6/27. The Supreme Court issued its unanimous opinion [55 pages in PDF] in MGM v. Grokster, reversing the judgment of the U.S. Court of Appeals (9thCir) regarding vicarious copyright infringement by the distributors of peer to peer (P2P) systems.

The Supreme Court held that "one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties."

The Supreme Court did not overturn or criticize its 1984 opinion in Sony. Rather, it clarified Sony, and the law of vicarious infringement, and held that the 9th Circuit misapplied Sony. This is a victory for the music and movie industries, and some other copyright holders.

Background. Metro Goldwyn Meyer (MGM), and other movie companies, and various record companies, filed a complaint in the in the U.S. District Court (CDCal) against Grokster, Streamcast and Kazaa alleging copyright infringement, in violation of 17 U.S.C. § 501. They alleged contributory and vicarious infringement. In addition, professional songwriters and music publishers filed a class action complaint against the same defendants alleging contributory and vicarious infringement. The two actions were consolidated. No individual infringers are parties in these actions.

The Supreme Court wrote that "MGM's evidence gives reason to think that the vast majority of users' downloads are acts of infringement, and because well over 100 million copies of the software in question are known to have been downloaded, and billions of files are shared across the FastTrack and Gnutella networks each month, the probable scope of copyright infringement is staggering."

Moreover, the Court wrote that "The record is replete with evidence that from the moment Grokster and StreamCast began to distribute their free software, each one clearly voiced the objective that recipients use it to download copyrighted works, and each took active steps to encourage infringement."

The factors the the Court cited included the quantity of infringement, the proportion of available works that infringe copyrights, the marketing of the P2P software, the advertising based business model employed by Grokster and Streamcast, and the absence of attempts to filter out infringing works.

The parties filed cross motions for summary judgment in the District Court regarding software provided by Grokster and Streamcast. On April 25, 2003, the District Court issued its opinion holding that Grokster's and Streamcast's P2P networks do not contributorily or vacariously infringe the copyrights of the holders of music and movie copyrights. See also, story titled "District Court Holds No Contributory or Vicarious Infringement by Grokster or Streamcast P2P Networks" in TLJ Daily E-Mail Alert No. 650, April 28, 2003

On August 19, 2004, the U.S. Court of Appeals (9thCir) issued its opinion [26 pages in PDF], affirming the District Court, and holding that Grokster's and Streamcast's P2P networks do not contributorily or vicariously infringe the copyrights of the holders of music and movie copyrights. See, story titled "9th Circuit Holds No Vicarious Infringement in Grokster Case" in TLJ Daily E-Mail Alert No. 963, August 20, 2004. The 9th Circuit's opinion is reported at 380 F.3d 1154.

The Office of the Solicitor General (SG) submitted a brief with the Supreme Court urging reversal. See, story titled "Petitioners, Solicitor General, & Amici Urge Supreme Court to Reverse in MGM v. Grokster" in TLJ Daily E-Mail Alert No. 1,063, January 26, 2005.

Holding of the Supreme Court. Justice David Souter writing for a unanimous Court, reversed the judgment of the Court of Appeals.

The Supreme Court commented that "The more artistic protection is favored, the more technological innovation may be discouraged; the administration of copyright law is an exercise in managing the trade-off. ... The tension between the two values is the subject of this case ..." It also stated that "When a widely shared service or product is used to commit infringement, it may be impossible to enforce rights in the protected work effectively against all direct infringers, the only practical alternative being to go against the distributor of the copying device for secondary liability on a theory of contributory or vicarious infringement."

It wrote that "One infringes contributorily by intentionally inducing or encouraging direct infringement, ... and infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it, ... " The Court also stated that "these doctrines of secondary liability emerged from common law principles and are well established in the law".

The Supreme Court also addressed its early opinion in Sony at length. It held in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), that the "sale of video cassette recorders (``VCR´´s) did not subject Sony to contributory copyright liability, even though Sony knew as a general matter that the machines could be used, and were being used, to infringe the plaintiffs' copyrighted works. Because video tape recorders were capable of both infringing and ``substantial noninfringing uses,´´ generic or ``constructive´´ knowledge of infringing activity was insufficient to warrant liability based on the mere retail of Sony’s products."

In the present opinion, the Supreme Court did not overturn Sony. Rather, it distinguished the facts in Sony from those in the present case. It wrote that "There was no evidence that Sony had expressed an object of bringing about taping in violation of copyright or had taken active steps to increase its profits from unlawful taping."

The Court continued that "On those facts, with no evidence of stated or indicated intent to promote infringing uses, the only conceivable basis for imposing liability was on a theory of contributory infringement arising from its sale of VCRs to consumers with knowledge that some would use them to infringe. ... But because the VCR was capable of commercially significant noninfringing uses,. we held the manufacturer could not be faulted solely on the basis of its distribution."

The Court held that the 9th Circuit "misapplied" Sony. The Court elaborated that "Sony barred secondary liability based on presuming or imputing intent to cause infringement solely from the design or distribution of a product capable of substantial lawful use, which the distributor knows is in fact used for infringement. The Ninth Circuit has read Sony's limitation to mean that whenever a product is capable of substantial lawful use, the producer can never be held contributorily liable for third parties. infringing use of it; it read the rule as being this broad, even when an actual purpose to cause infringing use is shown by evidence independent of design and distribution of the product, unless the distributors had .specific knowledge of infringement at a time at which they contributed to the infringement, and failed to act upon that information´´... Because the Circuit found the StreamCast and Grokster software capable of substantial lawful use, it concluded on the basis of its reading of Sony that neither company could be held liable, since there was no showing that their software, being without any central server, afforded them knowledge of specific unlawful uses."

"This view of Sony, however, was error," wrote the Supreme Court. It added, "we do not revisit Sony further", and "It is enough to note that the Ninth Circuit's judgment rested on an erroneous understanding of Sony and to leave further consideration of the Sony rule for a day when that may be required."

The Court elaboratd that "Sony's rule limits imputing culpable intent as a matter of law from the characteristics or uses of a distributed product. But nothing in Sony requires courts to ignore evidence of intent if there is such evidence, and the case was never meant to foreclose rules of fault-based liability derived from the common law." The Court added that "Thus, where evidence goes beyond a product's characteristics or the knowledge that it may be put to infringing uses, and shows statements or actions directed to promoting infringement, Sony's staple-article rule will not preclude liability."

Then, the Court offered the following concise statement of its holding. "For the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule, the inducement rule, too, is a sensible one for copyright. We adopt it here, holding that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties. We are, of course, mindful of the need to keep from trenching on regular commerce or discouraging the development of technologies with lawful and unlawful potential. Accordingly, just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe, ... mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability. Nor would ordinary acts incident to product distribution, such as offering customers technical support or product updates, support liability in themselves. The inducement rule, instead, premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise."

The Court then applied the facts of Grokster and Streamcast cases to this legal principle. It found ample evidence of their unlawful intent.

The Court also noted that one cannot be held liable for inducement of infringement unless there is also actual infringement. In a single paragraph, the Court concluded that "there is evidence of infringement on a gigantic scale" in the present cases.

Concurring Opinions. Justice Ruth Ginsburg wrote a concurring opinion, in which Chief Justice William Rehnquist and Justice Anthony Kennedy joined. She wrote that the District Court should not have granted summary judgment, because, under Sony, there was a genuine issue of material fact as to whether there was "a reasonable prospect that substantial or commercially significant noninfringing uses were likely to develop over time."

Justice Stephen Breyer wrote a separate opinion, in which Justice Sandra O'Connor (who wrote the majority opinion in Sony) and Justice John Paul Stevens joined. It is labeled "concurring". At the outset, he wrote that "the distributor of a dual-use technology may be liable for the infringing activities of third parties where he or she actively seeks to advance the infringement." However, he then went on to write in detail about the evolving noninfringing uses of P2P systems. But for his opening, his "concurring" opinion carries many attributes of a dissent.

Justice Breyer advanced arguments for not restricting new technologies that facilitate the distribution of information. Although, he was not enthusiastic about protecting the defendants in the present cases.

He argued that Justice Ginsburg's conclusion regarding noninfringing uses is incorrect. He wrote that "When measured against Sony's underlying evidence and analysis, the evidence now before us shows that Grokster passes Sony's test -- that is, whether the company's product is capable of substantial or commercially significant noninfringing uses."

He went on to enumerate and discuss at length the noninfringing uses of P2P systems, including the distribution of electronic books in the public domain, the distribution of research information, and as of yet unforeseen uses.

Justice Breyer then wrote that "The real question here, I believe, is not whether the record evidence satisfies Sony." Rather, "the real question is whether we should modify the Sony standard." And, he concluded, the Court should not modify Sony. In particularly, it has worked to protect new technologies.

6/27. Numerous persons reacted to the Supreme Court's opinion [55 pages in PDF] in MGM v. Grokster, reversing the judgment of the U.S. Court of Appeals (9thCir) regarding copyright infringement and the distributors of peer to peer (P2P) systems.

The Department of Justice's (DOJ) Office of the Solicitor General previously filed a brief urging the Supreme Court to reverse the 9th Circuit.

Following release of the opinion, Attorney General Alberto Gonzales stated in a release that "I am pleased that the Supreme Court has considered this important case and determined that those who intentionally induce or encourage the theft of copyrighted music, movies, software, or other protected works may be held liable for their actions. As the Solicitor General argued in this case, the Ninth Circuit Court of Appeals had created a standard that was unduly narrow and prevented victims from bringing civil court cases even on the assumption that companies have actively induced others to violate federal copyright laws on a massive scale. The Department of Justice remains strongly committed to the enforcement of intellectual property rights, and we will continue to support the ability of victims of intellectual property theft to pursue remedies for infringement in the civil courts."

Congressional Reaction. Rep. Lamar Smith (R-TX), the Chairman of the House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet and Intellectual Property (CIIP), stated in a release that "This is a huge victory for America’s creators. I am pleased that the Supreme Court recognizes the need to protect American innovation".

He continued that "Piracy and intellectual property theft cost American businesses billions of dollars and hundreds of thousands of jobs each year. A problem exists when the vast majority of people who would never shoplift a CD at a record store think nothing of downloading entire albums from peer-to-peer networks without paying for them ... Both shoplifting and illegally downloading copyrighted materials are wrong and represent a direct threat to artists, software developers, and others whose livelihoods depend on their creations".

Rep. Smith added that "In the weeks to come, the Intellectual Property Subcommittee will analyze the Court’s decision and its implications". No hearings have yet been scheduled.

Also, the Supreme Court's opinion likely means that Rep. Smith, and other Congressional supporters of the content industries, will not now introduce legislation to protect the content industries from those who induce infringement.

However, those who disagree with the Supreme Court's holding may introduce their own legislation.

Rep. Zoe Lofgren (D-CA), another member of the CIIP Subcommittee, stated in a release that "Today's Grokster decision was a victory for copyright holders, but it was also a victory for the future of technology. The Supreme Court wisely zeroed in on conduct, not technology, by refusing to alter the Sony Betamax standard. I hope that this decision provides the clarity legitimate innovators need to develop new and exciting technologies without the incessant threat of copyright litigation."

Sen. Ted Stevens (R-AK) and Sen. Daniel Inouye (D-HI) issued a joint statement. They wrote that "we also look forward to reviewing the Court’s decision in Grokster, and to considering its impact on efforts to stem the tide of digital piracy while promoting e-commerce and the Internet's lawful uses." They are the Chairman and ranking Democrat on the Senate Commerce Committee (SCC). The Senate Judiciary Committee (SJC) has jurisdiction over intellectual property bills.

Sen. Orrin Hatch (R-UT), the Chairman of the SJC's Subcommittee on Intellectual Property, offered slight praise for the Supreme Court. He wrote in a release that "Authors, artists and producers can breathe a little easier today knowing their works are a little safer."

Sen. Hatch added that "Prudence and respect for the role of the courts suggest Congress wait until it becomes clear how today’s decision will play out in the lower courts before there is a rush to legislate. Obviously, if it appears that U.S. industries, technological innovation, or consumers are ultimately harmed by this decision, Congress should consider a legislative solution that appropriately balances consumer interests, innovation, and intellectual property rights."

Sen. Patrick Leahy (D-VT), the ranking Democrat on the SJC, stated in a release that "This decision means that companies can no longer, with a wink and a nod, absolve themselves from any responsibility for what their products do.  Just as consumers bear a responsibility for using these products to illegally download files, the companies that fashion and promote these tools must share in that obligation."

Industry Reaction. Mitch Bainwol, Ch/CEO of the Recording Industry Association of America (RIAA), stated in a release that "With this unanimous decision, the Supreme Court has addressed a significant threat to the U.S. economy and moved to protect the livelihoods of the more than 11 million Americans employed by the copyright industries. The Supreme Court has helped to power the digital future for legitimate online businesses -- including legal file sharing networks -- by holding accountable those who promote and profit from theft. This decision lays the groundwork for the dawn of a new day -- an opportunity that will bring the entertainment and technology communities even closer together, with music fans reaping the rewards."

Dan Glickman, P/CEO of the Motion Picture Association of America (MPAA), stated in a release [MS Word] that "Today’s unanimous ruling is an historic victory for intellectual property in the digital age, and is good news for consumers, artists, innovation and lawful Internet businesses. The Supreme Court sent a strong and clear message that businesses based on theft should not and will not be allowed to flourish. This decision will be of utmost importance as we continue developing innovative and legitimate ways to marry content and technology so consumers can access entertainment on a variety of devices."

In contrast, Gary Shapiro, P/CEO of the Consumer Electronics Association (CEA), stated in a release that "The immediate impact of today's ruling is twofold: massive uncertainty and the likelihood of massive legal bills. The Court has done little to provide a clear path for legitimate innovators and manufacturers to avoid lawsuits related to copyright infringement over legitimate products and services."

Shapiro continued that "With this ruling the Supreme Court has handed a powerful new tool to litigious content creators to stop innovation. Innovators must now consider new murky legal rules and potentially overwhelming legal costs before bringing their product to market - or even moving forward with an innovative idea. It is essentially a 'full employment act' for plaintiff's attorneys and a guarantee for further lawsuits."

He added that "While the Court appears to have sought to narrowly tailor this decision to protect technological development and provide some guidance to promote innovation, the intent test established under this ruling stands as a heavy burden. Content creators may potentially find any act as an 'infringement to induce' and shut down a new product or service with the threat of a lawsuit. Who knows how many innovative products and services now face a premature death as the result of this ruling?"

More Reaction. Jim DeLong of the Progress & Freedom Foundation (PFF) stated in a release that "This looks like a giant win for everyone. For the tech industry -- the Court made clear that Sony is still good law, and that simply marketing a product with the knowledge that some people will use it to infringe is not a basis for liability. For the content providers -- the Court said that intentional inducement of infringement is illegal, and that in proving the existence of the intent the copyright holders can point to the infringement-dependent business models of Grokster and its kin, and to their failure to take any affirmative steps (such as filtering) to prevent infringement. And for consumers -- the unanimity shows that the Court meant what it said about the crucial importance of intellectual property rights when it decided Eldred two years ago, which is crucial to the cornucopia of creativity that the Internet makes possible."

Gigi Sohn, President of Public Knowledge, stated in a release that "Today's Court decision in the Grokster case underscores a principle Public Knowledge has long promoted -- punish infringers, not technology. The Court has sent the case back to the trial court so that the trial process can determine whether the defendant companies intentionally encouraged infringement. What this means is, to the extent that providers of P2P technology do not intentionally encourage infringement, they are exempt from secondary liability under our copyright law. The Court also acknowledged, importantly, that there are lawful uses for peer-to-peer technology, including distribution of electronic files `by universities, government agencies, corporations, and libraries, among others.´"

Jerry Berman of the Center for Democracy and Technology (CDT) stated in a release that "The court has worked to craft careful balance that allows copyright owners to pursue bad actors, but still protect the rights of technology makers. We hope this decision will preserve the climate of innovation that fostered the development of everything from the iPod to the Internet itself."

6/27. The Supreme Court granted certiorari in Texaco v. Dagher and Shell v. Dagher. See, Order List [11 pages in PDF] at page 3.

The Supreme Court also wrote that "The motion of Washington Legal Foundation for leave to file a brief as amicus curiae is granted. The motion of Visa U.S.A. Inc., et al. for leave to file a brief as amici curiae is granted. The motion of Chamber of Commerce of the United States, et al. for leave to file a brief as amici curiae is granted. The motion of Antitrust Scholars for leave to file a brief as amici curiae is granted. The petitions for writs of certiorari are granted. The cases are consolidated and a total of one hour is allotted for oral argument."

Department of Justice's (DOJ) Office of the Solicitor General wrote in a brief that the issue is "Whether an agreement between the owners of a lawful joint venture with respect to the pricing of the joint venture's products may be treated as a per se violation of Section 1 of the Sherman Act, 15 U.S.C. 1, when the joint venture's owners do not compete in the market for those products."

This case is Texaco, Inc. v. Fouad N. Dagher, et al., No. 04-805, and Shell Oil Company v. Fouad N. Dagher, et al., No. 04-814, petitions for writ of certiorari to the U.S. Court of Appeals for the 9th Circuit.

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6/27. The Supreme Court issued its opinion [59 pages in PDF] in NCTA v. Brand X, upholding the Federal Communications Commission's (FCC) determination that cable broadband internet access service is an information service, and reversing the judgment of the U.S. Court of Appeals (9thCir).

The Supreme Court overturned the 2003 opinion [39 pages in PDF] of the 9th Circuit, which vacated the FCC's 2002 Declaratory Ruling (DR) that cable modem service is an information service, and that there is no separate offering as a telecommunications service.

The 9th Circuit vacated the FCC's DR, in part, because it determined that as a result of a procedural oddity, it need not apply Chevron deference. The Supreme Court held that Chevron deference applies in this matter, and that under this standard of review, the FCC's DR is a lawful construction of the Communications Act.

This is a victory, after an long and hard fought battle, for the broadband policy of former FCC Chairman Michael Powell.

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."

Brand X, EarthLink, the State of California, and others filed petitions for review of the FCC's order in various federal circuits. These petitions for review were assigned to the 9th Circuit by lottery.

These petitioners argued that cable modem service is both an information service and a telecommunications service, and is therefore subject to regulation on a common carriage basis. That is, they argue that cable broadband providers must be required to let other internet service providers (ISPs) use their facilities.

The 9th Circuit decided without applying the deference to administrative agencies required by Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). Rather, it concluded that it was bound by the doctrine of stare decisis to follow its June 22, 2000 opinion in AT&T v. Portland, which held that cable modem service is a telecommunications service. The Portland case is also reported at 216 F.3d 871.

The FCC was not a party to that earlier action; it had not yet issued its DR. Moreover, the cable operator, AT&T, argued for telecommunications status, rather than information services status.

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 that cable modem service is an information service, and that there is no separate offering as a telecommunications service. See also, 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. This opinion is also reported at 345 F.3d 1120.

Opinion of the Court. Justice Clarence Thomas wrote the opinion for the Supreme Court. He first reviewed the FCC's Computer II rules, which distinguished between basic and enhanced service, and the Telecommunications Act of 1996's distinction between telecommunications service and information service. He then summarized the FCC's reasoning in its DR.

Thomas then shifted to a discussion of procedure. He noted the procedural history of the case, and that the 9th Circuit decision not to accord the DR Chevron deference. He concluded that the 9th Circuit "erred" in according stare decisis to the Portland case, and in not applying Chevron deference.

Thomas summarized the Chrevron doctrine. "In Chevron, this Court held that ambiguities in statutes within an agency’s jurisdiction to administer are delegations of authority to the agency to fill the statutory gap in reasonable fashion. Filling these gaps, the Court explained, involves difficult policy choices that agencies are better equipped to make than courts. ... If a statute is ambiguous, and if the implementing agency’s construction is reasonable, Chevron requires a federal court to accept the agency’s construction of the statute, even if the agency’s reading differs from what the court believes is the best statutory interpretation."

He concluded that "Only a judicial precedent holding that the statute unambiguously forecloses the agency's interpretation, and therefore contains no gap for the agency to fill, displaces a conflicting agency construction." But, the present statute is ambiguous.

The Supreme Court did not overturn the Portland opinion. Rather, it wrote that "our conclusion that it is reasonable to read the Communications Act to classify cable modem service solely as an "information service" leaves untouched Portland’s holding that the Commission’s interpretation is not the best reading of the statute." (Emphases in original, at page 14.)

Having determined that Chevron deference applies, Justice Thomas proceeded to review the FCC's order under the two part test set out in Chevron.

First, following a lengthy review of the Communications Act, and the cable modem service, Thomas concluded that the Communications Act fails unambiguously to classify facilities-based information service providers, such as cable modem services providers, as telecommunications service offerors. And second, Thomas concluded that the FCC's construction of the Communications Act in its DR was not unreasonable.

Justices John Paul Stevens and Stephen Breyer each wrote short concurring opinions regarding Chevron deference.

Scalia's Dissent. Justice Antonin Scalia wrote a long and vigorous dissenting opinion that was joined, in part, by Justices David Souter and Ruth Ginsburg.

He wrote, "Actually, in these cases, it might be more accurate to say the Commission has attempted to establish a whole new regime of nonregulation, which will make for more or less free-market competition, depending upon whose experts are believed. The important fact, however, is that the Commission has chosen to achieve this through an implausible reading of the statute, and has thus exceeded the authority given it by Congress."

Scalia also mocked the FCC's "self-congratulatory paean to its deregulatory largesse".

He explained that "what the Commission hath given, the Commission may well take away -- unless it doesn’t. This is a wonderful illustration of how an experienced agency can (with some assistance from credulous courts) turn statutory constraints into bureaucratic discretions. The main source of the Commission’s regulatory authority over common carriers is Title II, but the Commission has rendered that inapplicable in this instance by concluding that the definition of "telecommunications service" is ambiguous and does not (in its current view) apply to cable-modem service. It contemplates, however, altering that (unnecessary) outcome, not by changing the law (i.e., its construction of the Title II definitions), but by reserving the right to change the facts. Under its undefined and sparingly used "ancillary" powers, the Commission might conclude that it can order cable companies to "unbundle" the telecommunications component of cable-modem service."

"And presto," wrote Scalia, "Title II will then apply to them, because they will finally be "offering" telecommunications service! Of course, the Commission will still have the statutory power to forbear from regulating them ... Such Möbius-strip reasoning mocks the principle that the statute constrains the agency in any meaningful way." (Parentheses in original. Footnote omitted.)

Scalia concluded that "After all is said and done, after all the regulatory cant has been translated, and the smoke of agency expertise blown away, it remains perfectly clear that someone who sells cable-modem service is "offering" telecommunications. For that simple reason set forth in the statute, I would affirm the Court of Appeals."

6/27. Numerous persons reacted to the Supreme Court's June 27, 2005 opinion [59 pages in PDF] in NCTA v. Brand X,

FCC Reaction. Federal Communications Commission (FCC) Chairman Kevin Martin stated in a release [PDF] that "I am pleased that the U.S. Supreme Court has affirmed the FCC’s ruling. This decision provides much-needed regulatory clarity and a framework for broadband that can be applied to all providers. We can now move forward quickly to finalize regulations that will spur the deployment of broadband services for all Americans."

FCC Commission Kathleen Abernathy stated in a release [PDF] that "I am gratified that the Supreme Court has deferred to the Commission’s finding that cable modem services are “information services.” As I stated when the ruling upheld today was adopted, this classification accords the Commission the flexibility it needs to craft a minimal regulatory environment that promotes investment and innovation in a competitive marketplace. Now that the Court has resolved lingering uncertainty regarding the regulatory treatment of cable-based Internet access services, I am hopeful that the Commission will act quickly to establish a similarly forward-looking approach for competitive wireline xDSL services."

FCC Commission Michael Copps stated in a release [PDF] that "We really have our work cut out for us now. In the wake of this decision, the FCC confronts the challenge of protecting consumers, maintaining universal service and ensuring public safety in uncertain legal terrain. Today’s decision makes the climb much steeper. But this country just has to find ways to promote innovation, enhance competition, protect the openness of the Internet, and return the United States to a position of leadership in broadband penetration. The Commission needs to think anew and act anew to meet these challenges, and I look forward to working with my colleagues to do just that."

FCC Commission Jonathan Adelstein stated in a release [PDF] that "Speeding the wide deployment of broadband services throughout this country is one of the top priorities for the Commission. The Court's decision should not mean that policymakers turn their backs on American consumers or neglect public safety. I look forward to working with my colleagues at the FCC and with Congress to both promote a truly competitive marketplace and to ensure that all consumers are protected and have access to affordable broadband services."

Congressional Reaction. Rep. Joe Barton (R-TX), the Chairman of the House Commerce Committee, stated in a release that "I commend the court for upholding the FCC's deregulatory approach to broadband services. The FCC correctly determined that broadband services should not be regulated as common carriage. After an erroneous ruling by the Ninth Circuit, the court affirmed the validity of the FCC's determination."

Rep. Barton added that "While I am pleased that the court has removed the clouds of uncertainty regarding the proper regulatory framework for broadband services, this decision and the uncertainty that has existed in the market since the Ninth Circuit's erroneous decision demonstrate why Congress needs to modernize the Communications Act.  Congress needs to remove the ambiguity regarding what broadband services are and how they should be regulated.  I look forward to working with subcommittee Chairman Upton and the rest of my colleagues to bring clarity and consistency to the statutory framework governing the regulation of broadband and Internet Protocol services."

Sen. Ted Stevens (R-AK) and Sen. Daniel Inouye (D-HI) issued a joint statement. They wrote that "We are carefully reviewing the Brand X decision reached by the Supreme Court today. Brand X involves the legal treatment of cable modem services, and the decision announced today will have a number of complex policy implications for the communications industry and consumers."

They added that "we will review the decision’s impact on existing public interest obligations, including its effect on the Universal Service Fund, the provision of 911 services, access for persons with disabilities, consumer privacy protections, and on law enforcement and anti-terrorism activities. We will also be reviewing how this decision affects Internet Service Providers (ISPs), interconnection issues, as well as its implication on the proper regulatory treatment for DSL services. All of these issues deserve careful consideration, and we look forward to examining the Brand X decision in the context of our review of current communications laws. Such action will permit us to consider what steps may be necessary from the Congress or the Federal Communications Commission to ensure that our communications laws preserve competition and protect the interests of consumers."

More Reaction. Kyle Dixon stated in a release that "This is a hands-down victory for consumers, maximizing incentives to build competing broadband networks. The Court sent a strong message to the market: `Compete, don't look for government hand-outs.´"

Dixon is Director of the Progress and Freedom Foundation's (PFF) Federal Institute for Regulatory Law & Economics. He was previously an advisor to former FCC Chairman Michael Powell.

The PFF will host a panel discussion on the Supreme Court's opinion at 12:00 NOON on Friday, July 15. See, notice.

Kyle McSlarrow, P/CEO of the National Cable and Telecommunications Association (NCTA), stated in a release that "Today's Supreme Court's decision is a victory for consumers and maintains the momentum to advance broadband in the U.S.  Classifying cable modem service as an interstate information service, as the FCC did, keeps this innovative service on the right deregulatory path."

Walter McCormick, P/CEO of U.S. Telecom Association (USTA), stated in a release that "Today's Supreme Court decision clarifies the Commission’s role in setting a framework for service providers in the rapidly changing communications market. While this was the correct decision for the cable industry, it further highlights why all providers must be given the same incentive to invest and deploy new technologies."

In contrast, Dave Baker, VP of Earthlink, which challenged the FCC's order, stated in a release that "Today's Supreme Court ruling is a blow to consumers and competition.  For too long, cable companies and the FCC have denied consumers a choice of broadband providers over cable.  Besides keeping prices high, this lack of choice limits the future deployment of innovative voice, video and data services beyond just those offered by the local cable company."

"We will also work with Congress as it revisits the Telecommunications Act in order to ensure customer choice and the future deployment of advanced communications services and applications", said Baker.

The House will meet at 9:00 AM for morning hour, and at 10:00 AM for legislative business. The House will take up HR 3057, the "Foreign Operations, Export Financing and Related Programs Appropriations Act for Fiscal Year 2006". See, Republican Whip Notice.

8:00 AM - 5:00 PM. Day two of a two day workshop hosted by the National Institute of Standards and Technology (NIST) regarding the Federal Information Processing Standards (FIPS) 201 implementation. Registration is required. See, notice in the Federal Register, June 9, 2005, Vol. 70, No. 110, at Pages 33734. Location: undisclosed.

9:00 AM. The Senate Finance Committee will meet to mark up S 1307, a  bill to implement the Dominican Republic -- Central America -- United States Free Trade Agreement, and SJRes18, a resolution approving the renewal of import restrictions contained in the Burmese Freedom and Democracy Act of 2003. Location: Room 216, Hart Building.

9:30 AM. Day one of a two day hearing of the Federal Election Commission (FEC) regarding its proposed rules regarding regulation of speech on the internet. See, notice and notice in the Federal Register, Vol. 70, No. 63 April 4, 2005, at pages 16967 - 16979. See also, list of witnesses, with links to written comments. Location: FEC, 999 E Street, NW.

10:00 AM. The House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet and Intellectual Property (CIIP) will meet to mark up HR 2791, the "Patent and Trademark Fee Modernization Act of 2005", and HR 2955, the "Intellectual Property Jurisdiction Clarification Act of 2005". Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. This hearing will be webcast by the HJC. Location: Room 2141, Rayburn Building.

CANCELLED. 10:00 AM - 1:00 PM. The Federal Communications Commission's (FCC) Network Reliability and Interoperability Council (NRIC) will meet. See, notice in the Federal Register, June 1, 2005, Vol. 70, No. 104, at Page 31470. Location: FCC, 445 12th St., SW, Room TW-305. See, notice of cancellation in the Federal Register, June 22, 2005, Vol. 70, No. 119, at Page 36169.

10:30 AM. The Heritage Foundation will host a panel discussion titled "Restoring Fairness to the Judicial Confirmation Process in the United States Senate". The speakers will be Sen. Bill Frist (R-TN) and former Attorney General Ed Meese. See, notice. Location: Heritage, 214 Massachusetts Ave., NE.

2:00 - 3:00 PM. The Federal Communications Commission's (FCC) North American Numbering Council (NANC) will meet by teleconference. See, Public Notice numbered DA 05-1620, and dated June 9, 2005.

3:00 - 5:00 PM. The House Science Committee's Subcommittee on Environment, Technology, and Standards will hold a hearing titled "Small Business Innovation and Research: What is the Optimal role of Venture Capital?". The witnesses will be Ron Cohen (CEO of Acorda Technologies), Ann Eskesen (President of Innovation Development Institute, Fred Abramson (P/CEO of AlphaGenics), and Jonathan Cohen (CEO 20/20 Gene Systems). Press contact: Joe Pouliot at 225-0581 or joe dot pouliot at mail dot house dot gov. Location: Room 2318, Rayburn Building.

Day one of a four day conference of the Wireless Communications Association International (WCA) titled "WCA 2005". See, FCC notice and notice in the Federal Register, June 14, 2005, Vol. 70, No. 113, at Pages 34477 - 34478.

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

9:30 AM. The Senate Homeland Security and Governmental Affairs Committee will hold a hearing on vulnerabilities in the U.S. passport system. See, notice. Location: Room 562, Dirsksen Building.

9:30 AM. Day two of a two day hearing of the Federal Election Commission (FEC) regarding its proposed rules regarding regulation of speech on the internet. See, notice and notice in the Federal Register, Vol. 70, No. 63 April 4, 2005, at pages 16967 - 16979. See also, list of witnesses, with links to written comments. Location: FEC, 999 E Street, NW.

CANCELLED. 10:00 AM. The Senate Commerce Committee (SCC) may hold a hearing on "Spectrum/DTV". Press contact: Melanie Alvord (Stevens) at 202 224-8456 or Melanie_Alvord at commerce dot senate dot gov, or Andy Davis (Inouye) at 202 224-4546 or Andy_Davis at commerce dot senate dot gov. Location: Room 253, Russell Building.

10:00 AM. The House Science Committee's Subcommittee on Research will hold a hearing titled "Nanotechnology: Where Does the U.S. Stand?". The witnesses will be Floyd Kvamme (Co-Chair of the President's Council of Advisors on Science and Technology), Jim O'Connor (Motorola), Sean Murdock (NanoBusiness Alliance), and Matthew Nordan (Lux Research). Press contact: Joe Pouliot at 225-0581 or joe dot pouliot at mail dot house dot gov. Location: Room 2318, Rayburn Building.

10:00 AM. The House Homeland Security Committee's Subcommittee on Economic Security, Infrastructure Protection, and Cybersecurity will hold a hearing titled "Improving Pre-Screening of Aviation Passengers against Terrorist and Other Watch Lists". Location: undisclosed.

12:15 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host a brown bag lunch titled "Analyze This: Financial Analysts Explain the Impact of Telecom Regulation on Investors". The speakers will be Rudolfo Baca (Precursor Group), Paul Glenchur (Stanford Washington Research Group), and Susan Lynner (Prudential Financial). No RSVP necessary. For more information, contact Debrea Terwilliger at 202 383-3349 or debrea dot terwilliger at wbklaw dot com, or Jason Friedrich at 202 354-1340 or jason dot friedrich at dbr dot com. Location: Willkie Farr & Gallagher, 1875 K Street, NW, 2nd Floor.

2:00 PM. The House Armed Services Committee will hold a hearing titled "Small Business Technologies". Some of the witnesses will address electronics and information technologies. Location: Room 2118, Rayburn Building.

Day two of a four day conference of the Wireless Communications Association International (WCA) titled "WCA 2005". See, notice. Location: Marriott Wardman Park Hotel.

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

POSTPONED. The House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property (CIIP) will meet to mark up HR 2795, the "Patent Act of 2005". Rep. Lamar Smith (R-TX), the Chairman of the CIIP Subcommittee, announced this meeting at a hearing on June 9, 2005. See, story titled "House CIIP Subcommittee Holds Hearing on Patent Bill" in TLJ Daily E-Mail Alert No. 1,151, June 10, 2005. Location: Room 2141, Rayburn Building.

9:30 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. The SJC frequently cancels meetings without notice. See, notice. Press contact: Blain Rethmeier (Specter) at 202 224-5225, David Carle (Leahy) at 202 224-4242 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Commerce Committee's Subcommittee on Technology, Innovation, and Competitiveness will hold a hearing on health information technology. The witnesses will be David Brailer (Department of Health and Human Services), Carolyn Clancy (DHHS), Hratch Semerjian (National Institute of Standards and Technology), Jonathan Perlin (Department of Veterans Affairs), Susan Bostrom (Cisco Systems), John Glaser (Partners HealthCare System), Peter Basch (MedStar Health), Pamela Pure (McKesson Corporation), and Karen Ignagni (America’s Health Insurance Plans). See, notice. The hearing will be webcast. Press contact: Melanie Alvord (Stevens) at 202 224-8456 or Melanie_Alvord at commerce dot senate dot gov, or Andy Davis (Inouye) at 202 224-4546 or Andy_Davis at commerce dot senate dot gov. Location: Room 253, Russell Building.

11:00 AM - 12:00 PM. The National Science Foundation's (NSF) National Science Board's Committee on Programs and Plans will meet. The agenda includes "Review of NSF draft Cyber Infrastructure Vision document" and "Next steps for developing a Board-approved High Performance Computing Strategy for NSF". See, notice in the Federal Register: June 22, 2005, Vol. 70, No. 119, at Page 36213. Location: NSF, Public Meeting Room 130, 4201 Wilson Boulevard, Arlington, VA.

12:00 NOON - 1:30 PM. The Advisory Committee to the Congressional Internet Caucus will host a panel discussion titled "The U.S. Patriot Act and E-Surveillance". The speakers will be William Moschella (Department of Justice), James Dempsey (Center for Democracy and Technology), and Emily Sheketoff, (American Library Association). See, notice. Lunch will be served. RSVP to rsvp@netcaucus.org or 202 638-4370. Location: Room HC-5, Capitol Building.

Day three of a four day conference of the Wireless Communications Association International (WCA) titled "WCA 2005". See, notice. Location: Marriott Wardman Park Hotel.

Deadline to submit initial comments to the Copyright Office's Copyright Royalty Board regarding its interim regulations governing the organization, administration, and procedures of the Copyright Royalty Board. See, notice in the Federal Register, May 31, 2005, Vol. 70, No. 103, at Pages 30901 - 30916.

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

Day four of a four day conference of the Wireless Communications Association International (WCA) titled "WCA 2005". See, notice. Location: Marriott Wardman Park Hotel.

Effective date of the final rule of the Department of the Treasury's (DOT) Office of the Comptroller of the Currency (OCC), the DOT's Office of Thrift Supervision (OTS), the Federal Reserve System, and the Federal Deposit Insurance Corporation (FDIC) implementing § 216 of the Fair and Accurate Credit Transactions Act of 2003, which is also known as the FACT Act. The FACT Act was HR 2622 in the 108th Congress. It is now Public Law No. No. 108-159. § 216 of the FACT Act adds a new § 628 to the Fair Credit Reporting Act (FCRA) that pertains to protecting consumers against the risks associated with unauthorized access to information about the consumer contained in a consumer report, such as fraud and related crimes, including identity theft. The FCRA is codified at 15 U.S.C. § 1681 et seq. The new section is codified at 15 U.S.C. § 1681w. See, notice in the Federal Register, December 28, 2004,  Vol. 69, No. 248, at Pages 77610 - 77621. See also, story titled "Financial Regulators Publish Notice of Final Rule Implementing Section 216 of FACT Act" in TLJ Daily E-Mail Alert No. 1046, December 29, 2004.

Deadline to submit comments to the Antitrust Modernization Commission (AMC) in response to the AMC's request for public comments regarding the Robinson-Patman Act. See, notice in the Federal Register: May 19, 2005, Vol. 70, No. 96, at Pages 28902 - 28907.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its public notice regarding refreshing the record on issues raised in the Further Notice of Proposed Rulemaking (FNPRM) related to carrier identification code (CIC) conservation and the definition of "entity" as found in section 1.3 of the CIC Assignment Guidelines. This public notice is DA 05-1154 in CC Docket No. 92-237; it was released on April 26, 2005. See, notice in the Federal Register, June 1, 2005, Vol. 70, No. 104, at Pages 31405 - 31406.

Deadline for states and telecommunications relay services (TRS) providers to file with the Federal Communications Commission (FCC) their annual consumer complaint log summaries. See, FCC notice.

Independence Day.

The House will not meet on Monday, July 4 through Friday, July 8. See, House calendar.

The Senate will not meet on Monday, July 4 through Friday, July 8. See, Senate calendar.

The Federal Communications Commission (FCC) and other federal offices will be closed for Independence Day. See, Office of Personnel Management's (OPM) list of federal holidays.

Deadline to submit reply comments to the Federal Communications Commission's (FCC) Office of Engineering and Technology (OET) in response to its Public Notice [PDF] regarding the United Telecom Council (UTC) request to be the Access Broadband over Power Line (Access BPL) database manager. This is DA 05-1637, dated June 9, 2005, in ET Docket No. 04-37.