Supreme Court Grants Certiorari in PSLRA Case Regarding Pleading of Scienter

1/5. The Supreme Court granted certiorari in Tellabs v. Makor. See, Order List [4 pages in PDF] at page 3. The case pertains to the scienter requirements of the Private Securities Litigations Reform Act (PSLRA).

The Congress enacted the PSLRA in 1995 to revise federal securities law to insulate defendants from abusive lawsuits. It was Public Law No. 104-67. It is now codified at 15 U.S.C. § 78u-4 and § 78u-5.

The PSLRA created both a safe harbor for forward looking statements, and a heightened pleading requirement. Plaintiffs must "state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind."

This language is vague, and has resulted in conflicting interpretations by the various circuit courts that have interpreted it. It is also important to the technology sector, since it is the target of many actions by law firms that specialize in class action litigation. Many of these suits are meritless.

The Supreme Court also ordered expedited briefing. It wrote that "The petition for a writ of certiorari is granted. The brief  of petitioners is to be filed with the Clerk and served upon opposing counsel on or before 2 p.m., Friday, February 9, 2007. The brief of respondents is to be filed with the Clerk and served upon opposing counsel on or before 2 p.m., Friday, March 9, 2007. A reply brief, if any, is to be filed with the Clerk and served upon opposing counsel on or before 2 p.m., Tuesday, March 20, 2007."

Tellabs makes equipment used in fiber optic cable networks. It is a publicly traded company. The plaintiffs, are nominally Makor Issues & Rights, Ltd. and others. This is a class action lawsuit brought by Milberg Weiss.

The plaintiffs filed a complaint in U.S. District Court (NDIll) against Tellabs, Richard Notebaert and others alleging securities fraud in violation of § 10(b) of the Securities Exchange Act of 1934 (which is codified in 15 U.S.C. § 78j) and Rule 10(b)(5) thereunder, and control person liability by Tellabs executives.

The District Court dismissed the complaint pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted. It held that the complaint failed to satisfy the scienter requirements established by the PSLRA. The Court of Appeals reversed in part.

A three judge panel of the U.S. Court of Appeals (7thCir) issued its initial opinion [28 pages in PDF] on January 25, 2006.

The same panel of the Court of Appeals issued its Order on Petition for Rehearing [2 pages in PDF] on July 10, 2006, in which it denied rehearing, and modified one paragraph in the original opinion regarding control person liability.

The Securities Industry and Financial Markets Association (SIFMA) and the U.S. Chamber of Commerce argued in their joint amicus brief [25 pages in PDF] that the SCUS should grant certiorari.

They wrote that "To avoid dismissal, the PSLRA requires that securities fraud plaintiffs plead ``with particularity´´ facts giving rise to a ``strong inference´´ of scienter. ... Because the courts of appeals are hopelessly divided over the meaning of this frequently litigated standard, ... deficient complaints like the one in this case often escape dismissal. That result frustrates the PSLRA’s goal of curbing abusive securities litigation, which has harmful consequences for the national economy. ... This Court’s review is needed now."

The petitioners are represented by Carter Phillips of the Washington DC office of the law firm of Sidley Austin. The respondents are represented by Richard Weiss of the law firm of Milberg Weiss Bershad & Schulman.

This case is Tellabs, Inc. and Richard Notebaert v. Makor Issues & Rights, Ltd., et al., Sup. Ct. No. 06-484, a petition for writ of certiorari to the U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 04-1687. Judge Wood wrote the opinion of the Court of Appeals, in which Judges Ripple and Sykes joined. The Court of Appeals heard an appeal from the U.S. District Court of the Northern District of Illinois, Eastern Division, D.C. No. 02 C 04356, Judge Amy St. Eve presiding.

See also, Supreme Court docket.

9/11 Commission Bill Includes Privacy and Civil Liberties Provisions

1/5. Rep. Bennie Thompson (D-MS) and others introduced HR 1, which states that it is "A bill to provide for the implementation of the recommendations of the National Commission on Terrorist Attacks Upon the United States". This is a huge bill with many different provisions. One title relates to the protection of privacy and civil liberties. The House is scheduled to debate and approve this bill on Tuesday, January 9, 2007.

Privacy and Civil Liberties. Title XIII of the bill addresses the protection of privacy and civil liberties by federal agencies. It includes the "Protection of Civil Liberties Act", which revises the structure of the Privacy and Civil Liberties Oversight Board (PCLOB), and the "Privacy Officer With Enhanced Rights Act of 2007" or "POWER Act", which increases the power and effectiveness of the privacy officer at the Department of Homeland Security (DHS).

This title creates no new substantive rights or law. Nor does it delegate rule making authority to any agency. It pertains solely to the structure of executive departments and agencies, and administrative process.

The PCLOB, which was created by Section 1061(b) of the Intelligence Reform and Terrorism Prevention Act of 2004, which is codified at 5 U.S.C. § 601 note, is part of the Executive Office of the President (EOP). HR 1 would make it "an independent agency within the Executive branch".

The PCLOB is currently chaired by Carol Dinkins. Alan Charles Raul is the Vice Chairman. Both positions require Senate confirmation. The other members, who are not confirmed by the Senate, are Lanny Davis, Ted Olson, and Francis Taylor.

HR 1 would make all positions of a five member board subject to Senate confirmation. All would be for six year terms. However, for the first six years the appointments would be for two, three, four, five, and six years, so that thereafter, one position would open each year.

HR 1 also provides that "in no event shall more than 3 members of the Board be members of the same political party. The President shall, before appointing an individual who is not a member of the same political party as the President consult with the leadership of that party, if any, in the Senate and House of Representatives." That is, HR 1 would structure the PCLOB in a manner similar to the Federal Communications Commission (FCC).

HR 1 also gives the PCLOB, with the support of at least three members, the power to issue subpoenas, and to obtain orders enforcing these subpoenas from "the United States district court for the judicial district in which the subpoenaed person resides".

The PCLOB would also have the power to to hold hearings, and issue reports. It would not have any rulemaking or adjudicatory authority.

The bill requires the Department of Justice (DOJ), Department of Defense, Department of State, Department of the Treasury, Department of Health and Human Services, Department of Homeland Security, and all "intelligence community" agencies to have privacy and civil liberties officers. In addition, the bill provides that the PCLOB may designate any other department, agency, or element of the executive branch to have a privacy and civil liberties officers.

To date, some agencies with privacy officers have not provided those privacy officers with access to the information that they would need to assess the privacy implications of the activities and operations of the agency.

HR 1 addresses this. For example, it provides that "The head of each department, agency, or element shall ensure that each privacy officer and civil liberties officer -- (1) has the information, material, and resources necessary to fulfill the functions of such officer; (2) is advised of proposed policy changes; (3) is consulted by decisionmakers; and (4) is given access to material and personnel the officer determines to be necessary to carry out the functions of such officer."

HR 1 also contains a section that specifically addresses the powers of the privacy officer at the DHS, a agency which has obstructed the work of its privacy officer. The bill provides that this person's powers include subpoenas and taking of oaths.

Section 812 of HR 1 provides that Section 222 of the Homeland Security Act of 2002 is amended to provided that this privacy officer (senior official) is authorized to do the following:

"(A) to have access to all records, reports, audits, reviews, documents, papers, recommendations, and other materials available to the Department that relate to programs and operations with respect to which the senior official has responsibilities under this section;

(B) to make such investigations and reports relating to the administration of the programs and operations of the Department as are, in the senior official's judgment, necessary or desirable;

(C) to require by subpoena the production, by persons other than Federal agencies, of all information, documents, reports, answers, records, accounts, papers, and other data and documentary evidence necessary to performance of the functions of the senior official under this section;

(D) to administer to or take from any person an oath, affirmation, or affidavit, whenever necessary to performance of the functions of the senior official under this section; and

(E) to take any other action that may be taken by the Inspector General of the Department, as necessary to require employees of the Department to produce documents and answer questions relevant to performance of the functions of the senior official under this section."

Moreover, to protect this person from pressure or retaliation, this section provides job tenure of 5 years.

Other Provisions. Title II of HR 1 amends Title V of the Homeland Security Act of 2002, which is codified at Title 6 of the U.S. Code, by adding a new section that provides for grants to states and regions for interoperable emergency communications.

Title VIII of HR 1 requires the DHS to "establish a comprehensive information technology network architecture for the Office of Intelligence and Analysis.", which "shall, to the extent possible, incorporate the approaches, features, and functions of the network proposed by the Markle Foundation in reports issued in October 2002 and December 2003, known as the System-wide Homeland Security Analysis and Resource Exchange (SHARE) Network."

Title IX of HR 1 requires the DHS to create a "national database of nationwide critical infrastructure assets to identify and prioritize critical infrastructure and key resources and to protect them from terrorist attack". This would be named the "National Asset Database". The bill also requires the DHS to create, as a subset, a "National At-Risk Database".

More Bills To Be Considered By The House During The Week Of January 8-12

1/5. House Democrats introduced bills to be approved by the House during the week of January 8, 2007. The bills, and their descriptions contained in the Congressional Record, are as follows.

Rep. George Miller (D-CA) and others introduced HR 2, "A bill to amend the Fair Labor Standards Act of 1938 to provide for an increase in the Federal minimum wage".

Rep. Diana DeGette (D-CO) and others introduced HR 3, "A bill to amend the Public Health Service Act to provide for human embryonic stem cell research".

Rep. John Dingell (D-MI) and others introduced HR 4, "A bill to amend part D of title XVIII of the Social Security Act to require the Secretary of Health and Human Services to negotiate lower covered part D drug prices on behalf of Medicare beneficiaries".

People and Appointments

1/5. President Bush announced his intent to nominate John Negroponte to be Deputy Secretary of State at the Department of State (DOS). He is currently Director of National Intelligence. He has also been Ambassador to Iraq, and the Representative of the U.S. to the United Nations. See, White House release, and transcript of White House event. This position has been vacant since last summer when Robert Zoellick left the DOS.

1/5. President Bush announced his intent to nominate Michael McConnell to be Director of National Intelligence. He is currently an SVP at Booz Allen Hamilton. Previously, he was Director of the National Security Agency (NSA). McConnell previously served in the U.S. Navy, retiring in 1996, at the rank of Vice Admiral. See, White House release, and transcript of White House event.

1/5. Marcus Thomas was named Assistant Director of the Federal Bureau of Investigation's (FBI) Operational Technology Division (OTD). See, FBI release.

More News

1/5. The Copyright Royalty Judges, on behalf of the Copyright Royalty Board of the Library of Congress, published a notice in the Federal Register announcing the commencement of a proceeding "to determine the reasonable rates and terms for the making of an ephemeral recording of a sound recording for a later transmission by entities that transmit performances of a sound recording to business establishments". The deadline to file Petitions to Participate is February 5, 2006. Also, the filing fee is $150. See, Federal Register, January 5, 2007, Vol. 72, No. 3, at Pages 584-585.

1/5. Ben Bernanke, Chairman of the Federal Reserve Board (FRB), gave a speech in Chicago, Illinois. He stated that "We also continue to take measures to ensure that our communications, information systems, and policy processes will remain viable should critical infrastructure be disrupted." He added that "we will continue to work to ensure the vibrancy and resilience of the U.S. financial system."

Rep. Ehlers Introduces STEM Education Bills

1/4. Rep. Vernon Ehlers (R-MI) introduced HR 36, the "National Science Education Tax Incentive for Teachers Act of 2007", a bill to provide a tax credit for school teachers in grades K through 8 who teach science, technology, engineering, or math (STEM) "equal to 10 percent of qualified undergraduate tuition paid by such individual".

Rep. Ehlers stated in a release that this bill will "bring qualified math and science teachers to our K-12 schools" and will help the schools to retain them.

It was referred to the House Ways and Means Committee. Rep. Ehlers is not a member. The bill has attracted bipartisan cosponsorship support.

Rep. Ehlers (at right) also introduced HR 38, the "Math & Science School Readiness Act of 2007", a bill that would amend the Head Start Act to promote early math skills in preschool children.

The Head Start Act, at 42 U.S.C. § 9836a, sets minimum standards applicable to Head Start agencies, programs, and projects. HR 38 would add "scientifically-based education performance standards to ensure that the children participating in the program, at a minimum, develop and demonstrate premathematics and prescience knowledge and skills, including number concepts such as counting and seriation; number operations such as addition, subtraction, and multiplication; geometry and spatial concepts; classification; and time and measurement concepts".

Rep. Ehlers sponsored similar provisions that were included in Head Start reauthorization bills that were approved by the House in 2003 and 2005, but did not become law. HR 38, which is cosponsored by Rep. Gene Green (D-TX), was referred to the House Education and Labor Committee.

Also, on January 4, 2007, Rep. Ehlers introduced HR 37, the "National Science Education Tax Incentive for Businesses Act of 2007", a bill to amend the Internal Revenue Code by adding a new Section 450 regarding an elementary and secondary STEM contributions credit. This relates to the general business credit that is codified at 42 U.S.C. § 38.

Rep. Ehlers stated in his release that this bill "encourages businesses to donate new, needed math and science-related equipment to schools or donate teacher training services. Businesses may receive a tax credit equal to 100 percent of the value of their donations."

This bill, which has bipartisan cosponsorship support, was referred to the House Ways and Means Committee.

Rep. Jo Ann Davis Seeks STEM Grants for Associate Degree Colleges

1/4. Rep. Jo Ann Davis (R-VA) introduced HR 102, the "Higher Education Science and Technology Competitiveness Act", a bill to create a federal grant program to support the establishment of partnership arrangements between "associate-degree-granting public institutions of higher education" and "bachelor-degree-granting public institutions of higher education" for "math, science, engineering, and technology" education.

Rep. Davis stated in a release that this bill "would strengthen and increase scientific and technological education capabilities within associate-degree colleges through establishing arrangements with bachelor-degree institutions. This bill would allow associate-degree colleges to use and benefit from the programs and curriculum used by bachelor-degree institutions.".

The bill was referred to the House Committee on Education and Labor. There are no original cosponsors.

Reps. Issa and Schiff Reintroduce Patent Judges Bill

1/4. Rep. Darrell Issa (R-CA) and Rep. Adam Schiff (D-CA) introduced HR 34, an untitled bill to create a pilot program in some U.S. District Courts to encourage enhancement of expertise in patent cases among judges and clerks.

The bill has no other original cosponsors. It was referred to the House Judiciary Committee (HJC). Both Rep. Issa and Rep. Schiff are members.

Rep. Issa and Rep. Schiff introduced a very similar bill, HR 5418, in the 109th Congress. They introduced it on May 18, 2006. See, story titled "Reps. Issa and Schiff Introduce Bill to Create Pilot Program of Specialized Patent Judges" in TLJ Daily E-Mail Alert No. 1,376, May 23, 2006.

The HJC's Subcommittee on Courts, the Internet and Intellectual Property approved HR 5418 on July 27, 2006. The HJC approved it on September 21, 2006. See, stories titled "HJC Approves Bill Regarding Specialized Patent Judges" and "HR 5418 As Approved by House Judiciary Committee" in TLJ Daily E-Mail Alert No. 1,449, September 14, 2006. See also, House Report No. 109-673. The House approved it by voice vote on September 28, 2006. HR 34 (110th) is substantially identical to the version of HR 5418 (109th) that the House approved.

The Senate took no action on HR 5418. However, Sen. Orrin Hatch (R-UT) and Sen. Dianne Feinstein (D-CA) introduced a related bill, S 3923 (109th), on September 21, 2006. Neither the Senate Judiciary Committee (SJC) nor the full Senate acted on that bill.

Also, on January 4, 2007, Rep. Issa announced a list of nine bills of which he will seek enactment. HR 34 is the only intellectual property related bill on his list.

Sen. Baucus Advocates TPA and FTAs

1/4. Sen. Max Baucus (D-MT), the incoming Chairman of the Senate Finance Committee wrote a short essay titled "A Democratic Trade Agenda", which was published in the January 4, 2007, issue of the Wall Street Journal. He advocated extending trade promotion authority (TPA), free trade agreements (FTAs), an FTA in services, and FTA with Japan and the EU.

Sen. Baucus has long advocated free trade, and will soon become Chairman of the SFC, which has trade related jurisdiction. There may be enough votes in the Senate, with its greater representation of small population export dependent states, to approve an extension of TPA. However, approval of TPA by the House in 2001 was a close run thing. See, stories titled "House Passes Trade Promotion Authority Bill", "Analysis of the TPA Vote", "Technology, IPR and TPA", and "215 to 214" in TLJ Daily E-Mail Alert No. 323, December 7, 2001.

There would probably not be enough votes to extend TPA in the current House even if the membership of the 109th Congress had returned, and the Republicans had maintained control of the agenda. With many new protectionist Democrats in the House, and an anti-trade Democratic leadership, the chances for extension of TPA by the House are now slim.

Sen. Baucus (at right) wrote that "At a time when our country's competitive strength depends increasingly on an aggressive trade policy, Americans are far less willing to embrace one. Many equate trade and globalization with ballooning deficits, stagnating wages and layoffs." He added that "U.S. policy has lurched frantically from one trade agreement to the next, eking out just enough votes to push each one through Congress."

He argued that "Congress should begin by renewing the administration's fast-track negotiating authority for trade agreements. The current grant expires in June, and trading partners will not negotiate trade agreements with us unless Congress gives the president the ability to bring these agreements to fruition." But he added, it should be with "better trade enforcement capability and better environmental and labor provisions".

He also argued that "we must refocus current trade efforts". He stressed the importance of the Doha round, but conceded that "the world's economies do not appear ready to make the hard choices". However, he predicted that "Doha may yet progress in time, as the Uruguay round did after 1990".

In the meantime, the US "should move forward on commercially significant initiatives with our largest trading partners. We should lay the foundations for a future free-trade agreement with the European Union and Japan by concluding a first ever free-trade agreement in services." Also, the US "should stitch our current patchwork quilt of free-trade agreements into a seamless, coherent network that we can later open to other countries."

New Senate Bills

1/4. The following bills were introduced in the Senate on January 4, 2007. The following bill descriptions are taken from the Congressional Record.

Sen. Max Baucus (D-MT) introduced S 41, "A bill to amend the Internal Revenue Code of 1986 to provide incentives to improve America's research competitiveness". It was referred to the Senate Finance Committee (SFC).

Sen. Ted Stevens (R-AK) introduced S 49, "A bill to amend the Communications Act of 1934 to prevent the carriage of child pornography by video service providers, to protect children from online predators, and to restrict the sale or purchase of children's personal information in interstate commerce". It was referred to the Senate Commerce Committee (SCC).

Sen. Stevens, Sen. Norm Coleman (R-MN), and Sen. David Vitter (R-LA) introduced S 92, "A bill amend the Communications Act of 1934 to prohibit the unlawful acquisition and use of confidential customer proprietary network information, and for other purposes". It was referred to the SCC.

Sen. Stevens introduced S 93, "A bill to authorize NTIA to borrow against anticipated receipts of the Digital Television and Public Safety Fund to initiate migration to a national IP-enabled emergency network capable of receiving and responding to all citizen activated emergency communications". It was referred to the SCC.

Sen. Stevens, Sen. Trent Lott (R-MS), and Sen. Kay Hutchison (R-TX) introduced S 101, "A bill to update and reinvigorate universal service provided under the Communications Act of 1934". It was referred to the SCC.

Sen. Baucus and Sen. Coleman introduced S  122, "A bill to amend the Trade Act of 1974 to extend benefits to service sector workers and firms, enhance certain trade adjustment assistance authorities, and for other purposes". It was referred to the SFC.

Sen. Wayne Allard (R-CO) introduced S 129, "A bill to study and promote the use of energy-efficient computer servers in the United States". It was referred to the Senate Energy and Natural Resources Committee.

Sen. Charles Schumer (D-NY) introduced S 139, "A bill to expedite review by the Supreme Court of the warrantless electronic surveillance program of the National Security Agency". It was referred to the Senate Judiciary Committee (SJC)

Sen. Schumer and Sen. Mike Crapo (R-ID), introduced S 140, "A bill to amend the Internal Revenue Code of 1986 to repeal the excise tax on telephone and other communications services". It was referred to the SFC.

Sen. Harry Reid (D-NV), Sen. Ron Wyden (D-OR), Sen. John McCain (R-AZ), and Sen. John Sununu (R-NH) introduced S 156, "A bill to make the moratorium on Internet access taxes and multiple and discriminatory taxes on electronic commerce permanent". It was referred to the SCC.

Sen. McCain, Sen. Jim DeMint (R-SC), Sen. Gordon Smith (R-OR), and Sen. Sununu introduced S 166, "A bill to restrict any State from imposing a new discriminatory tax on cell phone services". It was referred to the SFC.

Sen. John Ensign (R-NV), Sen. Larry Craig (R-ID), Sen. DeMint, Sen. Tom Coburn (R-OK), Sen. Stevens, Sen. McCain, Sen. Vitter, and Sen. Crapo introduced S 170, "A bill to amend the Internal Revenue Code of 1986 to repeal the excise tax on telephone and other communications services". It was referred to the SFC.

Sen. Arlen Specter (R-PA) introduced S 187, "A bill to provide sufficient resources to permit electronic surveillance of United States persons for foreign intelligence purposes to be conducted pursuant to individualized court-issued orders for calls originating in the United States, to provide additional resources to enhance oversight and streamline the procedures of the Foreign Intelligence Surveillance Act of 1978, to ensure review of the Terrorist Surveillance Program by the United States Supreme Court, and for other purposes". It was referred to the SJC.

People and Appointments

1/4. President Bush announced his intent to nominate Richard Russell (at right) to be U.S. Representative to the World Radio Communication Conference. See, White House release. He is currently Associate Director of the President's Office of Science and Technology Policy (OSTP). Before that, he worked on the newly elected President Bush's transition teams for the Department of Commerce (DOC), National Science Foundation (NSF) and OSTP. Before that, he worked for the House Science Committee, including as Chief of Staff.

1/4. Terry Lane, James Maday, and Michael Nunes joined the staff of the Telecommunications Industry Association (TIA). Lane, who will handle communications, was previously Deputy Communications Director for the House Commerce Committee. Before that, he was a reporter for Communications Daily. Maday previously worked for former Rep. Mike Oxley (R-OH). Nunes previously worked for Commissioner Jennifer Hillman of the U.S. International Trade Commission (USITC). See, TIA release. Also, effective January 1, 2007, Grant Sieffert replaced Matt Flanagan as President of the TIA. See, September 5, 2006, TIA release.

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1/4. The Investment Company Institute (ICI) stated that it released a draft taxonomy for XBRL tagging for the data in the risk/return summary at the front of mutual fund prospectuses. See, ICI release. (The ICI's hyperlink to this draft document references a blank page.) The Securities and Exchange Commission (SEC) issued a release praising this development. SEC Chairman Chris Cox stated that this brings "the potential of interactive data closer to reality for mutual fund customers. Completing the taxonomy for the mutual fund risk/return summary means that funds can now make this information available to investors in far more useful ways. Interactive data will transform static figures into dynamic databases that can readily be searched, analyzed, and compared. There is no more important place for application of this tool than mutual funds, where millions of Americans engage in comparison shopping every day. Retail investors rely on mutual funds to finance their retirement, their education, their health care and almost every other need. Today's announcement means they will soon be armed with better, more accessible information on which to base their investment decisions. The SEC will act quickly to facilitate the use of the new taxonomy in Commission filings".

1/4. The Department of Homeland Security (DHS) published a notice in the Federal Register regarding the DHS's Bureau of Customs and Border Protection interim agreement with the European Union pertaining to the transfer of passenger name record data. See, Federal Register, January 4, 2007, Vol. 72, No. 2, at Pages 348-351.

People and Appointments

1/3. Securities and Exchange Commission (SEC) Administrative Law Judge Lillian McEwen retired from the SEC, effective January 3, 2007. See, SEC release.

1/3. Brewster Kahle and Warrington Hudlin were named to the Board of Directors of the Public Knowledge. Kahle founded the Internet Archive. He is also the plaintiff in Kahle v. Gonzales, a First Amendment challenge to the Copyright Term Extension Act, which is pending in the U.S. Court of Appeals (9thCir). Hudlin, who has produced and directed movies, is now President of the Black Filmmaker Foundation.

1/3. Joe Pouliot, who was previously head of media relations for the House Science Committee, is now a VP at The CJR Group. His new e-mail address is jpouliot at cjrgroup dot net.

1/3. David Goldston, who was previously Chief of Staff for the House Science Committee, will teach a course on public policy at Princeton University, and write for Nature. His new e-mail address is dgoldsto at princeton dot edu.

More News

1/3. The Federal Communications Commission's (FCC) Consumer & Governmental Affairs Bureau (CGB) published on December 29, 2006, a report on consumer complaints and inquiries submitted during the third quarter of 2006. The FCC removed this report from its web site on January 3, 2007. This report states that the FCC received a total of 266,458 complaints in July, August and September. 193,504, or 72.6%, complained regarding obscenity or indecency in radio or television broadcasts. 55,010 complaints, or 20.6%, related to "universal service". The remainder of all other complaints totaled 17,908, or 6.7%. The FCC's second quarter report, which the FCC has not depublished, states that complaints totaled 73,554. The third quarter report provides no data on new issues, or issues not assigned a category. For example, there is no pretexting related category for complaints. A FCC spokesman declined to answer questions from TLJ regarding the data in the third quarter report, or about the number of complaints and inquiries pertaining non-categorized issues. Stephen Ebner (Chief of the CGB's Consumer Inquiries and Complaints Division) did not return calls from TLJ.

1/3. The Department of Homeland Security (DHS) released a report [179 pages in PDF] titled "Tactical Interoperability Communication Scorecards". This report contains assessments of interoperable communications capabilities in 75 urban and metropolitan areas in the U.S. The DHS stated in a release that "Policies for interoperable communications are now in place in all 75 urban and metropolitan areas", but that "Regular testing and exercises are needed to effectively link disparate systems and facilitate communications between multi-jurisdictional responders". See also, DHS and summary. The incoming Chairman of the House Homeland Security Committee (HHSC), Rep. Bennie Thompson (D-MS), stated in a release that "It's been five years since 9/11 and we still have a long way to go. Time and again, the lack of interoperable communication has hindered the ability of our first responders to successfully do their jobs. The only way to truly address this problem is to create an interoperability grant program that provides guidance and exclusive funding for states and cities to wisely build out their communications systems without forcing them to choose between funding their bridges and water supply."

1/3. The U.S. District Court (SDCal) sentenced Michael E. Laude to serve three years probation following his plea of guilty to theft of trade secrets, in violation of 18 U.S.C. § 1832(a)(1). The Office of the U.S. Attorney for the Southern District of California (USAO) stated in a release [PDF] that Laude previously worked for Qualcomm in engineering and product management positions. In 2002, just prior to leaving Qualcomm and going to work for Nokia, he downloaded proprietary and confidential source code to his home computer. This amounted to "almost 400,000 files", and "virtually all of Qualcomm's product line". The USAO also stated that in 2004 "Nokia announced the release of Preminet, a product designed to compete with Qualcomm's Brew Distribution System, and identified Mr. Laude as Preminet’s architect. An internal investigation at Qualcomm identified the downloads of source code by Mr. Laude. The source code obtained by Mr. Laude included the source code for the Brew Distribution System. A federal search warrant recovered all of the source code from Mr. Laude’s home computer system." However, the USAO added that "There is no evidence that the pilfered source code was used by Mr. Laude at Nokia or otherwise infiltrated Nokia. Nokia cooperated in the federal investigation."

Go to News from December 26-31, 2006.