| Insider Trading |
| 4/16. A grand jury of the U.S. District Court (NDCal)
returned an indictment
[PDF] against Malcolm Wittenberg charging two counts of
insider trading in violation of 15 U.S.C. § 78j and 17 C.F.R.
240.10b-5. Wittenberg is the head of the patent department in
the San Francisco office of the law firm of Crosby Heafey
Roach & May. The indictment alleges that he twice made
purchases of stock of a software company (Forte Software) that
was a client of the firm, and that was about to be acquired by
Sun Microsystems, based upon
material non public information that he acquired in the course
of his representation of that client. The indictment alleges
that Wittenberg learned of the impending transaction when
lawyers for Sun and Forte asked him to provide information
regarding Forte's intellectual property. The complaint further
alleges that his gross proceeds from the transactions was
$54,687.44. Otherwise, the five page indictment is short on
details. John Hemann is the Assistant U.S. Attorney who is
prosecuting the case. Wittenberg is represented by Doug Young,
who handles white collar crimes at the law firm of Farella Braun & Martel.
See, USAO
release of April 16. See also, Sun
release of August 23, 2000, regarding its acquisition of
Forte. |
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| CALEA |
4/16. The FCC released a Second
Order on Reconsideration [PDF] in its CALEA proceeding (CC
Docket No. 97-213). Congress passed the Communications
Assistance for Law Enforcement Act in 1994 to enable law
enforcement authorities (LEAs) to maintain their existing
wiretap capabilities in new telecommunications devices. It
provides that wireline, cellular, and broadband Personal
Communications Services carriers must make their equipment
capable of certain surveillance functions. The FBI and Justice
Department have since aggressively sought to expand their
CALEA authority through interpretation and implementation.
In the present matter, the FBI asked the FCC reconsider its
previous orders implementing the CALEA by further imposing
"more effective personnel security obligations" upon
carriers. The FCC declined to impose new requirements, stating
that carriers were capable of ensuring security "without
micro-management oversight by law enforcement or the
Commission." The FBI also asked the FCC to require
carriers to generate an automated message that would permit
LEAs "to confirm periodically that the software used to
conduct an interception is working correctly and is accessing
the equipment, facilities, or services of the correct
subscriber." The FCC declined this request also. However,
the FCC did make minor revisions to §§ 64.2103 and 64.2104
of its rules to clarify the arrangements telecommunications
carriers subject to CALEA must make to ensure that LEAs can
contact them when necessary, and the interception activity
that triggers a record keeping requirement. |
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| Computer III |
| 4/16. Monday, April 16, was the deadline to file comments
with the FCC in response
to its notice
requesting comments to "update and refresh the
record" on issues raised in its Computer III Further
Notice of Proposed Rulemaking, originally issued on
January 30, 1998. Computer III established nonstructural
safeguards for the provision of enhanced services by the Bell
Operating Companies (BOCs). eVoice,
which provides voice mail services which allow users to access
their messages via the Internet, submitted a comment
[PDF]. It urged the FCC "to continue all of the existing
Computer III and ONA safeguards". It also argued that the
BOCs have repeatedly violated the existing Computer III and ONA
safeguards, and hence, additional safeguards and enforcement
efforts are necessary. See, CC Dockets 95-20 and 98-10. The
FCC's notice was published in the Federal Register, March 15,
2001, Vol. 66, No. 51, at Pages 15064 - 15065. |
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| 3G Spectrum |
4/16. Monday, April 16, was the deadline to file comments
with the FCC regarding
its Final
Report [101 pages in PDF] on the possible use of spectrum
in the 2500-2690 MHz band for Third Generation (3G)
wireless systems. See, notice
requesting comments published in the Federal Register, April
11, 2001, Vol. 66, No. 70, at Pages 18740 - 18741. The Final
Report, dated March 30, 2001, is titled "Final Report:
March 30, 2001: Spectrum Study of the 2500-2690 MHz Band: The
Potential for Accommodating Third Generation Mobile
Systems". It concluded that this spectrum is already
heavily licensed throughout the country, that it would be
technical difficult to segment or share the spectrum, and that
relocation could cost between $10.2 and 30.4 Billion. See
also, executive
summary of Final Report.
Incumbent users of spectrum in the 2500 to 2690 MHz band filed
comments commending the Final Report, and urging the FCC not
to place 3G services in this band. The National ITFS
Association submitted a comment
in which it stated that "The Final Report effectively
precludes any rational argument that the ITFS/MDS bands can or
should be made available for 3G services. It's time to take
these bands off the table so that ITFS/MDS licensees and their
partners can move forward with the roll out of fixed wireless
broadband services, which are critical to the educational and
commercial well being of this country." The American
Association of School Administrators submitted a comment
in which it stated that "we urge that the ITFS spectrum
no longer be considered a viable option for 3 rd Generation
Cellular rollout."
Clearwire, which is a
provider of wireless high speed Internet access, and equipment
for two-way fixed wireless Internet access in the 2500 to 2690
MHz band, submitted a comment
in which it argued that "The Final Report confirms that
there is no room in the 2500-2690 MHz band for 3G services,
and no way to make room. All parties agree that spectrum
sharing will not work. There is not enough in-band spectrum
for segmentation, and not enough elsewhere for relocation.
Even if spectrum could be found, either segmentation or
relocation would entail costs in the tens of billions of
dollars. The Commission must place 3G services elsewhere in
the spectrum." Sprint submitted a comment
in which it stated that "MDS/ITFS services can neither
share the band nor be reallocated to other spectrum without
great disruption of service and prohibitive cost."
Background information: 3G is intended to bring broadband
Internet access to portable devices, but needs spectrum
allocated for its use. Two spectrum bands were identified by
the International Telecommunication Union (ITU) 2000 World
Radiocommunication Conference (WRC-2000) for possible 3G use.
One is the 1710 to 1885 MHz band, which is currently being
used by federal agencies, especially the Department of
Defense. It is subject to NTIA
jurisdiction. The DOD adamantly opposes locating 3G systems in
this band. The other is the 2500 to 2690 MHz band, which is
currently being used for MMDS
and ITFS,
and which is subject to FCC jurisdiction. As the comments
quoted above indicate, incumbent users of this are likewise
hostile to the use of this band by 3G services. |
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| Privacy |
4/16. The Progressive
Policy Institute, a Democratic party think tank, released
a report
[PDF] titled Online Privacy and a Free Internet Striking a
Balance, which was authored by Shane Ham and Robert
Atkinson. The report reviews the three major online privacy
bills introduced in the 106th Congress, and endorses the bill
sponsored by Sen. John McCain (R-AZ) and Sen. John Kerry
(D-MA). Their bill requires specific notice mandates, an
opt-out mandate, and strong state preemption. See also, PPI
release and S
2928 (106th), the Consumer Internet Privacy Enhancement
Act.
4/16. The George Washington University Virginia Campus held a
symposium titled "Privacy in the Information Age."
See, agenda. |
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| More News |
4/16. Winstar, a
competitive local exchange carrier (CLEC) which provides local
and long distance voice, Internet access, and data transport,
stated that it "is considering all appropriate actions,
including the possibility of a reorganization under Chapter 11
of the U.S. Bankruptcy Code ..." Winstar also stated that
"did not make aggregate interest payments of
approximately $75 million on its senior debt securities, which
were due on April 16, 2001. Under the terms of this debt, the
Company has 30 days from the payment date to make the required
payment in order to cure this default. Additionally, Lucent Technologies has
declared a default under the terms of the Company's facility
with Lucent, which Winstar disputes." See, release.
4/16. The FCC's International Bureau published a notice
[PDF] requesting public comments to assist it in preparing its
annual report to various Congressional committees regarding
the progress being made under the ORBIT
Act in promoting competition in satellite
communications services, and in privatizing INTELSAT and
Inmarsat. |
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| Trade |
| 4/16. President Lagos of Chile met in Washington DC with US
President Bush. The two held a joint press conference at which
Bush stated that "I'm confident that by the time
this year is over we will conclude a free trade agreement
with Chile." He also stated that "I'd certainly
like to have what they call fast track authority. ... It's
important for the President to fight for the right to be able
to negotiate trade agreements without amendment. I believe
we're making progress toward regaining that power for the
President." See, transcript. |
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| FCC Approves Verizon LD
Application |
4/16. The FCC approved Verizon's Section
271 application to provide in-region interLATA long
distance service in Massachusetts. This is the fifth state for
which the FCC has allowed the regional bell operating company
to enter the long distance phone service market. The others
are New York, Texas, Oklahoma, and Kansas. See, FCC
release and Verizon
release. Chairman Michael Powell supported the decision,
along with Commissioners Harold Furchtgott-Roth and Susan
Ness. See, separate statements of Powell,
HFR,
and Ness.
The FCC wrote in its Memorandum
Opinion and Order [MSWord, 142 pages plus voluminous
appendices] that it commends Verizon for "all of the work
that it has undertaken to open its local exchange market to
competition in Massachusetts. For example, Verizon states that
competitive local exchange carriers (competitive LECs) serve
more than 513,000 lines on a facilities basis in Massachusetts ..."
(FCC Docket No. CC 01-9.)
Commissioner Gloria Tristani dissented. She wrote in her statement
that "The availability of unbundled network elements (UNEs)
at cost-based rates is an essential ingredient of a primary
strategy for entering the residential market in Massachusetts.
... Based on the evidence in the record, I cannot conclude
that Verizon has demonstrated that its switching rates are
based on the forward-looking, total element long run
incremental cost (TELRIC) of providing that network
element."
USTA
President Gary Lytle said in a statement
that "We anticipate several long distance applications
from other Bell companies this year. The FCC should act
quickly to approve those applications and give consumers
across the country real choices in telecommunications
services." BellSouth
Vice chairman Jere Drummond said in a prepared statement
that "We anticipate a series of applications, starting
with Georgia, which we plan to file soon."
Some criticized the FCC's decision. The Consumer Federation of
America and the Massachusetts Consumers' Coalition
released a joint statement in which they asserted that
"Allowing Verizon to sell long distance service before it
has opened its monopoly service areas to alternative local
service providers snuffs out any hope that a vigorously
competitive telephone market will develop." Similarly, AT&T VP for Federal
Government Affairs Len Cali said in a prepared statement
that "The FCC afforded Verizon far too much latitude in
approving its application to offer long distance services in
Massachusetts. Verizon's wholesale rates do not comply
with the requirements of the Telecom Act, and do not permit
meaningful competition." |
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| Today |
| Deadline to file reply comments with the FCC regarding
its Public
Notice [PDF] regarding rules for location privacy for
mobile devices. 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. 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. On April 6 the FCC received a dozen comments.
See, WT Docket No. 01-72. |
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