Tech Law Journal Daily E-Mail Alert
April 9, 2001, 8:00 AM ET, Alert No. 161.
TLJ Home Page | News from the Web | Calendar | Search | Back Issues
Easter Recess
4/6. The Senate passed a budget resolution, and then adjourned until April 23 for the traditional Easter recess. By a vote of 65 to 35, the Senate approved a budget that provides for a $1.2 Trillion tax cut over ten years -- not the $1.6 Trillion that President Bush requested. The House adjourned on April 4 for its two week recess.
Location Privacy
4/6. The FCC received a dozen comments regarding rules for location privacy for mobile devices. At issue are privacy rules for cell phones, PDAs, in car map and traffic services, wireless tollbooth collection systems, Blackberry e-mail pagers, Bluetooth enabled devices, and anything else which can be embedded with a GPS chip, or other technology, capable of generating location data. The CTIA filed a petition [PDF] with the FCC on Nov. 22, 2000, requesting a rule making proceeding. In response, the FCC issued a Public Notice [PDF] on March 16, 2001 requesting comments on the CTIA's petition. Comments were due by April 6. Reply comments are due by April 17. (See, WT Docket No. 01-72.)
The 106th Congress enacted, and President Clinton signed, the Wireless Communications and Public Safety Act of 1999. This bill was S 800, sponsored by Sen. Conrad Burns (R-MT), and HR 438, sponsored by Rep. John Shimkus (R-IL). It designated 911 as the universal emergency service number, and promoted wireless 911 service. The bill also amended Section 222 of the Communications Act to include cell phone call location information in the definition of customer proprietary network information (CPNI). The FCC has authority to strictly regulate the use of CPNI by telecommunications carriers. (The FCC has another proceeding concerning CPNI; see, Docket No. 96-115.) However, while the FCC does not have statutory authority to regulate the privacy practices of many other entities that may obtain location data from web enabled devices, many commenters requested that the FCC adopt rules that apply to all such entities.
All commenters stated that location privacy is a good thing, but differed as to how the FCC should proceed. The comments addressed many issues, including whether the FCC should conduct a rule making proceeding, whether it should promulgate rules, whether any proceeding should be separate from the CPNI docket, whether state laws should be preempted, what entities with location data are subject to FCC jurisdiction, what privacy principles should be included in any FCC rules, and what legislative recommendations the FCC should make to Congress, if any.
Nokia submitted a comment in which it said that the FCC "should initiate a formal rulemaking to further consider the issues raised in CTIA's petition and should ultimately adopt nationally uniform principles that provide consumers with strong location privacy protection." It added that "As third-generation (3G) and other advanced wireless services continue to develop, location based information will play an increasingly critical role in providing consumers with valuable services that will increase their efficiency and safety." Nokia added that rules should apply to all entities with location information. Ericsson submitted a comment in which it too supported the CTIA's petition, and argued that "ensuring the security and integrity of personal private information is important to foster the wide deployment of location-based services." It also stated that the "FCC should consider privacy principles that hold carriers and overlay providers to the same standards of conduct."
Sprint PCS filed a comment in which it stated that it "supports Commission confirmation of the Fair Information Practices policies (notice, consent, access and security) -- whether by rule or via a policy statement. However, for two reasons, Sprint PCS submits that the Commission must resist the temptation to adopt new detailed regulations at this time. First, the provision of location-based services is at an embryonic stage. ... Second, the Commission must recognize that it lacks authority to regulate most entities that will generate or gain access to wireless location information. The Commission's jurisdiction over CPNI is limited to "telecommunications carriers," but most of the entities that will have access to wireless location information will be non-carrier third parties." It also argued for preemption of state laws.
Verizon Wireless filed a comment in which it stated that "does not believe that a new set of Commission regulations on the use of location information is necessary at this time." The Wireless Advertising Association, a group organized last year, submitted a comment arguing that the FCC should not conduct a rule making proceeding, and should instead rely upon voluntary industry self regulation.
The EPIC filed a comment in which it stated that the "devices and services that will make use of location data will be varied and complex, ranging from hand-held personal digital assistants ("PDAs"), such as a Palm Pilot or a Blackberry, to automotive navigational systems." The EPIC argued that the FCC should adopt rules that are "technology neutral", and thus, extend to entities beyond the jurisdiction of the FCC. The EPIC further wrote that the FCC "should seek comment on extending similar privacy regulation to any such business, and its authority to impose such regulation ... [and] consider making legislative recommendations to Congress ... to ensure that location data is treated uniformly ..." The Media Access Project also signed this comment. The CDT also filed a comment in which it argued that the FCC should conduct a rule making proceeding separate from the CPNI docket.
New Documents
Weller: HR 1411, Expensing Technology Reform Act of 2001, 4/5 (HTML, TLJ).
Weller: statement re tax treatment of software and hardware purchases, 4/5 (HTML, TLJ).
USTR: notice re Ukraine and intellectual property rights, 4/6 (TXT, FedReg).
GAO: report re medical privacy regulations, 4/6 (PDF, GAO).
FCC Appointments
4/6. President Bush announced his intent to nominate Kevin Martin, Kathleen Abernathy, and Michael Copps to be Commissioners of the Federal Communications Commission. See, White House release. If confirmed, there will be three Republicans and two Democrats on the Commission.
Kevin Martin is a former Legal Advisor to outgoing Commissioner Harold Furchtgott-Roth. He authored many of HFR's dissenting opinions, speeches and statements for Congressional committees on common carrier matters. These typically advocated free market approaches, and adherence to Congressional statutes. But, his name did not appear on these documents. However, Tech Law Journal did transcribe one panel discussion in which Martin participated in 1999. He previously worked at Wiley Rein & Fielding, a Washington DC based law firm with Republican ties that specializes in communications law. Senior partner Richard Wiley is a former General Counsel, Commissioner, and Chairman of the FCC during the Nixon and Ford administrations. Fred Fielding was the White House Counsel for the first six years of the Reagan administration. Last year Martin was Deputy General Counsel for Bush for President; he is currently Special Assistant to the President for Economic Policy. He will be nominated for a five-year term expiring June 30, 2006.
Kathleen Abernathy, also a Republican, is VP for Public Policy of BroadBand Office Communications. She was previously VP of Air Touch Communications. Before that, she worked at the FCC as a Legal Advisor to former Commissioner Sherry Marshall and as Legal Advisor to former Chairman James Quello. She will be nominated for the remainder of a five-year term expiring June 30, 2005.
Michael Copps, a Democrat, was a longtime aide to Sen. Ernest Hollings (D-SC), the Ranking Democrat on the Senate Commerce Committee, which oversees the FCC. He was Assistant Secretary of Commerce for Trade Development from 1998 to 2001, and Deputy Assistant Secretary of Commerce for Basic Industries from 1993 to 1998. From 1989 to 1993, he held the position of Senior Vice President of the American Meat Institute and from 1985 to 1989 he was Director of Government Affairs for Collins and Aikman Corporation. Copps served for 15 years in the Office of Senator Fritz Hollings in several positions including Chief of Staff. He will be nominated for the remainder of a five-year term expiring June 30, 2004.
Reaction to FCC Picks
FCC Chairman Michael Powell released a statement in which he said "Each of the three nominees -- Kathleen Abernathy, Michael Copps and Kevin Martin -- if confirmed by the Senate, will bring important experience and expertise to the Commission and I welcome the opportunity to carry out the responsibilities of the FCC with them."
Outgoing Commissioner Harold Furchtgott-Roth also released a statement: "President Bush has chosen very wisely. ... I have every confidence that they will be a credit to the Commission and to the country. I am particularly pleased with President Bush’s selection of Kevin Martin. Before joining President Bush's election campaign as Deputy General Counsel, Kevin served with distinction on my staff. His first hand experiences inside the Commission, keen intellect, good humor, and strong commitment to public life will serve him well. Kevin will be an outstanding Commissioner ..."
Rep. Billy Tauzin (R-LA), Chairman of the House Commerce Committee, had this to say: "They may be incoming freshmen, but there are no rookies in this class. All three of the nominees have impeccable credentials and fully understand the important role telecommunications plays in our global economy. I plan to meet with each of them individually in the upcoming weeks to discuss the importance of working with Congress to fundamentally reform the FCC." See, statement
Ukraine Special 301
4/6. The USTR published a notice in the Federal Register pertaining further actions against Ukraine for its denial of adequate protection of intellectual property rights. On March 12, the USTR designated Ukraine as a "Priority Foreign Country" under the "Special 301" program. Section 301 is the statutory means by which the U.S. asserts its international trade rights, including its rights under WTO Agreements. Under the "Special 301" provisions of the Trade Act of 1974, the USTR identifies trading partners that deny adequate and effective protection of intellectual property or deny fair and equitable market access to U.S. artists and industries that rely upon intellectual property protection. The USTR now invites interested persons to submit written comments and to participate in a public hearing concerning further action. Requests to appear at the public hearing are due by April 13, 2001. Written testimony is due by April 20, 2001. A public hearing will be held on April 27, 2001. Written comments and rebuttal comments are due by May 7, 2001. See, Federal Register, April 6, 2001, Vol. 66, No. 67, at Pages 18346 - 18348. See also, USTR release of March 13. 
Federal Circuit
4/6. The U.S. Court of Appeals (FedCir) issued its opinion in Waymark v. Porta Systems, a patent infringement case. The case involves U.S. Patent No. 5,505,929, which claims a system and corresponding method for monitoring the capacity of batteries in a string. Waymark filed a complaint for patent infringement against Porta Systems. The District Court granted summary judgment of non-infringement, and the Appeals Court affirmed. However, because the District Court relied on an incorrect interpretation of § 271(f)(2) in reconsidering summary judgment, the Appeals Court vacated in part and remanded.
4/6. The U.S. Court of Appeals (FedCir) issued its opinion in Bridgestone v. Automobile Club De L'Ouest De La France, a case involving the defense of laches to a trademark claim. Bridgestone is the owner of Trademark Registration No. 756,436 for the mark LEMANS for "pneumatic rubber tires" on the principal register, issued on September 10, 1963. The Automobile Club sought cancellation of Bridgestone's registration, 27 years later, on the ground that Bridgestone's trademark use of LEMANS falsely suggested a connection with the Automobile Club and its sponsorship of its annual Le Mans automobile race, in violation of §2(a) of the Lanham Act. Bridgestone raised the defense of laches. The USPTO Trademark Trial and Appeal Board granted the petition of the Automobile Club to cancel the registration. The Appeals Court reversed.
4/6. The U.S. Court of Appeals (Fed Cir) heard oral argument in Allvoice Computing v. Dragon Systems, Appeal No. 00-1428.
4/6.. The U.S. Court of Appeals (Fed Cir) heard oral argument in Goldtouch Technologies v. Microsoft, Appeal No. 00-1430.
4/5. Rep. Jerry Weller (R-IL) and Rep. Richard Neal (D-MA) introduced HR 1411 IH, the Expensing Technology Reform Act of 2001. The bill would reform the Internal Revenue Code by updating the existing depreciation schedules for high tech assets. Rep. Weller explained the bill in a statement in the Congressional Record. "Currently, businesses must depreciate much of their high tech equipment over a 5 year period. This bill would allow businesses to expense these assets. The 5 year depreciation lifetime for tax purposes is outdated since many companies today must update their computers as quickly as every 14 months in order to stay technologically current. We allow businesses to expense their computers, peripheral equipment, servers, networks, wireless telecommunications equipment, software, high tech medical equipment and copiers in this bill."
More Bills
4/6.  Sen. Bill Nelson (D-FL) introduced S 729, a bill to provide grant money to states to enable states to expand the opportunity for citizens to vote over the Internet. It was referred to the Senate Committee on Rules and Administration.
4/5. Sen. Charles Schumer (D-NY) introduced S 705, a bill to establish a health information technology grant program for hospitals, skilled nursing facilities, and home health agencies. It was referred to the Senate Finance Committee.
4/5. Sen. Olympia Snowe (R-ME) and Sen. John Kerry (D-MA) introduced S 714, a bill to urge the USTR to pursue the establishment of a small business advocate within the WTO. It was referred to the Senate Finance Committee.
4/5. Sen. Bill Frist (R-TN) introduced S 722, a bill to amend the Communications Act of 1934 to prohibit telemarketers from interfering with the caller identification service of any person to whom a telephone solicitation is made. It was referred to the Senate Commerce Committee. The House Commerce Committee approved a related but not identical bill, HR 90, on February 28.
Hastert on High Tech
4/2. House Speaker Denny Hastert (R-IL) gave a speech in Chicago, Illinois, in which he addressed Internet taxes and privacy. He said that "Congress originally enacted the moratorium to prevent thousands of state and local taxing jurisdictions from using the Internet as a cash cow. Well, in October, the moratorium ends. Rather than slow down the Internet with a slew of new taxes, we must extend the moratorium ..." He also said that "I believe it is the Internet technology industry's job to lead when it comes to privacy matters."
Medical Privacy
4/6. The GAO released a report [PDF] titled "Medical Privacy Regulation: Questions Remain About Implementing the New Consent Requirement." The report was written at the request of Sen. James Jeffords (R-VT), Chairman of the Senate Health, Education, Labor and Pensions Committee.
NIPC Advisory
4/6. The FBI's National Infrastructure Protection Center issued an advisory restating PDG Software's advisory to customers of its Shopping Cart software regarding a potential security vulnerability. The NIPC stated that it issued this advisory "to confirm the significance of this vulnerability and to let systems administrators know that hackers are actively exploiting it. Based on ongoing investigations, including information immediately provided to the FBI by PDG Software and numerous victim companies, the NIPC is aware that the vulnerability has already resulted in compromise and theft of important information, including consumer data."
Securities Fraud
4/4. The U.S. District Court (SDFl) entered judgment against Sean Healey enjoining him from further violations of § 17(a) of the Securities Act of 1933 and § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Court further ordered disgorgement and a civil penalty. The SEC alleged that Healey and other defendants used wash sales to create the appearance of active stock trading in the stock of New Directions Manufacturing, Inc., a company quoted on the NASD's OTC Bulletin Board system. Healey and another defendant then arranged to have a false and misleading research report published on a stock-picker web site, on their own web site, and through unsolicited mass e-mails. See, SEC release.
About Tech Law Journal
Tech Law Journal is a free access web site and e-mail alert that provides news, records, and analysis of legislation, litigation, and regulation affecting the computer and Internet industry. This e-mail service is offered free of charge to anyone who requests it. Just provide TLJ an e-mail address.

Number of subscribers: 1,312.

Contact: 202-364-8882; E-mail.
P.O. Box 15186, Washington DC, 20003.

Privacy Policy

Notices & Disclaimers

Copyright 1998 - 2001 David Carney, dba Tech Law Journal. All rights reserved.