the U.S. of broadband services, including emerging services such as Voice over Internet Protocol service."

12/2. The Department of Justice (DOJ) filed a criminal complaint in U.S. District Court (NDCal) against Heinrich Florian, Günter Hefner, Peter Schaefer, and T. Rudd Corwin alleging violation of Section 1 of the Sherman Antitrust Act in connection with their alleged conspiracy to fix the prices of dynamic random access memory (DRAM).

The four are executives of Infineon Technologies AG, and its subsidiary, Infineon Technologies North America Corporation.

The DOJ also announced that it has entered into plea agreements with the four defendants. These agreements provide that the four will plead guilty, pay a $250,000 criminal fine, serve prison terms ranging from four to six months, and assist the government in its ongoing DRAM investigation.

Scott Hammond, Director of Criminal Enforcement in the DOJ's Antitrust Division, stated in a release that "These four executives are the first to plead guilty to a charge of fixing prices in what is still a very active and far-reaching investigation into antitrust violations in the DRAM industry ... We will continue in our efforts to bring to justice other domestic and foreign-based executives who were involved with fixing DRAM prices."

On September 15, 2004, the DOJ filed a criminal information in the U.S. District Court (NDCal) against Infineon Technologies AG, charging price fixing in violation of 15 U.S.C. § 1. Simultaneous, Infineon agreed to plead guilty and to pay a $160 Million fine. See also, DOJ release and Infineon release. On October 20, 2004, Infineon plead guilty. See also, story titled "DOJ Charges Infineon With Felony Price Fixing; Infineon Pleads Guilty" in TLJ Daily E-Mail Alert No. 978, September 16, 2004.

Also, on December 17, 2003, the DOJ announced that it charged Alfred P. Censullo, a former employee of Micron Technology Inc., with violation of 18 U.S.C. § 1503 in connection with his "altering and concealing documents containing competitor pricing information, which were requested in a federal grand jury subpoena". See, DOJ release. The DOJ also stated that he "has agreed to plead guilty to obstructing the grand jury investigation of a suspected conspiracy to fix the price of dynamic random access memory (DRAM) products sold in the United States".

Micron Ch/CEO Steve Appleton stated then in a release that "The charges against Mr. Censullo relate to his personal actions in the course of the Department of Justice investigation and do not pertain to Micron. Micron takes compliance with the law very seriously and requires all employees to follow instructions with respect to legal proceedings. Mr. Censullo's actions were contrary to the company's instructions. We have fully and actively cooperated with the Department of Justice since the inception of their investigation and will continue to do so."

On January 21, 2004, Censullo plead guilty in U.S. District Court (NDCal).

Section 1 of the Sherman Act, which is codified at 15 U.S.C. § 1, now provides, that "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court".

11/30. The Department of Justice (DOJ) charged Evan Collins by criminal information [4 pages in PDF] with securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff, and 17 C.F.R. § 240.10b-5, in connection with his alleged trading of securities based upon non-public material information. The transactions alleged to constitute criminal violations are his exercise and sale of stock options in the company which employed him.

The information states that Collins was previously the controller of McAfee Associates (until 1999), and then Chief Financial Officer of McAfee.com (until 2002).

The information states that in 2000 "Collins learned that Network Associates' then controller and others knowingly employed a scheme to defraud Network Associates' shareholders, its creditors, the public, and the SEC, and to deprive Network Associates of its intangible right to honest services, by manipulating Network Associates' financial statements, including those relating to software license sales revenue, by among other things, improperly transferring 15 million dollars from a Network Associates' tax reserve account to an accounts receivable reserve account in order to improperly increase revenue."

The information does not charge him with securities fraud for a role in the preparation, release or filing or false financial statements. Rather, it alleges that "Based on this and other inside information Collins obtained, Collins sought to enrich himself by trading Network Associates' stock during November 200 because he believed that Network Associates would not meet its 4th quarter 2000 earning estimates and that its financial books and records did not comply with GAAP."

It further alleges that "On or about November 1 and 2, 2000, defendant Collins exercised stock options and sold 30,000 shares of Network Associates' common stock for net proceeds of approximately $250,000. Collins made these trades on the basis of the material non-public information that Network Associates' publicly reported financial statements were false and misleading and materially misrepresented the company's revenues, expenses and net income and the probability that the company would eventually need to restate those numbers."

The DOJ stated in a release that Collins "is the third former Network Associates executive charged with securities fraud arising out of allegedly fraudulent financial statements submitted in 1999 and 2000. Prabhat Goyal, the former chief financial officer (CFO) of Network Associates, was indicted on June 17, 2004, by a federal grand jury in San Francisco on 20 counts of securities fraud and conspiracy. The indictment against Mr. Goyal alleges that between 1998 to 2000, while he was CFO of Network Associates, he conspired with others to commit securities fraud by causing Network Associates to make millions of dollars in payments to its distributors falsely disguised as discounts, rebates, and marketing fees in order to convince the distributors to hold excess inventory, not return unsold products, and purchase more products than the distributors could actually sell to customers during a given quarter." Also, the DOJ stated that "Collins' replacement as Controller, Terry Davis, pled guilty to securities fraud on June 11, 2003."

12/2. Supachai Panitchpakdi, Director General of the World Trade Organization (WTO), gave a speech in Shanghai, People's Republic of China, titled "China and the WTO: Challenges and Opportunies for the Future".

Panitchpakdi (at right) discussed the WTO's Doha Development Agenda. He said that "following the setback at our Ministerial Conference in Cancún, the negotiations are back on track and moving forwards. In July this year, we succeeded in making significant progress in some of the areas that had been most divisive among Members in the past, most notably agriculture."

He then discussed the PR China. He said that "Three years ago when China joined the WTO, it gave an important signal of its commitment and willingness to bring its economy into harmony with the rules of the WTO. To China's credit it did not waver in its resolve. The task was not always easy but throughout this period we have seen China, in implementing the terms of its accession to the WTO, progressively lower its tariffs, phase-out non-tariff measures and reduce restrictions on trade in services. In trade in goods, China's simple average tariff rate dropped from 42.9 per cent in 1992 to 10.4 percent at the beginning of 2004. Overall, China's performance has been very good."

However, he continued that "China has not settled all the issues and concerns of other WTO Members relating to bringing its trade regime into strict conformity with its terms of accession. For instance, I have been informed that the level of counterfeiting and piracy remains of concern to many WTO Members."

He also said that "China will have to strengthen its efforts in terms of transparency and information on relevant laws and procedures."

Panitchpakdi also discussed agriculture, textiles and anti-dumping.

12/2. Microsoft announced that it filed seven complaints in Superior Court in King County in the state of Washington against unnamed defendants alleging violation of the federal Controlling the Assault of Non-Solicited Pormography and Marketing (CAN-SPAM) Act, the Federal Trade Commission's (FTC) rules thereunder, and Washington's Commercial Electronic Mail Act, in connection with their bulk unsolicited e-mail practices. The complaint alleges that the defendants failed to label sexually explicit messages, failed to include an unsubscribe option, and failed to provide a physical address. See, Microsoft release.

12/3. President Bush announced his intent to nominate Bernard Kerik to be Secretary of Homeland Security. If confirmed by the Senate, he will replace Tom Ridge. Kerik is a former New York City Police Commissioner. See, transcript of White House event.

12/2. President George Bush announced his intent to nominate Mike Johanns, the Governor of the state of Nebraska, to be Secretary of Agriculture. See, White House release and transcript of White House event. Bush stated that "We'll enforce trade laws to make sure other countries play by the rules." Neither discussed the Department of Agriculture's (USDA) Rural Utilities Services (RUS) or rural broadband issues.

12/2. Liam Weston was elected Chairman of the U.S. Chamber of Commerce's Space Enterprise Council for  2005. He also works for Ball Aerospace on space remote sensing radar, electro-optical systems and international business. Matthew Jones was elected Vice Chairman of the Space Enterprise Council. He also works for Boeing on GPS and weather programs.

The House will not meet until Monday, December 6. See, Republican Whip Notice.

The Senate will not meet until Tuesday, December 7.

Day two of a two day event hosted by the Federal Communications Bar Association (FCBA) and the Practicing Law Institute (PLI) titled "22nd Annual Telecommunications Policy and Regulation Conference". The price to attend ranges from $1,165.50 to $1,295.00. See, registration form [PDF]. Location. Watergate Hotel, 2650 Virginia Ave., NW.

12:00 NOON - 2:00 PM. The Progress and Freedom Foundation (PFF) will host a panel discussion titled "The Myths and Realities of Universal Service: Revisiting the Justification for the Current Subsidies". The speakers will be Howard Waltzman (House Commerce Committee Senior Majority Counsel), Robert Crandall (Brookings Institution), Jerry Ellig (George Mason University), Randolph May (PFF), Joseph Kraemer (PFF), and Richard Levine (PFF). See, notice and online registration page. Press contact: Patrick Ross at 202 289-8928 or pross@pff.org. Lunch will be served. Location: Room B369, Rayburn Building.

12:00 NOON - 2:00 PM. The DC Bar Association will host a brown bag lunch titled "Telecom Act Rewrite: Following the Money Trails". The speakers will be Rudy Baca (Precursor Group), Jonathan Askin (General Counsel of Pulver.com), James Gattuso (Heritage Foundation), Lawrence Movshin (Wilkinson Barker & Knauer), and Carolyn Brandon (CTIA). See, notice. Prices to attend range from $15 to $30. For more information, call 202 626-3463. Location: CTIA, 1400 16th Street, NW.

The House will meet at 2:00 PM. See, Republican Whip Notice.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in James A. Kay v. FCC, No. 02-1175. This is a case pertaining to the finder's preference rule, 47 C.F.R. § 90.173(k)(2)(1992). See, FCC brief [pages in PDF]. Judges Edwards, Sentelle and Randolph will preside. Location: Prettyman Courthouse, 333 Constitution Ave., NW.

10:00 AM. The U.S. Court of Appeals (FedCir), Panel A, will hear oral argument in Designing Health v. Erasmus (No. 03-1438), Northpoint Technology, Ltd v. MDS America, Inc. (No. 04-1249), and Taylor v. DaimlerChrysler (No. 04-1319). The Northpoint Technology case is an appeal from the U.S. District Court (SDFl) involving claims infringement of patents pertaining to use of DBS spectrum for terrestrial wireless services. See, FedCir calendar. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir), Panel B, will hear oral argument in ISCO International v. Concuctus, Inc. (No. 04-1007) and Bellehumeur v. Bonnett (No. 04-1258). See, FedCir calendar. Location: Courtroom 203, 717 Madison Place, NW.

10:00 AM - 1:00 PM. The Federal Communications Commission's (FCC) Network Reliability and Interoperability Council (NRIC) will meet. See, notice [PDF]. Location: FCC, 445 12th Street, SW, Room TW-C305 (Commission Meeting Room).

Deadline to submit comments in response to the notice of proposed rulemaking by the Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) regarding telecommuting by federal contractors. See, notice in the Federal Register, October 5, 2004, Vol. 69, No.192, at Pages 59701 - 59702.

The Senate will meet at 9:30 AM.

Hannukah.

10:00 AM. The Supreme Court will hear oral argument in Granholm v. Heald, No. 03-1116, Michigan Beer & Wine Wholesalers v. Heald, No. 03-1120, and Swedenburg v. Kelly, No. 03-1274. See, schedule [PDF]. These cases involve constitutional challenges to state restraints on the direct sales of alcoholic beverages, including internet wine sales.

10:00 AM. The U.S. Court of Appeals (FedCir), Panel C, will hear oral argument in Stambler v. RSA Security (No. 04-1129) and AT&T v. Microsoft (No. 04-1285). See, FedCir calendar. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir), Panel D, will hear oral argument in Block Financial v. Yodlee, Inc. (No. 04-1087) and McKenchnie Vehicle Components v. Lacks Industries, Inc. (No. 04-1278). See, FedCir calendar. Location: Courtroom 203, 717 Madison Place, NW.

6:00 - 8:15 PM. The DC Bar Association will host a continuing legal education (CLE) program titled "2004 Intellectual Property Law Year in Review Series: Part 1 -- Patent Update". The speakers will be Bradley Wright (Banner & Witcoff) and Kevin Duncan (Hunton & Williams). See, notice. Prices vary from $70 to $115. For more information, call 202 626-3488. Location: D.C. Bar Conference Center, B-1 Level, 1250 H St., NW.

EXTENDED TO DECEMBER 21. Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking and Declaratory Ruling (NPRM & DR) [100 pages in PDF] regarding imposing Communications Assistance for Law Enforcement Act (CALEA) obligations upon broadband internet access services and voice over internet protocol (VOIP). This NPRM is FCC 04-187 in ET Docket No. 04-295. The FCC adopted this NPRM at its August 4, 2004 meeting, and released it on August 9. See, story titled "Summary of the FCC's CALEA NPRM" in TLJ Daily E-Mail Alert No. 960, August 17, 2004. See, notice in the Federal Register, September 23, 2004, Vol. 69, No. 184, Pages 56976 - 56987. See also, notice of extension [PDF].

10:00 AM. The U.S. Court of Appeals (FedCir), Panel E, will hear oral argument in Sunny Fresh Foods v. Michael Foods (No. 04-1059) and Schreiber Foods v. Beatrice Cheese (No. 04-1279). See, FedCir calendar. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir), Panel F, will hear oral argument in Jore Corp. v. Kouvato, Inc. (No. 04-1163) and Lisle Corp. v. AJ Manufacturing (No. 04-1275). See, FedCir calendar. Location: Courtroom 203, 717 Madison Place, NW.

10:00 AM - 12:00 NOON. The Department of State's (DOS) International Telecommunication Advisory Committee (ITAC) will meet to advise the DOS on policy and technical issues with respect to the International Telecommunication Union (ITU), and in particular, the December 15-17, 2004 meeting of ITU's Telecommunications Development Advisory Group (TDAG) in Geneva, Switzerland. See, notice in the Federal Register, November 5, 2004, Vol. 69, No. 214, at Page 64620. Location: DOS, Room 2533A.

12:00 NOON. The Federal Communications Bar Association (FCBA) Foundation Board of Trustees will meet. Location: Wiley Rein & Fielding, 1776 K St., NW.

12:00 NOON - 1:30 PM. The DC Bar Association will host a luncheon program titled "Intellectual Property Considerations in Strategic Alliances". The speakers will be Linda Alcorn and Marvin Guthrie (both of Sterne Kessler Goldstein & Fox). See, notice. Prices vary from $8 to $18. For more information, contact Tracy Muller at 202 772-8697 or tmuller@skgf.com. Location: SKGF, 8th Floor, 1100 New York Ave., NW.

3:00 PM. The U.S. Court of Appeals (1stCir) will hear oral argument, en banc, in USA v. Councilman, a case regarding the applicability of the Wiretap Act to e-mail in storage. See, opinion of the three judge panel, and story titled "1st Circuit Holds Wiretap Act Does Not Apply to E-Mail in Storage" in TLJ Daily E-Mail Alert No. 930, July 1, 2004. Location. En Banc Courtroom, John Joseph Moakley Courthouse, Boston, MA.

8:30 - 10:30 AM. The Federal Communications Bar Association's (FCBA) Wireless Practice Committee will host a continuing legal education (CLE) seminar and breakfast titled "Spectrum Management 101: Nuts and Bolts of Spectrum Management -- Engineering, Legal, and Economic Perspectives". The speakers will include Julius Knapp (Deputy Chief of the FCC's Office of Engineering and Technology), Evan Kwerel (Senior Economic Advisor in the FCC's Office of Strategic Planning and Policy Analysis), and Christopher Wright (Harris Wiltshire & Grannis). See, registration form [PDF]. The price to attend ranges from $50 to $125. Location: Wiley Rein & Fielding, 1776 K St., NW.

RESCHEDULED FOR DECEMBER 15. 9:30 AM. The Federal Communications Commission (FCC) will hold a meeting. The event will be webcast. Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).

10:00 AM. The Federal Trade Commission (FTC) will hold a meeting, part of which will be closed to the public. The agenda includes oral argument in its proceeding pertaining to Rambus, Inc., Docket No. 9302, and consideration of the Rambus matter. For more information, contact Mitch Katz at the FTC's Office of Public Affairs at 202 326-2180. Location: FTC Building, Room 532, 600 Pennsylvania Ave., NW.

10:00 AM. The U.S. Court of Appeals (FedCir), Panel G, will hear oral argument in Israel Bio-Engineering (No. 04-1153 and 04-1301). See, FedCir calendar. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir), Panel H, will hear oral argument in Eolas Technologies v. Microsoft (No. 04-1234) and Morton v. The First Years (No. 04-1308). See, FedCir calendar. Location: Courtroom 203, 717 Madison Place, NW.

6:00 - 8:00 PM. The DC Bar Association's Computer and Telecommunications Law Section will host a social event titled "A CTLS Evening Gathering And Keynote With Jeff Pulver". The speaker will be Jeff Pulver. See, notice. Prices vary from $25 to $40. For more information, call 202-626-3463. Location: 21 Hundred Restaurant, Westin Embassy Row, 2100 Massachusetts Ave., NW.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Savannah College of Art and Design v. FCC, No. 04-1024. Judges Ginsburg, Garland and Williams will preside. Location: Prettyman Courthouse, 333 Constitution Ave., NW.

10:00 AM. The U.S. Court of Appeals (FedCir), Panel I, will hear oral argument in Collegenet v. Applyyourself (No. 04-1202). See, FedCir calendar. Location: Courtroom 402, 717 Madison Place, NW.

10:00 AM. The U.S. Court of Appeals (FedCir), Panel J, will hear oral argument in Rasmusson v. SmithKline Beecham (No. 04-1191) and Watson Industries v. Murata Electronics (No. 04-1235). See, FedCir calendar. Location: Courtroom 203, 717 Madison Place, NW.

12:00 NOON - 2:00 PM. The Progress and Freedom Foundation (PFF) will host a panel discussion titled "Grokster and the Supreme Court: The Case For and Against Consideration". The speakers will include James DeLong (PFF), Solveig Singleton (PFF), and Mitch Glazier (RIAA). See, notice and online registration page. The PFF filed an amicus curiae brief [12 pages in PDF] on November 8. Press contact: Patrick Ross at 202 289-8928 or pross@pff.org. Lunch will be served. Location: Room B369, Rayburn Building, Capitol Hill.

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