Tech Law Journal Daily E-Mail Alert
March 23, 2001, 8:00 AM ET, Alert No. 150.
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FTC Chairman
3/22. FTC Chairman Robert Pitofsky stated that "I plan to step down from the Commission promptly after a new chairman is confirmed by the full Senate. I am willing to stay on as Chairman until that time to make sure the FTC enjoys a smooth transition. However, I anticipate that the new Chairman should be in place by June 1 at the latest." See, release. Pitofsky's term does not expire until September. President Bush will nominate George Mason University law professor Timothy Muris to be the next FTC Chairman.
FTC & Antitrust
3/22. The FTC announced that it will hold another workshop on competition issues that arise in connection with business to business (B2B) and business to consumer (B2C) e-commerce. The workshop will be held on May 7 and 8 in Washington DC. See, release.
3/22. The House Commerce Committee's Subcommittee on Health held a hearing titled Assessing HIPAA: How Federal Medical Record Privacy Regulations Can Be Improved. See, testimony of witnesses: John Melski (Marshfield Clinic), John Clough (Cleveland Clinic Foundation), Bob Heird (Anthem BlueCross BlueShield), Carlos R. Ortiz (CVS Pharmacy), Janlori Goldman (Georgetown University), Paul Appelbaum (Univ. Mass. Med. School), Mary E. Foley (American Nurses Assoc.). See also, statement by Rep. Billy Tauzin (R-LA).
More Congress News
3/22. The House Government Reform Committee's Technology and Procurement Subcommittee held a hearing titled "Toward a Telework Friendly Government Workplace: Successes and Impediments in Managing Federal Telework Policies."
3/21. Rep. Michael Honda (D-CA) and Rep. Steve Horn (R-CA) introduced HR 1149, a bill to amend the Domestic Volunteer Service Act of 1973 to create as a component of the Volunteers in Service to America program a technology corps that uses VISTA volunteers and other persons to facilitate the use of information technology in schools, libraries, and community centers.
3/21. Sen. Bob Smith (R-NH) introduced S 589, a bill to make permanent the moratorium on Internet taxes. It was referred to the Senate Commerce Committee.
Covenants Not to Compete
3/22. The California Court of Appeal issued its opinion [PDF] in Advanced Bionics Corp. v. Medtronics Inc., a case regarding a covenant not to compete in an employment contract. Order affirmed; petition for writ of mandate denied.
New Documents
CCA: opinion re covenants not to compete, 3/22 (PDF, CCA).
NTIA: report to Congress on §§ 109 and 107 of the Copyright Act, 3/22 (HTML, NTIA).
NTIA: comments re software defined radio, 3/21 (HTML, NTIA).
USPTO: notice re Patent Cooperation Treaty, 3/22 (TXT, FedReg).
Milberg: complaint in Bodner v. alleging violation of federal securities laws, 3/21 (PDF, Milberg).
Unger: speech re raising capital on the Internet, 3/9 (HTML, SEC).
Quote of the Day
"The popularity of the Internet as a means of connecting investors with issuers has put squarely on the Commission's plate the question of how to regulate "offers" of securities in both public and private offerings in the Internet age. Does it make sense to regulate communications during the pre-effective period? Who should be able to access electronic roadshows – and should they be open to all investors? Perhaps now is the time to consider regulating offers at the point of sale."

Laura Unger, Acting Chairman of the SEC, March 9 speech at the University of Cincinnati.
High Tech Exports
3/22. The Senate Banking Committee amended and approved S 149, the Export Administration Act of 2001, a bill which eases restraints on the export of most dual use products, such as computers and software. The mark-up was originally scheduled for March 15, but was delayed to allow the Bush administration more time to review it. Committee Chairman Phil Gramm (R-TX) offered a manager's amendment which incorporates changes requested by the administration. National Security Advisor Condoleezza Rice submitted a letter in which she stated that if the changes contained in the manager's amendment are adopted, then "the Administration will support the bill." See also, committee release.
The Export Administration Act expired in 1990. Since, then, the administration has used a series of temporary emergency powers to continue its export control regime. The current extension expires on August 20. Sen. Gramm stated at the hearing that the bill "is based on a belief that we want the United States to be the leader in high-tech development and employment while, at the same time, we protect the technologies that could be used to harm us or our allies." He added that it will "build a higher fence around a smaller number of things."
Sen. Gramm offered an amendment on behalf of Sen. Bob Bennett (R-UT), who was not present, that repeals  provisions of the 1998 National Defense Authorization Act which require the president to use MTOPS to set restrictions on the export of high performance computers. On March 21 Sen. Bennett and Sen. Harry Reid (D-NV) introduced this proposal as a stand alone bill, S 591. See, Bennett release.
Sen. Mike Enzi (R-WY), sponsor of the bill, offered an amendment regarding the sunset provision of the bill, by allowing the President to extend it. Under the amendment, the authority under the Act will terminate on Sept. 30, 2004, unless the President provides to Congress a detailed report on both the Act and the operation of export controls, and provides to Congress either a "legislative reform proposals" or certification "that no legislative reforms are necessary."
Sen. Jim Bunning (R-KY) stated that he may offer an amendment on the Senate floor to raise penalties for violation of the Act.
All amendments were passed by voice vote without opposition. The vote on the bill, as amended, was 19 to 1. Sen. Richard Shelby (R-AL), the sole dissenter, stated that "we need to make sure that there is a balance here, and that the Defense Department is at the table." He also wants a "blue ribbon commission" to study the issue.
IP News
3/22. The House Judiciary Committee's Subcommittee on Courts, Internet, and Intellectual Property held an oversight hearing titled ICANN, NEW gTLDS, and the Protection of Intellectual Property. Subcommittee Chairman Howard Coble (R-NC) said in his opening statement that "the assignment of domain names is done through a privately administered system which produces registrations that result in a global presence, accessible from anywhere in the world. In contrast, intellectual property rights are publicly administered on a territorial basis and are exercisable only within that territory. That is the crux of the problem before us." See, prepared testimony of Elana Broitman, Steven Metalitz, Jeffrey Neuman, and Louis Touton.
3/22. The NTIA submitted its report to Congress on Sections 109 and 117 of the Copyright Act, as required by § 104 of the Digital Millennium Copyright Act. § 109, which contains what is known as the "first sale doctrine," permits the owner of a copy or phonorecord to sell or otherwise dispose of possession of that copy or phonorecord without the authority of the copyright owner, notwithstanding the copyright owner's exclusive right of distribution. § 117 permits the owner of a copy of a computer program to make a copy or adaptation of the program for archival purposes or as an essential step in the utilization of the program in conjunction with a machine. The report reviews the comments received by the NTIA in response to its June 5, 2000, request for public comment, and testimony heard at its November 29, 2000 hearing.
3/22. The USTR announced that the U.S. and Greece resolved their World Trade Organization dispute over television piracy. This case concerned the Greek government's failure to enforce its intellectual property laws effectively against television stations that broadcast U.S. copyrighted works without authorization. See, release.
3/22. The USPTO published a notice in the Federal Register regarding amending its rules of practice relating to applications filed under the Patent Cooperation Treaty. See, Federal Register, March 22, 2001, Vol., No. 56, at Pages 16004 - 16007.
Pennsylvania PUC
3/22. The Pennsylvania Public Utility Commission (PUC), by a 5 to 0 vote, adopted a plan for the "functional structural separation" of Verizon Pennsylvania into wholesale and retail units. See, Joint Motion by Chairman Quain and Vice-Chairman Bloom [PDF]. The PUC stated that "Verizon would continue to operate as one company but the wholesale and retail divisions would be required to operate at arms-length pursuant to a code of conduct." See, PUC release [PDF]. This is less than the requirement of forming a separate affiliate, for which AT&T had lobbied. Verizon, which waged a massive PR and lobbying campaign, declared victory. "The commission recognized that dividing Verizon Pennsylvania into two separate entities -- one to sell wholesale services and one to sell retail services -- is unwarranted," said Daniel Whelan, P/CEO of Verizon Pennsylvania. See, Verizon release. Meanwhile, AT&T stated that "it is disappointed that the PUC did not require full structural separation of Verizon Pennsylvania, but heartened by the Commission's recognition of Verizon's past abuses and resolve to bring vibrant competition to the state’s local phone market." See, AT&T release. The PUC was also disturbed by Verizon's campaigning. Said Commissioner Quain, "there exists a very public prima facie case that Verizon has pursued an extensive, systematic campaign of misinformation in connection with the structural separation case." See, Quain statement [PDF]. See also, statement [PDF] by Commissioner Brownell and statement [PDF] by Commissioner Fitzpatrick. See also, CompTel response and USTA response.
3/22. BellSouth responded to the petition filed by AT&T on March 21 with the Florida Public Service Commission seeking structural separation of BellSouth into separate retail and wholesale operations. Joseph Lacher, President of BellSouth Florida, said, "It is time, if not long past time, for AT&T to stop complaining and start competing." See, BellSouth release. See also, AT&T release.
3/21. The NTIA submitted comments to the FCC in its rule making proceeding on software defined radio (SDR).
3/22. The U.S. Court of Appeals (DC Cir) heard oral argument in Coalition for Noncommercial Media v. FCC, Appeal No. 00-1253. This is a petition for review of an FCC order approving a license transfer associated with the sale of WNEQ-TV by the Western New York Public Broadcasting Association (WNYPBA) to LIN Television Corp.
Trade News
3/22. Sen. Pat Roberts (R-KS) introduced the Permanent Trade Promotion Authority and Market Access Act of 2001, a bill to give the President fast track trade negotiating authority. "It is imperative that Congress gives the Executive Branch every tool possible to aggressively pursue new trade agreements," said Sen. Roberts. See, Roberts release. Also, Sen. Charles Grassley (R-IA), Chairman of the Senate Finance Committee, stated that "the President's lack of trade negotiating authority harms the vital national interests of the United States, because it undermines our credibility at the negotiating table." See, Grassley release.
3/21. Sen. Chris Dodd (D-CT) introduced S 586, a bill to authorize negotiation for the accession of Chile to the North American Free Trade Agreement, to provide for fast track consideration, and for other purposes; to the Committee on Finance.
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