More News

9/29. The National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) released its Draft NIST IR 7328 [51 pages in PDF], titled "Security Assessment Provider Requirements and Customer Responsibilities: Building a Security Assessment Credentialing Program for Federal Information Systems". The deadline to submit comments is Friday, November 30, 2007.

Maryland and Florida State Attorneys General Oppose Rep. Frank's Internet Gambling Bill

9/28. Douglas Gansler, the Attorney General of Maryland, and Bill McCollum, the Attorney General of Florida, wrote a letter to Rep. Barney Frank (D-MA), the Chairman of the House Financial Services Committee (HFSC), and Sen. Max Baucus (D-MT), the Chairman of the Senate Finance Committee, opposing HR 2046 [LOC | WW], the "Internet Gambling Regulation and Enforcement Act of 2007".

Rep. Frank introduced HR 2046 on April 26, 2007. See, story titled "Rep. Frank Introduces Bill to Facilitate Licensed Internet Gambling" in TLJ Daily E-Mail Alert No. 1,574, May 3, 2007.

Gansler and McCollum (who is a former Republican member of the House and the House Judiciary Committee) wrote that the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) "has effectively driven many illicit gambling operators from the American marketplace".

However, "H.R. 2046 proposes to do the opposite, by replacing state regulations with a federal licensing program that would permit Internet gambling companies to do business with U.S. customers."

They continued that "The bill would legalize Internet gambling in each State, unless the Governor clearly specifies existing state restrictions barring Internet gambling in whole or in part. On that basis, a State may ``opt out'' of legalization for all Internet gambling or certain types of gambling. However, the opt-out for types of gambling does not clearly preserve the right of States to place conditions on legal types of gambling. Thus, for example, if the State permits poker in licensed card rooms, but only between 10 a.m. and midnight, and the amount wagered cannot exceed $100 per day and the participants must be 21 or older, the federal law might nevertheless allow 18-year-olds in that State to wager much larger amounts on poker around the clock."

They also asserted that "the opt-outs may prove illusory. They will likely be challenged before the World Trade Organization."

The text of this letter is published in the Congressional Record, October 18, 2007, at Page H11755.

Barnett Discusses Remedies for Section 2 Violations

9/28. Thomas Barnett, Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division, gave a speech in New York City titled "Section 2 Remedies: A Necessary Challenge".

He addressed Section 2 of the Sherman Act, which is codified at 15 U.S.C. § 2. Its closest equivalent in European law is Article 82 of the EC Treaty. The Antitrust Division invokes Section 2 in actions based upon unilateral conduct, such as in the US antitrust action against Microsoft. Barnett discussed the US Microsoft case, but not unilateral conduct actions brought by the European Commission (EC).

Barnett said that the goals of antitrust remedies should be "1. Prohibiting the continuation or recurrence of anticompetitive conduct that constituted the antitrust violation; 2. Restoring competitive conditions in the marketplace; 3. Compensating victims of the violation; and 4. Deterring future violations."

He offered a number of guidelines for implementation of these goals. First, "do no harm" to consumer welfare. Second, "There should be a close nexus between the remedy and the proven violation."

Third, "The remedy should seek to re-establish the opportunity for competition", rather than "a reduction in the defendant's share of the market".

Fourth, "The remedy should use market competition to the greatest extent possible to achieve its ends and should minimize regulatory restraints, such as market share caps, price regulations, or other behavioral restrictions."

Fifth, "place time limits" on decrees, because "we cannot predict how markets will change". Sixth, set "objective requirements for a defendant subject to a remedy". Seventh, take into consideration that antitrust regulators can make mistakes. Eighth, "remedies that require government entities to make business decisions or that require extensive monitoring or other government activity should be avoided whenever possible".

Ninth, Barnett stated that it is important to recognize that markets are dynamic, not static, and therefore that "incentives created by imposing a duty on a defendant to provide competitors access to its assets".

He said that "Such a remedy can undermine the incentive of those other competitors to develop their own assets as well as undermine the incentive for the defendant competitor to develop the assets in the first instance."

Finally, he commented on damages. He said that "we do not provide for civil fines in connection with unilateral conduct violations" in the US.

The EC does impose huge fines as remedies. Also, in the US, in cases such as with Microsoft, the US action is followed by a multitude of private treble damage actions.

3rd Circuit Dismisses as Premature Challenge to FCC's DE Rules

9/28. The U.S. Court of Appeals (3rdCir) issued its opinion [PDF] in Council Tree Communications v. FCC, dismissing a petition for review of the Federal Communications Commission (FCC) orders that contain rules regarding competitive bidding for wireless communications spectrum licenses. The Court of Appeals dismissed the petition as premature.

47 U.S.C. § 309(j)(3) provides that the FCC shall seek to "promot[e] economic opportunity and competition and ensur[e] that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small businesses, rural telephone companies, and businesses owned by members of minority groups and women." These businesses are known as "designated entities" or "DEs".

Council Tree proposed to the FCC in 2005 that it change its bidding rules. The Court of Appeals wrote that Council Tree "sought to prevent abuse of DE benefits by prohibiting those DEs affiliated with large incumbent wireless companies from receiving ``bidding credits´´ at spectrum license auctions. These credits are discounts of 25% or 15% from a DE’s winning bid."

In response, the FCC issued a Further Notice of Proposed Rulemaking (FNPRM). After notice and comment, the FCC issued new rules in a Second Order, which the Court of Appeals summarized as follows: "That Second Order adopted new rules that: (1) take bidding credit eligibility away from DEs that have certain material relationships with other entities; and (2) extend the repayment period to prevent the unjust enrichment of DEs that lose their eligibility after winning a license."

Council Tree then petitioned the FCC for reconsideration of the Second Order. The FCC issued an order on reconsideration that the Court of Appeals wrote "did not expressly grant or deny the petition, but essentially rejected all of the arguments contained therein".

Council Tree filed a petition for review on June 7, 2007, in advance of the FCC's Auction 66 held in August and September of 2006. This was the Advanced Wireless Services 1 (AWS-1) auction of 90 MHz in the 1710-1755 MHz and 2110-2155 MHz bands. Council Tree also sought to stay the effectiveness of the new rules and the AWS-1 auction. However, it filed before the FCC had published its reconsideration order in the Federal Register.

The Court of Appeals concluded that "Petitioners' petition for review is incurably premature because the Second Order is non-final, and the Reconsideration Order had not been published in the Federal Register at the time the petition was filed. Moreover, neither the law of the case doctrine nor the All Writs Act permits us to excuse the prematurity. Accordingly, we lack jurisdiction to reach the merits of Petitioners' challenges to the FCC’s new spectrum licensing rules and Auction 66, and we will dismiss the petition for review."

See also, the FCC's brief.

The CTIA - Wireless Association and T-Mobile USA, Inc. intervened. See, Wireless Association's web page regarding AWS legal activity.

Frontier Wireless stated in a release that "We are pleased that the Third Circuit decision has removed a cloud that hung over the AWS auction and now the Federal Communications Commission can resolve any pending DE (designated entity) questions with the threat of this litigation no longer weighing in the balance."

This case is Council Tree Communications, Inc., et al. v. FCC and USA, U.S. Court of Appeals for the 3rd Circuit, App. Ct. No. 06-2943, a petition for review of orders of the FCC. Judge Hardiman wrote the opinion of the Court, in which Judges Chagares and Wallace Tashima, sitting by designation, joined.

FCC Commissioner Jonathan Adelstein commented earlier in the week on DEs in prepared testimony [PDF] for the Senate Small Business Committee's hearing titled "Improving Internet Access to Help Small Business Compete in the Global Economy".

He stated then that "I have been disappointed, however, with the way that the Commission has handled its designated entity (DE) program. The bidding credits made available through this program can be a potent means of getting spectrum into the hands of small businesses and entrepreneurs. Yet, the Commission has missed the chance, time and again, to craft rational DE rules. So, I was again disappointed that, in the 700 MHz proceeding, we lost an opportunity to provide crucial bidding credits to designated entities that wholesale fully built-out network services. I think it is essential that we revisit our policies in this respect to ensure that all bidders have opportunities to bid, particularly where wholesale service is a compelling option for new and diverse providers."

People and Appointments

9/28. Donald Rosenberg was named SVP, General Counsel and Corporate Secretary of Qualcomm. He was previously SVP, General Counsel and Secretary of Apple. See, Qualcomm release. However, he had only been at Apple since November of 2006. Before that, he was a long time employee of IBM. He replaces Lou Lupin at Qualcomm, who resigned in August of this year after presiding over a series of litigation defeats. See, story titled "Lupin Resigns As Qualcomm General Counsel" in TLJ Daily E-Mail Alert No. 1,622, August 14, 2007.

9/28. Daniel Cooperman was named SVP, General Counsel and Secretary of Apple. He was previously SVP, General Counsel and Secretary of Oracle. He replaces Donald Rosenberg., who had been at Apple less than one year. Rosenberg replaced Nancy Heinen, whose departure was associated with the dating of stock option grants. See, Apple release.

More News

9/28. President Bush signed HR 3375 [LOC | WW], a bill that extends the Trade Adjustment Assistance Program until December 31, 2007. See, White House release.

DOJ Applies ADA Public Accommodations Status to Online Educational Service

9/27. The Department of Justice's (DOJ) Civil Rights Division (CRD) entered into a settlement agreement [PDF] with Sylvan Learning Centers that imposes obligations upon Sylvan with respect to its online tutoring services, pursuant to the public accommodations title of the Americans with Disabilities Act (ADA).

The DOJ/CRD enters into many settlement agreements pursuant to the ADA's Title III, the primary purpose of which is to require public accommodations, such as restaurants, stores and movie theaters, to remove architectural barriers to access by persons with mobility disabilities. It is the statutory authority for requiring brick and mortar businesses to install curb cuts, ramps and elevators.

What is notable about this settlement agreement is that it presumes that Title III gives the DOJ/CRD authority over online activities (and hence, that there also exists a private right of action). The statute creates no such authority. Moreover, there is little basis in judicial precedent for expanding the statute to encompass online activity.

Settlement Agreement. This agreement is titled "Settlement Agreement between the United States of America and Sylvan Learning Centers, L.L.C. under the Americans with Disabilities Act". The DOJ announced the agreement in a September 27, 2007, release.

This release states that "Sylvan provides tutoring, both in person and online". The agreement states that "Sylvan provides tutoring, both in person and online, and personalized instruction to students primarily in grades pre-K through 12."

Sylvan's web page (as of October 1) for online tutoring shows a picture of a child seated in front of a computer, reading text on the monitor, while wearing a headset with a microphone. The web pages states that Sylvan provides "live, online tutoring", and that "Each student and teacher work in real time and talk to each other throughout the entire lesson".

The agreement states that the CRD initiated this proceeding against Sylvan "after it received a complaint from the mother of an individual who is deaf".

Rena Comisac, the acting Assistant Attorney General in charge of the CRD, stated in the DOJ release that "this agreement improves access to the tutoring programs and services". The agreement provides that "Sylvan will not discriminate against any individual on the basis of disability in the full and equal enjoyment of the ... services ... or accommodations of Sylvan by excluding or providing unequal treatment to persons who are deaf or hard-of-hearing."

The gist of this agreement is that since this case pertains to a deaf person, if Sylvan provides an online service by voice or audio, it must also provide "written materials ... videotext displays, or any other effective methods of making aurally delivered materials available to students with hearing disabilities."

This agreement does not address the ADA obligations of an online educational service provider when the disability is blindness. However, if the CRD were to apply the same approach to blindness that it applied to deafness, it might require the production and distribution of Braille copies of all written materials that are available for viewing through a web interface. Alternatively, the CRD might require audio versions of all written materials, or that all written materials be provided in a format that screen reader software can convert to audio.

Statutory Authority. The agreement also states that the statutory authority for treating Sylvan, including its online services, as a public accommodation with the meaning of the ADA is 42 U.S.C. § 12181(7)(J).

Title III of the ADA pertains to "public accommodations". (Title I deals with disability based discrimination in employment. Title II deals with disability access to public services.) Title III is codified at 42 U.S.C. §§ 12181-12189. This is the title that requires the removal of access barriers for persons with physical disabilities.

Section 12181 provides definitions for Title III. Subsection 12181(7) enumerates twelve categories of "public accommodations". (7)(A) includes hotels and motels. (7)(B) includes restaurants and bars. (7)(C) includes movie theaters.

(7)(J) includes schools. However, like most of the twelve categories, it adds a catch all phrase. It adds "or other place of education".

Hence, while Sylvan operates no schools, the CRD has determined that is an "other place of education". Although, Sylvan does have physical places.

What is more novel about this settlement agreement is that it writes the word "online" into the statute. Under this agreement, Sylvan online tutoring services are included within the meaning of "other place of education".

This construction of the statute is not supported by the wording of the statute. Nor is it supported by all of the judicial precedent on point. See, following story titled "Commentary: Extending ADA Public Accommodations Treatment to Online Activities".

Commentary: Extending ADA Public Accommodations Treatment to Online Activities

9/27. The Department of Justice's (DOJ) Civil Rights Division (CRD) entered into a settlement agreement [PDF] with Sylvan Learning Centers that imposes obligations upon Sylvan with respect to its online tutoring services, pursuant to the public accommodations title of the Americans with Disabilities Act (ADA).

The statute does not include online activities within the meaning of "public accommodations". This area of law is far from settled. There is little judicial precedent. Some of it is directly contrary to the position taken by the DOJ/CRD.

Judicial Precedent.  The settlement agreement does not discuss or cite any of what little case authority exists.

First, there are two opinions in Access Now v. Southwest Airlines that suggest that the DOJ/CRD lacks authority to regulate Sylvan's online tutoring services.

Access Now filed a complaint in the U.S. District Court (SDFl) against Southwest Airlines, which maintains a web site the enables users to check airline fares and schedule and book airline and hotel reservations, alleging violation of Title III of the ADA. Access Now alleged that the Southwest has not made its web site accessible to blind persons using a screen reader.

The District Court dismissed the complaint for failure to state a claim, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (FRCP). The Court wrote that this was a case of first impression, and reached its decision on the basis of statutory construction. It held that "the plain and unambiguous language of the statute and relevant regulations does not include Internet websites among the definitions of ``places of public accommodation´´".

The District Court also applied the "rule of ejusdem generis" which provides that "where general words follow a specific enumeration of persons or things, the general words should be limited to persons or things similar to those specifically enumerated." (Citations omitted.)

The District Court elaborated that "Where Congress has created specifically enumerated rights and expressed the intent of setting forth "clear, strong, consistent, enforceable standards," courts must follow the law as written and wait for Congress to adopt or revise legislatively defined standards that apply to those rights. Here, to fall within the scope of the ADA as presently drafted, a public accommodation must be a physical, concrete structure. To expand the ADA to cover ``virtual´´ spaces would be to create new rights without well-defined standards."

See, October 18, 2002, Order Granting Defendant's Motion to Dismiss, which is also published at 227 F.Supp.2d 1312, and story titled "District Court Holds ADA Does Not Apply to Web Site" in TLJ Daily E-Mail Alert No. 538, October 30, 2002.

Then, on September 24, 2004, the U.S. Court of Appeals (11thCir) issued its opinion [PDF] dismissing the appeal, without addressing the merits of the case, on the basis that the "none of the issues on appeal are properly before us".

The District Court case number is 02-21734 CV-PAS. The Court of Appeals case number is 02-16163.

Second, there is National Federation of the Blind v. Target, a civil action against Target alleging that its web site violates the ADA. It is pending in the U.S. District Court (NDCal). The District Court, Judge Marilyn Patel presiding, denied a motion to dismiss the complaint, holding that the web site is a service of the stores, which are public accommodations, and hence Target must comply with the ADA in its web operations.

See, September 5, 2006, Memorandum and Order [26 pages in PDF] denying motion to dismiss. This case is D.C. No. C 06-01802 MHP.

The National Federal of the Blind (NFB) is represented by Daniel Goldstein of Brown Goldstein & Levy.

TLJ spoke with Goldstein. He distinguishes the Southwest Airlines and Target case. He said that former case was framed as the "web site as public accommodation". He said that the District Court held that the web site is not covered by the ADA because it is not a public accommodation. In contrast, he said that the later case is framed as a brick and mortar public accommodation (stores) that also offer online services. He said that this is a "bricks and clicks theory".

TLJ also spoke with Chris Danielsen of the NFB. He said that "we believe the the ADA applies to internet based activity", especially "where the general public has access".

The settlement agreement is not specific enough to ascertain whether the DOJ/CRD's understanding is that Title III applies to all internet based services available to the public, or only to the internet based activities that support physical brick and mortar public accommodations.

The distinction is important because many internet based businesses, such as Google, Amazon, MySpace, and YouTube are pure internet plays. That is, there is no physical Google store in Silicon Valley where one can go to search dead tree indices or card catalogues. One cannot drive to a MySpace storefront, open and account, and deposit audio tapes.

Patrick Letter. There is also the matter of Deval Patrick's September 9, 1996, letter to Sen. Tom Harkin (D-IA). Patrick is now the Governor of the state of Massachusetts. He was previously head of the CRD in the administration of former President Clinton.

Patrick (at right) wrote in this letter that "The Americans with Disabilities Act (ADA) requires ... places of public accommodation to furnish appropriate auxiliary aids and services where necessary to ensure effective communication with individuals with disabilities ... Covered entities under the ADA are required to provide effective communication, regardless of whether they generally communicate through print media, audio media, or computerized media such as the Internet. Covered entities that use the Internet for communications regarding their programs, goods, or services must be prepared to offer those communications through accessible means as well."

Patrick wrote that web site operators could comply by providing audio tapes and Braille copies of their web sites.

Extension of DOJ/CRD Analysis. The agreement between Sylvan and the DOJ/CRD only applies to Subsection 12181(7)(J) and "education". However, if the CRD were to extend its interpretation of the ADA to other "education", then perhaps private universities that publish course materials online in visual format that cannot be converted to audio by screen reader software, must also publish them in screen readable, Braille, and/or audio format for blind persons. And if they publish audio of lectures online, then they must also publish text versions for deaf persons.

However, one might also extend the CRD's method of analysis to the other categories of "public accommodations" that have online variants. For example, (7)(C) includes not only a "motion picture house", but also any "or other place of exhibition or entertainment". If one adds in the word "online", then this might be construed by the CRD to cover any internet protocol based video download service, or any multichannel video over IP service.

As another example, (7)(E) includes not only a "grocery store", but also any "other sales ... establishment". If one adds the word "online", then online sales establishment might be construed by the CRD to cover any e-commerce activity. In the interpretation of a CRD attorney, this might mean that all e-commerce sites must have audio or screen readable versions all text in the web site for blind persons, must have audio descriptions of all graphics and video for blind persons, must have text versions of all audio clips for deaf persons, and so forth.

As another example, (7)(H) includes not only a "library", but also any "or other place of public display or collection". If one adds the word "online", then an online collection of books sounds like Google's, Amazon's and Microsoft's online book programs.

That is, under the CRD's method of analysis, when Google makes a book available online in a visual format that cannot be converted to audio by screen reader software, to satisfy the public accommodations requirements of the ADA, it must also produce and distribute screen readable, Braille and/or audio copies, at no extra charge, to vision impaired persons.

As another example, (7)(D) includes not only an "auditorium", but also any "other place of public gathering". If one adds the word "online", then an online place of public gathering sounds like MySpace, any social networking web site, or any other interactive fora where persons meet and exchange information.

Google Books, Snippets and Copyright. TLJ spoke with Goldstein (NFB's attorney) about Google's book programs. He did not offer any opinion as to Google's potential liability under the ADA. However, he predicted that there will not be litigation against Google because it is aware of, and is addressing, accessibility issues.

He added that one needs to consider the formats in which the content of books are made available to online users. When the content is in a text format that can be converted to audio by screen reader software, there is no accessibility problem. However, when the content is made available in a graphics format, such as with what Google has named "snippets", the content is not accessible. But, he added that Google is aware of this, and working on a solution.

It may also be the case that when Google, Amazon, or others make the content of books viewable online, or available for download, providing the content in text format not only makes the content accessible to disabled persons. It also makes the content accessible to copyright infringers, or others who would free ride on the efforts of the providers of book content.

That is, the service provider has incentives to convert books into a digital text format, so that is can provide search and retrieval functions to users, but then only make the retrieved content available to users in graphical format, to protect the copyright, proprietary, and advertising interests of the copyright holders and service providers.

The NFB has already negotiated an agreement with Amazon.com. The NFB announced this agreement in a release on March 27, 2007. However, this release does not provide details from the agreement pertaining to providing the content of books to users online.

The release does state that "Blind persons access Web sites by using keyboards in conjunction with screen access software, which vocalizes or translates into Braille the visual information displayed on a computer screen by Web browsers and other computer applications. If not designed properly, however, Web sites can present barriers that do not allow the information contained on them to be translated properly for blind users, and emerging Internet technologies are presenting new accessibility challenges."

It is also important to consider what theory of liability might eventually become established law. If the law were to evolved to a "bricks and clicks theory",  then a Google like program would not be affected by the ADA, while a nearly identical program offered by a private university, which has physical public accommodations, would be covered by the ADA.

User Posted Content. It is hypothetically possible that the sort of analysis applied in the Sylvan case would be applied to any online "place of public gathering".

The operators of these "place of public gathering" web sites generally to not create or post the vast majority of the content found in their web sites. Their users do.

Moreover, 47 U.S.C. § 230 provides that "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." That is, the web site operator cannot be held liable for something posted by a user.

However, the DOJ/CRD has demonstrated that it will pursue the operator of an interactive web site under the civil rights laws for content posted by its users. See, for example, story titled "DOJ Settles Case Against Interactive Computer Service" in TLJ Daily E-Mail Alert No. 808, December 31, 2003.

Moreover, the U.S. Court of Appeals (9thCir) recently allowed two state anti-discrimination agencies to escape the exclusion of Section 230. The two agencies sought to enforce the federal Fair Housing Act and various state laws against an interactive web site for information posted by its users.

The defendant operated a web site named Roommates.com. Its users published information about themselves, including their age and sex. This, the state agencies argued, is discrimination in housing on the basis of age and sex, and the web site is responsible. This, the Court of Appeals held, creates an exception to Section 230.

See, May 15, 2007, opinion [23 pages in PDF] in FHCSFV v. Roommates.com. See also, story titled "9th Circuit Holds Roommates.com May be Liable for Speech of Users" in TLJ Daily E-Mail Alert No. 1,581, May 15, 2007.

That is, if the law evolves in the direction sought by the DOJ/CRD and 9th Circuit, then when users post material to MySpace or YouTube the web site operators themselves might be responsible complying with multiple format requirements, and for taking down any content that does not.

TLJ asked the NFB's Chris Danielson regarding web sites with user generated content. He said that "what we have focused on in the National Federation of the Blind is the situation where you have a business that is providing a service on the internet ... or university". He would not speculate on the liability under the ADA of operators of web sites for user generated content.

However, having said that, he added that to create a MySpace account you have to pass a visual test. He said that "those are not accessible to screen readers", and the NFB is concerned about that.

Lack of Process and Transparency. It may also be worth noting the process by which the DOJ/CRD is proceeding with respect to regulation of online activities.

It has initiated no rule making proceedings, which would provide the public with notice, an opportunity to submit comments, and an opportunity for judicial review of unlawful rules.

Nor has the CRD issued any notice of inquiry, to provide opportunity to comment.

Nor has the CRD held any public workshops or seminars, at which legal scholars, technologists, and representatives of interested parties could make presentations.

Nor has the CRD held any public hearings, roundtables or discussion groups.

In short, the CRD is making policy without an informational basis for making policy.

Also, whatever the understanding of the CRD is regarding the applicability of Title III to internet activities, it is secretive and non-transparent about it. It has published no rules, no guidances, no opinions, no circulars, no business review letters, and no statements of intent to take no action.

The DOJ/CRD is extending Title III to internet activity without statutory authority. However, while some government agencies adopt technology related policies without statutory authority, they usually pursue multiple processes to assist them in developing these policies. The DOJ/CRD, in contrast, is not following formal or informal procedures and processes relied upon by other federal agencies when considering new policies.

Conclusion. This is an unsettled and developing area of law. Yet the direction that the DOJ/CRD appears intent upon taking the law, as evidenced by Patrick's letter, previous settlement agreements, and the just announced Sylvan agreement, is to broadly apply ADA public accommodations treatment to online activities.

If the law were to develop in a way that the DOJ/CRD seeks, several consequences might follow. For example, web site operators and web speakers might face private litigation.

Also, persons, companies, or government agencies who seek to suppress online speech might employ the tactic of complaining that the web site, blog, or YouTube posting fails to comply with the ADA, and must therefore be taken down. Companies that seek to suppress criticism of their business practices, politicians who seek to suppress political criticism, and others who seek to limit the free flow of ideas, might resort to filing ADA complaints. The class of speakers most unable to bear the costs of ADA compliance, and hence most likely to refrain from online speech, would be individuals.

Also, the costs of ADA related compliance and litigation could deter use of the internet, and inhibit innovation. The House Judiciary Committee's (HJC) Subcommittee on the Constitution, Civil Rights and Civil Liberties (SCCRCL) held a hearing in 2000 on the applicability of the ADA to online activities. One of the witnesses (Walter Olson, a Senior Fellow at the Manhattan Institute) testified then that if the ADA were applied to web sites, then "Hundreds of millions of existing pages would be torn down. Some of these would eventually be put back up after being made compliant. Countless others never would." He also predicted that "Many widely used and highly useful features on websites would be compromised in functionality or simply dispensed with for reasons of cost, delay or cumbersomeness." See also, story titled "Do Web Sites Violate the Americans with Disabilities Act?", February 10, 2000.

The HJC/SCCRCL will hold a hearing on Thursday, October 4, 2007, on HR 3195 [LOC | WW], the "ADA Restoration Act of 2007". The bill is a reaction to several opinions of the Supreme Court of the US regarding the meaning of physical or mental disability. However, this bill does not address the meaning of "public accommodations".

Sylvan did not take or return telephone calls from TLJ. It asserted in an e-mail to TLJ that the "settlement agreement is proprietary information". The settlement agreement is a public record that the DOJ/CRD has published in its web site. See, settlement agreement. The DOJ/CRD did not respond to TLJ's questions regarding this case. The DOJ/CRD has never responded to any of TLJ's questions, or granted interviews, regarding application of the ADA to internet activities, except for the purpose of stating that it will not respond to any questions.

Rep. Conyers Introduces State Video Tax Fairness Act

9/27. Rep. John Conyers (D-MI) introduced HR 3679 [LOC | WW], the "State Video Tax Fairness Act of 2007".

This bill provides that "No State shall impose a discriminatory tax on any means of providing multichannel video programming distribution services, including Internet protocol (or any successor protocol), direct broadcast satellite delivery, and cable television services." (Parentheses in original.)

The bill then defines "discriminatory tax" to be "any form of direct or indirect tax that results in different net State charges being imposed on substantially equivalent multichannel video programming services based on the means by which those services are delivered."

The original cosponsors of the bill are Rep. Chris Cannon (R-UT), Rep. Rick Boucher (D-VA), and Rep. Trent Franks (R-AZ). All are members of the House Judiciary Committee (HJC), which has jurisdiction over the bill.

Rep. Conyers (at right) stated in a release that "This legislation will ensure that video competition remains robust, states retain the ability to raise revenue through sales taxes, and, most importantly, consumers are not harmed".

Rep. Conyers' release states that the bill allows "states to tax pay-TV providers or their subscribers, provided that such taxes are applied equally to all such services, including cable and DBS."

He added that he expects the HJC to hold hearings on this subject, and to obtain a Government Accountability Office (GAO) report.

Verizon Wireless and Net Neutrality Advocates Clash Over Text Messaging

9/27. The New York Times (NYT) published an article on September 27, 2007, by Adam Liptak, titled "Verizon Blocks Messages of Abortion Rights Group". It states that Verizon Wireless (VW) "rejected a request from" the National Abortion Rights Action League (NARAL) "to make Verizon’s mobile network available for a text-message program".

VW reversed its decision immediately after publication of the NYT article. VW stated that its refusal resulted from a old policy intended to protect subscribers from spam messages.

See, full story.

EFF Files FOIA Complaint Against DOJ Seeking Records

9/27. The Electronic Frontier Foundation (EFF) filed a complaint in U.S. District Court (DC) against the Department of Justice (DOJ) alleging violation of the federal Freedom of Information Act (FOIA) in connection with its failure to produce records in response to a FOIA request for records regarding lobbying for an amendment to the Foreign Intelligence Surveillance Act (FISA) providing expanded immunity to telecom companies.

The EFF complaint states that it sent two FOIA requests to the DOJ's Office of Legislative Affairs (OLA) regarding "briefings, discussion, or other exchanges that Justice Department officials have had concerning amendments to FISA with a) representatives of telecommunications companies, and b) offices of members of the Senate or House of Representatives, including any discussion of immunizing telecommunications companies or holding them otherwise unaccountable for their role in government surveillance activities."

The complaint further states that the DOJ has not produced responsive records within the time period specified by the statute.

The complaint requests an order compelling the DOJ to process the request, and produce records.

The complaint is signed by Marcia Hoffman and David Sobel of the EFF.

Hoffman stated in a release that "The White House is publicly calling for immunity for the telecoms, while a recent Newsweek article detailed a 'secretive lobbying campaign' to block the lawsuits ... If there are backroom deals going on at the Department of Justice, then Americans need to know about them now, before Congress passes any law that gets the telecom companies off the hook."

The EFF also represents the plaintiffs in Hepting v. AT&T, one of dozens of civil actions against telecommunications companies arising out of allegedly illegal assistance provided to the government related to warrantless electronic surveillance. The government has intervened, and sought dismissal of these actions. See, story titled "District Court Denies DOJ Motion Dismiss Class Action Against AT&T Regarding Warrantless Surveillance" in TLJ Daily E-Mail Alert No. 1,415, July 21, 2006.

An appeal in that case is pending before the U.S. Court of Appeals (9thCir). See, DOJ brief [PDF] and AT&T brief [PDF].

That case is Tash Hepting et al. v. AT&T Corporation, AT&T, Inc., and Does 1-20, U.S. District Court for the Northern District of California, D.C. No. C-06-672 VRW, Judge Vaughn Walker presiding. The appellate proceeding is Tash Hepting et al. v. AT&T Corporation, et al., U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 06-17137

The just filed case is Electronic Frontier Foundation v. Department of Justice, U.S. District Court for the District of Columbia, D.C. No. 1:07-cv-01732, Judge Reggie Walton presiding.

The DOJ and many other government agencies frequently disregard their statutory obligations under the FOIA. The federal courts rarely provide meaningful enforcement of the FOIA.

House Judiciary Committee (HJC) Democrats have also made a different request for information from the DOJ regarding communications companies. For example, they asked in a letter, "Please identify all telecommunications companies or internet service providers that allowed the government to access communication streams in the US without warrants between September 2001 and January 10, 2007. Please identify all telecommunications companies or ISPs that have allowed access since January 10, 2007."

See, story titled "House Judiciary Committee Seeks Information about Surveillance from Government, Telcos and ISPs" in TLJ Daily E-Mail Alert No. 1,639, September 14, 2007.

Capitol Hill News

9/27. The Senate Judiciary Committee (SJC) amended and approved S 980, [LOC | WW] the "Online Pharmacy Consumer Protection Act of 2007". The bill is sponsored by Sen. Dianne Feinstein (D-CA).

9/27. Senate Judiciary Committee (SJC) held over consideration of S 2035, [LOC | WW], the "Free Flow of Information Act of 2007", at its September 27, 2007, executive business meeting.

9/27. The Senate Commerce Committee (SCC) approved S 1965 [LOC | WW], the "Protecting Children in the 21st Century Act", a bill pertaining to child pornography and online predation. See, SCC release. See also, story titled "Senate Commerce Committee Will Mark up Child Online Protection Bill" in TLJ Daily E-Mail Alert No. 1,642, September 22, 2007.

9/27. The Senate Commerce Committee (SCC) postponed consideration of S 1453 [LOC | WW], the "Internet Tax Freedom Act (ITFA) Extension Act of 2007". This is Sen. Tom Carper's (D-DE) bill to extend the moratorium, with numerous exceptions. Sen. Daniel Inouye (D-HI) issued a statement: "I am disappointed that the Commerce Committee was unable to act on legislation to extend the Internet tax moratorium at today’s markup. But after discussions with my colleagues, I believe that further negotiations are warranted. It is my hope that a reasonable compromise can be reached and that the Committee will be able to take swift action in the future." See also, story titled "Senate Commerce Committee Will Mark Up ITFA Extension Bill" in TLJ Daily E-Mail Alert No. 1,642, September 22, 2007. The current moratorium expires on November 1, 2007.

9/27. Rep. John Conyers (D-MI), Rep. Chris Cannon (R-UT), Rep. Rick Boucher (D-VA), and Rep. Trent Franks (R-AZ) introduced HR 3679 [LOC | WW], the "State Video Tax Fairness Act of 2007", a bill to prohibit discrimination in state taxation of multichannel video programming distribution services. It was referred to the House Judiciary Committee (HJC).

9/27. Rep. John Dingell (D-MI), the Chairman of the House Commerce Committee (HCC), commented in a release on Verizon Wireless and text messaging by the National Abortion Rights Action League (NARAL). See, story titled "Verizon Wireless and Net Neutrality Advocates Clash Over Text Messaging" in TLJ Daily E-Mail Alert No. 1,647, September 27, 2007. Rep. Dingell voted in favor of network neutrality mandates in the 109th Congress. He stated on September 27 that "Reports of Verizon's actions raise troubling questions about a network operator's ability to determine what its customers receive and from whom. I am particularly concerned by its ability and apparent willingness to interfere when customers choose to receive legitimate and legal communications from an organization. Further, its latest statement does not identify any substantive change in policy. I ask Verizon to decisively state that it will no longer discriminate against any legal content its customers request from any organization."

People and Appointments

9/27. The Senate Judiciary Committee (SJC) approved the nomination of James Dedrick to be the US Attorney for the Eastern District of Tennessee for the term of four years. See, Congressional Record, September 27, 2007, at Page S12287.

9/27. Joel Harris was named Chair of the Department of Commerce's (DOC) newly created DOC Technology Council. See, release.

More News

9/27. Sherwin Siy of the Public Knowledge wrote a piece regarding the WIPO broadcast treaty. He wrote that the World Intellectual Property Organization's (WIPO) "General Assembly has decided that there will be no Diplomatic Conference on the Broadcast Treaty this year."

9/27. The Department of Commerce (DOC) announced in a release creation of the Department of Commerce Technology Council, which will be "a department-wide council led by the Office of the Secretary to coordinate technology policy and provide a forum for information-sharing, analysis and deliberation of technology policy issues that cut across the diverse range of agencies within the Commerce Department". HR 2272 [LOC | WW], the "America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act", which was signed into law on August 9, 2007, and is now Public Law No. 110-69, eliminated the DOC’s Technology Administration.

Sen. Dorgan Introduces Bill to Prevent Automatic Expiration of Do Not Call Registrations

9/26. Sen. Byron Dorgan (D-ND) and others introduced S 2096 [LOC | WW], the "Do-Not-Call Improvement Act of 2007". This bill would prevent the automatic expiration and removal of numbers from the Do Not Call Registry.

This bill would amend the Do-Not-Call Implementation Act, which was enacted in 2003 to implement a Do Not Call Registry. It is Public Law No. 108-10. It is codified at 15 U.S.C. § 6101 note. Section 3 requires the Federal Communications Commission (FCC) to adopt certain rules. Section 2 authorizes the Federal Trade Commission (FTC) to adopt rules.

The 2003 Act is silent on the subject of automatic expiration. However, the FCC and FTC wrote a five year expiration into their rules.

S 2096 would add to Section 3 the requirement that "Such rule shall not provide any date of expiration for telephone numbers registered on the `do-not-call´ registry, nor for any predetermined time limitation for telephone numbers to remain on the registry.''

S 2096 would also provide that "In issuing regulations regarding the `do-not-call´ registry of the Telemarketing Sales Rule (16 C. F. R. 310.4(b)(1)(iii)), the Federal Trade Commission shall not provide for any date of expiration for telephone numbers registered on the `do-not-call' registry, nor for any predetermined time limitation for telephone numbers to remain on the registry."

Sen. Dorgan (at right) stated in the Senate that "Most Americans are unaware that their registration on the list is set to expire after 5 years. The expiration is unnecessary, most people who initially wanted to be rid of telemarketing calls likely still want to block these calls. The system automatically removes numbers that are disconnected and reassigned."

He added that "The automatic expiration will only create a hassle for Americans as they start receiving calls again and have to go through the process of re-registering. The U.S. Government would have to spend money to let people know they need to sign up again."

Sen. Ted Stevens (R-AK), the lead cosponsor of the bill, stated in a release that "Consumers should not have to mark their calendars every five years to remind them to re-register their numbers on the ‘Do-Not-Call’ list."

The other original cosponsors of the bill are Sen. Charles Schumer (D-NY), Sen. John Ensign (R-NV), Sen. John Kerry (D-MA), Sen. Herb Kohl (D-WI), Sen. Russ Feingold (D-WI), Sen. Hillary Clinton (D-NY), Sen. Dianne Feinstein (D-CA), and Sen. Bill Nelson (D-FL).

The bill was assigned to the Senate Commerce Committee (SCC). Sen. Dorgan and Sen. Stevens are members.

Senate Committee Holds Hearing on Policies Related to Broadband Access

9/26. The Senate Small Business Committee held a hearing titled "Improving Internet Access to Help Small Business Compete in the Global Economy".

Sen. John Kerry (D-MA), the Chairman of the SSBC, wrote in his opening statement that "high-speed Internet access is critical to our economic competitiveness" and a "robust and competitive broadband market is key to an affordable and readily available Internet".

He asserted that the US is "lagging behind the rest of the world" because President Bush has failed to "put policies in place".

Federal Communications Commission (FCC) Commissioner Michael Copps asserted that broadband performance in the US is "lackluster", and that the US needs a "broadband strategy". He added that "Part of our problem is reliance upon duopoly and oligopoly where we should be enjoying vigorous carrier and network competition."

Copps stated in his prepared testimony [PDF] that there is "enormous room to improve our competitive telecommunications policies". He also said that "we need to commit to supporting broadband with the Universal Service Fund".

FCC Commissioner Jonathan Adelstein also called for a "comprehensive national broadband strategy" in his prepared testimony [PDF].

Also, Adelstein, like Copps, said that the US is falling behind the rest of the world. They also complained about the FCC's collection of data on broadband availability.

Ben Scott of the Free Press wrote in his prepared testimony [PDF] that "we are falling behind the world leaders in broadband penetration -- our broadband speeds are comparatively low and prices are high", and that this is "threatening to stunt innovation and endangering our global competitiveness."

One problem, said Scott, is that the FCC is "supporting the entrenched incumbency of telephone and cable companies." He also advocated "transitioning USF programs to broadband", "opening the television white spaces for unlicensed use", "guaranteeing the interconnection of networks on nondiscriminatory terms", and network neutrality mandates.

Scott Wallsten of the Progress & Freedom Foundation (PFF) wrote in his prepared testimony [PDF] that "The sky is not falling."

He wrote that "there is little evidence of a U.S. broadband problem. Telephone, cable, and wireless companies are investing billions in new high-speed infrastructure, and consumers and businesses are adopting broadband at remarkable rates."

He added that "those who believe there is a problem advance proposals that sound appealing, but they fail to provide solid analysis showing that their proposals would actually benefit consumers or small businesses."

Barnett Addresses Benefits and Harms of Increasing Antitrust Enforcement Activity Around World

9/26. Thomas Barnett, Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division, gave a speech in Washington DC titled "Global Antitrust Enforcement".

He said that the US antitrust agencies, and some other nations' antitrust agencies, "have some differing views and practices when it comes to addressing anticompetitive conduct". Nevertheless, "Given the increasingly international nature of antitrust enforcement, cooperation among antitrust enforcers and convergence in our principles and practices has become imperative."

He said that the presence of multiple antitrust agencies around the world is working best in the area of anti-cartel enforcement, where agencies are "united in a commitment to pursue hard core anticompetitive conduct" and where multiple agencies makes enforcement more effective.

He said that the increasing number of agencies is "mixed news" in the area of merger reviews. On the one hand, "Review by multiple antitrust enforcement authorities can impose significant burdens and costly delays on corporate transactions, as well as heavy and non-productive burdens on the resources of the reviewing agencies themselves."

On the other hand, "consumers in more countries around the world have the potential to benefit from merger reviews that consider whether there is harm to competition in markets that affect their local regions."

Finally, he said that there is less consensus and uniformity around the world on antitrust agencies' actions regarding unilateral conduct.

He did not mention the EU's actions against Microsoft and Intel. However, he said that "firms in the marketplace generally can choose between a strategy of competing on the merits or a strategy of seeking government intervention to slow down their competitors."

He continued that "If it is predictable that losers in the marketplace can become winners because antitrust enforcement agencies and courts will compel access to a competitor's property or prohibit the competitive actions of a big firm, then competitors who cannot win on the merits will find it more desirable to seek government help rather than do the hard work of competing in the marketplace. On the other hand, for firms that do choose to compete, intervention can deter broad categories of vigorous competitive behavior."

Federal Circuit Issues Opinion in Verizon v. Vonage VOIP Patents Case

9/26. The U.S. Court of Appeals (FedCir) issued divided opinion [PDF] in Verizon v. Vonage, a patent infringement case involving VOIP technology. The Court of Appeals affirmed much of the District Court's judgment in favor of Verizon.

The District Court found that Vonage infringed three patents, issued an injunction, and awarded $58 Million in damages and a 5.5% royalty. The Court of Appeals affirmed the judgment of infringement, and injunction, as to two of the three patents, and vacated as to the third. The Court of Appeals also vacated the damages award.

All three members of the three judge panel wrote opinions. Two judges dissented parts of the opinion of the court.

Verizon file a complaint in the U.S. District Court (EDVa) against Vonage alleging patent infringement on June 12, 2006.

The District Court entered judgment of patent infringement with respect to U.S. Patent Nos. 6,282,574 titled "Method, server and telecommunications system for name translation on a conditional basis and/or to a telephone number", U.S. Patent No. 6,104,711 titled "Enhanced internet domain name server", and U.S. Patent No. 6,359,880 titled "Public wireless/cordless internet gateway".

It also awarded Verizon $58 Million in damages. On April 6, 2007, the District Court issued a permanent injunction barring Vonage from further infringement of these patents.

Vonage brought the present appeal. The Federal Circuit issued a stay pending appeal. See, story titled "Federal Circuit Issues Stay of Injunction in Verizon v. Vonage" in TLJ Daily E-Mail Alert No. 1,569, April 24, 2007.

The Court of Appeals held that the District Court "did not err in its construction of disputed claim terms of the ’574 and ’711 patents. Therefore, we affirm the judgment of infringement with respect to those claims. However, we hold that the district court improperly construed one of the disputed terms in the ’880 patent, and accordingly vacate the judgment of infringement with respect to the ’880 patent and remand for a new trial."

The Court of Appeals also held that the District Court "did not commit prejudicial reversible error in instructing the jury on the law of obviousness with respect to the ’574 and ’711 patents, and therefore affirm the judgment that the asserted claims of those patents would not have been obvious. However, in light of the error in the construction of the claims of the ’880 patent and the possibility of error in the jury instruction on obviousness, we remand to the district court to determine whether prejudicial error occurred with respect to the jury instructions that would affect the obviousness verdict with respect to the ’880 patent."

The Court of Appeals vacated the $58 Million damages award and the 5.5% royalty, and remanded. It affirmed the injunction as to the ’574 and ’711 patents. In vacated the injunction as to the ’880 patent.

Vonage stated in a release that "In light of the workaround technology that Vonage has developed and deployed, today's decision is not expected to have an adverse impact on Vonage's business and customers will continue to enjoy the same great service they have come to expect from Vonage. Workarounds to the 711 patent and the 574 patent have been deployed for awhile."

Vonage's Chief Legal Officer, Sharon O'Leary, stated in this release that "We are pleased with the decision to vacate the 880 patent and the damages. However, Vonage remains confident that it has not infringed on the 880 patent -- a position we will continue to vigorously assert and look forward to presenting at trial. ... In the meantime, it's business as usual. We have had our workarounds for the 711 and 574 patents in place for some time and will remain focused on providing a great customer experience."

This case is Verizon Services Corp., et al. v. Vonage Holdings Corp. et al., U.S. Court of Appeals for the Federal Circuit, App. Ct. Nos. 2007-1240, 2007-1251, and 2007-1274, appeals from the U.S. District Court for the Eastern District of Virginia, Judge Claude Hilton presiding. Judge Dyk wrote the opinion of the Court of Appeals. Judge Michel and Gajarsa also wrote opinions. Judge Michel would have affirmed the District Court judgment in its entirety.

9th Circuit Vacates in Freecycle Trademark Case

9/26. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Freecycle Network v. Oey, vacating the judgment of the District Court, and remanding.

Summary. The District Court granted a preliminary injunction to an applicant for a trademark registration that bars an opponent of the registration from disparaging the possible trademark. The defendant merely expressed opinions that the mark was in the public domain, encouraged others to use it in a generic sense, and argued that it should not be registered by the USPTO.

While this case is a victory for free speech regarding agency proceedings, and on the internet, the Court of Appeals decided the case solely on statutory grounds. That is, it held that the Lanham Act does not permit trademark applicants to suppress speech that constitutes opposition to registration and encourages generic use.

The Court of Appeals also held that there is no claim for "trademark disparagement" under Section 1125.

The Court of Appeals did not rule on the merits of TFN's trademark application, but held that it is not a violation of the Lanham Act to use a trademarked term in its generic sense. Nor is encouraging others to use a mark in a generic sense actionable, unless there is also infringement, false designation of origin, false advertising, or dilution.

See, full story.

District Court Holds Parts of FISA Violate 4th Amendment

9/26. The U.S. District Court (DOre) issued an Opinion and Order [44 pages in PDF] in Mayfield v. USA, an action for unlawful arrest and imprisonment and unlawful searches and seizures.

Brandon Mayfield was arrested and detained at a time when the US and Spanish governments were investigating terrorist bombings in Madrid, Spain, in 2004. The US also engaged in wiretapping, bugging, and secret searches and seizures at his house, pursuant to orders issued by the Foreign Intelligence Surveillance Court (FISC).

The lengthy recitation of facts in the Opinion and Order illustrates, in the least, the lack of cause for treating Mayfield as a suspect, and at worst, improper conduct by the US.

The District Court, among other things, held that the Foreign Intelligence Surveillance Act (FISA), at 50 U.S.C. § 1804 and 50 U.S.C. § 1823, as amended by the PATRIOT Act, violate the 4th Amendment of the Constitution. In so doing, the District Court rejected the reasoning of the Foreign Intelligence Surveillance Court of Review (FISCR) in In re Sealed Case.

This case is Mayfield et al. v. USA, U.S. District Court for the District of Oregon, D.C. No. 04-1427-AA, Judge Ann Aiken presiding.

People and Appointments

9/26. The Senate Rules and Administration Committee approved the nomination of four members of the Federal Election Commission (FEC): Steven Walther (for a term expiring April 30, 2009), Hans von Spakovsky (for a term expiring April 30, 2011), David Mason (for a term expiring April 30, 2009), and Robert Lenhard (for a term expiring April 30, 2011). See, Congressional Record, September 26, 2007, at Page S12141.

9/26. The Senate Homeland Security and Governmental Affairs Committee approved the nomination of Julie Myers to be Assistant Secretary of Homeland Security. See, Congressional Record, September 26, 2007, at Page S12141.

More News

9/26. The Government Accountability Office (GAO) submitted prepared testimony [PDF] for the House Appropriations Committee's Subcommittee on the Legislative Branch that projects a November 2008 opening date for the new Capitol Visitor Center.

9/26. Sen. Sherrod Brown (D-OH) gave a speech in the Senate in support of trade protectionism. He said that the US has a "trade policy that encourages companies to outsource and move overseas. It is time for a trade policy that puts an end to the global exploitation of cheap labor". See, Congressional Record, September 26, 2007, at Pages S12018-9.

Go to News from September 21-25, 2007.