TLJ News from November 16-20, 2007

1st Circuit Issues Order on Rehearing in Maine and New Hampshire 271 Case

11/20. The U.S. Court of Appeals (1stCir) issued an Order on Rehearing in Verizon v. Maine PUC, one of a consolidated pair of cases involving Section 271 and state regulation of Regional Bell Operating Companies (RBOCs).

The Court of Appeals issued its opinion on September 6, 2007. See, story titled "1st Circuit Rules Against Maine and New Hampshire PUCs in 271 Case" in TLJ Daily E-Mail Alert No. 1,636, September 7, 2007.

Verizon petitioned for rehearing.

The Court of Appeals wrote that Verizon "asks that we alter our judgment to delete our direction to the district court to make a primary jurisdiction referral to the FCC. Verizon proposes instead that the district court decision be vacated with directions to vacate the Maine PUC orders, leaving the Maine PUC free (as it perhaps already is) to consider any claims relating to the GWI agreement that depend solely on contract." (Parentheses in original.)

This order denies Verizon's request.

This case is Verizon New England, Inc. v. Maine Public Utilities Commission, Stephen Diamond, Sharon Reishus, and Kurt Adams, U.S. Court of Appeals for the 1st Circuit, App. Ct. No. 06-2151, an appeal from the U.S. District Court for the District of Maine, Judge Gene Carter presiding.

FCC Releases Tentative Agenda for November 27 Event

11/20. The Federal Communications Commission (FCC) released a tentative agenda [4 pages in PDF] for its event scheduled for November 27, 2007, titled "Open Commission Meeting".

The FCC is scheduled to adopt a Notice of Proposed Rulemaking (NPRM) regarding extension of the current five year registration period for the Do Not Call Registry. The FCC's proceeding is numbered CG Docket No. 02-278.

The Congress enacted the Do-Not-Call Implementation Act 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 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.

There is also legislation pending to preclude expiration of do not call registrations. On October 30, 2007, the House Commerce Committee (HCC) amended and approved HR 3541 [LOC | WW], the "Do-Not-Call Improvement Act of 2007". On the same day, the Senate Commerce Committee (SCC) amended and approved S 2096 [LOC | WW], the "Do-Not-Call Improvement Act of 2007".

See also, stories titled "House Commerce Committee Approves Bill to Preclude Expiration of Do Not Call Registrations" and "Senate Commerce Committee Approves Bill to Preclude Expiration of Do Not Call Registrations" in TLJ Daily E-Mail Alert No. 1,666, October 31, 2007. And see, story titled "Sen. Dorgan Introduces Bill to Prevent Automatic Expiration of Do Not Call Registrations" in TLJ Daily E-Mail Alert No. 1,648, October 1, 2007.

The FCC is scheduled to adopt a NPRM regarding petitions for forbearance under Section 10 of the Communications Act, which is codified at 47 U.S.C. § 160(c).

This section provides that "Any telecommunications carrier, or class of telecommunications carriers, may submit a petition to the Commission requesting that the Commission exercise the authority granted under this section with respect to that carrier or those carriers, or any service offered by that carrier or carriers. Any such petition shall be deemed granted if the Commission does not deny the petition for failure to meet the requirements for forbearance under subsection (a) of this section within one year after the Commission receives it, unless the one-year period is extended by the Commission. The Commission may extend the initial one-year period by an additional 90 days if the Commission finds that an extension is necessary to meet the requirements of subsection (a) of this section. The Commission may grant or deny a petition in whole or in part and shall explain its decision in writing." (Emphasis added.)

On October 22, 2007, Rep. John Dingell (D-MI) and Rep. Ed Markey (D-MA) introduced HR 3914 [LOC | WW], the "Proper Forbearance Procedures Act of 2007", a bill to remove the "deemed granted" clause from the forbearance petition section. See also, story titled "Reps. Dingell and Markey Introduce Bill to End Deemed Granting of FCC Forbearance Petitions" in TLJ Daily E-Mail Alert No. 1,661, October 24, 2007.

The FCC is scheduled to adopt a Report and Order (R&O) and 3rd Further NPRM regarding "initiatives designed to increase participation in the broadcasting industry by new entrants and small businesses, including minority- and women-owned businesses".

The FCC is scheduled to adopt a 3rd R&O regarding low power FM (LPFM) service. The FCC's proceeding is numbered MB Docket No. 99-25.

The FCC is scheduled to adopt a Report and Order regarding "standardizing and enhancing information provided to the public on how broadcast television stations serve the public interest". The FCC's proceeding is numbered MM Docket No. 00-168.

The FCC is scheduled to adopt a 13th annual report to the Congress on the status of competition in the market for delivery of video programming. The FCC's proceeding is numbered MB Docket No. 06-189. The FCC is also scheduled to adopt a Notice of Inquiry (NOI) that requests comments to assist it in preparing its 14th annual report to Congress on the status of competition in the market for the delivery of video programming.

See, the FCC's Twelfth Annual Report [161 pages in PDF] adopted on February 10, 2006, and released on March 3, 2006. See also, story titled "FCC Describes Annual Report on Video Competition" in TLJ Daily E-Mail Alert No. 1,308, February 13, 2006.

The FCC is scheduled to adopt a R&O that amends its commercial leased access and program carriage rules. This R&O relates to the FCC's proceeding titled "In the Matter of Leased Commercial Access; Development of Competition and Diversity in Video Programming Distribution and Carriage" and numbered MB Docket No. 07-42.

This event is scheduled for 9:30 AM on Tuesday, November 27, 2007, in the FCC's Commission Meeting Room, Room TW-C305, 445 12th Street, SW. The FCC's recent events titled "Open Commission Meeting" have rarely been held at the time announced by the FCC. The FCC does not always take up all of the items on its published program. The FCC sometimes adds items to the program without providing the "one week" notice required 5 U.S.C. § 552b. The FCC usually does not release at its events copies of the items that it adopts at its events.

Copyright Alliance Seeks Positions of Presidential Candidates on Copyright Issues

11/20. The Copyright Alliance sent a letter [PDF] and short list of questions [PDF] to Republican and Democratic candidates for President in the 2008 election regarding their positions on copyright issues. See also, CA release.

Patrick Ross, head of the CA, stated at a news conference on November 20, 2007, that the CA does not plan to endorse any candidate. His letter states that "we will be informing the creative community and the public at large where our presidential candidates stand on copyright and artists' rights."

Dan Glickman, head of the Motion Picture Association of America (MPAA), wrote in a statement published in the CA web site that "a key issue for the 2008 presidential candidates includes their commitment to recognizing the critical importance of intellectual property rights".

"As candidates debate the methods of ensuring our global competitiveness and the future health of the American economy, there is no doubt that this pivotal and increasingly important engine of intellectual property is central to our future", said Glickman. "This is not merely a ``movie industry´´ issue, but rather an issue of economic competitiveness, and I look forward to hearing more from our presidential candidates about how they will protect intellectual property as president."

Mitch Bainwol, head of the Recording Industry Association of America (RIAA), wrote in a statement published in the CA web site that "The next President will significantly shape or initiate policies, both national and international, that dramatically affect the health and vitality of the intellectual property sector, especially our copyright community. Whether it's ensuring that our trading partners comply with their international obligations to protect copyrights, or strengthening enforcement to address copyright theft here at home, or crafting new rules of the road for fair commerce in a digital world, federal policies have a real, and increasing, impact on our day-to-day lives and businesses."

Bainwol added that "there will be those who ... will suggest the notion of property rights in a digital age is little more than a quaint relic of the past. They will warp concepts of fair use into justification for free use under almost any circumstances. They will seek to weaken enforcement penalties to diminish respect for IP. They will assume the flow of content continues regardless of the existence of incentives to create. That's why elections do matter."

The CA letter propounds five questions regarding substantive copyright laws, application of copyright law to digital media, copyright enforcement procedure, copyright provisions in trade agreements, and free speech rights.

First, "How would you promote the progress of science and creativity, as enumerated in the U.S. Constitution, by upholding and strengthening copyright law and preventing its diminishment?"

Second, "How do you feel the rights that have served our economy and spurred creativity in the physical world should apply in the digital world?"

Third, "How would you protect the incentive to create by committing sufficient resources to support effective civil and criminal enforcement of copyright laws domestically and internationally?"

Fourth, "How would you ensure inclusion of copyright protections in bilateral, regional and multilateral trade agreements to protect creators and foster global development?"

Fifth, "How would you protect the rights of creators to express themselves freely under the principles established in the First Amendment?"

DOJ Requires Swarthmore to Install Assistive Listening Devices

11/20. The Department of Justice (DOJ) entered into a settlement agreement with Swarthmore College regarding Title III of the Americans with Disabilities Act (ADA), which pertains to "public accommodations". It contains typical mandates regarding making parking spaces, building entrances, and dormitories more accessible to physically disabled persons.

It also requires Swarthmore to install "permanent assistive listening devices" in lecture halls, meeting rooms, and other "assembly areas".

The document contains no mandates regarding educational materials in Swarthmore's web site, such as making textual content available in audio format for blind people, or making audio content available in text for deaf persons. TLJ spoke with Stuart Hain, Association VP for Facilities and Services at Swarthmore, who signed the agreement. He said that its web site was "not part of the discussion". He added that Swarthmore is a small liberal arts college that focuses on direct faculty student interaction. Hence, there is little educational material in its web site.

Former Rep. Charles Canady (R-FL), when he was Chairman of the House Judiciary Committee's (HJC) Subcommittee on the Constitution, organized a hearing on the applicability of the ADA to web sites. He graduated from Swarthmore. See, story titled "Do Web Sites Violate the Americans with Disabilities Act?", Tech Law Journal, February 10, 2000.

House Republicans Urge FCC Not to Expand Cable Regulation

11/20. Rep. Joe Barton (R-TX) and 22 other House Republicans signed a letter [5 pages in PDF] to the five Commissioners of the Federal Communications Commission (FCC) urging the FCC not to impose expanded regulatory mandates on the cable industry.

They wrote that "We are writing in regard to reports that the Commission may be contemplating expanded mandates on the cable industry, such as government-mandated a la carte, multicast must-carry rules, new program carriage requirements, rate regulation of leased access, invasive interactive set-top box obligations, and a judicially questioned cable ownership cap."

They continued that "Press stories have also indicated that the Commission may try to invoke authority over the cable industry pursuant to an excessively broad reading of the ``70/70´´ provision of the 1984 Cable Act."

They argued that "Such actions are unsupported by the record of significant competition in the video programming marketplace, and would be harmful to innovation and consumers."

The signers of the letter are all members of the House Commerce Committee (HCC). The copy of the letter published in the HCC web site on Tuesday morning, November 20, does not include either Rep. Heather Wilson (R-NM), Rep. Chip Pickering (R-MS), or Rep. Fred Upton (R-MI). The House is in recess.

Rep. Boehner Writes FCC Regarding Cable Regulation

11/19. Rep. John Boehner (R-OH), the House Republican Leader, sent a letter to the Federal Communications Commission (FCC) regarding regulation of cable companies. He wrote that since consumers now have "more and greater choices in the video programming marketplace as a result of responsible deregulatory policies", now "is not the time to embark on regulatory proposals that run contrary to Congress's intent on these deregulatory policies".

He said that with broadcast, cable, and satellite, and the ongoing "explosion in Internet video and Web sites such as YouTube", consumers have "an unlimited source of content".

"Yet the FCC appears to be considering imposing new mandates on the cable industry. The FCC may even try to invoke authority over the cable industry under an excessively broad reading of the "70/70" provision of the 1984 Cable Act. This provision was not intended to grant the FCC carte blanche to impose other types of regulation. Moreover, it was drafted more than 20 years ago as a mechanism to respond to decreases in sources of content, and that clearly is not a problem today. There also appears to be significant dispute over whether or not the 70/70 trigger has even been met."

He continued that "Deregulatory voice, video, and data policies supported in the past by Congress, the FCC, and the Administration spurred the investment that created the vibrant and innovative video environment we have today. Yet press reports indicate you may even be considering imposing horizontal ownership caps on the cable industry."

4th Circuit Affirms Dismissal of Go's Antitrust Action Against Microsoft

11/19. The U.S. Court of Appeals (4thCir) issued its opinion [15 pages in PDF] in Go Computer v. Microsoft, affirming the judgment of the District Court, which dismissed the antitrust complaint as barred by the statute of limitations.

Go Computer, Inc. and Jerrold Kaplan filed a complaint in U.S. District Court (DMd) in 2005 against Microsoft alleging violation of federal antitrust laws. The District Court dismissed the complaint. The statute of limitations on federal antitrust actions is four years. See, 15 U.S.C. § 15b. Yet, the alleged injuries to Go occurred in the early 1990s.

Kaplan founded a company named Go Computer, Inc. back in 1987 to produce a handheld computer with a touch screen and an operating system named PenPoint. See, Wikipedia entry for PenPoint.

The complaint alleges that Microsoft engaged in anticompetitive conduct by pressuring Intel and OEMs not to cooperate with Go, and by stealing its trade secrets.

Go ceased operations in January of 1994. It transferred its assets to EO Corporation, which ceased operations in July of 1994, when its main shareholder, AT&T, ended its funding. EO was dissolved in 1997. Its assets were transferred to Lucent Technologies, now Alcatel-Lucent, which still owns PenPoint.

Kaplan founded another company named Go Computer, Inc. in 2005. It acquired from Lucent an assignment of its antitrust claims, pursuant to a judgment splitting agreement. Kaplan and Go then filed the present action.

Kaplan and Go asserted a series of arguments which taken together would extend the deadline for filing suit from four to eleven years. The District Court rejected the arguments, and the Court of Appeals affirmed.

The Court of Appeals wrote that an antitrust action accrues, and the limitation period begins to run, when the injury takes place. The last alleged injury took place in 1994.

The Court wrote that Go was on notice as of 1992, and decided not to litigate for business and strategic reasons.

Go raised the argument of fraudulent concealment, based in part on a letter from Microsoft's Bill Gates asserting that Microsoft had not engaged in any wrongdoing. The Court wrote that "wrongdoing is not a straightforward matter of fact, and it is not fraud to deny it."

This case is Go Computer, Inc. and Jerrold Kaplan v. Microsoft Corporation, U.S. Court of Appeals for the 4th Circuit, App. Ct. No. 06-2278, an appeal from the U.S. District Court for the District of Maryland, at Baltimore, D.C. No. 1:00-md-01332-JFM, Judge Frederick Motz presiding. Judge Harvey Wilkinson wrote the opinion of the Court of Appeals, in which Judge T.S. Ellis joined. Judge Hamilton wrote a concurring opinion.

Go Computer was represented by the law firm of Kellogg Huber. Microsoft was represented by the law firm of Sullivan & Cromwell.

FCC Releases Order Approving AT&T Dobson Merger

11/19. The Federal Communications Commission (FCC) released its Memorandum Opinion and Order [59 pages in PDF] approving the merger of AT&T and Dobson Communications, subject to conditions. The Department of Justice (DOJ), which possess statutory antitrust merger review authority, has already approved the merger.

The FCC approved the transfer of licenses associated with AT&T's acquisition of Dobson Communications, subject to divestitures in several local markets, and other conditions. The FCC also uses this order to announce a revision to its method of analyzing wireless mergers. It will include the 700 MHz spectrum in the initial spectrum screen.

This order imposes an "interim cap" on high cost competitive Eligible Telecommunications Carrier (ETC) support, which "like the cap established as a condition of the ALLTEL-Atlantis transaction, is based on AT&T and Dobson's level of competitive ETC support as of June 2007".

However, this is subject to an exception. "AT&T and Dobson will not be subject to the interim cap condition to the extent AT&T and Dobson (1) file cost data showing their own per-line costs of providing service in a supported service area upon which their high cost universal service support would be based, and (2) demonstrate that their networks are in compliance with section 20.18(h) of the Commission’s rules specifying E911 location accuracy as measured at a geographical level defined by the coverage area of each Public Safety Answering Point (PSAP)."

See also, story titled "FCC Imposes Universal Service and E911 Location Accuracy Requirements on Alltel" in TLJ Daily E-Mail Alert No. 1,669, November 5, 2007.

This order follows the analysis applied by the FCC in other wireless mergers. It treats the product market as "mobile telephony services" and the geographic markets as local markets. This order does not consider competition between wireless and wireline services.

In addition, this order adds that "we no longer limit our examination to spectrum in the cellular, SMR, and broadband PCS bands. Instead, we update our analysis to include 700 MHz spectrum in the initial spectrum screen given its availability and suitability on a nationwide basis for the provision of mobile telephony services."

It continues that "As a result, our initial spectrum screen for the proposed transaction is 95 MHz, rather than 70 MHz that we previously have used. In addition, while we decide it is premature to include AWS-1 (1710-1755 MHz and 2110-2155 MHz) and Broadband Radio Service (``BRS´´) spectrum in the initial screen, we will consider such spectrum in our case-by-case analyses to the extent such spectrum is available in any local market not eliminated by our screen." (Parentheses in original.)

Commissioner Robert McDowell wrote in a statement [PDF] that "While it is certainly important that we update our analytical tools from time to time, this action is decidedly premature and introduces an unnecessary level of complexity into the Commission's market analyses. I also wonder how the new framework will affect participation in the forthcoming auction of 700 MHz spectrum."

He added that "The fact is that the capabilities of the 700 MHz band spectrum are irrelevant until the band is licensed, cleared of incumbent users, built out, and used to provide services to America’s consumers. Moreover, I wonder whether the distinctions for the purposes of this market screen between the cellular, PCS, SMR, 700 MHz, AWS-1 and BRS spectrum bands are still necessary or appropriate."

Commissioner Michael Copps wrote in his statement that this "radically inflates the screen to 95 megahertz -- in essence, finding that there is nothing per se problematic from a competitive standpoint with a single entity holding up to 94 megahertz of spectrum in a given market. This sets a truly dangerous precedent." He too added that the 700 MHz auction has yet to occur, the winning bidders are not known, and equipment is not yet available.

He also complained that "Since the Commission's short-sighted decision a few years ago to eliminate the CMRS spectrum aggregation limit, we have seen a wave of consolidation among wireless incumbents and a general drawing down on the storehouse of wireless competition that industry investment and wise FCC policy throughout the 1990s created. I continue to have concerns about ever-increasing concentration in the wireless sector."

Commissioner Jonathan Adelstein wrote in his statement that "we do not know what the complete impact of the 700 MHz auction will be, how that spectrum will be distributed and whether any single party, including the acquiring party in this proceeding, might get a disproportionate share of the spectrum. For these reasons, I am unable to fully support this aspect of the item."

This MO&O is FCC 07-196 in WT Docket No. 07-153.

People and Appointments

11/19. Fran Townsend resigned as Assistant to the President for Homeland Security and Counterterrorism. See, White House release and statement by Michael Chertoff.

Go to News from November 11-15, 2007.