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News Briefs from February 21-25, 2001
 
2/23. The U.S. District Court (CDCal) issued its order dismissing claims against two defendants in GTMI v. John Does, a case regarding attempts to silence posters to Internet message boards. Plaintiff, Global Telemedia International, Inc. (GTMI), is a publicly traded company. Defendants Reader and King posted numerous negative messages on the Raging Bull Message Board about GTMI and its officers. GTMI and individual officers filed a complaint in California state court against negative posters, including Reader and King, alleging trade libel, libel per se, and interference with contractual relations. Defendants removed the proceeding to U.S. District Court. Defendants filed motions to strike the Plaintiffs' claims, asserting that they were a "transparent effort to intimidate and silence individuals who are critical" of GTMI. The District Court dismissed the claims, pursuant to Cal. Civ. Proc. 425.16, as a Strategic Litigation Against Public Participation (SLAPP) lawsuit. It held that message boards devoted to discussions about publicly traded companies are "in connection with a public issue" and are protected under anti-SLAPP provisions.Megan Gray of the Los Angeles office of Baker & Hostetler represented one of the the defendants.
2/23. Sec. Thompson released a statement in which he said that the medical privacy regulations "are intended to ensure patients that the privacy of their medical records is secure, and to ensure that this information is used appropriately. This administration is absolutely committed to achieving these goals." He added that "under the Congressional Review Act, HHS was legally required to submit this regulation for consideration by the Congress for a 60-day period. Due to an oversight under the prior administration, this requirement was not met. As a result of this oversight, the 60-day period of Congressional review did not begin until Feb. 13, and therefore the effective date of the regulation has been delayed until April 14, 2001."
2/23. Napster filed a petition for rehearing and rehearing en banc with the U.S. Court of Appeals (9thCir). Napster seeks review of the Feb. 12 opinion [PDF] of a three judge panel of the court that largely upheld District Court Judge Patel's findings regarding patent infringement. See, Napster release.
2/22. The U.S. Attorney's Office (CDCal) announced that Adrian Herr plead guilty one count of criminal copyright infringement for copying and selling over the Internet a variety of computer software products, including Microsoft Windows 98, Windows 2000, Office 2000 and Publisher 2000. See, release.
2/23. The AEI-Brookings Joint Center for Regulatory Studies published a report titled Law and Policy in the Age of the Internet [43 pages in PDF] by Robert Litan. It addresses privacy, intellectual property, taxation, and policies relating to broadband access to the Net.
2/23. The U.S. Court of Appeals (DCCir) issued its opinion in USA v. Wilson, a bank fraud case. Wilson stole individuals' identities, and then fraudulently obtained and used credit and ATM cards in their names. The legal issues on appeal (sufficiency of the evidence, and sentencing guidelines) are not significant. However, what may be noteworthy is that while this was a extensive identity theft operation, the opinion does not state that there was any hacking into databases, or even use of the Internet. Wilson obtained the personal information of his victims an old fashioned way -- from corrupt bank employees.
2/22. A WIPO Arbitration and Mediation Center panel issued its opinion in Vertical Computer Systems. v. Registrant of pointmail.com, rejecting VCS's request to have the domain name transferred to it.
2/22. Feb. 22 was the deadline to file comments with the FCC in response to its Notice of Proposed Rulemaking (NPRM) [see, TXT and PDF versions] regarding reallocation of spectrum for use by Third Generation (3G) wireless services. The FCC received numerous comments. 3G is intended to provide broadband Internet access to portable devices. The NPRM sought comments on introducing 3G services in frequency bands currently used for cellular, broadband PCS, and SMR services, as well as in five other frequency bands: 1710-1755, 1755-1850, 2110-2150, 2160-2165, and 2500-2690 MHz. Spectrum currently allotted to the private sector or government entities for other purposes will have to be reallocated.
2/22. Numerous comments were filed by industry. For example, the Telecommunications Industry Association (TIA), a manufacturers' trade group, filed a comment [23 pages in PDF] in which it stated that "Additional spectrum must be made available that is suitable for advanced communications services, such as 3G mobile systems." See also, Motorola comment [PDF], Qualcomm comment [PDF], and Ericsson comment [PDF] (See, ET Docket No. 00-258.)
2/22. In contrast, incumbent users of spectrum under consideration for use for 3G services generally oppose sharing or reallocation spectrum currently assigned to them. For example, the Catholic Television Network (CTN) submitted a comment in which it opposed reallocation of spectrum used by educational institutions. CTN is an incumbent Instructional Television Fixed Service (ITFS) user of spectrum in the 2.5 GHz band. CTN has long used ITFS to distribute educational, training, religious programming to schools, parishes, hospitals, and other locations. Educators are now in the process of upgrading their systems to provide two-way interactive services.
2/22. The Senate Finance Committee announced its subcommittee assignments. The Subcommittee on International Trade will include Orrin Hatch (R-UT) (Chairman), Max Baucus (D-MT) (Ranking Democrat), Charles Grassley (R-IA), Fred Thompson (R-TN), Frank Murkowski (R-AK), Phil Gramm (R-TX), Trent Lott (R-MS), James Jeffords (R-VT), Olympia Snowe (R-ME), John Rockefeller (D-WV), Tom Daschle (SD), Kent Conrad (D-ND), John Kerry (D-MA), Blanche Lincoln (D-AR), Bob Graham (D-FL), Robert Torricelli (D-NJ). See, release.
2/22. The Federal Communications Commission held a meeting at which the four members of the Commission (Powell, Ness, Tristani, and Furchtgott-Roth) heard testimony from its own bureau and office chiefs. The new Chairman, Michael Powell, stated that "it is important, before you decide where you are going, to take stock of where you are." He stated that these meetings will be annual.
2/22. Two themes ran throughout the statements of both the bureau chiefs and Commissioners: first, the FCC staff is excellent; second, the FCC staff lacks the engineering expertise to understand the new Internet technologies that it has recently undertaken to regulate. FCC Chairman Powell and most of his bureau chiefs stated that the FCC lacks "engineering resources". Powell noted that about "30 to 45 percent of engineers are approaching retirement age. When we hire entry level engineers at GS 5 and 7 level, and you are competing with the very industries you regulate for the same talent, you have a problem." He also stated that "this Commission has to have an independent technical capability" and "cannot rely on the industry we regulate." He suggested the FCC needs more money from Congress for salaries, training, and "new technical tools and assets that the engineers like to play with." However, Powell, who is a lawyer, added that "we need lawyers to understand engineering" and "I would not undersell the ability of lawyers to be much more thoughtful ..."
2/22. FCC Cable Services Bureau Chief Deborah Lathen stated that her Bureau has 30 attorneys, but only 5 engineers. She also stated that her Bureau's responsibilities have "exploded." She said that "we have moved into broadband policy, direct broadcast satellite, ... Internet access, and new missions, such as interactive television." She added that "we have to recognize that our capabilities really are strained" and "we have difficulties attracting people to come because of salary limitations." She also addressed her own interest and background in engineering: "I think the future is very very exciting. And, many of you who know me, know that I am an avid sci-fi fan. Anything Star Trek, anything dealing with space, I will stay up all night long to watch, because it deals with the future. And that is what we deal with here."
2/22. The FCC's aging engineering staff possesses expertise in areas related to legacy technologies, including the public switched telephone network, and broadcast radio and television -- particularly, testing for interference. However, since Prof. David Farber returned to the University of Pennsylvania several weeks ago, no one at the FCC understands many Internet based technologies, such as instant messaging and Internet access over cable facilities. This now leaves the agency dependent for information upon the companies that it regulates, speakers at public forums, and its communications lawyers. See also, TLJ story of Jan. 7, 2000 regarding Farber's appointment as FCC Chief Technologist.
2/22. FCC Commissioner Harold Furchgott-Roth, who has said that he will step down as soon as President Bush names his replacement, offered advice to the new Chairman. First: "Follow the law, not to go beyond it, not to keep this agency, kind of breathing a sigh of relief every time we win in court, and hanging our shoulders when we loose ..." Second: "Efficiency. We really need to take Section 11 and Section 10 very seriously about deregulation, getting rid of some of the underbrush ..." Third: "Transparency. The public needs to know where items are in the process. The public needs to know that decisions are made based entirely on the record before this Commission, that there aren't secret deals, that there aren't little side agreements ..." Fourth: "Equality. The public needs to know that everyone before the Commission, whether a large company, or a small company, is going to get treated exactly the same."
2/22. Secretary of Agriculture Ann Veneman gave a speech in Vienna, Virginia, in which she said that "We must pass presidential trade negotiating authority so that we can enter into new market-opening agreements, including the Free Trade Area of the Americas and a new WTO agreement. The lack of this authority has undermined America's fundamental ability to lead global market-opening efforts. We must also advance an ambitious agenda for the next round of global trade talks."
2/22. President Bush held his first press conference as President. He was asked many questions, including one about fast track trade negotiating authority, a free trade agreement for the Americas, and the upcoming meeting in Quebec. He stated "I'd love to have fast track approval. I think it's going to be important to work with our neighbors to the south, and Canada to the north, to promote free trade throughout the Hemisphere. I spoke to the Prime Minister of Canada this morning, and that subject came up, about the summit, upcoming summit. And so we're going to begin the process in Congress. Ambassador Zoellick will be working with members of Congress to lay the groundwork for the ability for the President to have what they call fast track negotiating authority. ..." See, transcript and audio [RAM].
2/22. WTO Director General Mike Moore met over several days with USTR Robert Zoellick, Commerce Secretary Donald Evans, Agriculture Sec. Ann Veneman, NSC Advisor Condoleezza Rice, and NEC Advisor Lawrence Lindsey. Moore released a statement, in which he said that "I am also impressed by the determination of President Bush and Ambassador Zoellick to work closely with the Congress to gain trade promotion authority as soon as possible. This is very important not just for the United States but for all US trading partners. I very much appreciate the support the Administration has shown for the launch of a round this year."
2/22. The Consumer Electronics Association (CEA) announced that it conducted a survey of Internet users regarding the legal issues involved in the case A&M Records v. Napster. The CEA stated that the survey shows that "61 percent oppose laws that prevent the usage of file sharing software such as Napster." CEA CEO Gary Shapiro stated that "Public policy debates must shift to reflect the paradigm of the new economy as technology creates new ways for more consumers to access information and entertainment. We must protect the ability of technologies to evolve, especially those that allow personal, non-commercial recording." The CEA stated the survey was "conducted via the Internet to a sample of 1,812." The CEA did not assert that the sample was random. See, CEA release. CEA member companies make products that facilitate infringement of copyrights in music recordings.
2/22. The U.S. Court of Appeals (4thCir) issued its opinion in Dellastatious v. Williams, a case involving controlling person liability in securities fraud cases. Plaintiff filed a complaint for securities fraud that included claims against Donald Williams and Raymond Kelly, officers of LaserVision Technologies, alleging liability as "control persons" under  20 of the Securities Exchange Act of 1934. The U.S. District Court (EDVa) granted Williams' and Kelly's motion for summary judgment, holding that they were not control persons and that they satisfied the statutes' good-faith defense. The Court of Appeals affirmed. The suit involved LaserVision, a photography company. However, Section 20 liability is frequently alleged in securities fraud cases against high tech companies.
2/22. The GAO released a report [PDF], dated Feb. 16, prepared for Rep. Ed Markey (D-MA), the ranking Democrat on the House Telecom Subcommittee, regarding "digital divide" policy. The report found "greater home usage of the Internet by more highly educated and wealthier individuals. ... Furthermore, although we did not find Internet use to be statistically related to differences in community size, we did find less broadband availability in the more rural areas of America." However, the report continued that "it is often the case that individuals with greater education and income are the first to adopt new technologies, and individuals in rural areas are the last to be reached by the deployment of new telecommunications infrastructure. Since the Internet is still in a relatively early stage of commercial deployment, these socioeconomic and geographic differences in Internet usage are not surprising and may not be long lasting."
2/21. Bristol Technology and Microsoft announced an agreement to settle Bristol's antitrust and related claims against Microsoft. Microsoft stated in a release that "The terms of the settlement are confidential, but the claims of both parties are dismissed with prejudice." Bristol issued an identical release. Bristol filed a 14 count complaint against Microsoft on August 18, 1998 in which it pled a variety of federal and state antitrust, unfair trade practices, and common law theories. On July 16, 1999, the jury ruled for Microsoft on all counts, except one alleging violation of the Connecticut Unfair Trade Practices Act, for which it awarded a token $1 in compensatory damages. However, U.S. District Court Judge Janet Hall (DConn) sought a different outcome. On Aug. 31, 2000, she released a scathing 103 page ruling in which she awarded Bristol Technologies $1 Million in punitive damages against Microsoft, based on the $1 jury award. In addition to the punitive damages, she enjoined Microsoft from publishing or distributing its WISE Mission Statement. See also, Bristol release of Sept. 1, 2000, and TLJ summary of Bristol v. Microsoft.
2/21. Intel announced that it has settled its patent litigation against First International Computer (FIC). Intel sued FIC and others in U.S. District Court (NDCal) and elsewhere in late 1999 alleging patent infringement regarding its P6 bus microarchitecture. Intel stated that two companies entered into "a settlement and license agreement covering certain patents" but did not disclose the terms of the settlement. FIC is a mainboard producer based in Taipei, Taiwan. See, Intel release. Intel is represented in this matter by the law firm of Brobeck Phleger.
2/21. The law firms Sidley & Austin and Brown & Wood stated that they are in discussions about a possible merger. A combination would create a firm of more than 1300 lawyers. Any combination would likely take place in the second quarter of 2001. See, SA release and BW release.
2/21. President Bush announced his intent to nominate Brenda Becker to be Assistant Secretary of Commerce for Legislative Affairs. She is presently the VP of Congressional Communications for Blue Cross Blue Shield Associates. See, release.
2/21. President Bush announced his intent to nominate David Aufhauser to be General Counsel for the Department of the Treasury. He is currently a partner with the law firm of Williams & Connolly in Washington DC. Aufhauser worked for the Bush election team during the Florida election dispute, where he monitored overseas ballots. See, release.
2/21. President Bush announced his intent to nominate Maria Cino to be Assistant Secretary of Commerce and Director General of the United States and Foreign Commercial Service. She currently works for the Republican National Committee. Previously, she worked as National Political Director for the Bush for President Campaign. She also worked as a lobbyist at the Washington DC law firm of Wiley Rein & Fielding; 1998 lobby disclosure reports list INTELSAT and the PCIA as clients. She also worked for four years as the Executive Director of the National Republican Congressional Committee and as Chief of Staff for former Rep. Bill Paxon (R-NY); she assisted in organizing the Republican takeover of the House in the 1994 elections.
2/21. The Antitrust Division of the Department of Justice submitted a comment to the FCC regarding its proceeding on Verizon's Section 271 application to provide long distance service in the state of Massachusetts. It advised that "Verizon had not yet shown clearly that it was providing nondiscriminatory access to DSL lines." See, DOJ release. Mark Cooper, Director of Research of the Consumer Federation of America praised the DOJ: "Justice has taken the first step in restoring discipline to the approval process that was developed so carefully in the New York proceeding."
2/21. An individual named Frank Blumenthal filed a complaint [PDF] in U.S. District Court (NDCal) against Michael Glinsky and Elizabeth Fetter alleging violation of federal securities laws. Both defendants were employees of NorthPoint Communications. Plaintiff, who is represented by the law firm of Milberg Weiss and other firms, seeks class action status. NorthPoint is a DSL service provider. It filed a Chapter 11 bankruptcy petition in Bankruptcy Court (NDCal) on Jan. 16, 2001. It was delisted by NASDAQ on Feb. 8, 2001.
2/21. FCC Commissioner Gloria Tristani gave a speech in Washington DC to the National Congress of American Indians on telephone and Internet services in Indian areas. She stated that "The digital divide persists for America's minorities, for people with disabilities, for low-income individuals and for those in rural communities." The Albuquerque Tribune reported in a Feb. 8 story that "Tristani said she is seriously considering running for office in 2002, but is deciding between the Senate, the governorship or Rep. Heather Wilson's 1st District House seat. Tristani's term at the FCC is not up until 2003, but she said she plans to return to New Mexico by the end of the year because she cannot campaign while holding her commissioner's job."
2/21. The law firm of Covington & Burling announced that two of its former partners, Ethan Posner and Jean Veta, have returned from stints at the Justice Department. Posner was a Deputy Associate Attorney General. He worked on several topics, including prescription drug sales over the internet, bankruptcy reform, and class action reform. Veta was a Deputy Associate Attorney General. She was involved in e-commerce, technology, and privacy issues. See, release [PDF].

Go to News Briefs from February 16-20, 2001.

 

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