FCC Postpones Meeting

2/10. The Federal Communications Commission (FCC) postponed is February 13th meeting until February 20. The agenda includes a Report and Order regarding unbundled network elements (UNEs). The FCC is under a court imposed February 20 deadline. The meeting will be in the Commission Meeting Room at 9:30 AM. See, FCC notice [PDF].

Ashcroft Addresses Information and Law Enforcement

2/10. Attorney General John Ashcroft gave a speech to the Council on Foreign Relations. He spoke in broad terms about law enforcement agencies' collecting and sharing of information to prevent terrorism.

He stated that "I have said often that in this global war on terror, the best friend of prevention is information, and the best friends of information are cooperation, coordination and collaboration. Nations that stand on the side of the rule of law have embraced these principles, understanding also that we are bound to encounter occasional difficulties and temporary glitches as we embark on a new quest for international security."

He continued that "In the past, our focus has been on traditional law enforcement -- prosecution. Prosecution is retrospective; it re-creates a past event. It is like putting together a jigsaw puzzle with the benefit of the picture on the box top. Our new, international goal of terrorism prevention, on the other hand, involves anticipation and imagination about emerging scenarios, the puzzle pieces of which have yet to come into alignment. Together, our nations are finding new ways to anticipate these dangerous scenarios and to identify, intercept and disrupt them before they become tragic terrorist realities."

European Commission Proposes To Create A Cyber Security Agency

2/10. The European Commission proposed a regulation that would create an agency for cyber security. Erkki Liikanen, European Commissioner for Enterprise and Information Society, gave a speech in which he stated that "We propose to establish a European Network and Information Security Agency to build on national efforts to enhance network and information security and to increase the ability of Member States and EU Institutions to prevent and respond to major network and information security problems." See also, EU release.

Liikanen (at right) continued that "The Agency shall be able to provide assistance in the application of EU measures relating to network and information security. The assistance it provides shall help ensure interoperability of information security functions in networks and information systems, at the same time contributing to the functioning of the Internal Market. The Agency will ultimately serve as a centre of competence where both Member States and EU Institutions can seek advice on matters relating to security. This expertise provided for by the Agency will play a key role for the security of Europe's digital economy and the development of the information society in general."

He also stated that "The activities of the Agency will consist in advisory and co-ordinating functions, where data on information security is collected and analysed. Today both public and private organisations with different objectives gather data on IT-incidents and other data relevant to information security. There is, however, no central entity at European level that collects and analyses such data to support the EU policy work in that area, whilst at the same time providing added-value to national initiatives."

CO to Consider Programs Embedded in Printers and Cartridges In DMCA Exemptions Rulemaking

2/10. The Copyright Office (CO) granted a request from Static Control Components (SCC) to expand the scope of, and extend the reply comment deadline for, its current rulemaking proceeding concerning exemptions to the anti-circumvention provisions of the DMCA. SCC makes aftermarket printer cartridges.

OEMs and other printer manufacturers, who want to sell replacement printer cartridges, use copyrighted software programs embedded in their printers and cartridges that prevent the cartridges of other manufacturers from operating in their printers. One printer manufacturer, Lexmark, recently filed a complaint against SCC alleging violation of the DMCA. SCC then filed a petition with the CO, which the CO just granted. The CO has also set a new deadline of March 10, 2003 for relevant reply comments.

DMCA Exemptions. The Digital Millennium Copyright Act (DMCA) prohibits circumvention of technological measures that control access to copyrighted works. More specifically, 17 U.S.C. § 1201 provides, in Subsection (a)(1)(A), that "No person shall circumvent a technological measure that effectively controls access to a work protected under this title ...". Then Subsections (a)(1)(B) through (E) provide for rulemaking proceedings conducted by the CO to establish exemptions to the prohibition of (a)(1)(A) for certain non-infringing uses.

The CO is now conducting its second rulemaking on exemptions from the prohibition on circumvention of technological measures that control access to copyrighted works. See, the CO's Notice of Inquiry in the Federal Register, October 15, 2002, Vol. 67, No. 199, at Pages 63578-63582.

Initial comments proposing exemptions for specific classes of works were due by December 18, 2002. Reply comments submitted in opposition to or in further support of exemptions proposed in the initial comments were due February 19. Hence, SCC's request was untimely after December 18.

Lexmark's DMCA Lawsuit. On December 30, 2002 Lexmark filed a complaint [17 page PDF scan] in U.S. District Court (EDKent) against SCC alleging violation of the anti-circumvention provisions of the DMCA in connection with its production and sale of replacement cartridges for certain Lexmark printers.

Lexmark alleged in its complaint that its "strategy is based on a business model of building an installed base of printers that will then generate demand for Lexmark's printer supplies and services. Lexmark designs, manufactures, and distributes a variety of toner cartridges for use in its installed base of laser printers."

It further alleged that "Among the many products developed and marketed by Lexmark are its T520/522 and T620/622 laser printers and toner cartridges. Lexmark is the owner of valid copyright registrations covering computer programs that are used to control various operations of its T520/522 and T620/622 laser printers and to monitor operational characteristics of its toner cartridges."

According to the complaint, one of these programs, named the "Toner Loading Programs", is "contained on a microchip located on the T520/522 toner cartridge". There is another "Toner Loading Program" on a microchip in the T620/622. Another of Lexmark's programs is named the "Printer Engine Programs".

The complaint states that "In general, the technological measure, or authentication sequence, requires a ``secret handshake´´ between the printer and toner cartridge to enable printer functionality."

Lexmark alleges that SCC's "SMARTEK microchips are designed to enable unauthorized toner cartridges to function with Lexmark's T520/522 and T620/622 laser printers." It elaborates that these chips contain copies of Lexmark's programs, and constitutes a "circumvention" within the meaning of the DMCA.

The District Court issued a temporary restraining order on January 9, 2003 that enjoins SCC from making or selling its Smartek microchip for toner cartridges developed for the Lexmark T520/522 and T620/622 laser printers. See, Lexmark release of January 9.

SCC Petition to the CO. SCC filed a petition [14 pages in PDF] titled "Petition of Static Control Components, Inc. for Consideration of New Information" with the CO on January 23, 2003. SCC argued in this petition that "Technological measures applied by a manufacturer of computer printers and toner cartridges, Lexmark International Inc., prevent computer printers from interoperating with toner cartridge." SCC further stated that some Lexmark printers "perform a ``secret handshake´´ with a ``Toner Loading Program´´ located in an EEPROM chip located on a Lexmark toner cartridge." However, "the purpose of this ``handshake´´ authentication is not to protect against access to copyrighted works". It is to prevent unauthorized toner cartridges from being used with certain Lexmark printers.

SCC argued that "The DMCA was not intended to protect the type of program at issue here. ... Such inconsequential functional routines that control the operation of a machine or product, cannot be copied for external purposes, and have no market value independent of the machine or product, are not the type of works that Congress intended Section 1201(a) to protect against circumvention of technological measures."

"Moreover, such anticompetitive and exclusionary acts should not be permissible in light of public policies favoring the competitive recycling of used toner cartridges, and against the misuse of copyright to control the market for ancillary goods", wrote SCC.

Specifically, SCC asked the CO to also consider the following additional proposed exemptions in its pending rulemaking proceeding: "1. Computer programs embedded in computer printers and toner cartridges and that control the interoperation and functions of the printer and toner cartridge 2. Computer programs embedded in a machine or product and which cannot be copied during the ordinary operation or use of the machine or product 3. Computer programs embedded in a machine or product and that control the operation of a machine or product connected thereto, but that do not otherwise control the performance, display or reproduction of copyrighted works that have an independent economic significance."

The CO granted Static Control's request. It further announced that "Reply comments responsive to this new comment will be accepted from February 24, 2003 until March 10, 2003, at 5 pm Eastern Standard Time." See, notice in the Federal Register, February 10, 2003, Vol. 68, No. 27, at Pages 6678-6679.

More Information. See also, SCC's paper titled "Computer Chip Usage in Toner Cartridges and Impact on the Aftermarket: Past, Current and Future", and letter titled "The Challenges We Face: Meeting the Demands of New Technology" by SCC CEO Ed Swartz.

Lexmark wrote in its SEC form 10-Q on November 14, 2002 (at page 15) that "Competition  from supplies remanufacturers and refillers, as well as various legislative initiatives supported by such competitors, may have an adverse impact on the company's supplies business which would likely have an adverse impact on the company's profitability. Price reductions on inkjet and laser supplies products, regardless of their cause, are likely to result in lower profitability and could result in a material adverse impact on the company's strategy and financial results."

Rep. Rick Boucher (D-VA) has introduced legislation in the 107th and 108th Congresses to create a fair use exemption to the anti-circumvention provisions of the DMCA. See, HR 107 and PDF copy.

The SCC's petition to the CO was signed by Seth Greenstein of the law firm of McDermott Will & Emery and William London of SCC. For more information from the CO, contact Rob Kasunic, Office of the General Counsel, at 202 707-8380.

People and Appointments

2/10. Rep. Sherwood Boehlert (R-NY), Chairman of the House Science Committee, announced the subcommittees and chairman for the 108th Congress. Rep. Vernon Ehlers (R-MI) will chair the Subcommittee on Environment, Technology, and Standards. Rep. Nick Smith (R-MI) will chair the Subcommittee on Research. Rep. Dana Rohrabacher (R-CA) will chair the Subcommittee on Space and Aeronautics. Rep. Judy Biggert (R-IL) will chair the Subcommittee on Energy.

2/10. The Senate confirmed several nominees to be U.S. District Court Judges by unanimous roll call votes. John Adams (Ohio) was approved by a vote of 91-0. See, Roll Call No. 31. James Otero (California) was approved by a vote of 94-0. See, Roll Call No. 32. Robert Junell (Texas) was approved by a vote of 91-0. See, Roll Call No. 33.

2/10. JDS Uniphase President and COO Syrus Madavi was named to the Board of Directors. See, JDSU release.

Tech Crimes

2/10. Benjamin Curtis was charged with Criminal Possession of Marijuana in the Fifth Degree, and Unlawful Possession of Marijuana, in Criminal Court of the City of New York, County of New York. He was arraigned on February 10. Curtis is also know as the actor who played the role of Steven in Dell Computer's television commercials that used the line, "Dude, you're getting a Dell". See, New York Police Department's statement of the charges.

2/10. Condor Systems, Inc. plead guilty in U.S. District Court (NDCal) to two felony counts of making false statements to U.S. government officials, in violation of 18 U.S.C. § 1001. Condor submitted false information in applications for export licenses for software. Condor was also sentenced to three years probation, and ordered to pay a fine of $1 Million. See also, story titled "Condor Systems Charged With Making False Statements About Software in Export Application" in TLJ Daily E-Mail Alert No. 579, January 9, 2003; January 8, 2003 felony information [7 page PDF scan]; and February 10, 2003 release of the U.S. Attorney's Office (USAO) for the Northern District of California.

More News

2/10. The Computer and Communications Industry Association (CCIA) announced that it filed a complaint with the European Commission against Microsoft alleging violation of European competition law. See, CCIA's release [PDF], summary of complaint [20 pages in PDF].

Rogovin Named FCC General Counsel

2/7. Jane Mago has been replaced by John Rogovin as General Counsel of the Federal Communications Commission (FCC). Mago has been named to the newly created position of Chief of the newly created Office of Strategic Planning and Policy Analysis (OSPPA). See, FCC release [PDF].

Prior to being named FCC Deputy General Counsel in May of 2001, Rogovin was a partner in the telecommunications group in the Washington DC office of the law firm of O'Melvany & Myers. Prior to that, he was a Deputy Assistant Attorney General in the Civil Division of the Reno Justice Department, where he supervised the Federal Programs Branch. Among the functions of the Federal Programs Branch is to assist and represent federal government departments that do not comply with the Freedom of Information Act (FOIA). Rogovin was also lead counsel in AAPS v. Hillary Clinton, in which he defended the secret proceedings of Hillary Clinton's Health Care Task Force. And previously, he was a law clerk to Laurence Silberman, who is now a senior judge of the U.S. Court of Appeals (DCCir), which hears most appeals of FCC orders.

Mago has been with the FCC since 1978. She was named General Counsel in May of 2001. Before that, she had been acting General Counsel since the departure of Bill Kennard's General Counsel, Chris Wright, in January of 2001. Prior to that she was a Deputy Chief of the Enforcement Bureau. She has held numerous other positions at the FCC, including Senior Legal Advisor to Commissioner Powell. Mago is married to Robert Blau, vice president of federal, executive and regulatory affairs for BellSouth.

The FCC already has an Office of Plans and Policy (OPP). The FCC stated in another release [PDF] that "Robert Pepper, formerly Chief of the Office of Plans and Policy, will be part of the new office but report directly to Chairman Powell in a new Commission position of Chief, Policy Development."

The FCC also announced that Kathleen Ham will be named Deputy Chief, and Maureen McLaughlin will be named Chief of Staff, of the new (OSPPA). Ham is currently Deputy Chief of the FCC's Wireless Telecommunications Bureau (WTB). Before going to work for the FCC in 1990, she worked for the law firm of Akin Gump. McLaughlin is currently Senior Counsel for Law and Policy in the Office of General Counsel where she is involved in wireless telecommunications and spectrum management issues. She previously worked as Senior Counsel (Republican) to the Senate Commerce Committee's Communications Subcommittee.

Defense Department Announces Total Information Awareness Oversight Boards

2/7. The Department of Defense (DOD) announced in a release that it "will establish two boards to provide oversight of the Total Information Awareness Project, the program designed to develop tools to track terrorists. The two boards, an internal oversight board and an outside advisory committee, will work with the Defense Advanced Research Projects Agency (DARPA), as it continues its research. These boards will help ensure that TIA develops and disseminates its products to track terrorists in a manner consistent with U.S. constitutional law, U.S. statutory law, and American values related to privacy."

The DARPA web site has described the TIA as a project that "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 members of the outside board will included Newton Minow (Northwestern University), Floyd Abrams (Cahill Gordon & Reindel), Zoe Baird (President of the Markle Foundation), Griffin Bell (King & Spalding), Gerhard Casper (Stanford University Law School), William Coleman (Chief Customer Advocate of BEA), Lloyd Cutler (Wilmer Cutler & Pickering).

White House Press Office Gives Advice About Cyber Attacks

2/7. The White House press office issue a release titled "Are You Ready?", that addresses, among other things, cyber attacks. It states: "Cyber attacks target computer or telecommunication networks of critical infrastructures such as power systems, traffic control systems, or financial systems. Cyber attacks target information technologies (IT) in three different ways. First, is a direct attack against an information system ``through the wires´´ alone (hacking). Second, the attack can be a physical assault against a critical IT element. Third, the attack can be from the inside as a result of compromising a trusted party with access to the system." (Parentheses in original.)

It further offers two items of advice: "Be prepared to do without services you normally depend on that could be disrupted -- electricity, telephone, natural gas, gasoline pumps, cash registers, ATM machines, and internet transactions." Also: "Be prepared to respond to official instructions if a cyber attack triggers other hazards, for example, general evacuation, evacuation to shelter, or shelter-in-place, because of hazardous materials releases, nuclear power plant incident, dam or flood control system failures."

People and Appointments

2/7. John Snow was sworn in as Secretary of the Treasury. See, statement by Snow at swearing in ceremony, and statement by President Bush.

More News

2/7. The Federal Communications Commission (FCC) released a notice [PDF] regarding the status of its request for comments pertaining to the report [PDF] of its Spectrum Policy Task Force (SPTF). The notice states that "On November 15, 2002, the Commission issued a Public Notice, seeking comment on the Spectrum Policy Task Force Report. Pursuant to the provisions of 47 C.F.R. §§ 1.1200(a) and 1.1204(b)(1) of the Commission's rules, this proceeding is deemed an exempt proceeding, comparable to a notice of inquiry proceeding. Ex parte presentations to or from Commission decision-making personnel are permissible and need not be disclosed. For further information, contact Fred Thomas, at 202-418-7783 (SPTF) or SPTFINFO@FCC.GOV. ET Docket No. 02-135." (Footnote omitted.)

2/7. An organization named the Center for Public Integrity (CPI) published in its website a huge file [12 MB PDF scan] which the CPI states is a draft bill prepared by the Department of Justice titled the "Domestic Security Enhancement Act of 2003".

2/7. The Securities and Exchange Commission (SEC) filed a civil complaint in U.S. District Court (SDFl) against Marc Shiner and others alleging violation of federal securities laws in connection with their "ongoing, fraudulent, unregistered offer and sale of securities" in six limited liability partnerships that were ostensibly formed to operate competitive local telephone exchange carriers (CLECs) in states where Qwest Communications is an incumbent local exchange carrier (ILEC). The complaint alleges sale of unregistered securities in violation of §§ 5(a) and 5(c) of the Securities Act, fraud in violation of § 17(a) of the Securities Act, and fraud in violation of § 10(b) of the Exchange Act and Rule 10b-5 thereunder, fraud in violation of § 15(c) of the Exchange Act , and acting as an unregistered broker dealer in violation of § 15(a) of the Exchange Act. The District Court granted a temporary restraining order. See also, SEC release.

Hewitt Pate Addresses International Antitrust

2/6. Hewitt Pate, acting Assistant Attorney General (AAG) in charge of the Department of Justice's (DOJ) Antitrust Division, gave a speech titled "The DOJ International Antitrust Program -- Maintaining Momentum".

Pate became acting AAG when former AAG Charles James resigned. President Bush has yet to name a replacement. Pate stated that "my principal job is to provide the Division continuity and support during a transition period, not to make bold policy pronouncements".

He discussed the US relationship with the EU on antitrust enforcement. One of the issues which he addressed was intellectual property issues. He stated that "Given that the working group model has proven successful in the merger context, we decided in the past year to begin using that framework in the civil non-merger context as well by launching an Intellectual Property Working Group with the EU. The group has already had two videoconferences -- including one on patent pooling -- with more sessions planned for this winter and spring. Through this group, talented government antitrust experts on each side of the Atlantic can learn from one another and come up with optimal approaches to many of the difficult issues that face enforcers in matters that involve both antitrust and intellectual property issues."

He also discussed the new International Competition Network. It has no location or office. Pate quipped that "It's easy to say that something can be run as a ``virtual´´ organization when you don't really know -- as we did not know at this time last year -- whether a new network will amount to anything useful. We certainly have learned over the past year that it is challenging to run a virtual organization solely by Internet, teleconference and videoconference ..."

He also addressed international cartel enforcement. He spoke to an American Bar Association group in New York City.

FCC To Announce Unbundled Network Elements Order

2/6. The Federal Communications Commission (FCC) announced the agenda for its Thursday, February 13 meeting. It includes adoption of an order revising its rules regarding the unbundling obligations of incumbent local exchange carriers (ILECs).

The FCC agenda states that this is a "Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers (CC Docket No. 01-338), Implementation of the Local Competition Provisions of the Telecommunications Act of 1996 (CC Docket No. 96-98), Deployment of Wireline Services Offering Advanced Telecommunications Capability (CC Docket No. 98-147), and Appropriate Framework for Broadband Access to the Internet over Wireline Facilities (CC Docket No. 02-33)."

It continues that the FCC "will consider a Report and Order concerning incumbent local exchange carriers' obligations to make elements of their networks available on an unbundled basis."

CC Docket No. 01-338, which is referenced in this agenda, is more commonly known at the Triennial Review. The FCC adopted the Notice of Proposed Rulemaking (NPRM) [62 pages in PDF] instituting this proceeding at its December 12, 2001 meeting. See also, December 12, 2001 release and notice in the Federal Register.

The FCC wrote on December 12, 2001 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 further wrote that "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."

CC Docket 02-33, which is also referenced in the agenda, is commonly known as the Wireline Broadband NRPM. The FCC adopted the NPRM [58 pages in PDF] instituting this proceeding at its February 14, 2002 meeting. See also, 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."

The FCC will likely announce a few of the details of this Report and Order at the February 13 meeting. Typically, FCC staff reads a brief synopsis of the order, FCC Commissioners make very brief statements, and the item is approved by a vote. Then, Commissioners depart, and FCC staff hands out a short press release, but not the actual Report and Order. That usually is not released until at least a week later.

The FCC's agenda for the February 13 meeting lists two other items. One is a Memorandum Opinion and Order and Further Notice of Proposed Rulemaking in the FCC's proceeding regarding ultrawideband transmissions. The other is an order revising the FCC's rules regarding access for persons with disabilities to FCC programs and activities.

Ninth Circuit Rules In Online Vote Trading Case

2/6. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Porter v. Jones, a case involving the use of web based applications to facilitate vote trading in Presidential elections. The District Court dismissed in part, and stayed in part (under the abstention doctrine). The Appeals Court reversed both portions, and remanded.

Background. Plaintiffs operated a web site that facilitated the trading of votes in the 2000 presidential election. The goal was to obtain more votes for Al Gore in swing states to help him become President, and to obtain more votes for Ralph Nader in states where the outcome was not in doubt to help him become eligible for federal financing in future elections. The web site used a software program to match up voters in different states with complementary preferences.

Defendant, Bill Jones, who was then the Secretary of State for California, sent a cease and desist letter in which he threatened to prosecute under California Elections Code sections 18521 and 18522 for brokering the exchange of votes.

Section 18521, for example, provides in part, that "A person shall not directly or through any other person receive, agree, or contract for, before, during or after an election, any ... valuable consideration ... for himself or any other person because he or any other person: (a) Voted, agreed to vote, refrained from voting, or agreed to refrain from voting for any particular person or measure. ... (d) Induced any other person to: ... (3) Vote or refrain from voting for any particular person or measure. Any person violating this section is punishable by imprisonment in the state prison for 16 months or two or three years."

District Court. Plaintiffs filed a complaint in U.S. District Court (CDCal) against Jones alleging that his actions denied them freedom of speech and association in violation of the First Amendment and 42 U.S.C. § 1983, and requesting declaratory and injunctive relief. They applied for a temporary restraining order enjoining Jones from taking any enforcement action against Plaintiffs in connection with the 2000 presidential election. The District Court denied the motion. George Bush won the election.

Plaintiffs then amended their complaint, alleging intent to operate a similar web site for the 2004 election. They additionally requested damages from Jones in his individual capacity, and a permanent injunction against Jones in his official capacity.

Jones moved to dismiss, raising issues of mootness (the 2000 election is over) and ripeness (the 2004 election is not here yet). He also moved to stay the case under the Pullman abstention doctrine. See, Railroad Commission v. Pullman, 312 U.S. 496 (1941)

The District Court rejected the mootness and ripeness arguments. It stayed the claims for declaratory and injunctive relief under the abstention doctrine, and dismissed the claims for damages under Rule 12(b)(6), FRCP.

Appeals Court. The Appeals Court reversed both the stay under the abstention doctrine, and the dismissal of the damages claim, and remanded to the District Court for further proceedings.

The Appeals Court wrote that "It is rarely appropriate for a federal court to abstain under Pullman in a First Amendment case, because there is a risk in First Amendment cases that the delay that results from abstention will itself chill the exercise of the rights that the plaintiffs seek to protect by suit. We conclude that the risk of this kind of First Amendment chill is present here, notwithstanding the fact that Plaintiffs' challenge to the threatened application of Elections Code sections 18521 and 18522 is an as-applied challenge. Because the factors required for Pullman abstention were not met in this case, the district court had no discretion to abstain."

PPI Recommends Congressional Legislation to Remove Barriers to Internet Wine Sales

2/6. The Progressive Policy Institute (PPI), a Democratic party think tank, released a report [6 pages in PDF] titled "Buying Wine Online: Rethinking the 21st Amendment for the 21st Century". The report states that many states have "Archaic and unnecessary Prohibition-era laws" and that "More than 30 states prohibit citizens from purchasing beer, wine, and liquor over the Internet".

The report argues that "it is time to bring the regulation of the alcohol industry into the 21st century by ending the legal protections for middlemen. To do this: Congress should clarify the respective state and federal powers controlling commerce in alcohol, namely that states cannot prohibit open competition any more than is necessary to regulate for temperance and taxation purposes."

The report adds that "Such legislation would enable successful court challenges of most if not all state anti-direct shipment laws, at rest laws, and franchise laws because many of these laws do not aim at achieving legitimate purposes of temperance and taxation, and there are less restrictive alternatives to those that do."

The report also recommends that "States should abolish mandates that legally require a wholesaling tier and other statutes that unnecessarily restrict the market, so that consumers and producers may benefit from greater choice, competition, and market access. The federal government should help states and industry streamline compliance procedures for the various registration and licensing requirements mandated by individual states."

The report was written by Brian Newkirk and Robert Atkinson.

People and Appointments

2/6. President Bush nominated Edward Prado to be a Judge of the U.S. Court of Appeals (5thCir). See, White House release. Prado has been a Judge of the U.S. District Court (WDTex), at San Antonio, since his appointment by former President Reagan in 1984.

Tech Crime Report

2/6. A grand jury of the U.S. District Court (CDCal) returned an indictment against Andy Garcia on January 28 charging unauthorized access to a protected computer. The Department of Justice's (DOJ) Computer Crimes and Intellectual Property Section (CCIPS) stated in a release that Garcia had been a network administrator at Viewsonic Corporation, which makes computer monitors, and that after he was terminated he accessed company servers and deleted files. He was arrested on February 6.

More News

2/6. The Department of Justice (DOJ) filed a complaint in U.S. District Court (DC) against Gemstar TV Guide International, Inc. and TV Guide, Inc., alleging violations of § 1 of the Sherman Act, 15 U.S.C. § 1, which prohibits agreements in restraint of trade, and § 7A of the Clayton Act, 15 U.S.C. § 18a, which prohibits the acquisition of assets by would be merging parties prior to the expiration of statutory waiting periods. The DOJ simultaneously announced that it reached a settlement with the defendants. See, Stipulation and Order and Proposed Final Judgment. See also, DOJ release.

Go to News from February 1-5, 2003.