Tech Law Journal
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Oct. 26, 2000
8:00 AM ET.
Alert No. 50.

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News Briefs

10/25. The FTC released an administrative complaint against WebTV which alleges that the advertising practices of WebTV constitute unfair or deceptive acts or practices in violation of 5(a) of the Federal Trade Commission Act. The FTC and WebTV also simultaneously settled the matter. The complaint alleges that WebTV advertised that "The WebTV set-top box is equivalent to a personal computer with respect to its Internet-related performance" whereas, in fact, "The WebTV set-top box is not equivalent to a personal computer with respect to its Internet-related performance. For example, WebTV set-top box users are unable to download, store, or run software available on the Internet, display certain Web pages or play certain Web files, or open email attachments in certain common formats". The FTC released a agreement settling the matter. WebTV agreed not to advertise that its product "and a computer are equivalent in their ability to provide access to content available on the Internet" or that its product "provides access to all of the Internet's content". See also, FTC release. WebTV is a subsidiary of Microsoft.
10/25. The DOJ and Microsoft both filed responses to to the Court of Appeals' proposal to hold a technology review session in the Microsoft antitrust appeal. On Oct. 18, the U.S. Court of Appeals (DCCir) issued a notice requesting the parties to respond to a proposal that Michael Hites, CTO of the Illinois Institute of Technology, conduct a review session on the "fundamentals of automation" for the Court on Nov. 14. The DOJ response seeks to greatly limit the scope of Hites' review session to only those matters which all parties agree. See, Plaintiff's Joint Response to the Court's Request for the Parties Views Regarding the Proposed Review Session. Microsoft asks that the parties be given access to his presentation ahead of time. It also asks for more information about Hites' previous contacts with Sun Microsystems. See, Response of Microsoft Corporation to the Courts October 18, 2000 Notice.
10/25. Senate Finance Committee Chairman Sen. William Roth (R-DE) announced late on Wed. Oct. 24 that both House and Senate negotiators had agreed upon tax and health care package. It brings the Congress and Clinton closer to agreement. Included in the deal is the FSC Repeal and Extraterritorial Income Exclusion Act of 2000. The House passed HR 4986 as a stand alone bill on Sept. 13. The Senate Finance Committee amended and reported it on Sept. 20. The Foreign Sales Corporation tax regime benefits high tech companies that sell their goods and services abroad. Following a complaint from the EU, the WTO held the existing FSC tax regime to be an illegal export subsidy. HR 4986 bill repeals and replaces the old FSC tax regime. It also averts, temporarily, the possibility of a trade war with the EU. However, the EU will complain that this bill is also an illegal export subsidy. Earlier in the day Bill Clinton sent a letter to Rep. Denny Hastert (R-IL) and Sen. Trent Lott (R-MS), in which he stated that "it is essential for our commitment to economic growth to include the replacement of the Foreign Sales Corporation regime, which has passed the House and Senate with broad bipartisan support... "
10/25. The FCC released its order [143 pages in MS Word] pertaining to compelling access by telecommunications and Internet service providers to apartment buildings.
10/25. The FCC named Mania Baghdadi Deputy Chief of the Policy & Rules Division of the Mass Media Bureau. She has been Assistant Chief (Law) of the Policy & Rules Division since May 1997. See, release [MS Word].
10/24. The National Academies' National Research Council released a report titled "Building A Workforce for the Information Economy." It recommends that the government reduce the time it takes to obtain a "green card", which grants a foreign worker permanent residency in the United States, and make H1B visas more portable, so that highly skilled foreign workers would be able to more easily change jobs. See, release.
10/16. The U.S. District Court (SDNY) issued a permanent injunction against Enterprises Solutions, Inc. barring it from violating the antifraud provisions of the Securities Exchange Act of 1934. The company, which purports to be in the Internet security business, and is controlled by a convicted felon, issued a series of press releases baselessly projecting $30 to $50 Million in revenues and falsely claiming to have entered into multi-million-dollar contracts. See, SEC release.
10/16. The IRS issued an document titled "Announcement 2000-84" in which it requests public comment on whether and how the IRS should apply the Internal Revenue Code to regulate speech on the Internet by entities exempt under 501(c)(3). See, TLJ story.
Editor's Note: This column includes all News Briefs added to Tech Law Journal since the last Daily E-Mail Alert. The dates indicate when the event occurred, not the date of posting to Tech Law Journal.
New TLJ Stories

IRS Considers Regulating Internet Speech. The IRS released a document stating that it is considering whether to issue guidance regarding the application of the Internet Revenue Code to various types of Internet communications by tax exempt entities.
New Documents

FTC: administrative complaint against WebTV for deceptive advertising, 10/25 (HTML, FTC).
FTC: settlement agreement with WebTV, 10/25 (HTML, FTC).
DOJ: pleading re Appeals Court technology review session, 10/25 (HTML, DOJ).
MSFT: pleading re Appeals Court technology review session, 10/25 (HTML, MSFT).
FCC: order in multi- tenant buildings access proceedings, 10/25 (143 pages in MS Word, FCC).
IRS: Announcement 2000-84 re regulating Internet speech of 501(c)(3) entities, 10/16 (HTML, TLJ).
New and Updated Sections

Calendar (updated daily).
News from Around the Web (updated daily).
Quote of the Day

"I question the ultimate efficacy of the new, extremely restrictive regulation of private contracts adopted today. While we likely have statutory authority under section 201 over the common carrier conduct at issue here ... nothing in our regulations stops building owners from making their contracts de facto exclusive ones. That is, they remain free, even under our new rule, simply to decline to enter into contracts with providers other than the existing one. We certainly have no legal authority to force building owners to enter into contracts for service with other carriers."

Harold Furchtgott-Roth (R-FCC), dissenting from the FCC's order regarding telecom and Internet service provider access to multi-tenant buildings.