House Members Write FCC Re UNE Triennial Review and Wireline Broadband Proceedings

1/24. Twenty members of the House of Representatives wrote a letter [4 page PDF scan] to the Federal Communications Commission (FCC) regarding two of its pending proceeding -- the triennial review NPRM and the wireline broadband NPRM.

The group of twenty wrote that "it has come to our attention that the Commission may be considering proposals to limit the access of competitive broadband providers to essential last mile monopoly facilities. We have grave concerns about the effects of such proposals on competition in the residential DSL market."

They stated that the FCC is "re-writing the 1996 Act by administrative fiat", and instead asked the FCC to "ensure that competitors have access to the telephone network". They urged the FCC "not to make any final decision in the UNE Triennial Review or Wireline Broadband proceedings until Congress has a sufficient opportunity to consider the impact of the pending proposals on consumers and competition."

Triennial Review. This is Docket No. 01-338. The FCC adopted this NPRM [62 pages in PDF] at its December 12, 2001 meeting. See also, December 12, 2001 release and notice in the Federal Register.

The FCC wrote on December 12 that unbundled network elements (UNEs) "are the portions of the phone networks that incumbent local exchange carriers (LECs) must make available to competing carriers seeking to provide telecommunications services. Recognizing that incumbent LECs control some bottleneck facilities, Congress adopted section 251 of the 1996 Act to overcome the obstacles posed by that control."

The FCC wrote that "Specifically, the FCC will examine the framework under which incumbent LECs must make UNEs available to competing carriers. The Commission's action seeks to ensure that its regulatory framework reflects recent technological advances and marketplace developments and to remain current and faithful to the pro-competitive, market opening provisions of the Telecommunications Act of 1996."

The FCC further elaborated in it NPRM that "In 1996, the Commission first applied the statute and determined which network elements need to be unbundled to permit requesting carriers to compete. Then, in 1999, the Commission revisited its unbundling analysis, on remand from the Supreme Court. Recognizing that market conditions would change and create a need for commensurate changes to the unbundling rules, the Commission determined to revisit its unbundling rules in three years -- a schedule we adhere to by adopting this Notice of Proposed Rulemaking (NPRM) today. In this review, we undertake a comprehensive evaluation of our unbundling rules. We seek to ensure that our regulatory framework remains current and faithful to the pro-competitive, market-opening provisions of the 1996 Act in light of our experience over the last two years, advances in technology, and other developments in the markets for telecommunications services." (Footnotes omitted.)

Wireline Broadband NRPM. This is Docket 02-33. The FCC adopted this NPRM [58 pages in PDF] at its February 14, 2002 meeting. See also, FCC notice in the Federal Register. This NPRM pertains to the appropriate regulatory framework for broadband access to the Internet over wireline facilities.

This NPRM states that "we examine the appropriate classification for wireline broadband Internet access service. As discussed more fully below, we tentatively conclude that, as a matter of statutory interpretation, the provision of wireline broadband Internet access service is an information service. In addition, we tentatively conclude that when an entity provides wireline broadband Internet access service over its own transmission facilities, this service, too, is an information service under the Act. In addition, we tentatively conclude that the transmission component of retail wireline broadband Internet access service provided over an entity’s own facilities is ``telecommunications´´ and not a ``telecommunications service.´´ We seek comment on these tentative conclusions and ask additional questions with regard to the proper classification of wireline broadband Internet access service."

Congressional Letter. The letter's lead signatories are Rep. John Conyers (D-MI) (at right), the ranking Democrat on the House Judiciary Committee, and Rep. Tom Davis (R-VA), the new Chairman of the House Government Reform Committee.

Eleven other signatories are members of the House Commerce Committee, which has jurisdiction over telecommunications matters: Henry Waxman (D-CA), Ed Markey (D-MA), Bart Stupak (D-MI), Anna Eshoo (D-CA), Sherrod Brown (D-OH), Frank Pallone (D-NJ), Karen McCarthy (D-MO), Diana DeGette (D-CO), Lois Capps (D-CA), Peter Deutsch (D-FL), and Jane Harman (D-CA). However, this is still a small minority of the Committee's membership.

Five other signatories are members of the House Judiciary Committee: Chris Cannon (R-UT), Jerrold Nadler (D-NY), Ric Keller (R-FL), Zoe Lofgren (D-CA), and William Delahunt (D-MA).

Frank Wolf (R-VA) and Tom Osborne (R-NE) also signed the letter.

The letter summarizes arguments that have been advanced by independent internet service providers (ISPs), competitive local exchange carriers (CLECs), interexchange carriers (IXCs), state regulators, and consumer groups.

The letter states, for example, that "Independent ISPs are concerned that the FCC's proposals will prevent them from providing broadband services. Under the current rules, the Bell Companies cannot discriminate between their own ISPs and independent ISPs -- the Bells must give independent ISPs the same quality of access to the network at the same price that they give to themselves. One of the FCC's proposals would allow the Bell Companies to discriminate in favor of their own ISP and deny access to the independent ISPs for broadband services. This could put thousands of independent ISPs out of business and give the Bell Companies an enormous advantage in the broadband marketplace."

The letter also states that "State regulators are concerned that the FCC is proposing to preempt state regulators' authority to ensure that their consumers have affordable phone rates. State commissions have utilized the UNE-P framework as the basis for assessing whether the Bell Companies have opened their networks sufficiently to competition, to qualify for entry into the long distance market."

More News

1/24. The U.S. Bankruptcy Court (SDNY) approved Level 3's purchase of substantially all of Genuity's assets and operations. The transaction still requires regulatory approval. See, Level 3 release.

1/24. Bruce Mehlman, Assistant Secretary for Technology Policy at the Department of Commerce (DOC), gave a speech in which he discussed the Bush administration's high tech agenda, and several "principles to guide our efforts going forward". He said that "we must remember that digital literacy is more than having Internet access and broader than technical proficiency. It's also about learning digital rights and wrongs. Respecting intellectual property rights, practicing security as second nature, and valuing others' privacy are all going to be critical to a functionally literate information society." He also stated that "we must recognize that technologies only benefit society when we use them wisely. Technology can enable us to improve our lives and make the world a safer, more abundant, and more equitable place. Or it can exacerbate problems. For example, encryption technologies that protect our privacy also conceal terrorist communications." He spoke to the ICT Literacy Summit in Washington DC.

Cisco Sues Huawei and FutureWei

1/23. Cisco Systems filed a complaint [77 page PDF scan] in U.S. District Court (EDTex) against Huawei America, Huawei Technologies, and FutureWei alleging patent infringement, copyright infringement, trade secret misappropriation, and other claims. (The complaint is a very long download.)

The complaint states that "This is an action arising from Defendants' systematic and wholesale infringement of Cisco's intellectual property. Huawei, a Chinese company, and its wholly owned United States subsidiaries, Huawei America and FutureWei, manufacture and offer for sale a line of network routers designed to compete with Cisco's network routers. Unlike Cisco, however, which invested substantially in the development of its own proprietary router technology and software, Huawei has chosen to misappropriate and infringe Cisco's intellectual property in an attempt to develop a cheaper, inferior router which Huawei claims is compatible with Cisco's routers. In doing so, Huawei and its U.S. subsidiaries have shown a complete disregard for Cisco's intellectual property rights and the laws which protect those rights. The extent of Defendants' copying and misappropriation of Cisco's intellectual property is staggering. Defendants have copied Cisco's patented technologies; they have copied the copyrighted user interface for Cisco's routers; they have made verbatim copies of whole portions of Cisco's user manuals; and there is overwhelming evidence that they unlawfully gained access to Cisco's source code and copied it as the basis for the operating system for their knock-off routers. Cisco brings this action to enjoin this wholesale theft of its valuable intellectual property and recover the substantial damages it has incurred from Defendants' illegal conduct."

Count One alleges patent infringement of U.S. Patent No. 5,088,032, titled "Method and Apparatus for Routing Communications Among Computer Networks". Count Two alleges infringement of U.S. Patent No. 5,473,599, titled Standby Router Protocol". Count Three alleges infringement of U.S. Patent No. 5,519,704, titled "Reliable Transport Protocol for Internetwork Routing". Count Four alleges infringement of U.S. Patent No. 6,097,718 titled "Snapshop Routing with Route Aging". Count Five alleges infringement of U.S. Patent No. 6,327,251 titled "Snapshot Routing".

Count Six alleges infringement of Cisco's copyrights in its Internetwork Operating System (IOS) Software Programs and its Command Line Interface (CLI). Count Seven alleges infringement of Cisco's copyright in its IOS Manuals.

Count Eight alleges trade secret misappropriation. Specifically, Cisco alleges misappropriation of the source code of its IOS Software Programs. Count Nine alleges common law misappropriation regarding the CLI.

Count Ten alleges violation of the Lanham Act. The complaint states that "Defendants have represented to customers and prospective customers that their Quidway routers are interoperable with Cisco routers without any loss of performance, security or convenience. Such representations constitute a false and misleading characterization of the qualities and characteristics of Defendants' products in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)."

Count Eleven alleges unfair competition under Texas common law and the Lanham Act, Section 44. Count Twelve alleges conversion -- that is, obtaining computer files with Cisco code, and using it in a manner inconsistent with Cisco's rights.

Cisco seeks declarations of infringement of its patents and copyrights, injunctive relief, damages, and other relief.

Cisco, which is based in the Northern District of California, filed the complaint in the Eastern District of Texas. the complaint alleges that Huawei is PR China company, and that FutureWei, its wholly owned subsidiary, is a Texas corporation based in Plano, with offices in San Jose, California, and Reston, Virginia. Plano is in the Eastern District of Texas. The complaint lists Cisco's counsel as the Dallas based law firm of McKool Smith. The law firm of Orrick Herrington Sutcliffe is listed as of counsel.

Senate Approves Total Information Awareness Amendment

1/23. The Senate approved an amendment (SA 59) to HJRes 2 by a voice vote. The amendment would limit the ability of the Department of Defense to spend money on Defense Advanced Research Projects Agency's (DARPA) Total Information Awareness (TIA) project. The Senate has not yet passed HJRes 2. Then, the House may, or may not, pass its version of HJRes 2 with the Senate's TIA language.

HJRes 2 is the further appropriations for FY 2003 resolution, which the Senate has been debating for over a week. It includes funding for most executive branch departments, except the DOD.

The amendment was offered by Sen. Ron Wyden (D-OR) (at right). It would provide that no federal funds can be spent on TIA unless the DOD, DOJ and CIA submit a joint report within 60 days that "contains ... a detailed explanation of the actual and intended use of funds for each project and activity of the Total Information Awareness program ...", or "the President certifies to Congress in writing, that" such report is "not practicable" and "the cessation of research and development on the Total Information Awareness program would endanger the national security of the United States".

The DARPA web site states that this project "will imagine, develop, apply, integrate, demonstrate and transition information technologies, components and prototype, closed-loop, information systems that will counter asymmetric threats by achieving total information awareness useful for preemption; national security warning; and national security decision making."

The Wyden amendment contains several other provisions. One states that it is the sense of the Congress that "the Total Information Awareness program should not be used to develop technologies for use in conducting intelligence activities or law enforcement activities against United States persons without appropriate consultation with Congress or without clear adherence to principles to protect civil liberties and privacy".

Another states that it is the sense of the Congress that "the primary purpose of the Defense Advanced Research Projects Agency is to support the lawful activities of the Department of Defense and the national security programs".

Also, on January 16, Sen. Russ Feingold (D-WI) introduced a stand alone bill, S 188, the Data Mining Moratorium Act of 2003. This bill, which is cosponsored by Sen. Wyden, would require the DOD and the Department of Homeland Security to suspend the development of data mining systems, including the TIA project. (See, story titled "Sen. Feingold Introduces Data Mining Moratorium Bill", in TLJ Daily E-Mail Alert No. 586, January 20, 2003.)

On January 17, Sen. Charles Grassley (R-IA) offered an amendment (SA 53) to HJRes 2. His amendment, which the Senate did not adopt, would have provided that no federal funds can be spent on the TIA project unless "(1) such technology or component is to be used, and is used, only for foreign intelligence purposes; and (2) such technology or component is not to be used, and is not used, for domestic intelligence or law enforcement purposes". This amendment would also have required a detailed report. See, story titled "DARPA States FBI Is Involved in Total Information Awareness Program" in TLJ Daily E-Mail Alert No. 588, January 22, 2003.

Sen. Grassley and Sen. Wyden also released a statement on January 23: "Our amendment should make sure the TIA program strikes the very careful balance that's needed to protect civil liberties while at the same time protecting Americans against terrorism."

Also on January 23, the Association for Computing Machinery (ACM) wrote a letter to Sen. John Warner (R-VA) and Sen. Carl Levin (D-MI), the Chairman and ranking Democrat on the Senate Armed Services Committee, regarding the TIA project. The ACM stated that "the overall surveillance goals of TIA suffer from fundamental flaws that are based in exceedingly complex and intractable issues of human nature, economics and law.  Technological research alone cannot make a system such as TIA viable. As computer scientists and engineers we have significant doubts that the computer based TIA Program will achieve its stated goal of ``countering terrorism through prevention´´.  Further, we believe that the vast amount of information and misinformation collected by any system resulting from this program is likely to be misused to the detriment of many innocent American citizens. Because of serious security, privacy, economic, and personal risks associated with the development of a vast database surveillance system, we recommend a rigorous, independent review of these aspects of TIA."

Another Group Formed to Oppose Copyright Protection Technology Mandates

1/23. Another newly formed advocacy group, the Alliance for Digital Progress (ADP), announced its intent to pursue policies pertaining to the protection of digital copyrighted works. Specifically, it states that the "ADP strongly opposes efforts to make the government design and mandate copy protection technologies." See, ADP release.

The ADP further states that it "believes that private sector collaboration among the technology, consumer electronics, and content industries creates the most effective tools to combat digital piracy." Also, it "believes the proper role of Government is to enforce existing laws against illegal copying."

In other words, this is another group formed to oppose measures such as S 2048 (107th), the Consumer Broadband and Digital Television Promotion Act. Sen. Ernest Hollings (D-SC) (at right) and others introduced this bill on March 21, 2002. However, it has not yet been reintroduced in the just started 108th Congress. The bill would require software and electronic equipment makers to build copy protection technology into their products. It has long been opposed by technology companies, but supported by the movie industry. See, story titled "Sen. Hollings Introduces Copy Protection Bill" in TLJ Daily E-Mail Alert No. 394, March 23, 2002.

The new ADP has a web site, a public relations firm, at least two lobbyists, and a list of members.

Fred McClure is the President of ADP. He is a partner in the law and lobbying firm of Winstead Sechrest & Minick. He is a Texan who was Assistant for Legislative Affairs in the administration of the elder George Bush. Bruce Heiman is Executive Director of the ADP. He is the chair the Information Technology Policy Group at the Washington DC office of the law and lobbying firm of Preston Gates Ellis & Rouvelas Meeds. This is the firm of the elder Bill Gates.

The ADP's corporate members include Apple, Cisco, Dell, HP, IBM, Intel, Microsoft and Motorola.

Last week three groups, the Recording Industry Association of America (RIAA), the Business Software Alliance (BSA), and the Computer Systems Policy Project (CSPP), announced that they reached an agreement regarding policies that they will advocate in the 108th Congress regarding digital copyright issues. One of the key provisions of this agreement is that "Technical protection measures dictated by the government ... are not practical". See, story titled "Software, Computer and Music Companies Reach Agreement on Digital Copyright Issues", in TLJ Daily E-Mail Alert No. 583, January 15, 2003.

The corporate members of the ADP -- Apple, Cisco, Dell, HP, IBM, Intel, Microsoft and Motorola -- are also members of either the BSA, the CSPP, or both.

The BSA and CSPP are also a members of the ADP. BSA P/CEO, Robert Holleyman, stated in a release that "Those who seek to put the burden of piracy on the technology industry are simply missing the point. The technology industry is not the problem, but part of the solution. Mandates from the government are not the answer. Market based solutions, along with education and enforcement of existing laws, are the answer. That's why even though we will be actively opposing government mandates on technology, we will continue to work closely with the movie studios to find solutions that will satisfy consumers and promote innovation in the marketplace."

Fred McClure stated in another release that "government designed and mandated technology that swaps the diversity of marketplace solutions for a ‘one size fits all’ approach is not the answer. Mandates are a mistake. A mandate will raise the price of everything from CD players and DVD players to personal computers. It will make the devices consumers own today obsolete. And it will stifle the innovation at the heart of digital progress."

McClure added that "ADP believes Hollywood should fight piracy by working with industry to come up with solutions that meet consumer expectations, and by providing attractive legal alternatives to piracy by putting content online in a wide variety of digital formats".

4th Circuit Rules in Cyber Squatting Case

1/23. The U.S. Court of Appeals (4thCir) issued its "unpublished" per curiam opinion [6 pages in PDF] in Cable News Network v. cnnews.com, an in rem cyber squatting case. The Appeals Court affirmed the District Court's order that the domain name cnnews.com be transferred to Cable News Network.

Background. The Cable News Network (CNN) is the the news network built by Ted Turner. However, it is now an AOL Time Warner Company. CNN has registered the trademarks CNN, CNN Interactive, CNNFN, and CNN Learning. cnnews.com is an Internet domain name. It currently directs web users to a Chinese language news web site that is also identified as cnitv.com. It includes an English language section.

Maya Online Broadband Network (HK) Company, Limited (hereinafter Maya) is the company that registered the cnnews.com domain name with Network Solutions, Inc. (NSI).

District Court. CNN filed an in rem complaint in U.S. District Court (EDVa) action against the domain name cnnews.com pursuant to the Anticybersquatting Consumer Protection Act of 1999 (ACPA), which is codified at 15 U.S.C. § 1125(d). CNN alleged that domain name's use by Maya both infringed on and diluted the CNN trademark. CNN sought an order transferring the domain name cnnews.com from Maya to CNN.

This is an in rem action, meaning that the claim is brought against a thing (rather than against a person or entity), and seeks a determination of interests in the thing (rather than a determination of personal liability). And hence, CNN asserted in rem jurisdiction (over the domain name), rather than personal jurisdiction (over Maya). Maya challenged the jurisdiction of the Court.

The District Court held that is has in rem jurisdiction under the ACPA. It then ruled on cross motions for summary judgment that Maya infringed CNN's trademark. However, it ruled that there was no trademark dilution because CNN did not demonstrate actual harm to the mark. The District Court then ordered that the domain name be transferred to CNN. Maya appealed.

Statute. Section 1125(d)(1)(C) provides that "In any civil action involving the registration, trafficking, or use of a domain name under this paragraph, a court may order the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark."

Section 1125(d)(2)(A) provides, in part, that "The owner of a mark may file an in rem civil action against a domain name in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located if ..."

Court of Appeals. The part portion of the Court of Appeals' opinion that states its holding is very short, and is therefore quoted in here in full. The Court wrote, "The district court properly exercised in rem jurisdiction over the domain name cnnews.com. See Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 225 (4th Cir. 2002). The court decided the merits, including the issue of Maya HK's bad faith, prior to our holding that a plaintiff may prevail in an in rem trademark infringement and dilution action without alleging and proving bad faith. Harrods Ltd., 302 F.3d at 232. The portions of the district court's summary judgment opinion dealing with the bad faith issue are therefore vacated. In light of Harrods Ltd. there is no need for us to address the issue of whether Maya HK acted in bad faith. This, however, does not alter the outcome because the district court determined that CNN had established all of the essential elements of a trademark infringement claim. As to the issue of trademark infringement and all remaining issues raised on appeal, we affirm on the reasoning of the district court. Cable News Network L.P., L.L.L.P. v. cnnews.com, 177 F. Supp. 2d 506 (E.D. Va. 2001) (opinion granting CNN’s motion for summary judgment). The district court's final order transferring the domain name cnnews.com to CNN is also affirmed. VACATED IN PART AND AFFIRMED IN PART; FINAL ORDER AFFIRMED" (Parentheses in original. Hyperlink added.)

The Court also wrote that this opinion is "UNPUBLISHED", and that "Unpublished opinions are not binding precedent in this circuit. See Local Rule 36(c)."

AT&T filed an amicus curiae brief in support of CNN. The Electronic Frontier Foundation (EFF) filed an amicus curiae brief in support of Maya.

Grand Jury Returns Wire Act Indictment for Listening in on Conference Calls

1/23. A grand jury of the U.S. District Court (EDVa) returned an indictment [6 pages in PDF] charging Edmund Matricardi with three counts of  interception of wire communications in violation of 18 U.S.C. § 2511(1)(a), and two counts of disclosure of intercepted wire communications, in violation of 18 U.S.C. § 2511(1)(c).

The indictment alleges that Marticardi, a former Executive Director of the Republican Party of Virginia (RPV), obtained the call in number and access code for Democratic Party conference calls, used his phone at the RPV to listen in without disclosing his presence, and then disclosed the contents of the conference calls to others. The Democratic Party's e-mail notice of the conference calls included the statement, "Due to the sensitive nature of the meeting, and attorney client privilege, only General Assembly members should attend or participate."

Section 2511 provides, in part, that "(1) ... any person who ... (a) intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication ... shall be punished as provided in subsection (4) ..." Section 2510, in turn, defines "intercept" as "the aural or other acquisition of the contents of any wire, electronic, or oral communication through the use of any electronic, mechanical, or other device."

The indictment alleges, in part, that Matricardi "did knowingly, intentionally, and unlawfully intercept and endeavor to intercept a wire communication, in that, using his telephone at RPV Headquarters in Richmond, Virginia, he used the access code and called in to an interstate conference call of the members of the Democratic Party of Virginia, and, without disclosing that he was on the line, secretly listened for approximately two and one-half hours and recorded the call on a tape recorder." See also, USAO release [PDF].

Appeals Courts Discuss Internet Use in Sentencing Cases

1/23. Two U.S. Courts of Appeals recently issued opinions in cases involving appeals from sentences that included post release prohibitions of Internet use. In both cases, the Appeals Courts overturned the conditions. Both cases involved application of the sentencing provisions of the Criminal Code, which provide that special conditions of supervised release must entail "no greater deprivation of liberty than is reasonably necessary" See, for example, 18 U.S.C. § 3583(d)(2). However, the Courts also discussed the nature of the Internet, filtering, hacking, and online copyright infringement.

On January 21, the U.S. Court of Appeals (7thCir) issued its opinion [7 pages in PDF] in USA v. Scott, an appeal of a criminal sentence that included a complete ban on Internet use. The Appeals Court vacated and remanded.

The defendant, Todd Scott, plead guilty in U.S. District Court to fraud. The Court imposed a sentence that included the requirement that "The defendant shall be prohibited from access to any Internet Services without prior approval of the probation officer." The District Court's rationale was that a "search of the computer in Scott's office turned up a few images of child pormography."

Judge Frank Easterbrook wrote the opinion for the three judge panel. He opined that "The district judge might have prohibited Scott from accessing newsgroups, as opposed to the entire Internet. Or the judge might have required Scott to install filtering software that would block access to sexually oriented sites, and to permit the probation officer unannounced access to verify that the filtering software was functional. Filtering software is imperfect and may block access to some sites that lack the attributes sought to be put off limits ... but is less restrictive than blocking the whole Internet -- and reliance on software avoids any problem in giving discretion to a probation officer, whose errors may be greater." (Citations omitted.)

Judge Easterbrook continued that "If Scott had used the Internet extensively to commit the crime of conviction, then perhaps a ban might be justified. ... But here the only justification was misbehavior that neither resulted in a conviction nor was treated as relevant conduct, making an outright ban difficult to justify." Hence, on remand, "the judge should invite the probation officer to recommend restrictions on Internet access designed to ensure that Scott does not use his computer to commit additional crimes while on supervised release."

Scott had argued that "limitations on Internet access cannot be justified at all, given §3583(d)(2) and the first amendment." Judge Easterbrook responded that "That is not a tenable argument. Computers and the Internet may be used to commit crimes, of which child pormography and fraud are only two examples. Inveterate hackers who have used access to injure others may be ordered to give up the digital world. If full access posed an unacceptable risk of recidivism, yet all controls on access were forbidden, then a judge would have little alternative but to increase the term of imprisonment in order to incapacitate the offender. Few defendants would deem that a beneficial exchange; most would prefer the conditional freedom of supervised release, even with restrictions on using the Internet, to the more regimented life in prison."

Judge Easterbrook concluded that "The Internet is a vast repository, offering books, newspapers, magazines, and research tools along with smut. A judge who would not forbid Scott to enter a video rental store (which may have an adult-video section) also should not forbid Scott to enter the Internet, even though Disney’s web site coexists with others offering filthy pictures or audio files circulated in violation of the copyright laws. ... A judge who would not forbid a defendant to send or receive postal mail or use the telephone should not forbid that person to send or receive email or to order books at Amazon.com. Scott does not have a record of extensive abuse of digital communications that could justify an outright ban." (Parentheses in original. Citations omitted.)

On January 6, the U.S. Court of Appeals (3rdCir) issued its opinion [PDF] in USA v. Robb Freeman, another criminal sentencing case involving a no Internet use condition.

In this case, the defendant, Robb Freeman, did plead guilty to a crime involving use of the Internet -- possession of child porm. And, the District Court imposed a post incarceration condition "forbidding him from possessing any computer in his home or using any on-line computer service without the written approval of the probation officer". In this case also, the Appeals Court held that the condition was "overly broad; it involves a greater deprivation of liberty than is reasonably necessary to deter future criminal conduct and to protect the public."

Judge Roth, writing for the three judge panel, reasoned that "a total ban on internet access prevents use of email, an increasingly widely used form of communication, and other common-place computer uses such as getting a weather forecast or reading a newspaper online. ... There is no need to cut off Freeman's access to email or benign internet usage when a more focused restriction, limited to pormography sites and images, can be enforced by unannounced inspections of material stored on Freeman’s hard drive or removable disks." The Court then distinguished using the Internet to contact children with using it to download.

More Court Opinions

1/23. The U.S. Court of Appeals (8thCir) issued its opinion [16 pages in PDF] in Kushner v. Beverly Enterprises, a securities fraud suit involving the scienter requirement of the Private Securities Litigation Reform Act (PSLRA). The District Court dismissed the complaint for failure to state a claim upon which relief can be granted. The Appeals Court affirmed.

Tech Crimes

1/23. A trial jury of the U.S. District Court (WDPenn) returned a verdict of guilty against Brian Ferguson on three counts of unauthorized access to a protected computer. The protected computer belonged to AOL. The content was an e-mail account that belonged to Pennsylvania Common Pleas Court Judge Kim Eaton. See, CCIPS release.

People and Appointments

1/23. Tom Sugrue, the Chief of the Federal Communications Commission's (FCC) Wireless Telecommunications Bureau (WTB), will leave the FCC "this spring". He will be replaced "in early February" by John Muleta. See, FCC release [PDF]. Muleta is currently P/CEO of Source 1 Technologies, a privately held systems integration firm. He also cofounded OI Systems, a consulting firm. He worked at PSINet from 1998 through 2000. He worked at the FCC from 1994 through 1998.

1/23. Ron Bonjean will become Director of Public Affairs at the Department of Commerce (DOC) on February 3, 2003. He was previously press secretary to Sen. Trent Lott (R-MS). See, DOC release.

More News

1/23. The Federal Communications Commission (FCC) denied a request to further extend the deadline to submit comments in response to its Notice of Proposed Rulemaking (NPRM) [15 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Copy Protection". This NPRM proposes that the FCC promulgate a broadcast flag rule, and seeks comment on this, and related questions. The deadline to submit reply comments remains February 18. This is MB Docket No. 02-230. The FCC has already twice delayed this proceeding. The request just denied had asked for an additional six month delay. See, FCC order [MS Word] of January 23, 2003. See also, FCC release [PDF] and Order [PDF] of October 11, 2002 extending deadlines, and Order [PDF] of January 3, 2003.

1/23. The Department of Justice's (DOJ) Antitrust Division published a notice in the Federal Register (January 23, 2003, Vol. 68, No. 15, at Pages 3267-3272) regarding the public comments it has received in response to its Proposed Final Judgment in USA v. MathWorks and Wind River Systems. The DOJ filed its complaint on June 21, 2002 in U.S. District Court (EDVa) against MathWorks and Wind River Systems alleging violation of Section 1 of the Sherman Act. The complaint alleged that MathWorks and Wind River were competitors in the development and sale of dynamic control system design software tools, and that they entered into an agreement that gave MathWorks the exclusive right to sell Wind River's MATRIXx products and required Wind River to stop its own development and marketing. See, DOJ June 21 release. On August 15, 2002, the DOJ announced that it filed a proposed settlement with the District Court. See also, notice in the Federal Register (October 21, 2002, Vol. 67, No. 203, at Pages 64657 - 64666) regarding the Proposed Final Judgment and Competitive Impact Statement.

1/23. Nortel Networks and Ciena announced that they have entered into a settlement agreement to resolve the pending lawsuit filed by Nortel in U.S. District Court (EDTex) against ONI Systems (which has been acquired by Ciena) alleging patent infringement and misappropriation of trade secrets. Nortel and Ciena stated that Nortel has granted Ciena a license in U.S. Patent No. 6,084,694 titled "WDM optical network with passive pass through at each node", and U.S. Patent No. 6,493,117 titled WDM optical network with passive pass through at each node". The parties also stated that Ciena will make a payment to Nortel of $25 Million. See, Nortel release, and substantially identical Ciena release.

Commissioner Martin Addresses TV Programming

1/22. Federal Communications Commission (FCC) Commissioner Kevin Martin gave a bully pulpit speech in which he addressed television "family friendly" programming. He stated that the FCC does not have statutory authority in this area. However, Martin said that FCC Commissioners can give bully pulpit speeches.

He stated that the increased diversity in television programming has been accompanied by a "corresponding rise in the amount of programming less suitable for children".

He continued that "We at the FCC need to address these issues. We need to do more. Now, the FCC does not have express statutory authority governing family-friendly programming. But I don’t believe that renders us powerless. At a minimum, we need to use the bully pulpit to persuade broadcasters, cable operators, and satellite providers to re-think their approach to family-friendly programming."

He said that "the time has come for us to call on broadcasters to reinstate the Family Viewing Hour". He also said that "cable operators and satellite providers, too, must rethink their level of responsibility to the viewing public".

Martin also discussed the V-Chip and digital cable. He said that "Blocking technologies such as the V-Chip were once hailed as a potential solution to this problem. Unfortunately, studies have shown that their adoption rate has been very low. Few parents know about these technologies, and of those that do, fewer still can figure out how to make them work. Now some in the industry are heralding digital cable as the new panacea. However, penetration of digital cable is not yet widespread. It is therefore is too soon to tell whether consumers will actually learn about this function once digital cable is more prevalent, whether this capability will prove sufficiently user-friendly to become an effective tool, or whether the blocking mechanism will be too easily circumvented."

Martin did not address Internet content in the prepared text of his speech.

He spoke at the annual conference of National Association of Television Program Executives in New Orleans.

Sen. Grassley Writes FBI Re Ptech Software

1/22. Sen. Charles Grassley (R-IA) wrote a letter to Federal Bureau of Investigation (FBI) Director Robert Mueller regarding Ptech, Inc., the Boston software company raided by federal agents last month in connection with investigation of financial crimes. Sen. Grassley wrote that "I am concerned that the FBI may not have done enough to ensure the computers and networks of the government and private sector are free of vulnerabilities which might arise from using Ptech software."

Sen. Grassley continued that "Until the National Infrastructure and Protection Center (NIPC) moves to the Department of Homeland Security (DHS), it is still the FBI's responsibility, through NIPC, ``to serve as the U.S. government's focal point for threat assessment, warning, investigation, and response for threats or attacks against our critical infrastructures,´´ as NIPC's web site states."

"In the case of Ptech and the potential for widespread vulnerability in government computers and systems, I fear some at FBI Headquarters may be suffering from a ``not my job, not my problem´´ attitude that focuses only on the vulnerability of the FBI itself rather than the federal government at large -- not to mention the private sector", wrote Sen. Grassley.

He concluded, "I urge you to make sure that the FBI and NIPC, rather than only the bureau’s counter-terrorism division, address this issue in a global way. I also urge you to ensure that NIPC's detection, analysis and prevention functions continue during its transfer to the DHS."

Michael Sullivan, the U.S. Attorney for Massachusetts, released a statement on December 6, 2002, in which he said that "Last night a search warrant was executed at the offices of P-Tech located in Quincy, Massachusetts. The search was conducted without incident by investigators from U.S. Customs, FBI, IRS, Secret Service, INS and the Massachusetts State Police. The affidavit filed in support of the search warrant is under a court-ordered seal and at this time, no further information about the search warrant can be disclosed."

He also said that "Due to P-Tech's status as a provider of software to agencies of the U.S. Government, there have been questions raised concerning their products. All of the products provided to the Government were of a non-classified nature. However, out of an abundance of caution, the affected Government agencies, including the FBI, conducted a review of their computer systems. There is no reason to believe that the software has any secondary purpose or malicious code, or that there has been a breach of any kind. There have been no vulnerabilities identified in connection with any of the products provided by P-Tech. There is also no evidence to suggest that the system is susceptible to compromise or poses any security risk."

Sullivan added that "The search was conducted in connection with an on-going financial crime investigation. Media characterizations of this as a terrorist investigation are premature."

For more information, contact Oussama Ziadé at ziade@ptechinc.com.

People and Appointments

1/22. Senate voted unanimously to confirm Tom Ridge to be Secretary of Homeland Security. See also, statement by President Bush.

1/22. Hilary Rosen, Ch/CEO of the Recording Industry Association of America (RIAA) announced that she will leave the RIAA at the end of 2003. Cary Sherman remains as President. See, RIAA release.

1/22. Howard Fienberg was named Legislative Assistant to Rep. Chris Cox (R-CA). He will handle energy, science, environmental and other issues.

1/22. President Bush nominated Mark Everson to be Commissioner of Internal Revenue for a term of five years. He will replace Charles Rossotti, whose term expired. See release.

More News

1/22. The Federal Trade Commission (FTC) released its annual report [68 pages in PDF] titled "National and State Trends in Fraud and Identity Theft: January – December 2002". The report states that in 2002 the FTC received 380,103 consumer fraud and identity theft complaints. 43% of these related to identity theft. The rest of the top ten fraud categories were Internet auctions (13%), Internet services and computer complaints (6%), advance fee loans and credit protection (5%), shop at home/catalog sales (5%), foreign money offers (4%), prizes/sweepstakes and lotteries (4%), business opportunity and work at home plans (3%), telephone services (2%), health care (2%), and magazines and buyers clubs (2%). See also, FTC release.

DARPA States FBI Is Involved in Total Information Awareness Program

1/21. The Department of Defense (DOD) stated that the Federal Bureau of Investigation (FBI) is involved the Defense Advanced Research Projects Agency's (DARPA) Total Information Awareness (TIA) project.

The DARPA web site states that this project "will imagine, develop, apply, integrate, demonstrate and transition information technologies, components and prototype, closed-loop, information systems that will counter asymmetric threats by achieving total information awareness useful for preemption; national security warning; and national security decision making." The DARPA is headed by Anthony Tether. John Poindexter is the head of the DARPA's TIA project.

The DOD made the statement regarding the FBI in its responses to a set of questions propounded by Sen. Charles Grassley (R-IA) in a November 22, 2002 letter. Sen. Grassley asked, among other things, "What coordination has the program had with Federal law enforcement officials?"

The DOD responded to Sen. Grassley on January 17 that "Dr. Tether has advised of contacts with the Federal Bureau of Investigation (FBI), Foreign Terrorist Tracking Task Force, Department of Justice, and components of the Department of Homeland Security, DARPA officials note it is their understanding that the FBI is working on an MOU with DARPA for possible experimentation with TIA technology in the future."

Sen. Grassley responded by writing a letter on January 21 to Attorney General John Ashcroft. Sen. Grassley noted that the Department of Justice (DOJ), of which the FBI is a part, had previously denied receiving information on TIA. Sen. Grassley then stated, "I am very concerned that DoJ and the FBI may have been less than forthright to the press and the American people about their involvement with TIA. Please provide a complete accounting, including timeline, of DoJ and FBI’s actions regarding TIA as well as the draft MOU."

On January 17, Sen. Grassley (at right) offered an amendment (SA 53) to HJRes 2, the further appropriations for FY 2003 resolution, which the Senate is currently debating. His amendment would provide that no federal funds can be spent on the TIA project unless "(1) such technology or component is to be used, and is used, only for foreign intelligence purposes; and (2) such technology or component is not to be used, and is not used, for domestic intelligence or law enforcement purposes". This amendment would also require a detailed report.

In addition, also on January 17, Sen. Ron Wyden (D-OR), and others, offered a related amendment (SA 59). This amendment contains several provisions. One provides that it is the sense of the Congress that "the Total Information Awareness program should not be used to develop technologies for use in conducting intelligence activities or law enforcement activities against United States persons without appropriate consultation with Congress or without clear adherence to principles to protect civil liberties and privacy".

The amendment further provides that it is the sense of the Congress that "the primary purpose of the Defense Advanced Research Projects Agency is to support the lawful activities of the Department of Defense and the national security programs".

The Wyden amendment would also provide that no federal funds can be spent on TIA unless the DOD, DOJ and CIA submit a joint report within 60 days that "contains ... a detailed explanation of the actual and intended use of funds for each project and activity of the Total Information Awareness program ...", or "the President certifies to Congress in writing, that" such report is "not practicable" and "the cessation of research and development on the Total Information Awareness program would endanger the national security of the United States".

Also, on January 16, Sen. Russ Feingold (D-WI) introduced a stand alone bill, S 188, the Data Mining Moratorium Act of 2003. This bill, which is cosponsored by Sen. Wyden, would require the DOD and the Department of Homeland Security to suspend the development of data mining systems, including the TIA project. (See, story titled "Sen. Feingold Introduces Data Mining Moratorium Bill", in TLJ Daily E-Mail Alert No. 586, January 20, 2003.)

The bill provides that until "there is enacted a law specifically authorizing data-mining", "no officer or employee of the Department of Defense or the Department of Homeland Security may take any action to implement or carry out for data-mining purposes any part of (including any research or development under) (1) the Department of Defense component of the Total Information Awareness program or any other data-mining program of the Department of Defense; or (2) any data-mining program of the Department of Homeland Security that is similar or related to the Total Information Awareness program."

Sen. Grassley also asked the DOD in his November 22, 2002 letter, "What protections are in place to ensure civil liberties are not violated?" The DOD responded on January 17 that "Dr. Tether has advised that part of the TIA project will focus on the development of privacy protections that do not currently exist, along with other advanced security and system hardening characteristics as part of the TIA program. The IG, DoD, audit will ``assess whether the proper controls are being included in the developmental contracts to ensure that the technology is properly managed and controlled when placed in an operational environment.´´ The audit will also assess the adequacy of computer security protections and human access protections intended to protect civil liberties."

District Court Rules DMCA Subpoenas Available for P2P Infringers

1/21. The U.S. District Court (DC) issued its opinion in RIAA v. Verizon, ruling that copyright holders can obtain subpoenas pursuant to 17 U.S.C. § 512(h) that require Internet Service Providers (ISPs) to reveal the identities of their customers who infringe copyrights on peer to peer filing sharing systems. Verizon had argued that 512(h) subpoenas were only available with respect to infringers who stored infringing content on the servers of the ISP. While the Recording Industry Association of America (RIAA) could obtain a subpoena by other means, this holding is significant because Section 512(h) provides a fast and efficient means of obtaining subpoenas for ISP's information that identifies infringers. In particular, it requires no notice to, or opportunity to be heard by, the alleged infringer. Verizon stated that it will appeal. See, full story.

More Court Opinions

1/21. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Eminence Capital v. Aspeon, a class action securities fraud action against a producer of touch screen hardware systems for retail business computer networks involving application of the Private Securities Litigation Reform Act (PSLRA). The District Court dismissed the complaint. The Appeals Court reversed.

1/21. The U.S. Court of Appeals (7thCir) issued its opinion [5 pages in PDF] in ISI v. Borden Ladner Gervais, a case involving the application of the doctrine of forum non conveniens to an underlying claim for violation of trademark law and breach of fiduciary duty. The alleged breach of fiduciary duty occurred in a patent licensing matter. The District Court concluded that the suit should proceed in Canada, where the alleged breach of fiduciary duty occurred. It reasoned that more witnesses are located there, and Canadian judges know the law of fiduciary duty better. The Appeals Court affirmed.

People and Appointments

1/21. The Senate Finance Committee published in its web site the questionnaire responses [49 pages PDF scan] of John Snow, President Bush's nominee to be Secretary of the Treasury. He was Chairman of CSX. The responses cover, among other things, the lawsuit CSX Transportation v. Qwest, filed in U.S. District Court in 1999 alleging "breach of the fiber optic placement agreement that governs Qwest's ability to install fiber optic communications facilities along CSXT's railroad right-of-way." The suit was settled in 2002. See, pages 40-41. Snow's confirmation hearing is scheduled for January 28 at 10:00 AM.

1/21. The American Electronics Association (AEA) named Dave Cox, the Republican Leader in the California Assembly, its AeA California High-Tech Legislator of the Year. See, AEA release.

1/21. Kris Anne Monteith has been named Deputy Bureau Chief for Outreach and Intergovernmental Affairs in the Federal Communications Commission's (FCC) Consumer & Governmental Affairs Bureau (CGB). She has worked for the FCC since 1997. Before that she worked for the law firms of McDermott Will & Emery and Keller & Heckman. See, FCC release [MS Word].

1/21. Morgan Guenther resigned as President of TiVo. TiVo, which makes digital video recorders, has not named his replacement. See, TiVo release.

1/21. Robert Borchardt will serve a second year as the Chairman of Electronic Industries Alliance's (EIA) Board of Governors. He is Ch/CEO/P of Recoton, which make home and mobile audio products and other consumer electronics and accessories. Ron Turner, CEO of Ceridian, and Van Cullens, CEO of Westell, will again be Vice Chairmen. See, EIA release.

More News

1/21. The U.S. Court of Appeals (DCCir) issued its opinion in Sprint v. FCC. Sprint, AT&T and WorldCom filed petitions for review of the Federal Communications Commission's (FCC) order governing the means by which payphone service providers are compensated for certain calls made from their payphones. The FCC granted the petitions, and remanded, because the FCC failed to follow notice and comment requirements of the Administrative Procedure Act (APA).

1/21. The General Accounting Office (GAO) released a report [PDF] on the "Purchases of Degrees from Diploma Mills". It GAO found that a search of a government sponsored resume database identified over a thousand resumes with bogus degrees. It wrote that "A the time of our investigation, the Oregon State Office of Degree Authorization identified 43 institutions as diploma mills or unaccredited institutions. To determine the reason for which the degrees had been purchased, we requested that a government sponsored Internet résumé repository query its database to determine if any résumés it contained listed degrees from entities identified by the state of Oregon as diploma mills. We received a database of more than 1,200 résumés that included degrees from 14 of the 43 diploma mills."

Go to News from January 16-20, 2003.