|1/11. Rep. Fred
Upton (R-MI) will be the new Chairman of the Telecom
Subcommittee of the House
Commerce Committee. Much of the technology related
legislation in the House must pass through this subcommittee.
Commerce Committee announced its membership for the
107th Congress. It has jurisdiction over many high tech
related items. Newly appointed members are Barbara Boxer
(D-CA), John Edwards (D-SC), and Jean Carnahan (D-MO), Gordon
Smith (R-OR), Peter Fitzgerald (R-IL), John Ensign (R-NV), and
George Allen (R-VA). The returning members are Ernest
Hollings (D-SC), Daniel Inouye (D-HI), Jay Rockefeller (D-WV),
John Kerry (D-MA), John Breaux (D-LA), Byron Dorgan (D-ND),
Ron Wyden (D-OR), Max Cleland (D-GA), John McCain (R-AZ), Ted
Stevens (R-AK), Conrad Burns (R-MT), Trent Lott (R-MI), Kay
Hutchison, (R-TX), Olympia Snowe (R-ME), and Sam Brownback
(R-KS). Departing members include Bill Frist (R-TN),
who left to take another committee assignment, Slade Gorton
(R-WA), whose lost his re-election bid, and John Ashcroft
(R-MO), who lost his bid for re-election, and is now President
Elect Bush's nominee to be Attorney General. McCain will be
Committee Chairman; Hollings will be the Ranking Minority
Member; and Burns will be Chairman of the Communications
Subcommittee. See, release.
1/11. Sen. Maria Cantwell (D-WA) has been appointed to the Senate Judiciary
Committee. She is a former Real Networks
executive who now represents Microsoft's home state. Sen. Orrin Hatch
(R-UT), who will become Chairman after Jan. 20, strongly
supports the government's antitrust action against Microsoft.
In addition to antitrust matters, the Committee has
jurisdiction over immigration (including H1B visas) and crime.
1/11. Sen. Hillary
Clinton (D-NY) was appointed to three committees without
any significant jurisdiction over technology related issues:
Health, Education, Labor and Pensions Committee; Budget; and
Environment and Public Works. (The HELP Committee does have
some authority over medical privacy issues.)
|Va. Computer Crimes Act
|1/3. The Free
Republic filed a complaint in the
Circuit Court of Fairfax County Virginia against
Thomas Chappell Aldridge alleging violation of the Virginia
Computer Crimes Act in connection with his hostile
postings to a discussion group web site. The Free Republic is
a not for profit California corporation which operates a
discussion web site for political conservatives and
libertarians. It recently lost a copyright infringement
lawsuit brought in U.S. District Court (CDCal)
Times v. Free Republic for publishing complete verbatim
copies of thousands of news stories from the LA Times and
Washington Post. Aldridge, an attorney in Northern Virginia,
is a cantakerous writer and flamer who has earned the enmity
of Free Republic members for his unorthodox commentary, his
ability to assume a multitude of pseudonymous identities, and
his skill at evading technological efforts to prevent him from
posting. He also supplied an affidavit in the copyright
infringement action that the Court relied upon in finding
infringement. The complaint against Aldridge pleads six causes
of action. Counts 1-4 are based upon the recently enacted
Virginia Computer Crimes Act. Count 1 alleges computer
trespass. Count 2 alleges theft of computer services. Count 3
alleges harassment by computer. Count 4 alleges injury from
unsolicited bulk electronic mail. Count 5 alleges civil
conspiracy under Virginia law. Count 6 alleges break of
contract (i.e., the web site user agreement). Plaintiff seeks
monetary damages and an injunction against posting
unauthorized messages on its web site.
of AOL Time Warner merger conditions, 1/11 (PDF, FCC).
in Lone Star Ladies v. Schlotsky's re PSLRA, 1/11 (HTML, USCA).
against VA Linux under federal securities laws, 1/11 (PDF,
|AOL Time Warner Merger
|1/11. The FCC approved
the merger of AOL and Time Warner with conditions. This
FCC proceeding is nominally a license transfer proceeding; the
parties applied for radios licenses held by Time Warner to be
transferred to the merged entity. However, the proceeding is
in the nature of an antitrust merger review, redundant of the
review already completed by the FTC,
an agency that has statutory authority to conduct antitrust
merger reviews. Moreover, the antitrust analysis conducted by
the FCC concerned Internet operations, not the radio licenses.
The decision was expected. The FCC almost never rejects
license transfer requests. Rather, it often withholds its
approval of license transfers until it extracts the
concessions from the parties that it seeks. The numerous
concessions in the matter mostly regulate Internet operations
of AOL Time Warner for for which the FCC does not issue
licenses: instant messaging (IM), interactive TV, and
broadband Internet access over cable facilities. While the FCC
has released its own summary
[PDF] of its Order approving the merger, a press
release, and statements by each of the five Commissioners,
it has not released the most important document -- the Order
1/11. The FCC imposed several significant conditions upon
its approval of the merger of AOL and Time Warner. AOL
Time Warner (AOL) shall not restrict the ability of any
current or prospective ISP customers to select and initiate
service from any unaffiliated ISP which, pursuant to a
contract with AOL, has made its service available over AOL's
cable facilities. AOL must permit each ISP to have a direct
billing arrangement with those high-speed Internet access
subscribers to whom the ISP sells service. AOL's instant
messaging (IM) services must interoperate with competing IM
providers before it can offer videoconferencing and other
streaming video over IM. The FCC's Cable Services Bureau will
have continuing oversight authority over the merged company.
1/11. All five FCC Commissioners voted to approve the AOL
Time Warner merger, but released separate statements.
wrote a statement
summarizing and defending the FCC's action. He concluded:
"With the merger of AOL and Time Warner, we are seeing
the creation of a new platform for communications based on the
Internet. Our challenge is to make sure that consumers get the
full benefits of this new world technology without importing
the dangers of monopoly and bottlenecks from the old world. We
have met this challenge." Tristani
wrote in her statement
that she would have taken an even more regulatory approach.
She stated that she had "advocated for even more forceful
conditions aimed at achieving interoperability" of IM. Furchtgott-Roth
wrote in his dissent
that the FCC has no legal authority to conduct antitrust
merger reviews; hence, he approved of the merger, but
dissented from the imposition of conditions. Powell,
who is rumored to be President Elect Bush's likely choice to
be the next FCC Chairman, wrote the most detailed and reasoned
He stated that "the record and the anticompetitive theory
did not support mandating interoperability" of IM. Ness
wrote in a brief comment,
"You've Got Approval!"
|More News Briefs
|1/11. President Elect George Bush announced that Robert
Zoellick will be new U.S.
Trade Representative. He previously worked in the Bush Sr.
administration as Deputy Chief of Staff and Under Secretary of
State for Economics. He also worked at Treasury Dept. during
the Reagan administration. He worked under James Baker. See, State
Dept. release. Outgoing USTR Charlene Barshefsky praised
Zoellick in a release.
filed a petition for Chapter 11 bankruptcy protection in U.S.
Bankruptcy Court (SDNY).
1/11. James Toupin has been named General Counsel of
effective Jan. 28, 2001. He is a former Deputy General Counsel
at the USITC.
He also was Assistant General Counsel for Litigation and
Special Projects at the USITC from 1987 to1994. He previously
worked at the law firm of Memel Jacobs from 1985 to1987,
and at Covington & Burling from 1978 to1985. Bernard
Knight has been named Deputy General Counsel for General
Law of the USPTO. He was previously a Senior Trial Attorney at
the Department of Justice. John Whealan has been named
Deputy General Counsel for Intellectual Property Law and
Solicitor. See, release.
1/11. The NTIA
will host a government - industry meeting on Third
Generation (3G) wireless services on January 17, 2001. The
meeting will be held from 9:30 AM to 12:30 PM in the Polaris
Room of the Ronald Reagan Building (Concourse Level), 1300
about its next round of meetings, to be held in Melbourne,
Australia, on March 10-13.
1/11. The National
Telecommunications and Information Administration (NTIA)
published a notice
in Federal Register regarding Technology Opportunity Program
(TOP) grants. The NTIA will award $42.5 Million in grants in
FY 2001, up from $12 Million in FY 2000. These grants go to
state, local, and tribal governments, colleges and
universities, and non-profit entities to extend advanced
telecommunications technologies to inaccessible, rural and
underserved urban communities. See also, NTIA
release. The NTIa will host a series of workshops around
the country to assist grant applicants. See, NTIA's online
1/11. The U.S.
Court of Appeals (FedCir) heard oral argument in Octel v. Theis.
This is an appeal from a final judgment of the U.S. District
in a patent infringement case. The trial court
dismissed on the grounds of res judicata. The court had
previously adjudged the patent in suit invalid, the Federal
Circuit had affirmed, and the Supreme Court had denied
certiorari. But, appellant thinks the original Patent Office
determination should carry more weight. The patent concerns
voice processing services, such as voice mail.
|1/12. Appeal Briefs are due to filed with the U.S. Court of Appeals (DCCir)
from the Department of Justice,
the states, and amici in support of the government, in the Microsoft
antitrust case. See, scheduling order
1/12. Sixty small technology companies and the Association for
Competitive Technology (ACT) wrote an Open
Letter to the 107th Congress and Bush administration
regarding the Microsoft antitrust case. They stated:
"We're deeply troubled by the potential legacy of the
outgoing Justice Department, which could undermine our
industry’s future and threaten our nation’s recent
economic success. ... Misguided application of antitrust laws,
such as the case against Microsoft, ignores the realities of
our industry and could create disastrous new rules to govern
competitive behavior in the 'new economy.' " the group
also published the letter as an advertisement
[PDF] in the paper versions of the Washington Post and Wall
Street Journal. See also, ACT release.
|1/11. The U.S. Court
of Appeals (5thCir) issued its opinion
Star Ladies v. Schlotsky's reversing the trial
court's dismissal of a class action securities
complaint for failure to comply with the heightened pleading
requirements of the Private
Securities Litigation Reform Act (PSLRA). This is not
a technology case. Schlotsky's is a restaurant chain. But, the
PSLRA was enacted by the Congress in large part to limit
frivolous federal class action securities suits against
technology companies. Plaintiffs sued Schlostky's and several
of its officers and directors alleging violations of federal
securities laws, and sought class action status. The U.S.
District Court (WDTex)
granted defendants' 12(b)(6) motion to dismiss for failure to
pleaded facts sufficient to give rise to a strong inference of
scienter as required by the PSLRA. The trial court denied
plaintiffs' motions to amend complaint, and dismissed with
prejudice. Reversed and remanded.
1/11. An individual named Alexander Markaron filed a complaint
[PDF] in U.S. District Court (SDNY)
against VA Linux, two of its officers
and directors, and Credit Suisse First
Boston alleging violations of federal securities laws. The
plaintiff, who is represented by the law firm of Milberg Weiss,
seeks class action status. Count one alleges violation of
§ 11 of the Securities Act by VA Linux. Count two
alleges violation of § 12(a)(2) of the Securities Act by
Credit Suisse. Count three alleges controlling person
liability for violation of § 15 of the Securities Act by
the officers and directors. Count four alleges § 10b and
Rule 10b-5 fraud by Credit Suisse. VA Linux provides Linux
based software and support services for ASPs, e-commerce
companies, and ISPs. Credit Suisse was the lead underwriter in
an initial public offering (IPO) of VA Linux shares in
December of 1999. Milberg Weiss is a law firm that specializes
in bringing class action securities suits against technology
companies when their stock prices drop.
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