FCC Approves Georgia's and Louisiana's Long Distance Requests
5/15. The Federal Communications Commission
(FCC) approved BellSouth's Section 271
application to provide in region interLATA service originating in the states of
Georgia and Louisiana. This is the first 271 approval for BellSouth.
Rep. Billy Tauzin (R-LA), the
Chairman of the House Commerce
Committee, stated in a release that "I am delighted that Louisiana
consumers will now reap the benefits of unfettered local and long distance
telephone competition."
Duane Ackerman, Ch/CEO of BellSouth stated in a release
that "We are pleased that the Federal Communications Commission, after a
very lengthy and thorough examination of BellSouth's compliance with the
Telecommunications Act's market opening requirements, has affirmed that we have
in fact met our obligations to our competitors who currently serve over 4.2
million customer lines in our region ... With today's approval we will now move
ahead with our plan to obtain long distance relief in all nine of our
states."
This is FCC Docket No. WC 02-35. See also, FCC
release.
Court Stays Surveillance Order in Paramount v. ReplayTV
5/15. The U.S. District Court (CDCal),
Judge Florence Marie Cooper presiding, granted SONICblue's request for a
temporary stay of the its April 26 ruling in Paramount Pictures v. ReplayTV
mandating surveillance of ReplayTV 4000 television users. The ReplayTV 4000,
sold by SONICblue, is a personal video
recorder that enables users to store television programming to hard disks. The
Court also set June 3 for a hearing on SONICblue's motion to vacate.
On May 13, the Electronic Privacy Information
Center (EPIC) and other groups filed an amicus
curiae brief [PDF] with the District Court. They wrote that "Requiring
disclosure of consumer viewing habits in the emerging digital environment raises
far reaching privacy questions and implicates the design of new
technology."
On May 14, the Consumer Electronics Association
(CEA) and other trade groups filed a second amicus curiae brief [PDF]. It
was joined in the brief by the Information
Technology Association of America (ITAA), the Computer & Communications Industry
Association (CCIA), and the Association
for Competitive Technology (ACT).
These trade groups wrote that "Although framed as a simple discovery order,
the Magistrate Judge's order of April 26, 2002 appears to be breathtaking in
scope. Defendants must fundamentally alter the structure of their product and
their customer relationship by creating and adding complex new software to
monitor customers' individual use of the ReplayTV product. The order compels the
design, development, and implementation of specific computer technologies to
assist Plaintiffs in the collection of evidence. Simply put, the Magistrate
Judge has ordered Defendants to create a new software work against their will,
transmit it to user's homes without users' consent, and install it on consumers'
property without their consent, in order to retrieve detailed information from
them without their consent, to transmit it to third parties without their
consent."
See also, EPIC
release, CEA release,
and SONICblue
release.
Groups Oppose Hollings' Bill To Regulate Online Information
Practices
5/15. The Computer & Communications
Industry Association (CCIA) announced its opposition S 2201,
the Online Personal Privacy Act. The Senate
Commerce Committee is scheduled to mark up this bill on Thursday, May 16.
CCIA P/CEO Ed Black wrote in a letter to Sen. Ernest Hollings (D-SC), the sponsor
of the bill and Chairman of the Committee, that "this legislation will
cause great harm to the Internet and e-commerce, discriminating against those
who conduct business online."
Black continued that "We are particularly concerned with the proliferation
of litigation that we anticipate would result from adoption of this legislation.
Given the fragile economic state of many Internet based companies, the threat of
massive litigation, coupled with costly and burdensome regulations mandating
access requirements and onerous sign-on schemes would have a disastrous impact.
We believe this legislation would also harm consumers as the free flow of
services and information facilitated by the Internet and online commerce would
be greatly curtailed." See also, CCIA release.
Also on May 15, the U.S. Chamber of Commerce
urged the Committee to reject the bill. The Chamber's Bruce Josten stated in a release
that "If enacted, this bill would derail the growth of online commerce and
could actually increase identity thefts by making it easier to obtain personal
information."
House Judiciary Committee Postpones More Meetings
5/15. The House Judiciary Committee
and its Subcommittee have postponed more scheduled hearings and mark up sessions
that had been scheduled for Thursday, May 16, and Friday, May 17.
The full Committee had been scheduled to mark up several bills on May 16,
including HR 4623,
the Child Obscenity and Pormography Prevention Act of 2002 (which pertains to
computer generated images), and HR 3215,
the Combatting Illegal Gambling Reform and Modernization Act (Goodlatte Internet
gambling bill). HR 4623 was amended and approved by the Crime Subcommittee
on May 9. It likely has wide support in the House. HR 3215 has been
scheduled for mark up, but held over, on many previous occasions. The Committee
lacked a quorum.
Also on May 16, the House Judiciary Committee's Subcommittee on Courts, the
Internet, and Intellectual Property again noticed and postponed its hearing
titled "The Accuracy and Integrity of the Whois Database."
The House Judiciary Committee's
Subcommittee on Crime again postponed its hearing on, and mark up of, several
bills, including HR 4640,
a bill to provide criminal penalties for providing false information in
registering a domain name on the Internet, and HR 4658,
the Truth in Domain Names Act. This had been scheduled for Friday, May 17.
Committee members and staff have cited various reasons for not following
schedules in the past several weeks, including that the Democrats have invoked
the 24 hour rule, that the Republicans have had a conference to attend, that not
enough members have attended for a quorum, that there have been floor votes, and
that there has not been enough time.
House Judiciary Committee Postpones Hearings
5/15. The House Judiciary Committee
postponed from Wednesday, May 15, to Thursday, May 16, its mark up of several
bills, including HR 4623,
the Child Obscenity and Pormography Prevention Act of 2002 (which pertains to
computer generated images), and HR 3215,
the Combatting Illegal Gambling Reform and Modernization Act (Goodlatte Internet
gambling bill). HR 4623 was amended and approved by the Crime Subcommittee
on May 9; it is on the fast track for approval by the full House. HR 3215
has been scheduled for mark up, but held over, on several previous occasions.
The House Judiciary Committee's
Subcommittee on Courts, Intellectual Property and the Internet postponed its
oversight hearing titled "The Accuracy and Integrity of the WHOIS
Database", which had been scheduled for Thursday, May 16. No new date has
been set.
The House Judiciary Committee's
Subcommittee on Crime postponed its hearing on, and mark up of, several bills,
including HR 4640,
a bill to provide criminal penalties for providing false information in
registering a domain name on the Internet, and HR 4658,
the Truth in Domain Names Act. Both of these bills had been scheduled for
hearing and mark up on May 9, and then on May 17. No new date has been set.
Rep. Stearns Introduces Auction 35 Down Payment Refund Bill
5/15. Rep. Cliff Stearns (R-FL)
introduced HR 4738,
a bill to enable the winning bidders in the Federal
Communications Commission's (FCC) re-auction of Nextwave spectrum to obtain
a return of their deposits.
The bill provides that "On or before the 15th day after the date of
enactment of this Act, the Federal Communications Commission shall return to the
winning bidders of auction 35 the full amount of all deposits and downpayments
made by such winning bidders for licenses that the Commission has not by that
date delivered to such winning bidders."
Rep. Stearns explained this bill in a release.
"The successful bidders on Auction No. 35 have not received the spectrum
they bid on and they have not received their total deposits back. While this
issue is mired in litigation, these wireless companies are denied the use of
these deposits for new investments or to improve customer service. They are
entitled to the licenses or to their deposits."
The other initial cosponsors are Rep.
Rick Boucher (D-VA), Rep. Lee Terry
(R-NE), Rep. Chip Pickering
(R-MS), Rep. Adolphus Towns (D-NY),
and Rep. Bobby Rush (D-IL). The bill
was referred to the House Commerce
Committee. All of the sponsors are members of this Committee.
Appeals Court Opinions
5/15. The U.S.
Court of Appeals (6thCir) issued its opinion
in Conwood
v. U.S. Tobacco, an antitrust case involving smokeless
tobacco. Conwood prevailed in the District Court on its Sherman Antitrust Act, 15 U.S.C. § 2,
claim involving use of monopoly position to exclude competitors from the market.
The Court of Appeals affirmed.
5/15. The U.S.
Court of Appeals (FedCir) issued its opinion (MS Word) in Cooper
Cameron v. Kvaerner Oilfield Products, a patent case. The
case involves U.S.
Patent 5,544,707 and U.S.
Patent 6,039,119 which pertain to the oil business. Specifically, they are
directed to subsea wellheads having a horizontal spool tree arrangement that
protects the integrity of the well during workover activities for repair and
maintenance. The Appeals Court's opinion addresses the doctrine of equivalents,
invalidity for inadequate written description, and documents that qualify as
"printed publications" under 35 U.S.C. § 102.
5/15. The U.S.
Court of Appeals (9thCir) issued an opinion
[PDF] in Vizcaino
v. Microsoft, the long running litigation between Microsoft
and its freelance workers. This opinion pertains only to the amount of
attorneys' fees awarded to class counsel. The District Court entered an order
approving class counsel's fee request of $27,127,800, which was 28% of the cash
settlement fund. The Court of Appeals affirmed.
People and Appointments
5/15. President Bush nominated Kevin Ryan to be the U.S. Attorney for the
Northern District of California for the term of four years. Ryan has been a
Judge on the Superior Court of California since 1999. Before that he was a Judge
on the San Francisco Municipal Court. And before that, he was Deputy District
Attorney in the Alameda County District Attorney's Office. See, White House
release.
5/15. Michael Marinelli and Bruce Barker joined the Washington DC
office of the law firm of Gray Cary Ware &
Freidenrich as partners in the firm's intellectual property and technology
group. Barker focuses on intellectual property transactions and patent
litigation; he was previously a partner in the Washington DC office of the law
firm of Pennie & Edmonds. Marinelli focuses on international trade
regulation; he was previously a partner in the Austin, Texas office of the law
firm of Verner Liipfert. GCWF opened its Washington DC office in January when it
merged with the former Washington DC law firm of Blumenfeld & Cohen. See, GCWF release.
More News
5/15. The Senate Judiciary Committee
held a hearing titled "Copyright Royalties: Where is the Right Spot On The
Dial For Webcasting?" See, prepared statements of Committee members: Sen.
Patrick Leahy (D-VT) and Sen.
Orrin Hatch (R-UT). See also, prepared statements of witnesses: Hilary
Rosen (Recording Industry Association of America), Jon
Potter (Digital Media Association), Bill
Rose (Arbitron), Frank
Schliemann (Onion River Radio), Billy
Straus (Websound.com), and Dan
Navarro (American Federation Of Television and Radio Artists).
5/15. Robert Sachs, P/CEO of the National Cable
and Telecommunications Association (NCTA), gave a speech
at the Advanced Television Systems Committee
(ATSC) annual meeting in which he addressed the DTV transition. He stated that
"HDTV will bolster cable's competitiveness and value proposition to
consumers. This is why the cable industry two weeks ago pledged strong support
for voluntary industry actions to speed the transition to digital television
proposed by Chairman Powell." He also said that "Key to the creation
of more HDTV programming are digital rights protections. The cable industry
shares the broadcast industry's desire to protect copyrighted digital video
content from being retransmitted for free over the Internet."
5/15. The House
International Relations Committee held a hearing titled "The
Administration’s National Export Strategy: Promoting Trade and Development in
Key Emerging Markets". See, prepared
testimony of Secretary of Commerce Donald Evans.
5/15. The USPTO published the May
issue of the USPTO Pulse in its web site.
More New Bills
5/14. Sen. Jean Carnahan (D-MO) and Sen. Kay Hutchison (R-TX) introduced S 2511. This is
a bill to prevent trafficking in child pormography and obscenity. It is a
response to the Supreme Court's opinion
[PDF] in Ashcroft v. FSC, in which the Court held that the ban on child
pormography in the form of computer generated images violates the First
Amendment. This is the Senate companion bill to HR 4623,
which has already been approved by the House
Judiciary Committee's Subcommittee on Crime.
5/14. Rep. Steve Israel (D-NY), Rep. Greg Walden (R-OR), and Rep. Pete Sessions (R-TX) introduced HR 4720,
the Amateur Radio Emergency Communications Consistency Act of 2002. This brief
bill would provide that "For purposes of the Federal Communications
Commission's regulation relating to station antenna structures in the amateur
radio services (47 CFR 97.15), any private land use rules applicable to such
structures shall be treated as a State or local regulation and shall be subject
to the same requirements and limitations as a State or local regulation."
It was referred to the House Commerce
Committee.
Supreme Court Upholds FCC Pricing Rules
5/13. The Supreme Court of the U.S.
issued its opinion
[104 pages in PDF] in Verizon
v. FCC, upholding the FCC's rules regarding how incumbent local
exchange carriers (ILECs) charge interexchange carriers (IXCs) and competitors
local exchange carriers (CLECs) for access to their facilities; it reversed the
U.S. Court of Appeals (8thCir).
The Supreme Court held, in a 5-3 decision, that the Federal Communications Commission (FCC) is
authorized under the Communications Act to require state utility commissions to
set the rates charged by the incumbents for leased elements on a forward looking
basis untied to the incumbents' investment, and to require incumbents to combine
such elements at the entrants' request when they lease them to the entrants.
The Court noted that "knowing that incumbents and prospective entrants
would sometimes disagree on prices for facilities or services, Congress directed
the FCC to prescribe methods for state commissions to use in setting rates that
would subject both incumbents and entrants to the risks and incentives that a
competitive market would produce."
The Court wrote that "the incumbent local exchange carriers claim error in
the Eighth Circuit's holding that a ``forward looking cost´´ methodology (as
opposed to the use of ``historical´´ cost) is consistent with §252(d)(1), and
its conclusion that the use of the TELRIC forward looking cost methodology
presents no ``ripe´´ takings claim. The FCC and the entrants, on the other
side, seek review of the Eighth Circuit's invalidation of the TELRIC methodology
and the additional combination rules. We ... now affirm on the issues raised by
the incumbents, and reverse on those raised by the FCC and the entrants."
Justice Souter wrote the opinion of the Court, in which Rehnquist, Stevens,
Kennedy, and Ginsburg joined. Scalia and Thomas joined in parts of the opinion.
Breyer wrote a separate opinion. O'Connor recused herself.
FCC Chairman Michael Powell
stated in a release
that "I'm pleased that the Supreme Court has affirmed the Commission's
implementation of the 1996 Telecom Act. This decision brings much needed
additional certainty to the legal landscape and should advance the Commission's
efforts to carry out the statute's competition goals. I thank the Solicitor
General for his vigorous efforts in representing the Commission before the
Court."
IXCs and CLECs were pleased with the decision. AT&T
VP/Law Mark Rosenblum stated in a release that
"We're obviously delighted that the Supreme Court today has again validated
the Telecom Act's purpose of establishing local phone competition." WorldCom General Counsel Michael Salsbury
stated in a release
that the decision is "a tremendous victory for consumer and business
customers and the competitive carriers such as WorldCom that serve them. This
ruling finally ends six years of uncertainty created by Bell legal challenges
and other stonewalling." CompTel
President Russell Frisby stated in a release that "The
Supreme Court is right on target with its assessment of TELRIC as the
appropriate method for pricing the vital elements that competitors need access
to in order to serve their customers." He added that "We hope the FCC
keeps this ruling in mind as it considers its Triennial Review of UNEs."
In contrast, the ILECs were disappointed. USTA
P/CEO Walter McCormick stated in a release that
"Today’s ruling on TELRIC pricing is unfortunate. The decision upholds
the unjust status quo that requires local telephone companies to give
competitors access to their networks at prices below cost. These extreme
requirements sharply discourage both incumbents and competitors from making new
investments in infrastructure."
BellSouth stated in a release
that "Today's decision maintains an unfortunate status quo: BellSouth must
continue to provide pieces of its network to competitors at below cost prices.
This status quo discourages investment by both us and our competitors, resulting
in poorer choices for customers. We hope the FCC will correct this incorrect
pricing policy and eliminate its unnecessary requirements to provide certain
network pieces in dockets now pending before it." See, also Verizon release.
Jeff Eisenach of the Progress and Freedom
Foundation stated in a release
that the decision makes bad economics. He wrote that "There is nearly
unanimous agreement among economists that rules which require incumbent
facilities to be sold at below cost prices reduce the incentives for both
incumbents and new entrants to invest. But you don't have to be an economist to
know the current rules have failed: Just look at the mess they have made in the
telecom marketplace, where investors are in the process of losing literally
hundreds of billions of dollars. As a matter of economic policy, the current
rules are not just unreasonable -- they define unreasonableness."
Supreme Court Reverses Third Circuit in COPA Case
5/13. The Supreme Court of the U.S.
issued its opinion
[PDF] in Ashcroft
v. ACLU, upholding the constitutionality of the community
standards component of the Children's Online Protection Act (COPA). The Court
remanded the case for further proceedings.
The Statute. The COPA prohibits any person from "knowingly and with
knowledge of the character of the material, in interstate or foreign commerce by
means of the World Wide Web, mak[ing] any communication for commercial purposes
that is available to any minor and that includes any material that is harmful to
minors".
Unlike the Communications Decency Act, which the Supreme Court held
unconstitutional in Reno v. ACLU, the COPA only affects the web, only affects
commercial communications, and only restricts material that is harmful to minors
(rather than all indecency).
Proceedings Below. Promptly after enactement, the ACLU and others filed a
complaint in U.S. District Court (EDPenn) against then Attorney General Janet
Reno challenging the constitutionality of the act. The District Court issued a
preliminary injunction on First Amendment grounds. The U.S. Court of Appeals
(3rdCir) affirmed. The Supreme Court then granted certiorari.
Holding. The Court wrote that "This case presents the narrow
question whether the Child Online Protection Act's (COPA or Act) use of
``community standards´´ to identify ``material that is harmful to minors´´
violates the First Amendment. We hold that this aspect of COPA does not render
the statute facially unconstitutional."
However, the Court added that "The scope of our decision today is quite
limited. We hold only that COPA's reliance on community standards to identify
``material that is harmful to minors´´ does not by itself render the
statute substantially overbroad for purposes of the First Amendment. We do not
express any view as to whether COPA suffers from substantial overbreadth for
other reasons, whether the statute is unconstitutionally vague, or whether the
District Court correctly concluded that the statute likely will not survive
strict scrutiny analysis once adjudication of the case is completed below. While
respondents urge us to resolve these questions at this time, prudence dictates
allowing the Court of Appeals to first examine these difficult issues."
The Court also noted that the Attorney General did "not ask us to vacate
the preliminary injunction entered by the District Court, and in any event, we
could not do so without addressing matters yet to be considered by the Court of
Appeals. As a result, the Government remains enjoined from enforcing COPA absent
further action by the Court of Appeals or the District Court."
The Supreme Court vacated the judgment of the Court of Appeals and remanded the
case for further proceedings.
Now, the lower courts are free to enjoin enforcement of the COPA on other
grounds. And in the likely event that they do, this case will likely return to
the Supreme Court.
Justice Clarence Thomas wrote the opinion of the Court. O'Connor wrote a
concurring opinion. Breyer wrote a concurring opinion in which he stated that
"I believe that Congress intended the statutory word ``community´´ to
refer to the Nation's adult community taken as a whole, not to geographically
separate local areas." Kennedy wrote a separate concurrence in which Souter
and Ginsburg joined.
Stevens dissented. He stated that he would have affirmed the Court of Appeals.
He wrote that "In the context of the Internet, however, community standards
become a sword, rather than a shield. If a prurient appeal is offensive in a
puritan village, it may be a crime to post it on the World Wide Web."
Treasury Official Says Info Tech Enables Small Banks to
Survive
5/13. Under Secretary of the Treasury Peter Fisher gave a speech to the Independent Community Bankers of America in
which he argued that information and communications technologies will enable
community banks to survive amid consolidation of large financial institutions.
He stated that "I am skeptical of the view that the future of financial
services will be all about financial conglomeration. I expect that small and
nimble financial institutions will compete effectively in the coming years and,
thus, I expect that well managed community banks will prosper."
He elaborated that "Community banks have options and advantages that can
counter balance large banks' built-in diversification advantage."
Fisher stated that one of these advantages is that "advances in information
and communication technology offset some of the scale and diversification
advantages that large banks may have. The theory that supports large firms and
conglomerates is that it is cheaper to move information inside a single
corporation than between and among different corporations. The communications
revolution that we have lived through in the last twenty years challenges this
theory."
He continued that "Today technology permits small firms to outsource many
functions and thereby recapture some of the advantages previously associated
only with economies of scale. In fact, small banks increasingly have been
employing technological and financial innovations to improve efficiency and
diversify operating and balance sheet risks. More of you are turning to nonbank
technology providers as a means of outsourcing administrative and payments
functions and other activities. Eighty percent of community banks now have web
sites, up from 21 percent in 1997."
House Judiciary Committee Schedules Mark Up of Tech Bills
5/13. The House Judiciary Committee
has scheduled a meeting on Wednesday, May 15, to mark up several bills,
including HR 4623,
the Child Obscenity and Pormography Prevention Act of 2002, and HR 3215,
the Combatting Illegal Gambling Reform and Modernization Act.
HR 4623 pertains to computer generated images. It was amended and approved
by the Crime Subcommittee on May 9. It is on the fast track for approval by
the full House before the Memorial Day recess.
HR 3215, which is Rep. Bob
Goodlatte's (R-VA) latest attempt to restrict Internet gambling, has been
scheduled for mark up, but held over, on several previous occasions.
People and Appointments
5/13. The Senate confirmed Paul Cassell
to be a U.S. District Court Judge for the District of Utah, by a vote of 67-20.
5/13. Lucent Technologies elected Robert
Denham and Daniel Goldin to its board of directors. Betsy Atkins
resigned from the board. Denham is a partner in the law firm of Munger Tolles
& Olson. Goldin is a senior fellow at the Council on Competitiveness. See, Lucent release.
More News
5/13. Business Software Alliance (BSA) P/CEO
Robert Holleyman wrote a letter
to Sen. Tom Daschle (D-SD) and Sen. Trent Lott (R-MS) in which he advocated
passage of trade promotion authority (TPA) legislation. He wrote that "Free
trade is essential for the future of the high tech industry". He added that
"TPA will give the United States the ability to break down the trade
barriers and lower the tariffs that increasingly threaten our ability to lead
and compete in the global marketplace. Passing TPA will guarantee us a seat at
the table to help protect our economy and our jobs. As Senate Leaders, the high
tech industry is looking to you to exercise your full leadership skills to get
TPA legislation passed and sent to the President for enactment."
5/13. The U.S. Conference of Mayors,
National League of Cities, National Association of Counties, International
Municipal Lawyers Association, and the National Association of
Telecommunications Officers and Advisers announced that they filed a petition
for review with the U.S. Court of Appeals (DCCir) of an Federal Communications
Commission (FCC) classification of cable modem service as an information
service. These groups state that they will collect fewer fees from operators as
a result.
5/13. The Cellular Telecommunications &
Internet Association (CTIA), Information
Technology Association of America (ITAA), Telecommunications Industry Association (TIA)
and U.S. Telecom Association (USTA) issued
releases in which they stated that they wrote something that pertains to the
"protection of the nation's critical infrastructure", which they
delivered to Nancy Victory
(Director of the National Telecommunications
and Information Administration), and Richard Clarke (Chairman
of the President's Critical
Infrastructure Protection Board). However, they did not release the item
which they wrote. See, substantially identical CTIA release,
ITAA release,
and TIA release.
5/13. The U.S. Patent and Trademark Office (USPTO)
published a notice in
its web site regarding computer security. It states that "If you receive an
email purporting to be from the webmaster@uspto.gov address, please delete
it." It may have a file attached to it that contains a malicious worm or
virus.