News Briefs from May 16-20, 2001

Vivendi Universal to Buy MP3.com
5/18. Vivendi Universal announced that it will acquire MP3.com for $372 million in a friendly, combined cash and stock transaction. See, MP3.com release.
DOC and VeriSign Reach Agreement
5/18. The Commerce Department (DOC), ICANN, and VeriSign reached an agreement in principle on additional terms to be included in the ICANN and VeriSign Registry Agreements and related agreements. See also, DOC release and VeriSign release.
FCC Software Defined Radio NPRM
5/18. The FCC received six reply comments regarding its Notice of Propose Rule Making regarding on software defined radio (SDR). See, comments from AirNet Communications, Cingular Wireless, Industrial Telecommunications Association, SDR Forum, Sprint PCS, and Vanu. (ET Docket No. 00-47.)
SEC Regulation of Web Based Activities
5/18. Paul Roye, Director of the SEC's Division of Investment Management gave a speech to the Investment Company Institute in Washington DC in which he addressed web based baskets of securities, ETFs, and other topics. He stated that "The Internet has spurred a flurry of new products and ways of offering and delivering investment products and investment advisory services. It is incumbent upon regulators to understand these products and monitor their compliance with the federal securities laws." He said that the SEC is reviewing whether web based baskets of securities are investment companies, and whether the promoters should register as securities advisors.
Bush Trade Proclamation
5/18. President George Bush issued a proclamation regarding free trade in which he stated that "our exports support 12 million jobs that pay wages higher than the national average, and high-tech jobs supported by exports pay even more. It is no coincidence that the longest period of sustained economic growth in U.S. history has followed efforts to liberalize trade, such as the North American Free Trade Agreement and the Uruguay Round Agreement that established the World Trade Organization."
WIPO and ASPs
5/18. The WIPO's Arbitration and Mediation Center and the Application Service Provider Industry Consortium (ASPIC) finalized a set of best practices and guidelines for dispute avoidance and resolution for the Application Service Provider (ASP) industry. See, WIPO release.
More News
5/18. BellSouth filed a request with the Kentucky Public Service Commission for permission to provide long distance service. See, BellSouth release.
5/18. The GAO released a report [PDF] titled "Information Technology: Architecture Needed to Guide Modernization of DOD's Financial Operations."
Powell Confirmation Hearing
5/17. The Senate Commerce Committee held a hearing on the nomination of Michael Powell to be Chairman of the FCC. Members of the Committee uniformly praised Powell. They used the occasion to press their views, and to question Powell about his views, on various issues that fall within the jurisdiction or activity of the FCC. Sen. John McCain (R-AZ), the Chairman of the Committee, stated that the Committee would likely vote on the nomination on May 24. See, TLJ Story.
Abernathy, Martin and Copps Have Smooth Confirmation Hearing
5/17. The Senate Commerce Committee also held a hearing on the nominations Kathleen Abernathy, Kevin Martin, and Michael Copps to be FCC Commissioners. The hearing was quick and without controversy or opposition. They will likely be approved by the Committee at its May 24 mark up meeting, and by the full Senate shortly thereafter.
Sen. Jay Rockefeller (D-WV) sought commitments from all three that they will support (1) the e-rate subsidy program, (2) continued operation of the e-rate as a Section 254 universal service program, (2) continued coverage of telecommunications, Internet access, and internal connections, and (3) continued coverage of private and parochial schools and libraries. All three, like Powell before them, made these commitments. Sen. John Edwards (D-NC) praised the nomination of Kevin Martin, a Republican from North Carolina, who previously was a legal advisor to outgoing Commissioner Harold Furchtgott-Roth. Sen. Ted Stevens (R-AK) praised Abernathy. Sen. Fritz Hollings (D-SC) talked about the importance of the public interest standard. Sen. Conrad Burns (R-MT) said that spectrum management would be a major issue for the three.
NTCA Requests Rural FCC Commissioner
5/17. Michael Brunner, CEO of the National Telephone Cooperative Association (NTCA), wrote a letter to Senate Minority Leader Tom Daschle (D-SD) stating that the "fifth and final commissioner needs to be someone who will ensure the FCC's implementation of sound rural telecommunications policy ..." The NTCA is a group that represents rural telecommunications companies. The FCC will shortly have another opening, which must be filed by a Democrat to maintain the 3-2 partisan balance required by law.
Compulsory Licensing of Music on the Internet
5/17. The House Judiciary Committee's Subcommittee on Courts, the Internet and Intellectual Property held a hearing on music on the Internet. The hearing focused on the availability of music online, the technologies for providing music online, security for copyrighted music, the status of licensing by the various types of rights holders, and recommendations by some that the Congress extend compulsory licensing to music on the Internet. Several witnesses argued that existing laws are complex and archane, that too many permissions are required, that music is not being made available online, and that Congress should therefore pass legislation providing for compulsory licensing for online streaming and downloading of music. In contrast, several other witnesses who represent various types of copyright holders testified that their copyrights are being licensing for the Internet, that technologies (and security for those technologies) is being developed, and Congress should therefore not enact any new legislation. See, TLJ Story.
Computer and Software Depreciation Bills
5/17. Rep. Mac Collins (R-GA) introduced HR 1895, the Computer Equipment Common Sense Depreciation Act, a bill to amend the Internal Revenue Code to establish a 2 year recovery period for depreciation of computers and peripheral equipment used in manufacturing. It was referred to the House Way and Means Committee, of which Collins is a member. This is one of several bills that would shorten or eliminate the depreciation period for business computers. On April 4, Rep. Jerry Weller (R-IL) and others introduced HR 1411, which provides for the expensing of qualified equipment and computer software. And, on April 6, Sen. Conrad Burns (R-MT) introduced S 752, which provides for a three year period.
ProComp Criticizes Microsoft's .NET
5/17. The Project to Promote Competition & Innovation in the Digital Age (ProComp) released a paper [1.14 MB PDF file] titled "Microsoft's Expanding Monopolies: Casting a Wider .NET." The paper is subtitled "The Impact of .NET, HailStorm, Windows XP, Internet Explorer 6.0, MSN Messenger, Windows Media Player 8.0, MSN Explorer and MS Passport on the Future of the Internet." The paper argues that Microsoft has introduced "a series of business initiatives that put Microsoft in a position to extend its monopoly to the Internet itself." ProComp is a Washington DC based group that is devoted to the criticism of Microsoft, that is funded by competitors of Microsoft. See also, ProComp's summary of its paper, and Microsoft's .NET web section.
HP Settles Patent Proceeding
5/17. Hewlett Packard (HP) announced that it settled patent proceedings pending before the U.S. International Trade Commission (USITC) regarding the importation of printer cartridges which infringe HP patents. HP filed complaints with the USITC against Printer Essentials, Microjet Technology, and four other companies, alleging that the companies infringed six HP patents by importing or selling inkjet cartridges manufactured by Microjet, including one model intended to replace the HP 51626A cartridge and another model intended to replace the HP 51629A cartridge. Under the settlement, Printer Essentials agreed to enter into a consent order through which it agrees to stop importing and selling the disputed cartridges. Printer Essentials also acknowledged that the Microjet cartridges infringe HP's patents and that the patents are valid. See, HP release.
GAO Reports on Defense Spectrum Management
5/17. The GAO released a report [PDF] titled "Defense Spectrum Management: New Procedures Could Help Reduce Interference Problems." The report, which was prepared for members of the House and Senate Armed Services Committees, addresses new Department of Defense procedures for spectrum management, including electromagnetic environmental effects, when acquiring and implementing new weapon systems. It concludes that "the new procedures established by DOD are reasonable and, if successfully implemented, could help prevent problems related to radio frequency interference."
ILEC Enforcement Hearing
5/17. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing on HR 1765, a bill to increase penalties for common carrier violations that is sponsored by Rep. Fred Upton (R-MI). The bill is related to HR 1542, a bill to give regulatory relief to the Baby Bells, which the House Commerce Committee approved last week. FCC Chairman Michael Powell has requested that Congress enact legislation giving the FCC more enforcement authority to deal with ILECs that violate the local competition provisions of the Telecom Act of 1996.
David Solomon, who testified on behalf of the FCC, said in his prepared statement that "Given the vast resources of the nation's large common carriers, including incumbent local exchange carriers and long distance carriers, the existing caps on common carrier forfeitures of $120,000 per violation or per day of a continuing violation, up to $1.2 million overall for a continuing violation, are an insufficient sanction or deterrent in many instances. The proposed 10-fold statutory increases -- to $1 million and $10 million -- would significantly strengthen our enforcement authority against incumbent local exchange carriers and other common carriers."
See, prepared testimony of witnesses: David Solomon (FCC Enforcement Bureau), Albert Halprin (Halprin Temple), Lawrence Sarjeant (USTA), Royce Holland (Allegiance Telecom), and Leon Jacobs (Florida PSC).
See also, statement of Rep. Tauzin.
HR 1542 is sponsored by Rep. Tauzin and Rep. John Dingell (D-MI). Reps. Tauzin and Dingell did not make the language of HR 1765 a part of HR 1542, citing lack of germaneness. Instead, it will be submitted to the House Rules Committee for permission to offer it as an amendment to HR 1542 on the House floor.
Internet Distance Learning and Copyright
5/17. The Senate Judiciary Committee amended and reported S 487, the Technology, Education and Copyright Harmonization (TEACH) Act of 2001, sponsored by Sen. Orrin Hatch (R-UT) and Sen. Pat Leahy (D-VT). The bill would amend 110(2) and 112 of the Copyright Act to extend the distance learning exemptions enacted in 1976 to digital delivery media. Under current law, there are exemptions for "face-to-face" and "transmission" teaching activities; but, Internet based education is not referenced.
Education Technology Bill
5/17. Rep. James Barcia (D-MI) and Rep. David Wu (D-OR) introduced HR 1889, a bill to improve the utilization of educational technologies in elementary and secondary education by creating an educational technology extension service. The bill was referred to the House Science Committee and the House Education and Workforce Committee.
Export Licensing Bill
5/17. Rep. Jeff Flake (R-AZ) introduced HR 1898, a bill to amend the Arms Export Control Act to update the export licensing requirements under that Act. The bill was referred to the House Committee on International Relations.
People
5/17. Robert Mendelson returned to New York City office of the law firm of Morgan Lewis as a partner in the firm's Securities Interdisciplinary Initiative. His practice includes securities regulation, broker-dealer regulation and enforcement, derivatives product development and litigation, and online public offerings. He spent two years as SVP and Co General Counsel of Wit SoundView Group, an investment bank and online broker. See, release.
5/17. Laura Klaus joined the Washington DC office of the law firm of Greenberg Traurig as shareholder in the litigation group. Her practice includes appellate litigation, federal administrative, and regulatory law. Before entering private practice, she was a trial attorney in the Antitrust Division of the Department of Justice. In addition, Tab Turano joined the Washington DC office as an associate. He practices in the areas of administrative, regulatory and appellate litigation and trademark and patent cases. See, release.
More News
5/17. The Senate Appropriations Committee's Subcommittee on Commerce, Justice, State, and the Judiciary held a hearing on proposed budget estimates for FY 2002 for the Federal Bureau of Investigation, Drug Enforcement Administration, and Immigration and Naturalization Service.
5/17. The Senate Governmental Affairs Committee held a hearing on several nominations, including that of John Graham to be Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget.
5/17. The Senate Judiciary Committee voted 9 to 9 on the nomination of Ted Olson to be Solicitor General. It was a straight party line vote. Senator Majority Leader Trent Lott may now bring the matter to a vote in the full Senate.
5/17.  The House Judiciary Committee's Subcommittee on the Courts, the Internet, and Intellectual Property held a hearing titled Music On The Internet. TLJ will write about this hearing in the Monday, May 21 issue.
RIM Files Blackberry Patent Suit
5/16. On April 17 the USPTO issued U.S. Patent No. 6,219,694 to Research in Motion (RIM). The patent discloses a system and method for pushing information from a host system to a mobile data communication device upon sensing a triggering event is disclosed. RIM produces the Blackberry wireless, always on, e-mail devices. See, RIM release.
On May 16 RIM filed a complaint in U.S. District Court (DDel) against Glenayre alleging patent infringement. The complaint alleges patent infringement, trademark infringement, dilution, unfair competition and false advertising, violation of the Lanham Act, and violation of the Delaware Deceptive Trade Practices Act. Glenayre, based in Charlotte, North Carolina, makes wireless messaging products. RIM seeks injunctive relief and damages. See, RIM release.
Coble Bills on Reexamination of Patents
5/16. Rep. Howard Coble (R-NC), introduced HR 1866, an untitled bill to clarify the basis for granting requests for reexamination of patents. The bill would amend 35 U.S.C.  303(a) and  313(a) by adding the following language: "The existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office." The bill was referred to the House Judiciary Committee, and its Courts, Internet and Intellectual Property Subcommittee. Rep. Coble is the Chairman of this Subcommittee. The Subcommittee has already scheduled a mark up for Tuesday, May 22, at 10:00 AM.
Rep. Coble also introduced HR 1886, a bill to provide for appeals by third parties in certain patent reexamination proceedings, on May 17. This bill is also scheduled for mark up on May 22.
Timothy Muris Confirmation Hearing
5/16. The Senate Commerce Committee held a hearing on the nomination of Timothy Muris to be Chairman of the Federal Trade Commission. The hearing, which covered several other nominees as well, went smoothly for Muris, and all nominees. Republicans and Democrats expressed their support. Members asked Muris about both online privacy and antitrust enforcement, but he said little in response. Committee Chairman John McCain (R-AZ) said "I look forward to moving these nominations quickly." He added that the Committee will likely vote next week. See, TLJ Story.
Bruce Mehlman Confirmation Hearing
5/16. The Senate Commerce Committee also held a hearing on the nomination of Bruce Mehlman to be Assistant Secretary of Commerce for Technology Policy. His hearing went smoothly. Like Muris, he said little. See, TLJ story.
FCC Ownership Rules
5/16. The FCC released a Report and Order [PDF] that amends its "dual network" rule to permit one of the four major television networks -- ABC, CBS, Fox or NBC -- to own, operate, maintain or control the UPN and/or the WB television network. The FCC had announced, but not released, this Order at its April 19 meeting. See, FCC release. Commissioner Tristani dissented; see, statement.
Bell News
5/16. Mark Cooper, of the Consumer Federation of America, a Washington DC based interest group, submitted a reply comment [PDF] to the FCC opposing SBC's Section 271 petition to provide interLATA long distance telephone service in the state of Missouri. He argued that "SBC has not provided parity in provisioning DSL loops to competitive local exchange carriers (CLECs)." He added that "Prematurely allowing incumbent local companies into the in-region long distance market undermines the prospects for competition." See, CC Docket No. 01-88.
5/16. The Missouri Office of Public Counsel also submitted a reply comment to the FCC regarding SBC's Missouri application. It stated that the U.S. Department of Justice (DOJ) filing was "squarely on point." On May 10, the Antitrust Division of the DOJ submitted an analysis to the FCC in which it recommended that the FCC should independently review the prices that SBC charges its competitors for use of its network. The DOJ stated that many of the prices charged by SBC for the use of "unbundled network elements" are significantly higher in Missouri than in states where SBC has already been permitted to provide long distance service.
5/16. BellSouth asked the Public Service Commission of South Carolina to permit it to provide long distance service in the state. See, release.
USTR Nominations
5/16. The Senate Finance Committee held a confirmation hearing on many nominations, including Linnet Deily and Peter Allgeier to be Deputy USTRs. See, statement [PDF] by Sen. Charles Grassley (R-IA), Chairman of the Committee.
SEC and Revenue Recognition
5/16. The SEC instituted an administrative proceeding against Microtest alleging that it improperly recognized revenue from sales in various quarterly and year end reports filed with the SEC, in violation of 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, and 13a-13 thereunder. Microtest and the SEC simultaneously settled the matter, with Microtest agreeing to cease and desist from violating these sections and rules. See, SEC release. Microtest, which is based in Phoenix, Arizona, makes network test and measurement products and network storage and appliance servers.
New Bills
5/16. Rep. Vernon Ehlers (R-MI) and Rep. James Barcia (D-MI) introduced HR 1860, a bill to reauthorize the Small Business Technology Transfer Program. It was referred to the House Small Business Committee and the House Science Committee.
5/16. Rep. Nancy Johnson (R-CT) and others introduced HR 1877, a bill to amend Title 18 to provide that certain sexual crimes against children are predicate crimes for the interception of communications. The bill would amend 18 U.S.C. 2516 regarding authorization for interception of wire, oral, or electronic communications. The bill was referred to the House Judiciary Committee. Former Rep. Bill McCollum (R-FL) sponsored a similar bill, HR 3484, in the 106th Congress; it was passed in the House by a voice vote.
People
5/16. Michael Songer and Robert Worrall joined the law firm of Arnold & Porter as partner and of counsel, respectively. Songer focuses on electrical and mechanical patent litigations. He also handles trademark, copyright and Internet disputes, including cybersquatter and other domain name infringements, website disputes, jurisdiction and evidence issues, and free speech cases. Songer is also an Adjunct Professor at Georgetown University Law Center, where he teaches the Law of Cyberspace. He was previously a partner at Brobeck Phleger & Harrison. Worrall is a patent litigator. See, release.

Go to News Briefs from May 11-15.