Tech Law Journal Daily E-Mail Alert
April 30, 2001, 8:00 AM ET, Alert No. 176.
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4/27. The U.S. Court of Appeals (DCCir) issued its opinion in FTC v. Heinz, a baby food industry antitrust merger review case. In early 2000 Heinz and Beech-Nut, the second and third largest baby food companies in the U.S., entered into a merger agreement. Gerber holds a 65% market share. The FTC sought a preliminary injunction pursuant to  13(b) of the Federal Trade Commission Act, 15 U.S.C. 53(b), to enjoin the merger. The U.S. District Court (DDC) denied the preliminary injunction. The FTC appealed. The Appeals Court reversed and remanded for entry of a preliminary injunction against Heinz and Beech-Nut.
4/27. The U.S. Court of Appeals (5thCir) issued its opinion in Lycon v. EVI, an oil industry antitrust case. Lycon sued EVI alleging that EVI had violated federal antitrust laws by engaging in price discrimination in violation of 15 U.S.C. 13. The District Court granted summary judgment for EVI reasoning that "Lycon cannot prove that EVI's alleged price discrimination had a prohibited effect on competition ..." The Appeals Court affirmed.
Wisconsin E-Rate
4/27. The U.S. Court of Appeals (7thCir) issued its opinion in Freedom From Religion Foundation v. Bugher, a constitutional challenge to a Wisconsin program that subsidizes Internet and telecommunications service for both public and private, sectarian and nonsectarian, schools. The FFFR and several individuals filed a complaint in U.S. District Court (WDWisc) pursuant to 42 U.S.C. 1983 alleging that Wisconsin's TEACH program is unconstitutional. The District Court granted summary judgment in part in favor of the Wisconsin defendants, finding the access portion of the program was constitutional. However, it also granted summary judgment in part in favor of the FFFR plaintiffs, finding that the grant aspect of the program was unconstitutional under the Establishment Clause of the First Amendment. Wisconsin appealed the later portion. The Court of Appeals affirmed.
New Bills
4/26. Sen. Strom Thurmond (R-SC) introduced S 791, the Video Teleconferencing Improvements Act of 2001, a bill amend the Federal Rules of Criminal Procedure to provide that video teleconferencing may be used to arraign defendants, and for certain other criminal proceedings.
4/24. Rep. Sheila Lee (D-TX) introduced HR 1562, the Immigration Restructuring and Accountability Act of 2001, a long bill that would, among others things, require the INS to establish "an Internet web-based system" that will allow any person or employer to track their filings under the Immigration and Nationality Act.
New Documents
FCC: NPRM re intercarrier compensation, 4/27 (PDF, FCC).
FCC: order setting prices for intercarrier compensation for ISP bound traffic, 4/27 (PDF, FCC).
HFR: dissent from FCC price setting order, 4/27 (HTML, FCC).
USCA: opinion in Freedom From Religion Foundation v. Bugher re constitutionality of state support for Internet access subsidies for schools, 4/27 (HTML, USCA).
USCA: opinion in Global NAPs v. FCC re reciprocal compensation, 4/27 (TXT, FCC).
USCA: opinion in FTC v. Heinz re antitrust merger review, 4/27 (HTML, USCA).
USCA: opinion in Lycon v. EVI, an oil industry antitrust case, 4/27 (HTML, USCA).
CPowell: speech re trade, 4/27 (HTML, State).
Thurmond: S 791, the Video Teleconferencing Improvements Act of 2001, 4/26 (HTML, LibCong).
Lee: HR 1562, a bill requiring the INS to provide would a web based system to allow people to track their INS proceedings, 4/24 (HTML, LibCong).
Reciprocal Compensation
4/27. The FCC released its order [72 pages in PDF] that adopts rules setting prices for intercarrier compensation for ISP bound traffic. 251(b)(5) of the 1996 Telecom Act provides that local phone companies must compensate each other for handling each other's local calls. One telephone company pays a second telephone company for each local call the second company completes to one of its customers. ILECs, such as BellSouth, Verizon, and SBC, complain that some CLECs are abusing the system by concentrating on serving ISPs, but not residential customers, and making the money off of reciprocal compensation payments that are not in fact reciprocal, and involve little cost to provide. They want to end reciprocal compensation for ISP bound traffic. The FCC order does not eliminate intercarrier compensation for ISP bound traffic. Rather, it regulates the rates for three years. The argument advanced by the FCC in the order is that telecommunications traffic delivered to an ISP is interstate access traffic under 201 of the Communications Act, specifically "information access," thus not subject to reciprocal compensation. See, CC Docket Nos. 96-98 and 99-68, Order on Remand and Report and Order, FCC 01-131.
FCC Commissioner Furchtgott-Roth issued a lengthy dissent. He wrote: "There is, however, one solution that is not respectful of other governmental institutions. It is a solution that places under exclusive federal jurisdiction broad expanses of telecommunications. It is a solution that does not directly solve the problem at hand. It is a solution that can be reached only through a twisted interpretation of the law and a vitiation of economic reasoning and general common sense. That solution is nationwide price regulation. That is the regrettable solution the Commission has adopted." He added that "The result will be another round of litigation, and, in all likelihood, this issue will be back at the agency in another couple of years."
4/27. The FCC also released its Notice of Proposed Rulemaking (NPRM) [70 pages in PDF] regarding reciprocal compensation specifically, and all intercarrier compensation generally. The NPRM states that it begins "a fundamental re-examination of all currently regulated forms of intercarrier compensation." It adds that this is "in light of increasing competition and new technologies, such as the Internet and Internet-based services, and commercial mobile radio services ..." See, In the Matter of Developing a Unified Intercarrier Compensation Regime, CC Docket No. 01-92.
The FCC seeks public comments "on our proposal to adopt a bill-and-keep rule to govern local exchange carrier ("LEC") recovery of costs associated with the delivery of ISP-bound traffic after the three-year interim period. We also seek comment on the potential adoption of a bill-and-keep approach to reciprocal compensation payments governed by section 251 ..., and the eventual application of bill and keep to interstate access charges regulated under section 201 ..."
The NPRM and Order were both announced by the FCC on April 19, but not released until April 27. This is common FCC practice. Public comments in response to the NPRM will be due within 90 days after publication in the Federal Register, which has not yet occurred. Reply comments will be due within another 45 days.
4/27. The U.S. Court of Appeals (DCCir) issued its opinion in Global NAPs v. FCC a petition for review of an FCC Order (FCC 99-381) that Globals Naps' tariff for Internet-bound traffic was facially invalid under FCC regulations. Upheld.
More News
4/26. Sen. Orrin Hatch (R-UT) gave a speech in the Senate on World Intellectual Property Day. He stated that "Our country's technological prowess and our high standard of living stem from the creativity, determination, and entrepreneurial drive of our citizens and the protection we provide for their creations."
4/26. The Senate Judiciary Committee, which had scheduled a business meeting for April 26 to consider the nominations of of Larry Thompson to be Deputy Attorney General and Ted Olson to be Solicitor General, held over the meeting for one week.
4/29. The ICANN published in its web site a preliminary agenda for the ICANN Board meeting in Stockholm, Sweden on June 4, 2001.
4/27. The U.S. Court of Appeals (4thCir) issued its unpublished opinion in Repede v. Course Technology. Repede entered into a publishing agreement with Course Technology (CT) to contribute material to a computer programming textbook. After Repede contributed several sections, CT hired another writer to replace him. Repede filed a complaint against Course Technology (CT) in U.S. District Court (DSC) alleging breached the contract by denying him a right of first refusal to draft subsequent versions of the textbook, and alleging fraud for underestimating royalties. The District Court found that there was no right of first refusal in the contract, and no fraud. The Appeals Court affirmed without explanation.
Michael Powell
4/27. President Bush announced his intent to renominate Michael Powell for another five year term as FCC Commissioner. This is a five year term commencing on July 2, 2002 and expiring on June 30, 2007. See, White House release and Powell reaction.
Colin Powell on Trade
4/27. Secretary of State Colin Powell gave a speech in Washington DC regarding trade, the WTO, World Bank, and IMF. He stated that "We must acknowledge first that engagement with the global economy, opening up to trade and investment, is the engine of poverty-easing growth. The last thing nations should do in response to the desperate needs of the ill-housed, ill-fed, uneducated and unhealthy is to adopt policies that have the effect of slowing growth. That is why the President supports the launch of a new round of multilateral trade negotiations in the WTO."
4/26. Sen. Bill Nelson (D-FL) gave a speech in the Senate regarding S 450, the Financial Institution Privacy Protection Act of 2001, which he introduced on March 1, 2001. He condemned the practice of pretext calling, in which a caller "contacts a business or government entity and uses a person's social security number or other personal identifier to trick an unsuspecting clerk to provide confidential information ..." He added that these "Information brokers with little regard for people's privacy are doing the dirty work for organizations that otherwise portray themselves as privacy proponents", such as banks, insurance companies and law firms.
8:30 AM. Sen. Charles Grassley (R-IA) will give a breakfast address to the U.S. Chamber of Commerce on Senate Finance Committee plans to mark up tax and trade bills. Location: U.S. Chamber of Commerce, 1615 H St. NW, Washington DC. See, release [PDF].
12:15 PM. Fleischman & Walsh's Telecom Group and the Federal Communications Bar Association's Wireless Committee will host a brown bag lunch on "FCC Rules on Telecom Providers' Rights to Access Property." The speakers will be John Windhausen (ALTS), Gerry Lederer (BOMA), and Larry Freedman (Fleischman & Walsh). Location: F&W, 1400 16th St., NW. RSVP to Barbara Fitzpatrick.
Deadline to file reply 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. See, Federal Register, March 15, 2001, Vol. 66, No. 51, at Pages 15064 - 15065.
Deadline to submit comments to the USPTO regarding "the international effort to harmonize substantive requirements of patent laws, and the subsequent changes to United States law and practice." Comments on any topic may be submitted. However, the USPTO notice enumerates 17 topics, including the first to invent versus the first to file systems of priority, and what may be considered patentable subject matter in light of the State Street decision. See, Federal Register, March 19, 2001, Vol. 66, No. 53, at Pages 15409 - 15411.
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