News from September 21-25, 2002
House Subcommittee Holds Hearing on DTV Transition
9/25. The House Commerce Committee's Subcommittee on Telecommunications and the Internet held a hearing on the transition to digital television. See, draft of proposed bill [16 pages in PDF] and summary of draft bill.
See also, prepared testimony of witnesses: Robert Wright (NBC), Richard Lewis (Zenith Electronics Corp.), Michael Fiorile (Dispatch Broadcast Group, on behalf of the NAB), Michael Willner (Insight Communications, on behalf of the NCTA), Lana Corbi (Crown Media USA, on behalf of the NCTA), Jim Gleason (Cable Direct, on behalf of the American Cable Association), Alan McCollough (Circuit City Stores, for the Consumer Electronics Association), Richard Lewis (Association of Public Safety Communications Officals International), Thera Bradshaw (Association of Public Safety Communications Officials), and Gene Kimmelman (Consumers Union).
House Subcommittee Holds Hearing on Check Clearing and Tech
9/25. The House Financial Services Committee's Subcommittee on Financial Institutions held a hearing on HR 5414, the Check Clearing for the 21st Century Act.
HR 5414 was introduced on September 19 by Rep. Mike Ferguson (R-NJ). It would update banking laws by giving electronic versions of checks the same legal validity as paper checks.
Roger Ferguson, the Vice Chairman of the Federal Reserve Board (FRB), stated in his prepared testimony that the bill "removes existing legal barriers to the use of new technology in check processing and holds the promise of a more efficient check collection system."
He said that while "Check processing is far more efficient than it once was ... Legal impediments, however, have prevented the banking industry from fully using these new electronic technologies, such as digital imaging, to improve check processing efficiency and provide improved services to customers."
Ferguson elaborated. "This is because existing law requires that the original paper checks be presented for payment unless the banks involved agree otherwise. ... Therefore, legal changes are needed to facilitate the use of technologies that could improve check processing efficiency, which should lead to substantial reductions in transportation and other check processing costs."
He added that "The act might also better position banks to provide new and improved services to their customers. For example, banks might allow some corporate customers to transmit their deposits electronically. Because the act will likely encourage greater investments in image technology, banks might also be able to expand their customers' access to enhanced account information and check images through the Internet."
Gail Hillebrand of the Consumers Union criticized the bill. She said that it would "make it impossible for the estimated 45.8 million U.S. households who now get their paper checks back to get all their paper checks back every month" and "not effectively protect consumers from new errors that could be caused by electronic imaging of checks." She also argued that "Information on the electronic image of a check could be used to invade consumer privacy."
See also, prepared statements of witnesses in PDF: Roger Ferguson (Federal Reserve Board), Curtis Hage (Home Federal Bank), Joel Biggerstaff (AirNet Systems), Lee Schram (NCR Corporation), Robert Fenner (National Credit Union Administration), David Walker (Electronic Check Clearing House Organization), and Gail Hillebrand (Consumers Union).
House Subcommittee Holds Hearing on Local Tax Exemption for Satellite Radio
9/25. The House Judiciary Committee's Subcommittee on Commercial and Administrative Law held a legislative hearing on HR 4869, the "Satellite Radio Freedom Act", and HR 5429, the "Satellite Services Act of 2002".
Rep. Tom Davis (R-VA) introduced HR 5429 on September 23. It would provide that "A provider of direct to subscriber satellite service shall be exempt from the collection or remittance, or both, of any tax or fee imposed by any local taxing jurisdiction on direct to subscriber satellite service".
Rep. Davis stated that "Satellite television services have been with us for a number of years, and we are now seeing the emergence of satellite radio service providers. With satellite radio, new benefits arise. Signals can be received by listeners in their vehicles, not only at home. In addition, since this service is available nationwide, it has the ability to aggregate small, dispersed listener populations, making niche educational, ethnic, religious, or specialized music programming economically feasible.
He addressed "the extraordinary administrative obstacle that would arise if such providers were forced to collect and remit local taxes in approximately 15,000 different jurisdictions. This reality has already been recognized in reference to satellite television, and appropriate legislative steps have been taken." Davis stated that currently Section 602 of the Telecom Act provides an exemption for satellite TV, but that "additional legislation is required to include satellite radio and certain other satellite programming services that may evolve in the future".
The bill has also been referred to the House Commerce Committee, of which Rep. Davis is a member.
Copps Addresses Media Ownership
9/25. Federal Communications Commission (FCC) Commissioner Michael Copps gave a speech in Washington DC in which he addressed the FCC's review of all of its media ownership rules, the public interest obligations of digital television broadcasters, and broadband as a civil right.
He said that "Two weeks ago the Commission commenced a far reaching review of all our media ownership rules. This was done in the context of the Congressionally mandated biennial review of FCC ownership rules, and also as a result of some occasionally curious court decisions mandating further review of these rules."
He said that "At stake is how this industry is going to look in the next generation and beyond. At stake are core values of localism, diversity, competition and maintaining the multiplicity of voices and choices that undergird our precious marketplace of ideas and that sustain American democracy. At stake ... is equal opportunity writ large -- the opportunity to hear and be heard; the opportunity to make this country as open and diverse and creative as it can possibly be; and the opportunity for jobs, career advancement, promotion and ownership in our media industries."
Copps also argued that access to broadband is a civil right. He stated that "Those who have access to advanced communications like broadband in this new century will win. Those who don’t will lose. For my part, I don’t think it exaggerates a bit to characterize access to modern communications in this modern age as a civil right. But civil rights always have to be won, don’t they? Herein, perhaps, is our next great challenge." See also, release [PDF].
Former Homestore.com Execs Charged
9/25. The Office of the U.S. Attorney for the Central District of California filed a criminal information in U.S. District Court (CDCal) charging John Giesecke, Joseph Shew and John Desimone. The three are former executives of Homestore.com, an Internet provider of real estate listings.
The information charges Giesecke and Shew with conspiracy to commit securities fraud in connection with a scheme to fraudulently inflate the earnings of Homestore.com. The information also charges Giesecke with wire fraud, and Desimone with insider trading. The three also entered into plea agreements with the Department of Justice whereby they agreed to plead guilty. See, DOJ release and speech by Attorney General John Ashcroft.
In addition, the Securities and Exchange Commission (SEC) filed a civil complaint in U.S. District Court (CDCal) charging John Giesecke, Joseph Shew and John Desimone with securities fraud. See also, SEC release.
New Bills
9/25. Rep. Judy Biggert (R-IL), Rep. Carolyn Maloney (D-NY), and others, introduced HR 5457, a bill to amend the Gramm Leach Bliley Act to exempt attorneys from the privacy provisions of that Act. The bill was referred to the House Committee on Financial Services.
9/25. Sen. Tim Johnson (D-SD) introduced S 3006, a bill pertaining to Internet gambling. It was referred to the Senate Judiciary Committee.
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9/25. The Federal Communications Commission (FCC) approved Verizon's Section 271 application to provide in-region, interLATA service in the states of Delaware and New Hampshire. See, FCC release.
9/25. The General Accounting Office (GAO) released a report [105 pages in PDF] titled "Information Management: Update on Implementation of the 1996 Electronic Freedom of Information Act Amendments".
9/25. The U.S. Court of Appeals (4thCir) issued its opinion [17 pages in PDF] in In Re Carefirst of Maryland, a trademark infringement and unfair competition case. The Appeals Court did not reach the merits. It dismissed the appeal and petition for writ of mandamus as interlocutory.
NTIA Requests More Comments on E-SIGN Act
9/24. The National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register that it is seeking public comments on the product recall notices exception to the E-SIGN Act.
The Electronic Signatures in Global and National Commerce (E-SIGN) Act provides, at Section 101, for the acceptance of electronic signatures in interstate commerce, with certain enumerated exceptions. Section 103 of the Act provides that "The provisions of section 101 shall not apply to ... (2) any notice of ... (D) recall of a product, or material failure of a product, that risks endangering health or safety". The Act also requires the NTIA to review, evaluate and report to Congress on each of the exceptions.
The deadline to submit written comments to the NTIA regarding the product recall notices exception is November 25, 2002. See, Federal Register, September 24, 2002, Vol. 67, No. 185, at Pages 59828 - 59830.
On September 3, the NTIA published a pair of notices in the Federal Register regarding two other exceptions -- court records and hazardous materials notices. The deadline for comments on those exceptions is November 4. See also, NTIA release, notice in Federal Register, September 3, 2002, Vol. 67, No. 170, at Pages 56277 - 56279, regarding court records, and notice in Federal Register, September 3, 2002, Vol. 67, No. 170, at Pages 56279 - 56281, regarding hazardous materials notices.
Congressional Hearings
9/24. The House Commerce Committee's Subcommittee on Commerce, Trade, and Consumer Protection held a hearing on HR 4678, the Consumer Privacy Protection Act of 2002, sponsored by Rep. Cliff Stearns (R-FL). See, opening statement of Rep. Stearns, and opening statement of Rep. Billy Tauzin (R-LA), the Chairman of the full Committee. See also, prepared statements of witnesses: John Palafoutas (AeA), Philip Servidea (NCR, on behalf of the Computer Systems Policy Project), John Schall (National Business Coalition on E-Commerce and Privacy), Rebecca Whitener (EDS Security & Privacy Services), Paul Misener (Amazon), Jennifer Barrett (Acxiom), and Marc Rotenberg (EPIC).
9/24. The House Commerce Committee's Subcommittee on Oversight and Investigations held a hearing titled "Capacity Swaps by Global Crossing and Qwest: Sham Transactions Designed to Boost Revenues?" See, prepared testimony of witnesses: Patrick Joggerst (formerly with Global Crossing), Roy Olofson (formerly with Global Crossing), Robin Szeliga (Qwest Communications), Jackie Armstrong (Global Crossing), Greg Casey (formerly with Qwest), Kym Smiley (formerly with Qwest), and Ken Floyd (FLAG Telecom).
PPI Report Advocates Government Action to Boost Broadband Demand
9/24. The Progressive Policy Institute (PPI), a Democratic party think tank, released a report [36 pages in PDF] titled "Unleashing the Potential of the High Speed Internet: Strategies to Boost Broadband Demand".
The report states that "most people who are able to subscribe to a home broadband connection choose not to do so. The reason is simple: Most Americans feel that the current offerings on the Internet do not justify paying two or three times more for a broadband connection than they do for a dial-up connection. Because of the low take-up rate, providers of advanced broadband connections have little economic justification to engage in the large scale rollout that could drive prices down. Likewise, providers of services requiring broadband connections have little incentive to roll these out, given the low take up rate of broadband."
The report calls this a "chicken or egg conundrum"; moreover, it states that solving this conundrum should be a goal of public policy.
The report argues that "governments at all levels should pursue policies that: Encourage greater Internet penetration and more robust use by expanding e-commerce and e-government ... Encourage the availability of digital content ... Encourage the development and deployment of transformative applications".
The Report also offers many specific policy recommendations. It argues that government should "Oppose actions designed to protect the status quo against e-commerce competition and resist efforts to prevent consumers from capturing the savings realized by online transactions."
It also states that government should "Support digital transformation of industries by calling for government agencies to examine how their procurement, regulatory, and other functions can speed the digitization of the sectors they influence ..."
The report also recommends that the Congress should pass the Driver’s License Modernization Act, the E-Government Act of 2002, and "appropriate federal privacy and spam legislation while encouraging technologies that empower users, such as the Platform for Privacy Preferences (P3P) and the Internet Content Rating Association (ICRA) rating system".
In the area of encouraging the availability of digital content, the report recommends that the government "Harmonize the royalties paid by terrestrial broadcasters and webcasters and simplify the process for collecting and distributing royalties", give $50 Million to PBS for webcasting their shows, establish a "National Digital Lending Library", and fund "online museums".
Finally, the report advocates "passing telework incentive legislation; ensure that home offices are not subject to workplace regulations; and develop telework programs for government employees". It also advocates legislation to make it easier for distance learning to qualify for federal support.
The report was written by Robert Atkinson, Shane Ham, and Brian Newkirk.
FCC Media Ownership NPRM Seeks Comments on Impact of Internet
9/24. The Federal Communications Commission (FCC) finally released its Notice of Proposed Rulemaking (NPRM) [68 pages in PDF] regarding its comprehensive review of the FCC's various media ownership rules. The FCC it announced this NPRM back at its September 12 meeting. The document seeks public comment on hundreds of specific questions. One theme that runs through many of the questions is what impact does the Internet now have on achieving the FCC's goals of promoting diversity, competition, and localism in its various ownership rules. See, full story.
GAO Releases Report on PR China's Membership in WTO
9/24. The General Accounting Office (GAO) released a report [81 pages in PDF] titled "World Trade Organization: Selected U.S. Company Views about China's Membership".
The GAO conducted a survey of U.S. companies to analyze their view regarding "(1) the importance of WTO related commitments to their business operations in China, (2) the anticipated effects of China’s WTO related reforms on their businesses, and (3) China's prospects for implementing these reforms."
The GAO found that most respondents believe that China's WTO commitments are important to their companies. The GAO reported that "Respondents identified many rule of law related reforms as more important than other reforms. Specifically, three quarters of the respondents selected intellectual property rights; consistent application of laws, regulations, and practices; and transparency of laws, regulations, and practices as the most important commitment areas for their companies. Company representatives that we interviewed also explained the importance of other reforms, including reductions to market access barriers (such as tariffs and product quotas) and investment related measures for their future operations in China."
Out of the thirty WTO related commitments areas listed in the survey, more respondents identified intellectual property rights as important than any other commitment area.
The GAO also reported that "Respondents expected many of China's WTO related commitment areas to be relatively difficult for Chinese officials to implement". In particular, "U.S. companies expected rule of law related commitment areas regarding consistent application of laws, regulations, and practices, and intellectual property rights to be the most difficult areas to carry out."
191 out of 551 companies responded to the GAO's survey. The report does not identify the companies that participated in the survey.
The report was prepared for Sen. Max Baucus (D-MT), the Chairman of the Senate Finance Committee (SFC), Sen. Charles Grassley (R-IA), the ranking Republican on the SFC, Rep. Bill Thomas (R-CA), the Chairman of the House Ways and Means Committee (HWMC), and Rep. Charles Rangel (D-NY), the ranking Democrat on the HWMC.
People and Appointments
9/24. Verizon named Kathryn Brown SVP for Public Policy Development and International Government Relations. She is currently a partner in the law firm of Wilmer Cutler & Pickering. She was previously Chief of Staff of the Federal Communications Commission (FCC) and Chief of the FCC's Common Carrier Bureau during the chairmanship of William Kennard. She will start at Verizon on October 15.
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9/24. Sanjay Kumar, P/CEO of Computer Associates International, gave a speech regarding corporate governance and financial reporting.
9/24. Kevin Clark, a former VP of Sales at Critical Path, plead guilty in U.S. District Court (NDCal) to insider trading in violation of 15 U.S.C. § 78j(b), 15 U.S.C. § 78ff(a), and 17 CFR 240.10b-5. See, USAO release.
9/24. The U.S. Court of Appeals (3rdCir) issued its opinion [8 pages in PDF] in Nextel v. City of Margate, a dispute over Nextel's construction of a telecommunications facility atop a condominium building. Nextel filed a complaint in U.S. District Court (DNJ) against the City of Margate and others seeking relief under 47 U.S.C. § 332(c)(7) following Margate's efforts to reopen hearings on Nextel construction of previously approved facilities. The District Court denied Nextel's motion for preliminary injunction. The Appeals Court dismissed the appeal, and vacated the District Court's order, for lack of ripeness, with further instructions to dismiss the complaint, without prejudice.
Important Breaking News
9/24. The Federal Trade Commission (FTC) announced that it will introduce Dewie The Turtle, its "Internet security mascot", at the Privacy 2002 conference on September 26 in Cleveland, Ohio. See, FTC release. FTC officials have not commented publicly on why McGruff The Crime Dog was passed over for the job. The appointment does not require Senate confirmation.
9th Circuit Rules in US West v. Jennings
9/23. The U.S. Court of Appeals (9thCir) issued its opinion [24 pages in PDF] in US West v. Jennings, an appeal from a ruling of the District Court regarding various interconnection agreements between an ILEC and CLECs arbitrated by a state PUC. The Appeals Court affirmed in part and reversed in part.
Background. US West (now Qwest) is the incumbent local exchange carrier (ILEC) in the state of Arizona. Following passage of the Telecommunications Act of 1996, US West failed to negotiate interconnection agreements with competitive local exchange carriers (CLECs) operating in Arizona. It petitioned the Arizona Corporations Commission, which is the public utilities commission (PUC) in Arizona, to arbitrate. The ACC arbitrated various interconnection agreements.
District Court. Various lawsuits were then filed in U.S. District Court (DAriz) challenging these agreements. These lawsuits were consolidated. The District Court affirmed some provisions of the various interconnection agreements, and rejected others.
Appeals Court. These consolidated appeals followed. The Appeals Court affirmed in part and reversed in part. This appeal raised the questions of whether the terms of the interconnection agreements are consistent with the 1996 Act, and whether Federal Communications Commission (FCC) regulations that took effect after the ACC's decisions are applicable. Appeals Court held that the FCC regulations are applicable, thus reversing the District Court on this issue. The Appeals Court then went on to apply those regulations to the provisions of the interconnection agreements, including provisions pertaining to: cable sheath mileage; four wire loop price; geographic deaveraging; conditions on access to subloops; reciprocal access to poles, ducts, conduits, and rights of way; collocation of remote switching units; single points of access; tandem switch rates; conditions on resale of centrex services; non-recurring charges for unbundled network elements; and conditions on access to dark fiber.
VOD Over IP Company Files Antitrust Suit Against AOLTW, Sony, Universal
9/23. Intertainer filed a complaint [68 pages in PDF] in U.S. District Court (CDCal) against AOL Time Warner, Sony, Universal, and others alleging violation of federal antitrust law, and other claims, in connection with the provision of video on demand (VOD) services over Internet protocol (IP). See also, Intertainer release.
Intertainer is a Culver City, California based company that has developed and marketed VOD over IP services.
The complaint alleges that AOL Time Warner, Sony and Universal, and various of their companies, have violated antitrust law. Intertainer summarizes the suit in a release by stating that the three content companies have "attempted to control the marketplace for entertainment content on demand, thereby hindering and delaying the emergence of the broadband content industry and Intertainer's video on demand services. Intertainer maintains that the defendants have deliberately caused the delay so that they may have the opportunity to deploy a service called Movielink, owned in material part by the named defendants and other studios, that would monopolize the Internet video on demand market."
The complaint alleges that the VOD services delivered by IP technology to consumers is the relevant market for antitrust purposes. It further alleges that Intertainer's streaming technology is of superior quality to the downloading technology of the defendants. It further alleges that they "have attempted to hinder and delay the emergence and expansion of IP video on demand services provided by businesses independent of Defendants in order to protect and control their revenues."
The complaint alleges violation of §1 of the Sherman Act (15 U.S.C. §1), and violation of §7 of the Clayton Act (15 U.S.C. §18). The complaint prays for damages, treble damages, an order requiring divestiture of MovieLink, and other injunctive relief.
It also pleads, in shotgun fashion, many other causes of action: breach of contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, aiding and abetting and conspiring to breach fiduciary duties, misappropriation of confidential information, intentional interference with contractual relations, unfair competition, and unjust enrichment. 
Technology Administration Releases Report on Broadband Demand
9/23. The Commerce Department's Technology Administration released a report [23 pages in PDF] titled "Understanding Broadband Demand: A Review of Critical Issues". The report argues that widespread broadband deployment will bring many social benefits, and that federal, state and local government entities should work to promote broadband. This report focuses on "demand side" issues.
The report is based on the premise that an analysis of government policy with respect to promotion of broadband deployment is divisible into two sets of issues -- supply side issues, and demand side issues.
The report states that "many nations, states, cities and communities are trying to accelerate the deployment and usage of broadband networks. To date, these efforts have predominantly focused on the supply side -- promoting infrastructure build-out and determining appropriate competition and regulatory policies." However, the report continues, "It is also important and appropriate to consider the demand side -- factors impacting business and consumer uptake."
The report notes that the Federal Communications Commission (FCC) and National Telecommunications and Information Administration (NTIA) are focused on supply side issues, while the President's Council of Advisers on Science & Technology (PCAST) and the Technology Administration are focused on demand side issues.
The TA report continues that "There are several factors that impact the robustness of demand. For consumers these include concerns over cost; disappointment with the quality and types of content available, especially lack of movies, music and local information; inadequate customer support and lack of plug and play consumer premises equipment; and lack of confidence in the Internet due to security and privacy concerns. For businesses, barriers to greater broadband demand stem from price concerns (exacerbated by economic uncertainty); lack of access to DSL or cable; failure to perceive the returns on investment in broadband; lack of understanding about how to implement broadband business solutions that make sense for company strategy; and concerns over security and other legal uncertainties." (Parentheses in original.)
The report argues that "federal, state and local leaders can take steps to accelerate broadband demand ... actions to accelerate demand are justified and valuable."
The report identifies four things that determine demand for broadband: cost, content, convenience and confidence.
The report then lists and discusses several things government can do to impact demand. The federal government should support business investment in broadband equipment, support R&D new applications and technologies, create compelling content and leading by example, protect intellectual property, oppose taxation of new content and online services, promote efficient and broadband friendly management of radio spectrum, and promote consumer confidence and cyber security, ensure free flow of goods, services and ideas online.
With respect to intellectual property rights, the report states that "governments can take several steps to strengthen the intellectual property rights framework. By prosecuting clear violations of law, educating citizens and students to respect IPR in the digital medium, protecting consumers’ interests (such as fair use rights), and encouraging market players to cooperate and coordinate, the federal government hopes to increase the pace with which movies and music venture online." (Parentheses in original.)
The TA report also states that state and local government should consider "bandwidth when addressing issues such as rights of way, taxes and application fees, tower siting, zoning, building and construction codes, building access, franchise agreements, historic preservation and environmental protections."
GAO Releases Report on Internet Gambling Funding
9/23. The General Accounting Office (GAO) released a report [22 pages in PDF] titled "Interim Report on Internet Gambling". It reviews current law at the federal level, and in five states (Massachusetts, Nevada, New Jersey, New York, and Utah). It also reviews the structure and operation of the credit card industry, and how illegal gambling on the Internet could be affected by prohibiting the use of credit cards in gambling. Finally, the report reviews the vulnerability of Internet gambling to money laundering.
The report was prepared for Rep. Mike Oxley (R-OH), Chairman of the House Financial Services Committee (HFSC), Rep. John LaFalce (D-NY), ranking Democrat on the HFSC, Rep. Spencer Bachus (R-AL), Chairman of the Subcommittee on Financial Institutions and Consumer Credit, and Rep. Sue Kelly (R-NY), Chairman of the Subcommittee on Oversight and Investigation. This Committee has jurisdiction over Internet gambling to the extent that financial instruments are involved.
HR 556, which is sponsored by Rep. Jim Leach (R-IA), and HR 2579, the Internet Gambling Payments Prohibition Act, which is sponsored by Rep. John LaFalce (D-NY), both attempt to stop illegal gambling over the Internet by prohibiting the use of certain financial instruments, including credit extended via a credit card, electronic fund transfers, and checks.
The HFSC amended and approved HR 556 on October 31, 2001. See, story titled "House Committee Passes Internet Gambling Funding Bill" in TLJ Daily E-Mail Alert No. 299, November 1, 2001. The GAO report states that "In your letter dated September 10, 2002, you noted plans to bring H.R.556, the Unlawful Internet Gambling Funding Prohibition Act, to the House floor for debate later this month."
The GAO labeled this report an "interim report". It added that it will complete a "final report" in November 2002. This will be after the 107th Congress has completed its work, unless there is a lame duck special session after the November elections.
Tech Bills Signed in California
9/23. California Gov. Gray Davis signed SB 772, sponsored by Senator Debra Bowen (D-Marina del Rey), a bill pertaining to termination of e-mail addresses. The bill provides that "Unless otherwise permitted by law or contract, any provider of electronic mail service shall provide each customer with notice at least 30 days before permanently terminating the customer's electronic mail address." The bill further provides that "No contract for electronic mail service may permit termination of service without cause with less than a 30-day notice. For purposes of this subdivision, ``termination of service without cause´´ means termination of service at the unfettered discretion of the service provider without regard to any conduct of the customer that violates the service provider's terms of service or acceptable use policy." Finally, the bill provides that "For purposes of this section, ``provider´´ shall mean the entity that controls the customer's electronic mail address, and not the entity making the underlying network or access available to the provider or the customer."
9/23. California Gov. Gray Davis signed AB 885, sponsored by Assemblymember Lynn Daucher (R-Brea). The bill allows high school students taking approved Internet based courses to be counted toward a school's average daily attendance. Gov. Davis wrote in a signing statement the bill "establishes a distance learning pilot program for a limited number of California public high schools. This pilot program is a pivotal first step in exploring an important new mode of instruction. The potential benefits to expanding internet based instruction are immense, including more one-on-one communication between teachers and students, increases in technology training to prepare students for the workforce, and improvements in the breadth and quality of curriculum in urban, small, and remote schools."
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9/23. The Federal Communications Commission (FCC) released a Notice of Apparent Liability for Forfeiture in a proceeding titled "In the matter of One Call Communications, Inc. d/b/a Opticom", in which it proposed to assess a forfeiture in the amount of $5,120,000 against Opticom for widespread violations of the FCC's rules governing operator service providers (OSPs). The FCC stated that these rules require OSPs "to identify itself audibly and distinctly at the beginning of each call, before the consumer incurs any charge; to permit the consumer to terminate the call at no charge before it is connected; to provide its rates to consumers upon request; and to provide instructions to the consumer on how to obtain the total cost of the call, which must be available either by dialing no more than two digits or by remaining on the line." The FCC further detailed 64 of Opticom's violation of these rules. See also, FCC release.
9/23. The Federal Communications Commission (FCC) released a second Notice of Apparent Liability for Forfeiture in a proceeding titled "In the matter of ASC Telecom, Inc. d/b/a Alternatel", in which it proposed to assess a forfeiture of $1,440,000 for 16 violations of its OSP rules.
9/23. The Commerce Department's Bureau of Industry and Security (formerly known as the Bureau of Export Administration) published a notice in the Federal Register containing its final rule amending the Export Administration Regulations (EAR) to provide which "space qualified'' items and telecommunications items for use on board satellites are controlled on the Commerce Control List (CCL) and are therefore subject to the EAR. This rule also removes the License Exception eligibility and amends the CCL for certain "space qualified'' items. See, Federal Register, September 23, 2002, Vol. 67, No. 184, at Pages 59721 - 59733.
9/23. Securities and Exchange Commission (SEC) Chairman Harvey Pitt gave a speech to the Council of Institutional Investors' Fall Conference in New York, New York. He also gave a speech at the September Symposium On Corporate Governance and Accounting Reform in Washington DC on September 20.
9/23. The Department of Justice (DOJ) issued a release in which it stated that the DOJ announced "three new guidelines designed to institutionalize the ongoing sharing of information between federal law enforcement and the U.S. intelligence community".
9/23. The U.S. Court of Appeals (5thCir) issued its opinion [22 pages in PDF] in IQ Products v. Pennzoil, a Lanham Act case involving the advertising of competing canned tire inflator products. The Appeals Court affirmed the grant of summary judgment to defendants.
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9/22. Qwest Communications announced in a release that it will again restate its 2000 and 2001 financial statement, resulting in a $950 Million change in revenues. It stated that the restatement pertains to "revenue recognition and accounting treatment for exchanges and sales of optical capacity assets (IRUs). In restating its 2000 and 2001 financial statements with respect to these matters to be in conformance with generally accepted accounting principles, the company will reverse $ 950 million in revenues and related costs related to exchanges of optical capacity assets previously recognized."

Go to News from September 16-20, 2002.