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Tech Law Journal |
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| News, records, and analysis of legislation, litigation, and regulation affecting the computer, internet, communications and information technology sectors | |
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9/30. California Gov. Gray Davis signed AB 1767, sponsored by Assemblywoman Charlene Zettel (R-Poway). This bill expands the computer and high-tech equipment forfeiture statute to most crimes in which such equipment could be used to commit the crime. It also provides for forfeiture of computer equipment of parents where the defendant is a minor, unless "the parent or guardian files a signed statement with the court at least 10 days before the date set for the hearing that the minor shall not have access to any computer or telecommunications device owned by the parent or guardian for two years after the date on which the minor is sentenced." 9/30. California Gov. Gray Davis signed AB 2720, sponsored by Assemblyman Keith Olberg (R-Victorville). This bill creates a Bipartisan California Commission on Internet Political Practices to examine issues posed by campaign activity on the Internet in relation to the goals and purposes of the Political Reform Act of 1974, and to make recommendations for appropriate legislative action. Compare, FEC Notice of Inquiry Regarding Use of Internet for Campaign Activity (Nov. 99). 9/29. Stan Smith filed a complaint in U.S. District Court (NDAl) against Network Solutions alleging violation of the Sherman Antitrust Act for refusing to delete expired domain names from its central WHOIS registry database. The named plaintiff, who seeks class action status, is represented by Scott Powell of the law firm of Hare, Wynn, Newell and Newton, of Birmingham AL. See, Hare release. 9/29. The SEC filed a complaint in U.S. District Court (DC) against Intelligent Decision Systems, Inc. (IDSI) for failing to file periodic reports with the SEC. IDSI, which markets and leases computer systems, failed to filed 10-K Annual Reports for the fiscal years ended June 30, 1998, 1999 and 2000, as well as 10-Q Quarterly Reports for the fiscal quarters ended Sept. 30, 1998, Dec. 31, 1998, March 31, 1999, Sept. 30, 1999, Dec. 31, 1999 and March 31, 2000. The complaint seeks an order compelling IDSI to make the required filings. (Civil No. 1:00-CV-02341.) See, release. 9/29. U.S. District Court Judge Leonnie Brinkema (EDVa) entered a preliminary injunction order against Tutornet.com Group, and its President, Euburn Forde. On Aug. 29, the SEC filed a complaint which alleged that defendants made false and misleading statements in 8-K Forms in violation of § 17(a) of the Securities Act of 1933, § 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5. The complaint alleged that defendants falsely stated that Tutornet was in the process of co-branding with AOL. The order also sets Oct. 10 as the hearing date for the SEC's request for a permanent injunction and imposition of civil penalties. (Civil Action No. 00-1472-A.) See, release. 9/29. The FCC approved BellSouth's and SBC's new entity for cellular and PCS services, named Alloy. Specifically, the FCC issued a Memorandum Order and Opinion (DA 00-2223) in a proceeding on SBC's and BellSouth's application to transfer control of wireless licenses and associated international authorizations; the proceeding was also in the nature of an antitrust merger review analysis. The FCC found that "that the combination of SBC and BellSouth’s U.S. wireless properties will not adversely affect competition ..." See, FCC release. 9/29. The Telecommunications Industry Assoc. (TIA) submitted a report [89 pages in PDF] to the FCC titled "Surveillance of Packet-Mode Technologies." The FCC has responsibility for adopting rules implementing the Communications Assistance for Law Enforcement Act (CALEA). Congress passed the CALEA in 1994 for the purpose of allowing law enforcement authorities to maintain their existing wiretap capabilities in new telecommunications devices. It provides that wireline, cellular, and broadband PCS carriers must make their equipment capable of certain surveillance functions. However, the CALEA also provides that its provisions do not apply to "information services". The FBI has since sought an implementation of CALEA that expands surveillance capabilities beyond those provided in the statute. The FCC has sided with the FBI on most points, and relied on the technical recommendations of the TIA. The FCC adopted its Third Report and Order [huge WP file] in Aug. 1999, adopting the TIA's standard known as J-STD-025. This Order also directed TIA to conduct a study of government surveillance of packet mode technologies, including "steps that can be taken, including particular amendments to J-STD-025, that will better address privacy concerns." The report just published is TIA's response. It also addresses Carnivore. The TIA represents companies that provide communications materials, products, and systems in government relations, market support, and standards development. Phone companies and privacy groups successfully challenged several parts of the FCC's Third Report and Order. See, Aug. 15, 2000 Opinion of the U.S. Court of Appeals (DCCir). See also, TIA release. 9/29. The NIST announced that it will announce its proposed choice for the Advanced Encryption Standard on Monday, Oct. 2 at 11:00 AM ET. See, NIST release. 9/29. The FCC and Industry Canada signed a Letter of Understanding [74 pages in PDF] regarding the introduction of digital television service (DTV) along the US Canada border. The letter covers DTV operations within 400 kilometers on either side of the border. It contains a table of DTV channel allotments for each country and the procedures each country will use in notifying and evaluating proposed DTV facilities. See, FCC release and Industry Canada release. 9/29. The FCC issued a Memorandum Opinion & Order [huge MS Word file] granting Inmarsat a 9 month extension of the Oct. 1, 2000 deadline by which it must conduct an Initial Public Offering (IPO). It was created in 1979 as a joint venture of governments, but was recently privatized, following pressure from the U.S. 9/29. The Commerce Department's National Oceanic and Atmospheric Administration (NOAA) awarded a $34 Million contract to Raytheon for a new high performance computing system (HPCS) to be used to improve understanding of weather and climate. It will be used by NOAA's Geophysical Fluid Dynamics Laboratory (GFDL) in Princeton, NJ. SGI will develop the computational hardware and supporting software. StorageTek will supply the equipment for GFDL's data archive. See, NOAA release. 9/29. California Gov. Gray Davis vetoed Assembly Bill 2519, sponsored by Assemblyman Kevin Shelley (D-San Francisco). This bill would establish an Internet Voting Pilot Program in three counties to test the viability of such a system. See, Davis statement. 9/29. California Gov. Gray Davis vetoed Senate Bill 1874, sponsored by Senate Majority Leader Richard Polanco (D-Los Angeles). This bill would require the Secretary of State to develop an online system allowing entities to submit campaign disclosure reports directly into the Secretary of State’s office via the Internet. See, Davis statement. 9/29. ICANN issued a statement regarding the practice of pre-registration of new top level domains (TLDs). Quote: "The Names Council feels it is premature for companies to offer pre-registration services for domain names in speculative new TLDs. To date, no new TLDs have been selected and there is no guarantee that any particular organization will be authorized to take registrations for any particular TLD." 9/29. The ITC's Office of Economics published an article titled "United States-Japan Agreement on Telecommunications Access Fees to Reduce Costs and Likely Increase Competition" in the current issue [PDF 685 KB] of its International Economic Review (IER). See also, ITC release. To request a paper copy, write to the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, D.C. 20436, or fax a request to 202-205-2104. 9/29. FCC Commissioner Susan Ness released a statement criticizing NBC and Fox for not televising the debate between George Bush and Al Gore on Oct. 3. ABC and CBS plan to carry the debate. Ness also asserted: "I respect and defend the First Amendment right of broadcasters to determine what programming they will air". See also, statement by FCC Chairman Wm. Kennard. 9/28. FCC Chairman Wm. Kennard gave a speech in St. Paul Minnesota to the Indian Telecom Training Initiative. Quote: "Through the leadership of President Clinton and Vice-President Gore, we have already wired 95% of the nations schools -- and over one million American classrooms -- to the web. Our e-rate program ..." 9/28. The Senate Judiciary Committee approved S 2924, the Internet False Identification Prevention Act of 2000, with an amendment in the nature of a substitute. The bill is sponsored by Sen. Susan Collins (R-ME), and would amend 18 USC § 1028, regarding fraud and related activity in connection with government identification documents. 9/28. The Herrick District Library Board of Trustees in Holland, Michigan, voted unanimously to install filtering software on public Internet terminals. In Feb. 2000, city voters rejected a ballot measure that would have required the city to withhold funds from the library unless it installed Internet filtering software. 9/28. The FCC issued a Notice of Inquiry regarding regulatory treatment of broadband Internet access services over cable and other facilities. Comments are due within 45 days of publication in the Federal Register. See also, FCC release. 9/28. The House Ways and Means Committee's Oversight Subcommittee held its second hearing this week on "the tax code and the new economy." See, prepared statements of witnesses: • Joseph Hester (Community College for Allegheny County). • Martin Bean (Prometric, on behalf of Technology Workforce Coalition). • Mitchell Salamon (American Airlines). • William Sample (Microsoft, on behalf of the R&D Credit Coalition). • Randall Capps (EDS). • Linda Evans (IBM). • Collie Hutter (Click Bond). 9/28. The E-SIGN Act (S 761, Electronic Signatures in Global and National Commerce Act) goes into effect on Sunday, Oct. 1. 9/28. Rep. Dick Armey (R-TX) released a statement on the FBI's e-mail surveillance system named Carnivore: "The Department of Justice says we should trust them with our most personal information. But time and again they have shown a bureaucratic carelessness with this information. Our emails and Internet transactions should not be entrusted to the care of any individuals who demonstrate a lack of concern for our personal information. That's why the government should not have the ability to cybersnoop on millions of citizens at the flip of a switch. This Department of Justice proposal has confirmed my fears. According to press accounts, many of the reviewers have close connections with the Department of Justice and Clinton Administration. This important issue deserves a truly independent review, not a whitewash." 9/28. A federal grand jury indicted Mark Jakob on 11 counts of securities fraud and wire fraud in connection with his submission of a fraudulent press release to Internet Wire and Bloomberg regarding Emulex, while trading in Emulex stock. He is scheduled to be arraigned in U.S. District Court (CDCa) on Oct. 10. See, DOJ release. 9/28. The Oklahoma Corporation Commission (OCC) approved Southwestern Bell's request to provide long distance service in Oklahoma. The OCC found that SB is now allowing facilities based competition for both residential and business customers in Oklahoma without discriminating against competing carriers, and recommended that the FCC approve SB's § 271 petition. See, OCC release and SB's release. See also, AT&T reaction. 9/28. Commerce Sec. Norman Mineta announced the award of $13.9 Million in Technology Opportunities Program (TOP) grants at the Maya Angelou Charter School in Washington DC. "This year's grant recipients are leading the way in developing local initiatives moving from digital divide to digital inclusion," said Mineta. These grants (which are also known as TIIAP grants) are administered by the NTIA at the Commerce Dept. See, NTIA release. 9/28. Microsoft filed three complaints in U.S. District Court (MDFl) against three software vendors, alleging distribution of counterfeit and/or infringing copies of Microsoft software. The defendants are: • Computers Etc. of Clearwater (Case No. 8:00-CV-2001-T-17A). • Dacanay Consulting of Orlando (Case No. 6:00-CV-1283-ORL-28A). • Eva Computer Service of Clearwater (Case No. 8:00-CV-2000-T-17F). See, MSFT release. 9/28. MP3.com announced a grass roots lobbying campaign which it calls the "Million Email March" in support of HR 5275, sponsored by Rep. Rick Boucher (D-VA). See, MP3.com release. HR 5275 would amend Title 17 with respect to personal interactive performances of recorded nondramatic musical works. 9/27. The SEC instituted an administrative cease and desist proceeding against YourBankOnline.com and its President, Pakie Plastino. The SEC alleges that they made fraudulent statements about the company's banking software and its financial strength. See, SEC release. 9/27. William Reinsch, head of the Bureau of Export Administration at the Commerce Dept., gave a speech to the "Information Security Solutions Europe 2000 Conference" in Barcelona, Spain, titled "United States Encryption Policy." He stated that "cryptography remains a challenging public policy issue, but the issue of the future will be our collective ability to avoid the converse of export controls -- protectionist trade barriers or artificial standards, de facto or de jure, intended to keep foreign software products out of selected markets." 9/27. Amanda DeBusk (Asst. Sec. for Export Enforcement at the BXA, U.S. Dept. of Commerce) gave a speech in Oxford, UK, titled "Export Enforcement and the Challenge of Intangible Technology Transfers." She stated that "Many companies today provide all their technical support and software updates in customer restricted areas of their company websites. Controlled information is literally flying around the world at light speed. It presents great challenges to law enforcement to step into this cyber-export world and say this packet of data can go here, but that packet of data needs an export license." She also problems associated with allowing access to software to foreign nationals, outsourcing data storage out of nation, and e-mailing of controlled software to a foreign end-user. The event at which she spoke was titled the "Second Oxford International Conference on Export Control." 9/27. The SEC announced the members of the Advisory Committee on Market Information. This committee will assist the SEC in evaluating issues relating to the public availability of market information in the equities and options markets. The membership includes Michael Atkin, VP of the Software and Information Industry Association, Financial Information Services Division. See, SEC release. 9/27. The House passed HR 3100, the Know Your Caller Act, on a roll call vote of 420 to 13. The bill would amend the Communications Act of 1934 to prohibit telemarketers from interfering with the caller identification service of any person to whom a telephone solicitation is made. 9/27. The House passed HR 2346 by voice vote. The bill would authorize the enforcement by State and local governments of certain FCC regulations regarding use of citizens band radio equipment. 9/27. The House Commerce Committee's Telecom Subcommittee held a hearing titled "The Future of the Interactive Television Services Marketplace: What Should Consumers Expect?" See, prepared statements of Rep. Tom Bliley (R-VA), Steve Case (AOL), and Gerald Levin (Time Warner). 9/27. The House Science Committee held a hearing to investigate continued computer security lapses at the Federal Aviation Administration (FAA). GAO witness Joel Willemssen provided a report which concluded that the "FAA's agencywide computer security program has serious and pervasive problems." Committee Chairman Rep. James Sensenbrenner (R-WI) criticized the FAA for its problems, and for not taking seriously repeated reports of its computer security problems. FAA Administrator Jane Garvey defended the FAA's record on computer security. Committee Democrats downplayed accusations of FAA computer weaknesses. 9/27. Verizon filed a brief with the U.S. Court of Appeals (4th Cir.) in the Henrico County cable access case in which it argued that broadband Internet access provided over cable facilities is a telecommunications service within the meaning of Communications Act. It further argued that such cable operators must provide "open access" to their cable facilities to competing ISPs. In Dec. 1999, the Henrico County Board of Supervisors passed an ordinance approving the transfer of MediaOne's cable license to AT&T, conditioned upon allowing open access. AT&T filed a complaint in the U.S. District Court (EDVa). In May 2000, the Court held that the County's franchising authority was preempted by federal law. Henrico County and Verizon appealed. See, Verizon release. On June 22, the U.S. Court of Appeals (9th Cir.) issued its opinion in a similar case, AT&T v. Portland, holding that broadband Internet access over cable is a telecommunications service. 9/27. Macromedia filed counterclaims in the U.S. District Court (DDel) against Adobe alleging patent infringement. It alleges infringement of three patents: U.S. Patent No. 5,467,443, which relates to changing blended elements and automatic re-blending of elements, and which is alleged to be infringed by Adobe Illustrator; and U.S. Patents Nos. 5,151,998 and 5,204,969, which relate to visually displaying and editing sound waveforms, and which are alleged to be infringed by Adobe Premiere. See, Macromedia release. On Aug. 10, Adobe filed suit against Macromedia alleging infringement of U.S. Patent No. 5,546,528, which covers Adobe's tabbed palette, a method of displaying and working with multiple sets of information in the same area of the computer screen. See, Adobe release of Aug. 10. 9/27. The FTC and European Commission approved Boeing's acquisition of Hughes Space and Communications, Electron Dynamics and Spectrolab from Hughes Electronics Corporation. The new entity will be operated as a wholly owned subsidiary called Boeing Satellite Systems (BSS). Under agreements with the FTC and the EC, Boeing will establish firewalls to ensure both the confidentiality of launch vehicle information that is provided to BSS by various launch service providers and satellite information provided by various manufacturers to Boeing's Expendable Launch Systems unit. See, Boeing release. To impose these restrictions upon Boeing, the FTC filed and settled an administrative Complaint. See, Consent Order and Decision and Order. See also, FCC release and EC release. 9/27. California Gov. Gray Davis signed several bills pertaining to technology related crimes: • AB 1862, sponsored by Assemblyman Tom Torlakson (D-Antioch), which requires the Calif. Dept. of Justice to establish and maintain a database of identity theft victims to assist them in clearing their names. • AB 2232, sponsored by Assemblyman Rico Oller (R-San Andreas), which increases the criminal penalties for unlawfully accessing a computer, introducing a computer virus, and knowingly using another’s domain name, and which expands the definition of injury within the scope of computer crimes by including denial of access to legitimate users of a computer system, network, or program. • AB 2727, sponsored by Assemblyman Herb Wesson (D-Los Angeles), which provides a civil cause of action to the owner or lessee of a computer, system, network, program, or data who is harmed via the Internet by someone who maliciously causes a denial of service. • SB 1357, sponsored by Sen. Patrick Johnston (D-Stockton), which requires the appointment of a designee of the Dept. of Information and Technology or the Science and Technology Agency to the High Technology Crime Advisory Committee. 9/27. Microsoft published an essay regarding online privacy in its web site. 9/26. The Supreme Court of the U.S. declined to hear a direct appeal of the Final Judgment, in the Microsoft antitrust case. The appeal will instead go first to the U.S. Court of Appeals (DCCir). The Department of Justice had sought a direct appeal, pursuant to 15 U.S.C. § 29(b). Also, U.S. District Court Judge Jackson issued an Order certifying the Microsoft case for direct consideration by the Supreme Court. (See, S.C.U.S. Nos. 00-139 and 00-261.) 9/26. The Commodity Futures Trading Commission (CFTC) filed a civil complaint in U.S. District Court (CDCa) against two individuals alleging sales solicitation fraud in connection with advertising their commodity options trading methodology on their web site, The Cash Nursery. The complaint seeks an injunction against further fraud, an accounting, disgorgement, restitution, and civil fines. (Case No. SACV-00-940). See, CFTC release. 9/26. Rep. Rush Holt (D-NJ) introduced HR 5300, a bill to amend section 227 of the Communications Act of 1934 to prohibit the use of the text, graphic, or image messaging systems of wireless telephone systems to transmit unsolicited commercial messages. 9/26. The U.S. Court of Appeals (DCCir) issued a per curiam order [PDF] on its own motion, promptly after the Supreme Court's order, that Microsoft "file a motion to govern further proceedings herein, including a proposed briefing schedule and format, by 4:00 p.m. on Monday, October 2, 2000. Any responses are to be filed by 4:00 p.m. on Thursday, October 5, and any reply by 4:00 p.m. on Tuesday, October 10." The Order also consolidated the appeals of the judgments in the Department of Justice and state cases (which were consolidated in the trial court). (See, U.S.C.A. Case No. 00-5212.) 9/26. The House Judiciary Committee approved HR 5018, the Electronic Communications Privacy Act of 2000, after a lengthy mark up session. The bill, as adopted, would amend the criminal code in several ways. (1) It would extend the statutory exclusionary rule for wiretaps (18 U.S.C. § 2515) to also include electronic communications and "any stored electronic communication that has been disclosed." (2) It would also require judges to make certain reports to the Administrative Office (AO) of the U.S. Courts regarding "disclosure of stored electronic communications", and further require the AO to make annual reports to the Congress. (3) It would require that pen register and trap and trace orders not be issued for e-mail addresses, "unless the court finds that specific and articulable facts reasonably indicate that a crime has been, is being, or will be committed, and information likely to be obtained by such installation and use is relevant to an investigation of that crime ..." (4) It would prohibit the government from using cell phones as tracking devices without probable cause. (5) It would add several provisions regarding computer crimes. See, Tech Law Journal Summary of HR 5018. 9/26. It is unlikely that HR 5018 would be enacted into law in the 106th Congress, which could adjourn as early as its target adjournment date of Oct. 6. Two other House Judiciary Committee bills long thought to be stalled may yet be amended and passed by the full House: HR 3125, the Internet Gambling Prohibition Act, and HR 2100, the Antitampering Act. 9/26. The FCC's Office of Plans and Policy (OPP) released a paper titled "The Digital Handshake: Connecting Internet Backbones." [See, Text, MS Word, and PDF versions.] The paper, authored by Michael Kende, Director of Internet Policy Analysis in the Office of Plans and Policy, examines the interconnection arrangements between Internet backbone providers. It concludes that "competition, governed by antitrust laws and competition enforcement that can prevent the emergence of a dominant firm, can act to restrain the actions of larger backbones in place of any industry-specific regulations, such as interconnection obligations. If a dominant backbone provider should emerge through unforeseen circumstances, however, regulation may be necessary, as it has been in other network industries." See also, FCC release and summary. 9/26. The FTC closed its investigation of Intel. Richard Parker, Director of the FTC's Bureau of Competition sent a letter to Intel which stated: "Upon further review of this matter, it now appears that no further action is warranted by the Commission at this time. Accordingly, pursuant to authority delegated by the Commission, the investigation has been closed." See, Intel release. See also, Tech Law Journal Summary of FTC Antitrust Action Against Intel. (In the Matter of Intel Corporation, FTC Docket No. 9288.) 9/26. The USPTO issued a release regarding its recent rule changes, known as the Changes to Implement the Patent Business Goals: Final Rule [PDF], which were published in the Federal Register on Sept. 8. (See, Vol. 65, No. 175.) According to the USPTO, the purposes of the rule changes are "to increase the level of service to the public by raising the efficiency and effectiveness of the Office’s business processes. In furtherance of the Patent Business Goals, the Office is changing the rules of practice to eliminate unnecessary formal requirements, streamline the patent application process, and simplify and clarify the provisions of the rules of practice." 9/26. The FCC released its annual summary titled Telecommunications Industry Revenues: 1999 [31 pages in PDF]. It reports that telecommunications industry revenues were $269 Billion in 1999, up 9% from 1998. Wireless revenues increased 30%, from $37 Billion in 1998 to $48 Billion in 1999. Competive local phone companies' revenues increased 60%, to more than $5 Billion. See also, release. 9/26. The Telecommunications Industry Association (TIA) named Bill Belt to be its Director of Technical and Regulatory Affairs. He will coordinate activities for TIA's Wireless Communications Division. See, release. 9/26. The House Ways and Means Committee's Oversight Subcommittee held a hearing on the tax code and the New Economy. See, Tech Law Journal story. 9/25. The SEC instituted an administrative cease and desist proceeding against MainStreetIPO.com, and its President, Joseph Salvani, alleging that they are attempting to induce the purchase or sale of securities and to effect transactions in securities on behalf of others without registering as a broker, in violation of § 15(a) of the Securities Exchange Act of 1934. See, SEC release. 9/25. Sandra Weisman was named Deputy CFO at the USPTO. She was formerly at the Dept. of Veterans Affairs. See, release. 9/25. Jing Jing Fan Mou entered a plea of guilty in U.S. District Court (CDCa) to two felony counts: conspiracy and trafficking in counterfeit goods. She had purchased and distributed Microsoft Windows NT Server and Professional Office 1997 software with a black market value of more than $600,000. Sentencing is scheduled for Dec. 4. See, DOJ release. 9/25. The Office of the Attorney General of the State of Texas filed a complaint and joint settlement agreement with bankrupt Internet retailer living.com in U.S. Bankruptcy Court in Austin, TX. On Aug. 31 living.com filed a Chapter 11 bankruptcy petition. The company's privacy policy states that "living.com does not sell, trade or rent your personal information to others without your consent. We may choose to do so in the future with trustworthy third parties, but you can tell us not to by sending a blank email to never@living.com...." The proposed settlement agreement provides that a court appointed bankruptcy trustee will oversee the destruction of customers' credit card, bank account and social security numbers. However, the trustee may sell or transfer the customer list, after giving notice to all of living.com's customers and giving them an opportunity to opt-out of the proposed sale. See, release. The bankruptcy court may reject the settlement agreement. A bankruptcy court recently rejected a similar settlement agreement between the FTC and Toysmart. 9/25. California Gov. Gray Davis vetoed Assembly Bill 2412, sponsored by Assemblywoman Carole Migden (D-San Francisco). This bill would have imposed a sales tax for retailers who process orders over the Internet. In addition, Gov. Davis signed a bill creating a commission to examine sales tax issues in the New Economy and another calling for a three-year moratorium on Internet access taxes. SB 1933, sponsored by Sen. John Vasconcellos (D-Santa Clara), creates the California Commission on Tax Policy in the New Economy. The Commission will examine sales tax issues and develop a long-term strategy in relation to technology and the State and local tax structure. AB 1784, sponsored by Assemblyman Ted Lempert (D-San Carlos), provides a 3 year extension of California’s Internet Tax Freedom Act. See, Gov. Davis release. 9/25. U.S. International Trade Commission (ITC) announced that it determined not to review the presiding administrative law judge's (ALJ) finding that access from the U.S. of Mentor Graphics's foreign design verification centers would not be covered by the ITC's cease and desist order in its advisory opinion proceeding instituted by Quickturn regarding certain hardware logic emulation systems used in the semiconductor industry to debug and test electronic circuit designs for semiconductor devices. (Inv. No. 337-TA-383) The respondents are Mentor and Meta Systems. The ITC also determined to take no position on the ALJ' s alternate determination concerning the "use" of Mentor's hardware logic emulator in the United States if the term "covered product" in the cease and desist order is interpreted to include infringing hardware and software that has not been imported. See, ITC release. 9/25. The Commerce Department's National Institute of Standards and Technology (NIST) announced an electronic Braille reader that allows blind people to read e-books. It employs software to translate electronic text into Braille, and features variable speeds. NIST hopes that it will be adopted by the private sector. According to NIST, "About 50,000 e-books already have been sold in America, and industry analysts believe e-books could represent a $2.3 billion market by 2005, about 10 percent of all consumer books." See, release. 9/25. Christian Mixter left the SEC to become a partner in the Washington DC office of the law firm of Morgan, Lewis & Bockius, a huge Philadelphia based law and lobbying firm. He was the SEC's Chief Litigation Counsel in the Division of Enforcement. See, SEC release. 9/25. Bill Clinton announced his intent to nominate Donald Robinson to be a member of the National Commission on Libraries and Information Science. See, release. 9/25. Ivan Seidenberg, President and co-CEO of Verizon Communications, gave a luncheon address at the National Press Club in Washington DC. 9/22. The FTC's Bureau of Consumer Protection submitted Comments on Study of Privacy Issues in Bankruptcy Data to the Department of Justice, the Department of the Treasury, and the Office of Management and Budget. These agencies are conducting a study of how the bankruptcy proceedings affect the privacy of individual consumer information that becomes part of a bankruptcy case. See, notice of the study, and request for public comments, in the Federal Register (July 31, 2000, Vol. 65, No. 147, Pages 46735-46738.) The FTC's comments address two main topics: privacy and identity theft issues raised by the collection and handling of sensitive information in bankruptcy, and the electronic compiling and commercial sale by trustees and creditors of information contained in bankruptcy records. The comments also briefly touch upon the trustee's or debtor in possession's powers to sell assets, including customer information, in violation of debtor's online privacy policy. See, FTC release. See also, Tech Law Journal story. 9/22. The FCC's Wireless Telecoms. Bureau issued a Notice [MS Word] in which it requests public comment on a petition for declaratory ruling filed on Feb. 2, 2000 by the plaintiffs in the class action lawsuit White v. GTE. It pertains to whether certain CMRS practices violate the Communications Act. Comments are due by Oct. 20; reply comments are due by Nov. 6. 9/22. Verizon filed a Section 271 application with the FCC for permission to provide interLATA long distance service in Massachusetts. (Docket No. CC-00-176.) See, Verizon release and the application (78 pages in MS Word). In Dec. 1999 the FCC approved Verizon's (then Bell Atlantic) §271 application in New York State; that was the first such application to be approved by the FCC. The FCC has requested comments by interested third parties in support of or in opposition to Verizon’s application. Comments are due by Oct. 16, 2000. See, FCC release. 9/22. The House Education Committee held a hearing titled "Using Technology to Learn and Learning to Use Technology". See, prepared statements of witnesses: • James Thomas (Penn State Univ). • Eva Cronin (teacher). • Janet Guge (teacher). • Claudia Sutton (CompassLearning). • Michael Kaufman (Tequity). 9/22. The House Commerce Committee issued its report on HR 2346, a bill to authorize the enforcement by state and local governments of certain FCC regulations regarding use of citizens band radio equipment. (See, Rept. 106-883). 9/22. California Gov. Gray Davis vetoed Senate Bill 1997, sponsored by Sen. Don Perata (D-Alameda). The bill provided for Internet bicycle registration. See, statement of Gov. Davis. 9/21. Prof. Stan Liebowitz wrote a study for the Association for Competitive Technology which estimated that if Judge Jackson's order to break up Microsoft were implemented, the cost to U.S. consumers in the form of higher prices, would be at least $50 Billion over 3 years. See also, Tech Law Journal story. 9/21. The FCC released a statement regarding a Washington Post story that an FCC draft document recommended that the FCC approve the AOL Time Warner merger with an open access condition. The story stated: "provided the companies make legally binding their pledge to allow rival providers of high-speed Internet access to reach customers over their cable television systems." The FCC statement said: "The FCC staff is engaged in ongoing analysis and review of the proposed AOL/Time Warner merger transaction and has made no recommendations to the full Commission on the matter. Any media stories about potential staff recommendations or draft reports can only be based on incomplete and speculative analysis and do not accurately reflect the decision-making process at the FCC. ..." See also, the FCC Cable Services Bureau's AOL-TW merger web page. 9/21. The Department of Justice announced that a 16 year old plead guilty to, and was sentenced for, two counts of juvenile delinquency in U.S. District Court (SDFl). He intruded into computer networks of the Defense Threat Reduction Agency (DTRA) and the National Aeronautics and Space Administration (NASA). He also installed a backdoor on a DTRA server which intercepted electronic messages to and from DTRA staff, and user names and passwords of computer accounts of DTRA employees. He was sentenced to serve six months in a detention facility. See, DOJ release. 9/21. The U.S. Bankruptcy Court (DDel) approved Time Warner Telecom's purchase of substantially all of the assets of GST Communications for $690 Million. The assets to be acquired include over 4,200 miles of local and regional fiber networks in the western US, a network operations center in Vancouver, Washington, SS7 networks, and voice and data switches. See, TW release. GST filed for Chapter 11 bankruptcy protection on May 17. An auction was held on Aug. 22-25. Time Warner Telecom, which is based in Littleton, Colo., builds local and regional optical networks and delivers last-mile broadband data, Internet access and voice for businesses. The transaction still requires telecom regulatory approvals. 9/21. Xircom filed a complaint in U.S. District Court (CDCa) against 3Com alleging patent infringement in connection with PC cards. Xircom, which is based in Thousand Oaks, Calif., designs and develops communications access cards that connect mobile PCs to corporate networks, the Internet, and intranets, including its RealPort PC cards. 3Com, based in Santa Clara, Calif., makes similar products, including its Type III PC Cards. 3Com filed a complaint in U.S. District Court (DUt) against Xircom in May. 9/21. California Gov. Gray Davis announced an eGovernment initiative, which includes: • an Executive Order requiring state agencies and departments to make it easier to receive services on the Internet, including fishing and hunting licenses, and DMV appointments. • establishment of a Governors eGovernment Business Advisory Council. • naming Arun Baheti as Calif. Director of eGovernment. See, release. 9/21. Lernout & Hauspie confirmed that SEC is conducting an investigation of its prior financial statements, and stated that it is cooperating fully in the investigation. The company makes speech and language products, including speech recognition, text to speech, and translation software. See, LH release. 9/21. Bill Clinton and FCC Commissioner Susan Ness campaigned in Flint, Mich. Clinton gave a speech in which he said: "Now, for nearly eight years now, the Vice President and I have worked to break down barriers that hold people back. One of the most important things we did was to fight hard in the Telecommunications Act of 1996 to insist that people with disabilities have full access to telephone equipment and service that most people take for granted. And one of our Federal Communications Commissioners, Susan Ness, is here with me today. I thank her and I thank all of those who helped us to fight for the rights of disabled Americans in the Telecommunications Act of 1996." He also stated that "Millions of other people with disabilities can also access and use the information super highway if we build the necessary on ramps." 9/21. Bill Clinton announced his intent to nominate Daniel Burnham as Chairman of the National Security Telecommunications Advisory Committee (NSTAC). He is the Chairman and CEO of Raytheon. See, White House release. 9/20. The U.S. Attorney’s Office (NDCa) charged by information one Jason Everett Spatafore, aka Dis-man, on four counts of criminal copyright infringement for Internet movie piracy in violation of 17 U.S.C. §§ 506(a)(1) and (a)(2) and 18 U.S.C. §§ 2319(b)(3) and (c)(3). The Dis-man reproduced and distributed copies of Star Wars Episode I: The Phantom Menace. See, release. 9/20. California Gov. Gray Davis signed SB 88 [PDF], sponsored by Sen. Byron Sher (D-Palo Alto). This bill exempts computer software employees engaged in intellectual or creative work and whose hourly rate of pay is at least $41.00, from the provisions of the overtime pay requirements contained in the California Labor Code and Industrial Welfare Commission Orders. See also, Davis release. 9/20. The Senate Commerce Committee passed S 2454, the Low Power Television Pilot Project Digital Data Services Act, by a voice vote. This bill, is sponsored by Sen. Conrad Burns (R-MT), and would establish 10 pilot projects to provide for two way digital data services by low power television stations, and grant the FCC authority to promulgate regulations. See, release. 9/20. The Senate Commerce Committee passed S 2029, the Know Your Caller Act. This bill, which is sponsored by Sen. Bill Frist (R-TN), would amend §227 of the Communications Act to prevent telemarketers from taking any actions to block their name and telephone number from registering on Caller ID displays. See, release. The House Commerce Committee adopted its version of the Know Your Caller Act, HR 3100, on Sept. 14; it issued its Report (H. Rept. 106-872) on Sept. 20. 9/20. The Senate Finance Committee reported HR 4986, with amendments on Sept. 19. It issued its report on Sept. 20. The bill would repeal the provisions of the tax code relating to foreign sales corporations (FSCs) (which the WTO found to constitute an illegal export subsidy), and to instead exclude extraterritorial income from gross income. See, Rept. No. 106-416. The House passed its version of HR 4986 on Sept. 13. 9/20. The House Judiciary Committee began its markup of HR 5018, the Electronic Communications Privacy Act of 2000, sponsored by Rep. Charles Canady (R-FL). On Sept. 14 the Constitution Subcommittee approved the bill. On Sept. 20 Rep. Canady offered a lengthy amendment to the subcommittee version of the bill which limits some of the privacy protections, and gives new powers to law enforcement authorities. The Committee debated at length, but postponed further consideration until Tuesday, Sept. 26. At least six other amendments were still pending as of adjournment of the mark up. 9/20. The SEC brought and settled civil fraud charges against Jonathan Lebed, age 15, for using the Internet to conduct a series of stock manipulation schemes involving fraud and touting. On 11 occasions young Lebed purchased thinly traded microcap stocks, then sent e-mail messages, primarily to various Yahoo! Finance message boards, regarding the stock, and then sold his shares. On several occasions the punk placed a sell limit order before the market closed on the day he purchased the stock to ensure that he would not miss the price increase of the stock while he was in school the next day. Under the settlement, he will disgorge his illegal profits: $272,826. This is the first time the SEC has brought charges against a minor. See, SEC release. 9/20. The Supreme Court of the U.S. now has an online docket system that can be searched by the lower court docket number, the Supreme Court docket number, or names of the parties. 9/20. The Electronic Privacy Information Center (EPIC) and Privacy International released a 3rd annual Privacy and Human Rights survey. The report reviews the state of privacy in over fifty countries. See, release. 9/19. The law firm of Milberg Weiss filed a complaint in U.S. District Court (SDCa) against MP3.com, its CEO Michael Robertson, and others, alleging fraud in violation of §10b of the Securities Exchange Act, and Rule 10b5 thereunder. The complaint seeks class action status. Milberg Weiss is San Diego based law firm that specializes in bringing class action 10b5 suits against technology companies when their stock prices drop. 9/19. Unique Broadband Systems (UBS), a Canadian manufacturer of broadband wireless products, filed suit against Pixstream for breach of contract in connection with an alleged misappropriated its digital video technology. UBS is based in Concord, Ontario, and is represented by the law firm of Lenczner Slaght. Pixstream, which is based in Waterloo, Ontario, develops and manufactures hardware and software products that enable network service providers and enterprises to distribute and manage digital video. Cisco announced on Aug. 31 that it will buy Pixstream. See, Cisco press release. 9/19. The Senate passed HR 4444, a bill to extend permanent normal trade relations status to China, by a vote of 83 to 15. The House passed the bill on May 24. Clinton has promised to sign it. 9/19. Joel Klein, Asst. Atty. Gen. for the Antitrust Division at the U.S. Department of Justice announced that he will leave to DOJ at the end of September. Doug Malemed, the Principle Dep. Asst. A.G. for the Antitrust Division, will assume assume his responsibilities. Klein stated that "our work is on the right track." See, statements of Klein and Janet Reno and FTC Chairman Pitofsky. 9/19. The House passed three non-controversial copyright bills by voice vote: HR 4870, the Intellectual Property Technical Amendments Act of 2000, HR 5106, the Copyright Technical Corrections Act of 2000, and HR 5107, the Work Made For Hire and Copyright Corrections Act of 2000. 9/19. The House Judiciary Committee began a marathon mark up session. The long list of bills on the agenda includes HR 5018, the Electronic Communications Privacy Act of 2000. The Committee only addressed one bill on Tuesday. The mark up session continues on Wed. Sept. 20 at 10 AM. 9/19. The House Banking Committee's Subcommittee on Domestic and International Monetary Policy held a hearing titled "Future of Electronic Payments: Roadblocks and Emerging Practices." Rep. Spencer Bachus (R-AL) presided. Witnesses testified regarding why electronic payments has not replaced traditional methods of payments, technologies for electronic payments, and protecting consumers. See, prepared testimony of: • Rep. Bachus. • Thomas Vartanian (Fried Frank). • James Van Dyke (Jupiter Comm.). • Elliott McEntee (NACHA) • Gary Craft (Deutsche Bank). • Jane Winn (SMU School of Law). • Richard Rahn (Novecon Financial). • Jacki Snyder (Food Marketing Inst.). 9/19. The Commission on Child Online Protection held the second session of a two day meeting. 9/19. NTIA held a day long conference on online privacy. Sec. of Commerce Norman Mineta said in the opening speech that "The Internet has been a central part of the longest peacetime economic expansion in our history. But we don't think this growth will continue unless both consumers and businesses are confident about their experiences on the Net. So, we see privacy as a make-or-break issue." He also endorsed the FTC approach to online privacy: "we need to be sure that all content providers satisfy the Fair Information Principles." 9/19. Forrester Research released a study that concludes that "music piracy using sites like Napster won't be stopped, either by digital rights management (DRM) or by lawsuits". See, release. 9/19. The FCC released a staff report [266 pages in PDF] as the first step in its statutory responsibility to conduct a biennial review of its regulations. § 202(h) of the Telecom Act of 1996 requires that the FCC review its rules every two years and "determine whether any of such rules are necessary in the public interest as the result of competition." The FCC is also required to repeal or amend any regulations that are no longer in the public interest. The FCC stated in a press release that only after receiving public comment on the staff report will it issue a report identifying which, if any, regulations are no longer necessary. Comments are due by Oct. 10, and reply comments are due by Oct. 20. Commissioner Harold Furchtgott-Roth wrote a separate statement in which he said that the FCC has not complied with the statute. He wrote: "The Act provides that the Commission 'shall review all regulations'" but that "today's report does not detail that review on a rule-by-rule basis". 9/19. The Information Technology Association of America (ITAA) sent a letter to members of Congress stating what bills it would like Congress to pass before it recesses early next month. The list includes extending PNTR status for China, increasing the cap on H1B visas, passage of the New Millennium Classrooms Act (expanding the availability of tax deductions to companies donating computers to schools), the Internet Tax Freedom Act (extending the moratorium on Internet taxes), permanently extending the R&D tax credit, and creating incentives to businesses that provide IT training to employees. See, ITAA release. 9/14. U.S. Court of Appeals Judge Richard Posner gave an address titled Antitrust in the New Economy. He covered application of antitrust law and economics to intellectual property based technology companies (which he defined as software producers, communications services and equipment providers, and Internet access, service, and content providers). He stated that "antitrust doctrine is supple enough, and its commitment to economic rationality strong enough, to take in stride the competitive issues presented by the new economy." However, he also recommended that the DOJ Antitrust Division and FTC need more funding, and that the states should not be allowed to bring antitrust suits. 9/19. The CDT, Common Cause, and the Bertelsmann Foundation opened a web site with information about the At-Large Membership candidates for the ICANN's Board of Directors. The election is next month. 9/19. Microsoft stated that it filed three complaints in U.S. District Court (WDPa) against software vendors in the Pittsburgh area. The complaints allege distribution of counterfeit software. See, MSFT release. 9/18. The House Commerce Committee's Telecom Subcommittee amended and adopted HR 4445 [PDF], the Reciprocal Compensation Adjustment Act of 2000, by a voice vote late on Monday. This bill, which is supported by ILECs, would end reciprocal compensation payments made for phone calls to connect to the Internet. The Subcommittee held a hearing on this bill on June 22. See, TLJ story of June 23. 9/18. The WTO Appellate Body upheld a ruling by a dispute settlement panel that Canada's 17 years from grant patent term does not meet its TRIPS obligations. USTR Charlene Barshefsky had this to say: "We expect Canada to comply promptly and fully with this ruling." See, USTR release and the Report of the Appellate Body [34 pages in PDF]. See also, TLJ story. 9/18. The House Judiciary Committee scheduled a marathon mark up session for Sept. 19 and 20. The agenda includes 11 bills, including HR 5018, the Electronic Communications Privacy Act of 2000. On Sept. 14 the Constitution Subcommittee approved an Amendment in the Nature of a Substitute offered by Rep. Charles Canady (R-FL), as amended by an Amendment offered by Rep. Bob Barr (R-GA). The bill would: (1) require courts and law enforcement entities to make annual reports to the Administrative Office of the U.S. Courts (AO) regarding applications for orders, warrants, or subpoenas authorizing or requiring the disclosure of the contents of electronic communications, and further require the AO to submit an annual report to Congress; (2) affect the use of electronic communications as evidence in federal court; (3) affect the use pen registers and trap and trace devices; and (4) preclude any government entity from using any "mobile electronic communication service" device as a physical locator, without "a court order issued upon a finding that there is probable cause to believe that (A) an individual is committing, has committed, or is about to commit a felony offense; and (B) the location information sought to be obtained concerns the location of the person believed to have committed, be committing, or be about to commit that offense or a victim of that offense." The final item, which is the Barr Amendment, is intended to prevent the widespread use of cell phones as tracking devices. 9/18. The Commission on Child Online Protection held the first of two days of meetings. 9/18. Apple announced that it has licensed Amazon.com's 1-Click patent and trademark for use on its Apple Online Store, as part of an e-commerce patent cross-licensing agreement. See, Apple release. Go to News Briefs from September 1-15, 2000.
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