Internet News, February - May, 1998

AT&T Announces New Universal Service Charges and IP Telephony and Wireless Data Services.  (5/29/98)  AT&T announced plans to collect a new universal service charge and to notify customers of the reason for the charge in monthly bills.   AT&T also announced plans to offer IP telephony services in three cities, and flat rate wireless data services.  The universal service charge will recover the about $1.6 Billion that the FCC requires AT&T to contribute to universal service programs, including its new $2.2 Billion per year Schools and Libraries Fund.   The announcements do not sit well with the FCC and some proponents of universal service subsidies.

MCI Plan to Sell Internet Backbone Doesn't Placate GTE.  (5/29/98)  MCI announced on Thursday that it plans to sell much of its Internet backbone infrastructure to the British telecommunications company, Cable & Wireless.  The proposed merger of MCI and WorldCom has raised concerns that the new entity would concentrate Internet backbone service.  The merger is under review by the Department of Justice, Federal Communications Commission, and European Union.  Both GTE and Sprint claim that the proposed divestiture does not go far enough.

AOL Files Brief with Supreme Court in Zeran Case.   (5/27/98)  America Online filed a brief with the U.S. Supreme Court opposing the Petition for Writ of Certiorari of Kenneth Zeran.  In an unusual move, the Supreme Court last month requested a brief from AOL regarding whether or not it should accept the case.  The case involves §230 of the Telecommunications Act of 1996, which makes online services immune from liability for defamatory statements made by their content providers, subscribers, and others.

House Holds Hearing on Online Business.   (5/22/98)  The House Telecommunications Subcommittee held a hearing on Thursday about online business.  The hearing dealt with the methods by which electronic commerce is conducted, and public policy issues which affect e-commerce.

House Committee Passes Internet Tax Freedom Act.  (5/15/98)  The House Commerce Committee passed a "consensus" version of the Internet Tax Freedom Act on Thursday by a vote of 41-0.  The bill, HR 3849, contains a three year moratorium on new state and local Internet taxes.  The bill now goes to the full House.  It has yet to pass the Senate.  See, HTML Copy of HR 3849.

ITFA Limits FCC Control over Internet.  (5/15/98)  The consensus version of the Internet Tax Freedom Act passed by the House Commerce Committee overwhelmingly on Thursday morning would not only protect the Internet from a myriad of potential new taxes from thousands of state and local taxing authorities -- it would restrict the Federal Communications Commission's ability to fix prices and assess regulatory fees in connection with the Internet.

FCC and CATO Debate Internet Universal Service.  (5/13/98)  FCC Chief of Staff John Nakahata and CATO Institute VP David Boaz presented sharply contrasting visions of the government's role in providing universal service and Internet access for schools and libraries at the Policy '98 Conference in Washington on Tuesday.

Ira Magaziner Addresses Policy Conference.  (5/12/98)  Ira Magaziner, Senior Advisor to President Clinton for Policy Development, addressed a gathering of academics, IT professionals, and government officials regarding the administration's policies on privacy, blocking software, domain names, encryption, Internet taxation, and other issues.

Divided FCC Reports to Congress On SLC Plans. (5/11/98)  The Federal Communications Commission, in a partisan vote on Friday, issued a report to Congress on universal service and the Schools & Libraries Corporation.  The FCC proposed to merge the SLC and RHCC into the FCC's Universal Service Administration Company.  The Report also claimed that only $1.67 Billion of the planned $2.25 Billion would be raised this year without further increases in universal service contributions.  See, HTML Copy of the Report to Congress.

GTE Files Antitrust Suit Against WorldCom and MCI. (5/11/98)  GTE filed an antitrust suit in federal district court in Washington DC on Thursday to enjoin the merger of WorldCom and MCI, claiming that it would create a monopoly in the national market for Internet backbone service in violation of § 7 of the Clayton Act.  See: HTML Copy of the Complaint.

House E-Commerce Hearing on Internet Bottlenecks. (5/8/98)  The House Telecommunications Subcommittee held a hearing on Thursday on Internet bottlenecks and electronic commerce.  Most the testimony dealt with regulatory and technological matters pertaining to bandwidth bottlenecks, but the hearing also covered IP telephony, the Internet Protection Act, encryption, and Internet taxation.  Vint Cerf and other industry representatives testified.

FTC Solicits Public Comments on E-Commerce Policy. (5/7/98)  The Federal Trade Commission, which has enforcement authority over "unfair or deceptive acts or practices in or affecting commerce" published a request for public comments Wednesday on its proposal to issue a policy statement regarding the applicability of its consumer protection rules to electronic commerce.

Schools & Libraries Fund Has $2 Billion in Requests.  (5/6/98)  The Federal Communication Commission's Schools and Libraries Fund has received applications totaling somewhere around $2 Billion, fund administrators estimate.  The FCC created the fund to subsidize telecommunications services, Internet access, and some computer hardware and software, for schools and libraries.  See, HTML Copy of Schools and Libraries Report.

House Holds First in Series of Hearings on E-Commerce.  (5/1/98)  The House Commerce Committee held the first in a series of hearings on electronic commerce on Thursday, April 30.  The three and one half hour hearing touched on most policy questions affecting the Internet, including regulating Microsoft, IP telephony, encryption, taxation of the Internet, privacy, consumer confidence, domain names, Year 2000 problems, copyright, bandwidth, and backbone competition.  The committee heard from representatives of AOL, Sabre, MasterCard, CDNow, and other witnesses.

Y2K Candidate Gore Hypes Internet with Union Bosses. (4/29/98)  Vice President Al Gore met with union leaders, and held a ceremonial online session with school children, on Tuesday to publicize his support for subsidized Internet access for public schools, and related programs.

Judgment for AOL in Defamation Case.  (4/24/98)  U.S. District Court Judge Paul Friedman granted summary judgment to America Online in a defamation suit arising out of statements made by one of AOL's content providers.   The basis of the ruling was §230 of the Telecommunications Act of 1996, which immunizes interactive computer services from liability for the actions of their content providers.  The Plaintiffs promise to appeal.  See, Complete Text of Judge Friedman's Opinion.

Senate Holds Hearing on §706 and Bandwidth.  (4/23/98)  The Senate Telecommunications Subcommittee held a sometimes stormy hearing on Section 706 of the Telecommunications Act of 1996 and related bandwidth issues on Wednesday morning, April 22.  Industry representatives discussed competing versions of why broadband service is not widely available, and various technologies for bringing broadband service to all users.

Dole and Bork Join the Anti-Microsoft Camp. (4/21/98)  Microsoft's opponents announced the formation of a new lobbying group at a meeting at the National Press Club in Washington DC on Monday afternoon.  Two of its hired guns, Bob Dole and Judge Robert Bork, addressed the gathering of journalists and representatives of  computer industry companies and trade groups.

Bork's Analysis of Microsoft Antitrust Practices. (4/21/98)  Most of the allegations to date that Microsoft has violated antitrust laws have centered on the notion that it has engaged in illegal and anti-competitive tying arrangements.  The anti-Microsoft crowd's newest lawyer/lobbyist, Judge Robert Bork, has written that tying arrangements are not anti-competitive.  This may be some indication that Microsoft's opponents will switch their theory as to how Microsoft is violating antitrust laws.

Transcript of Robert Dole's Statement.   (4/20/98)  Complete transcript of Bob Dole's statement regarding Microsoft's monopoly to the Pro Comp press conference at the National Press Club on Monday, April 20, 1998.

FTC Releases Report on Internet Fraud.   (4/20/98)  The Federal Trade Commission released a report on Friday on its efforts in 1997 to combat fraud on the Internet.  Since 1994 the FTC has brought only 26 law enforcement actions challenging fraud and deception on the Internet.

Kennard Speech on Schools and Libraries Corp.  (4/17/98)   William Kennard, Chairman of the Federal Communications Commission, gave a speech on Thursday, April 16, to an education group about the Schools and Library Corp., the controversial entity created by the FCC to give up to $2.25 Billion per year to schools and libraries for Internet and telecommunications services, at the expense of phone users.

IP Telephony Companies React to FCC Report.  (4/15/98)   Companies involved in providing IP telephony had mixed reactions to the FCC Report to Congress released last Friday concerning telecommunications "universal service" and Internet services.   Some were pleased that it is merely a tentative report, and pleased that it continues to treat most forms of Internet access as "information services" rather than "telecommunication services."  However, company representatives expressed varying degrees of disappointment over the FCC suggestion that "phone-to-phone" IP telephony should be regulated.

FCC Claims Authority to Tax Internet Telephony.  (4/13/98)  The Federal Communications Commission released a lengthy report to Congress late on Friday that argues that "phone-to-phone" Internet telephony services constitute "telecommunications services" and should therefore be taxed to subsidize phone services in rural and low income areas, and other "universal service" programs.  The FCC Report also argues that self providers of Internet backbone are "telecommunications services."

Judge Rules in Domain Name Registration Suit.  (4/10/98)  U.S. District Court Judge Thomas Hogan ruled yesterday that fees collected by Network Solutions, Inc. for Internet infrastructure improvements constitute an illegal tax. Otherwise, Hogan dismissed the remaining nine counts of the ten count Complaint.  Plaintiffs had also alleged that NSI was an illegal monopoly under the Sherman Act.

Motion to Dismiss Denied in Loudoun Case.  (4/8/98)   U.S. District Court Judge Leonie Brinkema denied the Defendant's Motion to Dismiss in the Loudoun Library case on Tuesday, notwithstanding §230 of the Telecom Act of 1996.  The plaintiffs have challenged the constitutionality of the Loudoun County Library's Policy to use blocking software.  The Judge also ruled that the use of blocking software by a public library constitutes a prior restraint of speech to which the standard of "strict scrutiny" must be applied.   This is a strong indication that this Judge will ultimately rule that the blocking software Policy is unconstitutional.

Lieberman/Gregg Introduce Net Tax Freedom Bill.  (4/1/98)  Senators Judd Gregg (R-NH) and Joe Lieberman (D-CT) introduced yet another internet tax moratorium bill yesterday.  Their bill, S 1888, joins competing bills introduced by Rep. Chris Cox (R-CA), HR 1054, Sen. Ron Wyden (D-OR), S 442, and others.

House Holds Hearing on Domain Names.  (4/1/98)  Two House Subcommittees held a joint hearing on privatization of the Domain Name System yesterday.  Administration representative Ira Magaziner defended the Commerce Department's so called "Green Paper", while Jim Coulter of the Internet Council of Registrars (CORE) harshly criticized the "Green Paper" and promoted CORE's competing proposal.

Congressmen Decry the 'Federal Computer Commission'.  (3/31/98)  The House Subcommittee on Telecommunications, Trade, and Consumer Protection met today to question and hear testimony from all five Commissioners of the Federal Communications Commission.  Congressmen strongly criticized the FCC's recent handling of providing universal internet access to schools and libraries.

FCC Illegally Formed Schools and Libraries Corp.  (3/31/98)  The General Accounting Office issued a lengthy legal opinion today in which it stated the the Federal Communications Commission's formation of two corporations was without legal authority. The report was welcomed by many Representatives and Senators who have long complained about the FCC's handling of universal service subsidies for school and library internet hookup.

House Holds Hearing on Internet Privacy.  (3/27/98)  David Aaron, of the Department of Commerce, testified at a House subcommittee hearing on internet privacy on Thursday, March 26, that the Clinton administration plans to hold a privacy conference in May.

Gore Endorses Burns Version of S1619.   (3/24/98)  The prospects for passage of the some sort of bill protecting school children from smut on the net improved when the Vice President announced the Administration's support for new legislation on Monday, March 23.  However, the specifics remain uncertain.

Internet Bills Approved by Senate Committee.  (3/12/98)  The Senate Commerce Committee approved two bills by voice vote today.  S 1619, the Internet School Filtering Act of 1998, requires that elemenary and secondary schools, and libraries, receiving federal internet access subsidies install the blocking software of their choice.  S 1482 bans from the web certain materials which are "harmful to minors".   The only no vote came from Sen. Ron Wyden (D-OR), who opposed S 1482.

Judge Hears Motions in Blumenthal v. Drudge, AOL.   (3/11/98)  U.S. District Court Judge Paul Friedman heard arguments on two key pre-trial motions in the defamation case, Blumenthal v. Matt Drudge and America Online.  AOL moved to have the claims against it dismissed on the grounds the § 230 of the Telecom Act of 1996 immunizes online services from liability for the torts of its content providers.  Drudge moved to have the claims against him heard in California, where he lives, rather than in Washington, D.C.  Friedman made no rulings.

Freeh Wants ISPs to Collect "Caller ID" Data for FBI.  (3/10/98)  FBI Director Louis Freeh told a U.S. Senate committee today that he wants Internet Service Providers to keep records on their users' "caller ID" and the associated Internet Protocols, for use by the Federal Bureau of Investigation.  Freeh testified at a hearing on preventing child exploitation on the internet.

Zeran Appeals to the Supreme Court.  (3/9/98)  Kenneth Zeran filed an appeal with the U.S. Supreme Court on March 9 in its defamation case against America Online.  In this first major test of § 230 of the Telecom Act of 1996, Zeran seeks to have AOL held liable for the defamatory postings of an AOL subscriber.  Zeran lost in the U.S. District Court, and again in the U.S. Court of Appeals.

Hearing in Loudoun case.   (2/27/98)  Federal Judge Leonie Brinkema held a hearing today on pre-trial motions in Mainstream Loudoun v. Loudoun County Public Libraries.   The Plaintiffs seek to prevent the library for using blocking software on its computers, while the Library wants to keep using the software to prevent library patrons from accessing obscene materials on the internet.  Both sides asked the judge to rule without going through to trial.  Brinkema heard lengthy arguments, but announced no decision.

Judge Strikes Down Law in Urofsky Case.  (2/27/98)  U.S. District Court Judge Leonie Brinkema yesterday held unconstitutional a Virginia statute barring state employees from using their state owned computers to access sexually explicit materials.  State employees have a First Amendment right to use their computers at work to download sexual explicit materials.

Clinton Endorses Internet Tax Freedom Act. (2/26/98)  President Clinton endorsed the Internet Tax Freedom Act (ITFA) at the Technology '98 Conference in San Francisco today.  On Tuesday, February 24, the National Governors Association adopted a resolution against the bill. However, both Gov. Pete Wilson (R-CA) and Gov. Don Beyer (R-VA) support the bill.

Text of Clinton Speech.   (2/26/98)  "I think America should adopt a moratorium on discriminatory taxation so that a bipartisan commission of elected officials, business leaders, consumers and representatives of the Treasury Department can carefully study the matter and come to a resolution. Therefore, I support the Internet Tax Freedom Act now before Congress, because it takes into account the rights of consumers, the needs of businesses and the overall effect of taxation on the development of Internet commerce."

Blocking Bills Introduced.   (2/12/98)  Senators John McCain (R-AZ),  Ernest Hollings (D-SC), Dan Coats (R-IN), and Patty Murray (D-WA) introduced in the Senate the Internet School Filtering Act of 1998 on February 9.  It requires that elemenary and secondary schools, and libraries, receiving federal internet access subsidies install the blocking software of their choice.

Senate Hearing on Internet Indecency. (2/10/98)  The U.S. Senate Commerce Committee held a hearing on indecency on the internet on February 10, 1998.  Committee member Dan Coats (R, Ind.), who is one of the Senate's most ardent supporters of legislation to keep indecent and obscene material on the internet away from minors,  pressed for new legislation.

Internet Fraud Hearing. (2/10/98)   The U.S. Senate Governmental Affairs Committee heard testimony on February 10 regarding fraud on the internet.  Witnesses included representatives from America Online, the National Consumers' League, and the Federal Trade Commission, and a victim of an internet pyramid investment scheme.

ACLU Requests to Intervene in Loudoun Library Case.  (2/6/98)  The American Civil Liberties Union filed a motion to intervene in Mainstream Loudoun v. Board of Directors of the Loudoun County Public Libraries on behave of eight individuals and organizations who publish on the internet whose web pages are blocked by X-STOP software.