SEC Suspends Trading in Stocks Touted by YouTube Videos

3/20. The Securities and Exchange Commission (SEC) adopted and released an order [2 pages in PDF] that suspends trading in the securities of three companies subject to promotional videos on YouTube and e-mail spam.

The order states that for each of the three companies, "Questions have arisen regarding the adequacy and accuracy of statements in the company's press releases and promotional videos concerning the company’s management, operations, current financial condition, transactions involving the issuance of the company’s shares, and concerning stock promoting activity."

Mark Schonfeld, Director of the SEC's New York Regional Office, stated in a release that "Whether it's boiler rooms, blast faxes, e-mail spam, or Internet videos -- as promoters have exploited new channels of communication, the SEC has been there to stop them."

The SEC release adds that "Through its Anti-Spam Initiative, the SEC has suspended trading in the securities of 50 companies and has brought several enforcement actions against spammers, promoters, and insiders."

The three companies are NeoTactix Corporation, Graystone Park Enterprises, Inc., and Younger America, Inc.

People and Appointments

3/20. Rod Beckstrom was named Director of the Department of Homeland Security's (DHS) National Cyber Security Center (NCSC). See, statement by Michael Chertoff.

More News

3/20. The National Telecommunications and Information Administration (NTIA) released a document [248 pages in PDF] titled "Spectrum Management for the 21st Century: The President's Spectrum Policy Initiative: Federal Strategic Spectrum Plan". See also, NTIA release.

3/20. The Federal Communications Commission (FCC) published a notice in the Federal Register that sets the effective date (March 20, 2008) of its rules requiring information collection pertaining to interconnected voice over internet protocol (VOIP) services. See, Federal Register, March 20, 2008, Vol. 73, No. 55, at Page 14941-14942. This relates back to the FCC's Report and Order (R&O) extending its disability access and program support rules to providers of interconnected VOIP services. The FCC adopted this R&O on May 31, 2007. It is FCC 07-110 in CG Docket No. 03-123. See also, story titled "FCC Extends Disability Access Rules to Interconnected VOIP Providers" in TLJ Daily E-Mail Alert No. 1,589, May 31, 2007.

3/20. The Department of Defense (DOD) published a notice in the Federal Register that announces that it is extending the charter of the Defense Science Board (DSB). This notice states that the DSB "will ensure the
identification of new technologies and new applications of technology in those areas to strengthen national security". See, Federal Register, March 20, 2008, Vol. 73, No. 55, at Pages 14968-14969.

FCC Report Concludes Broadband Services Are Being Deployed in a Reasonable and Timely Fashion

3/19. Federal Communications Commission (FCC) adopted, but did not release, a Fifth Report regarding the "availability of advanced telecommunications capability to all Americans". These reports are required by Section 706 of the Telecommunications Act of 1996.

The FCC issued a short release [PDF] that states that this report finds that "broadband services are currently being deployed to all Americans in a reasonable and timely fashion".

Commissioner Jonathan Adelstein dissented. He wrote in his prepared statement [PDF] that the report "fails to set out an adequate basis for concluding that broadband is being deployed in a reasonable and timely basis to all Americans, which is our directive under the statute. Instead, this report repeats past shortcomings, relies on faulty data, and fails to present a clear picture of broadband in America."

Commissioner Michael Copps also dissented. See, prepared statement [PDF].

This report is FCC 08-88 in Docket No. 07-45.

FCC Adopts Order Regarding Broadband Data Collection

3/19. The Federal Communications Commission (FCC) adopted, but did not release, a Report and Order (R&O) and Further Notice of Proposed Rulemaking (FNPRM) regarding collection of broadband subscription and availability data.

The FCC issued a short release [PDF] that describes this item. It states that the FCC will "Expand the number of broadband reporting speed tiers to capture more precise information about upload and download broadband speeds in the marketplace", "Require broadband providers to report numbers of broadband subscribers by Census Tract, broken down by speed tier and technology type", and "Improve the accuracy of information the Commission gathers about mobile wireless broadband deployment".

FCC Chairman Kevin Martin wrote in his prepared statement [PDF] that pursuant to this order, the FCC will "collect dramatically improved data on broadband services", and that this "data will enable us to better identify and analyze the deployment of broadband throughout the nation".

Commissioner Michael Copps wrote in his prepared statement [PDF] that "it is truly shocking that we still rely on an absurdly dated definition of broadband speed and a 5-digit ZIP code methodology". He wrote that the just adopted order "shows we're finally getting serious about broadband data-gathering".

Robert McDowell (at left), the most free market oriented of the Commissioners, dissented. He wrote in his prepared statement [PDF] that "the majority is playing with fire by attaching subjective and, perhaps, misleading terminology and definitions to various speeds. In short, what started out with a sleepy bureaucratic Order may end up being a change of tectonic proportions. The majority has not thought through the unintended consequences of its actions today."

McDowell continued that "Instead of allowing consumers to determine what is a sufficient speed for their desired purposes, the government is drawing an arbitrary line that may favor some technologies that are currently considered ``broadband.´´ While the concept of what is ``broadband´´ should constantly improve and evolve, these decisions are best left to consumers and the marketplace, not unelected bureaucrats. It certainly should not be a political decision. I fear that what the majority has wrought this morning may very well come back to haunt us."

This item is FCC 08-89 in WC Docket No. 07-38.

FCC Order Abrogates Property Owners' Contracts with Telcos

3/19. The Federal Communications Commission (FCC) adopted, but did not release, a Report and Order (R&O) regarding contracts for the provision of telecommunications services in apartment buildings. The FCC released only and brief news release [PDF].

The FCC's release does not disclose what statute authorizes the FCC to take this action. Nor does the FCC's release disclose whether or not the FCC has written the R&O that it just adopted. Nor does it state when the FCC will release the R&O. All five Commissioners released self-congratulatory appraisals of their regulatory beneficence.

The FCC release states that this R&O "banned carriers from entering into exclusive contracts to provide telecommunications services in residential apartment buildings, and prohibited enforcement of existing contracts that contain exclusivity provisions".

FCC Chairman Kevin Martin wrote in his prepared statement [PDF] that "This action follows in the footsteps of our recent Order to prohibit similar exclusive arrangements for video services offered in apartment buildings" and provides "regulatory parity by applying a consistent regulatory framework across platforms".

On October 31, 2007, the FCC adopted an order that abrogates contracts between property owners and some, but not all, video services providers. See also, stories titled "FCC Adopts R&O Abrogating Contracts Between MDU Owners and Cable Companies" and "Commentary on FCC's R&O Regarding MDU Owners and Cable Companies" in TLJ Daily E-Mail Alert No. 1,669, November 5, 2007.

Enforcement of contracts by property owners is a matter of state law and jurisdiction. This order regulates the activities of real estate owners, and abrogates existing contracts.

Legal challenges brought by both property owners and cable companies to the FCC's October order are pending in the Court of Appeals. See, NCTA v. FCC and National Multi-Housing Counsel, et al. v. FCC, U.S. Court of Appeals for the District of Columbia, App. Ct. Nos. 08-1016 and 08-1017. Property owners may challenge this order also.

The FCC has not released the just adopted R&O. The FCC thereby obtains the effect of delaying judicial review of the R&O.

The FCC's release asserts that "these exclusive agreements between carriers and building owners hurt consumers and harm competition, with little evidence of countervailing benefits"

In contrast, Jim Arbury, of the National Multi Housing Council (NMHC) / National Apartment Association (NAA) Joint Legislative Program, asserted in a release that "Apartment owners have traditionally used exclusive access contracts to force telecommunications providers to lower their prices and improve their service offerings. By taking this bargaining tool away from owners, the FCC has essentially removed a key incentive these firms had to negotiate with apartment owners. The only losers in this decision, ironically, are likely to be the very consumers the FCC purports to want to serve."

He added that "This is just the latest in a series of misguided attempts by the FCC to manufacture competition through regulation instead of forcing the telecom firms to compete for new business. And they reveal the FCC's continued lack of understanding about how the multifamily telecommunications market actually works."

Commissioner Robert McDowell wrote in his prepared statement [PDF] that "I am hopeful that this decision will spur more competition among telecommunications providers".

Commissioner Michael Copps wrote in his prepared statement [PDF] that "the basic point is to offer people living in multiple tenant environments some of the same consumer benefits -- competition and choices -- as single-family homeowners."

Commissioner Jonathan Adelstein wrote in his prepared statement [PDF] that "By finding that exclusive access arrangements amount to an unreasonable practice under the Communications Act, we remove a potential barrier that could hinder new entrants from offering telecommunications services to residential consumers" in multi tenant environments.

See also, Commissioner Deborah Tate's prepared statement [PDF].

Neither the FCC release, nor the statement of Commissioners, address either bulk billing and exclusive marketing arrangements.

The FCC's release states that the just adopted R&O is FCC 08-87 in Docket No. 99-217. It is a Wireline Competition Bureau (WCB) item. The October 2007 cable R&O and FNPRM is FCC 07-189 in MB Docket No. 07-51.

Bush Names Wainstein Top Homeland Security and Counterterrorism Advisor

3/19. President Bush named Kenneth Wainstein Assistant to the President for Homeland Security and Counterterrorism.

As Assistant Attorney General in charge of the Department of Justice's (DOJ) National Security Division (NSD), he has represented the Bush administration before the Congress on Foreign Intelligence Surveillance Act (FISA) reform issues. He also worked on administration efforts to obtain extensions of the search and surveillance related provisions of the USA PATRIOT Act.

He has worked in various positions at the DOJ for almost 20 years. He has been the Federal Bureau of Investigation's (FBI) General Counsel and Chief of Staff. He has also been the U.S. Attorney for the District of Columbia.

President Bush stated in a White House release that "In his new role, Ken will coordinate our Nation's homeland security efforts to ensure that we continue to make progress on combating terrorism, securing our borders, and strengthening our emergency preparedness. I look forward to working with Ken to make America safer."

Attorney General Michael Mukasey praised Wainstein in a release.

More People and Appointments

3/19. President Bush announced his intent to nominate Michael Leiter to be Director of the National Counterterrorism Center in the Office of the Director of National Intelligence. See, White House release.

3/19. Federal Communications Commission (FCC) Chairman Kevin Martin named FCC Commissioner Deborah Tate Chair of the Joint Conference on Advanced Services. See, FCC release and Tate release.

3/19. The Federal Communications Commission (FCC) issued a release "soliciting nominations for state commission representatives from the National Association of Regulatory Utility Commissioners (NARUC) for seats on the Joint Conference".

3/19. President Bush named Heather Ann Hopkins to be Special Assistant to the President and Senior Director for Legislative Affairs in the National Security Council. See, White House release.

More News

3/19. President Bush gave a lengthy speech on the war on terrorism, without berating House Democrats for not passing a Foreign Intelligence Surveillance Act (FISA) reform bill that he supports.

3/19. The Federal Communications Commission (FCC) announced that it will hold another in a series of en banc hearings related to FCC Docket Nos. 07-52 and 08-7 on Thursday, April 17, 2007, at Stanford University. The Commission will hear from witnesses regarding "broadband network management practices and Internet-related issues". The FCC's notice does not identify the room, time or witnesses.

3/19. The U.S. District Court (NDCal) sentenced Judy N. Green to serve seven and one half years in prison for rigging bids and defrauding the Federal Communications Commission's (FCC) e-rate subsidy program. See, Department of Justice (DOJ) release.

3/19. The Department of Commerce's (DOC) Bureau of Industry and Security (BIS) published a notice in the Federal Register that announces, describes, and sets the comment deadline (June 17, 2008) for, its Notice of Inquiry related to its rules regulating crime control exports. These rules cover police and military hardware, such as helmets, shields, and guns. However, these rules also regulate the export of some computers and software. See, Federal Register, March 19, 2008, Vol. 73, No. 54, at Pages 14769-14770.

FCC Closes 700 MHz Auction

3/18. The Federal Communications Commission (FCC) closed its Auction No. 73, which is also known as the 700 MHz auction, and the auction of spectrum to be vacated by broadcasters as part of the digital television (DTV) transition. The auction began on January 24, 2008, and included 261 rounds of bidding. The FCC announced that it raised $19.592 Billion.

FCC Commissioner Deborah Tate stated in a release [PDF] that this spectrum "will provide consumers with mobile broadband, mobile video, and other services not yet imagined. With its excellent propagation characteristics, this spectrum may be particularly useful in expanding advanced services in rural areas".

FCC Chairman Kevin Martin released a statement [PDF] that addresses auction revenues. He wrote that "The $19.592 billion in revenue raised in the 700 MHz auction is significantly more than raised in any past FCC auction. In comparison, the 2006 Advanced Wireless Service-1 (AWS-1) Auction raised $13.9 billion."

The FCC's Auction 66, completed in September of 2006, auctioned 90 MHz of spectrum in the 1710-1755 MHz and 2110-2155 MHz bands.

See, story titled "FCC Completes First Advanced Wireless Services Spectrum Auction" in TLJ Daily E-Mail Alert No. 1,454, September 21, 2006.

Martin continued that "The $19.592 billion generated by the auction nearly doubled congressional estimates of $10.2 billion. All other 68 auctions conducted by the FCC in the past 15 years collectively generated a total of only $19.1 billion in receipts."

"The proceeds generated from this auction will be transferred to the U.S. Treasury by June 30, 2008, and will be used to support public safety and digital television transition (DTV) initiatives." Martin's release also states that "Even with open platform and aggressive build-out obligations, each of these blocks sold for more than AWS-1 blocks with comparable bandwidth and license areas."

The FCC's band plan and service rules, announced on July 31, 2007, provided for the auction of 62 MHz for commercial use within the 698-806 MHz band. The FCC plan called for the auction of five blocks, designated A through E. These rules covered such things as reserve prices, build out requirements, and for the C block, open devices and open applications requirements. See also, story titled "FCC Adopts 700 MHz Band Order" in TLJ Daily E-Mail Alert No. 1,619, July 31, 2007.

The A Block is 12 MHz of paired spectrum (698-704 and 728-734 MHz). It was auctioned by Economic Areas (EA) in 176 licenses. (757-758 and 787-788, also in the A Block, have already been auctioned, but are being relocated.) The winning bids met the reserve price, and raised a total of $3.96 Billion.

The B Block is 12 MHz of paired spectrum (704-710 and 734-740 MHz). It was auctioned by Cellular Market Areas (CMA) in 734 licenses. (775-776 and 805-806, also in the B Block, have already been auctioned, but are being relocated.) The winning bids met the reserve price, and raised a total of $9.14 Billion.

The C Block is 22 MHz of paired spectrum (746-757 and 776-787). It was auctioned by Regional Economic Area Groupings (REAGs) in 12 licenses. (710-716 and  740-746, also in the C Block, have already been auctioned.) This spectrum is subject to open devices and applications requirements (ODAR). The winning bids met the reserve price, and raised a total of $4.75 Billion.

The D Block is 10 MHz of paired spectrum (758-763 and 788-793). It was to have been auctioned as one nationwide license, and subject to a Public/Private Partnership. That is, the plan was for a commercial licensee to build a nationwide broadband interoperable network for use by public safety entities. However, it would then have preemptible secondary access to the spectrum. (716-722, also in the D Block, has been auctioned.)

The E Block is 6 MHz of unpaired spectrum (722-728). It was auctioned by Economic Areas (EA) in 176 licenses. The winning bids met the reserve price, and raised a total of $1.27 Billion.

D Block. FCC Chairman Martin's statement states that "The 700 MHz Upper D Block of spectrum, which was dedicated to the creation of a Public Safety/Private Partnership to create a nationwide, interoperable network, did not receive a bid that met the $1.3 billion reserve price established for this block."

He continued that "I believe the Commission remains committed to ensuring that we work to solve public safety’s interoperability challenges. Because the reserve price for the D Block was not met in the 700 MHz auction, the FCC is now evaluating its options for this spectrum."

Commissioner Tate wrote in her statement that "Now we must turn our attention to the important work of reviewing our options for the Upper 700 MHz D block, ten megahertz of spectrum that was designed to create a Public/Private Partnership to build a nationwide, interoperable broadband network that would improve public safety communications. In so doing, we must keep in mind that our nation’s first responders need advanced communications to provide their critical, lifesaving services to citizens all across this county. I am committed to working with Congress, my colleagues, the public safety community, and potential service providers to find a solution that meets our common goals."

Rep. John Dingell (D-MI), Chairman of the House Commerce Committee (HCC), stated in a release that "The construction of a nationwide, next-generation, interoperable broadband network for public safety is a crucial policy objective, and the need for such a network has not diminished. The Subcommittee on Telecommunications and the Internet will soon hold a hearing to consider this matter further, and I intend to work closely with the Commission, public safety, and industry as this process continues."

A collection of interest groups, including the Media Access Project (MAP), sent a letter [3 pages in PDF] to the FCC on March 19, 2008, to request that the FCC "not move immediately to reauction the D Block".

This collection of groups also includes the Public Knowledge, Consumers Union, Consumer Federation of America, New America Foundation, Free Press, and others.

They asked that the FCC "sever the D Block from auction 73, reveal the results of the auction, and conduct a thorough investigation into why the D Block failed to attract bidders. After conducting the investigation, the Commission should place any proposed changes or remedies, including a decision to award the D Block to the current bidder, on public notice."

They also asked that the FCC investigate "allegations surrounding a purported meeting between Frontline, its financial backers, and Morgan O'Brien of Cyren Call that may have had the effect of preventing Frontline from attracting needed capital and discouraging other bidders".

C Block. The C Block is subject to open devices and applications requirements (ODAR). Chairman wrote that "This auction provided an opportunity to have a significant effect on the next phase of wireless broadband innovation. With the open platform requirements on one-third of the spectrum, consumers will be able to use the wireless device of their choice on those networks and download whatever software or applications they want on it."

Martin added that "The open platform will help foster innovation on the edge of the network, while creating more choices and greater freedom for consumers to use the wireless devices and applications of their choice. A network more open to devices and applications can help ensure that the fruits of innovation on the edges of the network swiftly pass into the hands of consumers."

Rep. Dingell wrote that "I am pleased that the C Block exceeded its reserve price, triggering the pro-consumer open access rules. The Committee will watch closely to ensure that the successful bidder on the C Block remains committed to open access principles as they make use of this valuable public asset. I am hopeful that the auction also created opportunities for smaller and new entrants, which we'll learn when the FCC lifts the anti-collusion rules."

Rep. Dingell also wrote that "It is my hope that the Commission quickly closes out the auction and makes public information about winning bidders before coordinating with Congress on developing a thoughtful plan to re-auction the D block."

Steve Largent, head of the CTIA, stated in a release that "While the license winners of the 700 MHz auction may not yet be known, the true winners in this auction will be American consumers who once again will get to experience the innovation and other valuable benefits of a truly competitive wireless marketplace."

Rep. Markey Announces Hearing on 700 MHz Auction

3/18. Rep. Ed Markey (D-MA), the Chairman of the House Commmerce Committee's (HCC) Subcommittee on Telecommunications and the Internet (STI), announced that the STI will hold a hearing that will address the results of the 700 MHz auction, which closed on March 18, 2008.

See, related story in this issue titled "FCC Closes 700 MHz Auction".

He stated in a release that "any new auction for the `D-block´ should be consistent with an overarching policy goal of advancing public safety objectives and ultimately achieving a state-of-the-art, broadband infrastructure for first responders. In developing a plan for a re-auction of the `D-block,´ the FCC should also take into account the auction results to gauge the level of new competition achieved."

Rep. Markey (at right) continued that "Policymakers should also analyze whether a need for a high reserve price continues to exist. Moreover, I believe we must fully review the nature and authority of the public safety spectrum trust and whether this model should be retained or modified, the length of the license term, the build-out requirements and schedule of benchmarks for such build-out, the opportunities for ensuring further openness in wireless markets, the penalties associated with failure to fulfill license conditions, and other issues."

He also stated that he is "eager to ascertain the extent to which new entrants have succeeded in obtaining licenses through this auction. Providing new opportunities for competitive entry into the wireless marketplace and offering consumers greater choice is a key objective of wireless policy and for this auction in particular."

Rep. Markey also praised the FCC's decision to auction the C Block with open devices and applications requirements (ODAR). He added that "forward to monitoring implementation of this provision, which holds much promise for fostering innovation and consumer choice".

Rep. Markey did not set the date or time of the hearing.

GAO Issues Report on IP Enforcement Trends

3/18. The Government Accountability Office (GAO) released a report [89 pages in PDF] titled "Intellectual Property: Federal Enforcement Has Generally Increased, but Assessing Performance Could Strengthen Law Enforcement Efforts".

The report covers trends in intellectual property (IP) enforcement at five federal agencies over the fiscal years 2001 through 2006. It finds that IP enforcement activity has increased. However, the report contains no breakdowns for IP enforcement by industry sectors, such as software, movies, music, video games, drugs, and so forth.

The report examines the enforcement activities of the Department of Homeland Security's (DHS) Customs and Border Patrol (CBP), which seizes infringing items at borders, the DHS's Immigration and Customs Enforcement (ICE), which investigates IP crimes, the Federal Bureau of Investigation (FBI), which also investigates IP crimes, the Food and Drug Administration (FDA), which investigates counterfeit versions of the products it regulates, and the Department of Justice (DOJ), which prosecutes IP crimes.

The report finds that "Federal IP enforcement activity generally increased from fiscal year 2001 through 2006, but agencies have not taken key steps to assess their IP enforcement achievements."

It adds that "The number of IP prosecutions by DOJ for fiscal years 2001 through 2005 hovered around 150 cases before increasing to about 200 cases in fiscal year 2006."

The report also finds that "IP enforcement activities are generally a small part of these agencies’ much broader missions, and, according to agency officials and documents, IP enforcement is not the top priority for these agencies. However, within their IP enforcement activities, these agencies have given enforcement priority to IP crimes that pose risks to public health and safety, such as counterfeit pharmaceuticals, batteries, and car parts."

Software, digital media, and consumer electronics fall outside of these health and safety areas of concern.

The report contains some information about the DOJ's Computer Hacking and Intellectual Property (CHIP) units. It states that "The number of staff dedicated to IP enforcement has grown in recent years. For example, DOJ’s CHIP units, first created in February 2000, grew from 13 units as of 2002 to 25 units as of 2007. Most of the CHIP units have approximately two or more attorneys who focus on prosecuting IP and high-technology crimes, with as many as eight in at least one of the units. As the number of units has grown, so has the number of attorneys assigned to working IP cases. As of July 2007, DOJ had 101 Assistant U.S. Attorneys assigned to CHIP units."

The report adds that "Another 122 Assistant U.S. Attorneys have been specially trained to prosecute computer crime and IP offenses, with at least one such CHIP prosecutor located in every U.S. Attorney’s Office" and that the DOJ's Computer Crime & Intellectual Property Section (CCIPS) has another "14 attorneys working on IP enforcement".

However, the report adds that "officials from the U.S. Attorney’s Offices we visited noted that, over the past few years, their offices have experienced high turnover and have been generally understaffed, with vacant positions left unfilled."

10th Circuit Reverses Nacchio's Conviction

3/17. The U.S. Court of Appeals (10thCir) issued its divided opinion [74 pages in PDF] in US v. Nacchio, reversing the conviction of Joseph Nacchio, a former CEO of Qwest Communications International, and remanding for a new trial, before a new judge.

The Department of Justice (DOJ) criminally prosecuted Nacchio on allegations that he traded shares of Qwest while knowing that the company was unlikely to continue to meet its announced earnings.

On April 19, 2007, a trial jury of the U.S. District Court (DColo) returned a verdict of guilty on 19 counts of violation of federal securities laws involving insider trading. It acquitted Nacchio on 23 other counts.

On July 27, 2007, the District Court imposed a sentence of 72 months in prison on Nacchio. See, DOJ release.

The Court of Appeals held that "the improper exclusion of his expert witness merits a new trial". However, the Court of Appeals rejected Nacchio's other appeal points -- insufficiency of the evidence, improper jury instructions, and exclusion of classified information.

The excluded expert witness was Daniel Fischel, a professor at the University of Chicago law school, whose testimony would have provided economic analysis of Nacchio’s trading patterns, and the economic importance of the allegedly material inside information.

The Court of Appeals rejected, with little explanation, Nacchio's argument that the District Court erred in preventing him from introducing "classified information relevant to Qwest’s business prospects and the defendant’s state of mind".

The Court of Appeals wrote that Nacchio "claims that the evidence would have shown that he personally had reason to believe that Qwest’s economic prospects were much better than others realized. Thus, he says, this evidence should have been permitted both to show that he did not have material information and to negate scienter. We affirm the district court’s decision, because even if the classified information were presented and established what he said it would, it could not exonerate Mr. Nacchio as he claims. Essentially, Mr. Nacchio argues that undisclosed positive information can be used as a defense to a charge of trading on undisclosed negative information. We disagree."

The Court added that "If an insider trades on the basis of his perception of the net effect of two bits of material undisclosed information, he has violated the law in two respects, not none."

The Court of Appeals did not address whether or not the DOJ brought criminal charges against against Nacchio in retaliation for refusal to comply with National Security Agency (NSA) requests for customer call record data in violation of 47 U.S.C. § 222.

Nor does the Court of Appeals does not address whether or not Nacchio's claims regarding Qwest's business prospects were anticipated contracts with the NSA, or whether those contracts were also withheld in retaliation.

See also, story titled "Bush Responds to USA Today Story Regarding NSA Database of Phone Calls" in TLJ Daily E-Mail Alert No. 1,369, Friday, May 12, 2006, and story titled "BellSouth and Verizon Attack USA Today Story" in TLJ Daily E-Mail Alert No. 1,372, Wednesday, May 17, 2006.

The Court of Appeals also ordered that the case be reassigned to another District Court Judge. Judge Edward Nottingham presided at the first trial.

This case is U.S.A. v. Nacchio, U.S. Court of Appeals for the 10th Circuit, App. Ct. No. 07-1311, an appeal from the U.S. District Court for the District of Colorado. Judge McConnell wrote the opinion of the Court of Appeals in which Judge Kelly joined. Judge Holmes dissented in part.

Supreme Court Grants Certiorari in FCC Fleeting Expletives Case

3/17. The U.S. Supreme Court granted certiorari in FCC v. Fox Television Stations, a broadcast profanity case involving the Federal Communications Commission's (FCC) regulation of "fleeting expletives". See, Orders List [18 pages in PDF] at page 3. See also, Supreme Court docket.

On November 6, 2006, the FCC issued an Order [36 pages in PDF] on remand regarding complaints that four broadcast television programs contained indecent and/or profane material. The Order concluded, among other things, that comments made by Nicole Richie during "The 2003 Billboard Music Awards" and by Cheryl LaPiere during the "The 2002 Billboard Music Awards" were indecent and profane. This order is FCC 06-166.

Fox, CBS, and ABC filed petitions for review of the FCC's order. See also, stories titled "FCC Releases Indecency Orders" in TLJ Daily E-Mail Alert No. 1,332, March 20, 2006, and "FCC Releases Order on Remand Regarding Broadcast Indecency" in TLJ Daily E-Mail Alert No. 1,484, November 7, 2006.

On June 4, 2007, the U.S. Court of Appeals (2ndCir) issued its divided opinion [53 pages in PDF] finding that "the FCC’s new policy sanctioning ``fleeting expletives´´ is arbitrary and capricious under the Administrative Procedure Act for failing to articulate a reasoned basis for its change in policy. Accordingly, the petition for review is GRANTED, the order of the FCC is VACATED, and the matter is REMANDED to the agency for further proceedings consistent with this opinion."

The Court of Appeals did not decide any of the Constitutional issues. However, it wrote in extensive dicta that "we are skeptical that the Commission can provide a reasoned explanation for its ``fleeting expletive´´ regime that would pass constitutional muster".

See also, story titled "2nd Circuit Vacates and Remands FCC Profanity Order" in TLJ Daily E-Mail Alert No. 1,590, June 4, 2007.

Kevin Martin, Chairman of the FCC, wrote in a statement that "I am pleased the Supreme Court will review the Second Circuit’s decision in Fox vs. FCC. The Commission, Congress and most importantly parents understand that protecting our children is our greatest responsibility. I continue to believe we have an obligation then to enforce laws restricting indecent language on television and radio when children are in the audience."

FCC Commissioner Deborah Tate issued a release in which she stated that she is "pleased". FCC Commissioner Michael Copps also issued a release in which he stated that he too is "pleased".

The ACLU's Caroline Fredrickson stated in a release that "The FCC’s new policy of policing television broadcasts with a vengeance doesn’t survive First Amendment scrutiny. Giving the Commission the ability to leverage arbitrary fines based on a vague set of standards will have a chilling effect on free speech, because broadcasters trying to avoid the penalties will err on the side of caution and begin censoring content that wouldn’t actually be considered indecent."

This case is FCC, et al. v. Fox Television Stations, Inc., et al., U.S. Supreme Court, Sup. Ct. No. 07-582, a petition for writ of certiorari to the U.S. Court of Appeals for the District of Columbia, App. Ct. Nos. 06-1760-ag, 06-2750-ag, and 06-5358-ag. The Court of Appeals heard petitions for review of a final order of the FCC.

Supreme Court Denies Cert in Microsoft v. Novell

3/17. The U.S. Supreme Court denied certiorari in Microsoft v. Novell, an antitrust case involving PC operating systems that dates back to the mid-1990s. See, Orders List [18 pages in PDF] at page 15.

This lets stand the October 15, 2007, opinion [31 pages in PDF] of the U.S. Court of Appeals (4thCir), which affirmed the judgment of the District Court.

The Court of Appeals affirmed the District Court's denial of Microsoft's motion to dismiss the Sherman Act Sections 1 and 2 claims. Microsoft argued that since Novell did not compete with Microsoft in the PC operating system market it did not suffer antitrust injury, and therefore lacked standing.

The Court of Appeals also affirmed the District Court's dismissal of, as untimely, other claims brought by Novell.

This case is Microsoft Corp. v. Novell, Inc., Sup. Ct. No. 07-924, a petition for writ of certiorari to the U.S. Court of Appeals for the 4th Circuit, App. Ct. Nos. 06-1134 and 06-1238. The Court of Appeals heard appeals from the U.S. District Court for the District of Maryland, D.C. Nos. 1:05-cv-01087-JFM and 1:00-md-01332-JFM), Judge Frederick Motz presiding. Chief Justice Roberts did not participate. See also, Supreme Court docket.

8th Circuit Affirms Injunction of State Regulation of Violent Video Games

3/17. The U.S. Court of Appeals (8thCir) issued its opinion [8 pages in PDF] in Entertainment Software Association v. Swanson, affirming the District Court's permanent injunction against enforcement of a statute of the state of Minnesota that prohibits minors from purchasing or renting certain video games.

Minnesota enacted a statute titled "Minnesota Restricted Video Games Act", which is now codified at Minnesota Statutes Section 325I.06, that provides that a person under the age of 17 may not knowingly rent or purchase a video game rated AO or M by the Entertainment Software Rating Board (ESRB), and that violation is subject to a civil penalty of up to $25.

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3/17. The U.S. Court of Appeals (5thCir) issued its opinion [PDF] in Logix Communications v. Texas PUC, an interconnection case involving unbundled network element declassification by wire center. The Court of Appeals affirmed the District Court's summary judgment for AT&T. This case is Logix Communications v. Public Utilities Commission of Texas, et al., U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 06-51697, an appeal from the U.S. District Court for the Western District of Texas.

3/17. The Copyright Office (CO) published a notice in the Federal Register that announces, recites, and sets the effective date (March 17, 2008) for changes to its rules that change royalty rates for satellite carriers based upon changes in the Consumer Price Index (CPI). See, Federal Register, March 17, 2008, Vol. 73, No. 52, at Pages 14183-14185.

3/17. Paul Atkins, a Commissioner of the Securities and Exchange Commission (SEC), gave a speech at a conference on mutual funds in Phoenix, Arizona. He said that "Investors are willing and able at the click of a mouse to send their money across the world in search of diversification, service, innovation, and higher returns." Therefore, regulators must facilitate this internationalization of the financial markets. He also discussed, among other issues, internet distribution for mutual fund prospectuses.

3/17. The Association of American Publishers (AAP) submitted a comment [PDF] to the National Institutes of Health (NIH) regarding the negative impact upon copyright of a NIH policy regarding public access to NIH funded research. The AAP wrote that the NIH is "taking liberties with copyrighted content in a fashion that competes with the activities of independent publishers and that undermines their rights in copyright. Specifically, by reprocessing and enriching manuscript submissions and expropriating publishers' value-added investments in peer-reviewed content, NIH is creating enhanced, derivative publications that go beyond the congressional mandate of posting researchers’ documents that report on the results of federally funded research. Rather than just posting what it receives, be it an author’s version (after peer review) or a publisher’s submission (in a PDF or other fixed format), NIH has embarked upon XML-reformatting and tagging procedures to create alternative versions of published works that, when made freely available, substitute for the definitive articles in which publishers have already invested. In effect, NIH is entering the publishing business (and enabling other international mirror locations of its database to do so as well) by creating these enhanced derivative versions. As a result, the integrity of the scientific literature is compromised." (Parentheses in original.)

Go to News from March 11-15, 2008.