Tech Law Journal Daily E-Mail Alert
June 25, 2001, 8:00 AM ET, Alert No. 215.
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DC Cir Rules FCC Cannot Cancel NextWave Licenses
6/22. The U.S. Court of Appeals (DCCir) issued its opinion in NextWave v. FCC, holding that the FCC is prevented from canceling NextWave's spectrum licenses by the Bankruptcy Code. The decision will further delay the use of this spectrum for wireless communications services, including third generation services.
Background. NextWave obtained spectrum licenses at FCC auctions in 1996. The FCC permitted NextWave to obtain the licenses then, and later make payment under an installment plan. NextWave was unable to make payments, and filed a Chapter 11 bankruptcy petition. The FCC cancelled the licenses, but was blocked by the bankruptcy court. The U.S. District Court (SNDY) affirmed. The U.S. Court of Appeals (2nd Cir.) issued its order reversing and remanding the case on Nov. 24, 1999; it issued its opinion explaining its reversal in May 2000. The FCC then re- auctioned this spectrum to Verizon Wireless and other successful bidders, which intend to use it for third generation wireless, and other, services.
Holding of the DC Circuit. Judge Tatel, writing for a three judge panel, opined that the 2nd Circuit had not already addressed NextWave's bankruptcy claims. He further wrote that the FCC was prevented from canceling the spectrum licenses pursuant to Section 525 of the Bankruptcy Code. He wrote that the FCC "violated the provision of the Bankruptcy Code that prohibits governmental entities from revoking debtors' licenses solely for failure to pay debts dischargeable in bankruptcy. The Commission, having chosen to create standard debt obligations as part of its licensing scheme, is bound by the usual rules governing the treatment of such obligations in bankruptcy."
Fast Track Debate
6/21. Rep. Phil English (R-PA) spoke in the House about HR 1446, the Standard Trade Negotiating Authority Act, which he introduced on April 4, 2001. He stated that his bill "allows for full and appropriate consideration of labor and environmental issues as important trade agreements are negotiated." He added that it "ensures that no country could engage in a race to the bottom in order to lure jobs by sacrificing the environment or debasing the common rights of its citizens."
WTO Issues Report on FSC Challenge
6/22. The USTR released a statement regarding the U.S. Foreign Sales Corporation (FSC) tax regime, and EU challenges to legality before the World Trade Organization (WTO). He stated: "A panel of the World Trade Organization has issued a confidential interim report today on the FSC Repeal and Extraterritorial Income Exclusion Act of 2000, the law which replaced the Foreign Sales Corporation provisions of U.S. tax law. The report will be distributed on a confidential basis to the United States and the European Union, who will have the opportunity to submit written comments on the report to the panel. The WTO panel is scheduled to issue its final report in July, and the report will be made public in August. The United States will respect the confidential nature of the report and will not comment on its findings, nor its implications, at this time."
New Documents
USCA: opinion in NextWave v. FCC, 6/22 (HTML, USCA).
Lewis: HR 2259, the Community Technology Assistance Act, 6/20 (HTML, LibCong).
Quote of the Day
"... allowing NextWave to retain its licenses may be "grossly unfair" to losing bidders and licensees who "complied with the administrative process and forfeited licenses or made timely payments despite their financial difficulties." ... Any unfairness, however, was inherent in the Commission's decision to employ a licensing scheme that left its regulatory actions open to attack under Chapter 11 of the Bankruptcy Code ... nothing in the Act required the Commission to choose the licensing scheme at issue here."

U.S. Court of Appeals (DCCir), opinion in NextWave v. FCC, June 22.
9th Circuit Nominations
6/22. President Bush formally nominated Richard Clifton to be a United States Circuit Judge for the Ninth Circuit. He is a partner in the litigation department of Cades Schutte Fleming & Wright, in Honolulu, Hawaii. His practice focuses on antitrust counseling and litigation, financial institution litigation, securities litigation, and arbitrations. He is also general counsel of the Republican Party of Hawaii. See, Cades bio and White House release.
6/22. President Bush formally nominated Carolyn Kuhl to be a United States Circuit Judge for the Ninth Circuit. She is a Los Angeles County Superior Court Judge; she was appointed by former Gov. Pete Wilson. Prior to that, she was a partner at the law firm of Munger Tolles & Olson. Before that, she worked in the Reagan administration as Special Assistant to Attorney General William French Smith, Deputy Assistant Attorney General in the Civil Division, and Deputy Solicitor General. Sen. Barbara Boxer (D-CA), who may attempt to block Kuhl's confirmation, stated in a release that "I am continuing to evaluate this nomination."
Antitrust Panel Discusses New Economy
6/22. The Progress and Freedom Foundation (PFF) hosted a panel discussion on antitrust law and policy in the Rayburn House Office Building in Washington DC. The panel was comprised of  Jeffrey Eisenach (PFF), Ken Starr (Kirkland & Ellis), Robert Atkinson (Progressive Policy Institute), Albert Foer (Antitrust Institute), and Makan Delrahim (Sen. Hatch).
Makan Delrahim, who is the Republican Staff Director for the Senate Judiciary Committee, stated that just there was an injection of economic analysis into antitrust law in recent decades, "it may be time for a new injection of technical expertise" into antitrust law.
Bob Atkinson, of the Progressive Policy Institute, a Democratic think tank, stated that antitrust enforcement should focus on collusion by middlemen who prevent to development of e-commerce. He cited auto dealers who seek to prevent Internet auto sales as an example. He also stated that online exchanges, such as Covisant and Orbitz, pass antitrust muster.
Ken Starr, whose firm presents ProComp, an anti Microsoft group, stated that "the government is going to stay the course" in the Microsoft case. He also criticized Microsoft's forthcoming XP technology. He stated that with XP Smart Tags "Microsoft can re-edit anyone's site." He also said that XP "should be examined through the lens of traditional antitrust law." The PFF did not include a Microsoft proponent on the panel.
ABA Releases PKI Assessment Draft
6/22. The American Bar Association released for public comment its Public Key Infrastructure Assessment Guidelines -- PAG v0.30 Public Draft. The draft was written by the Information Security Committee of the ABA Section of Science and Technology Law.
6/21. The ICANN announced that Theresa Swinehart will join ICANN as its Counsel for International Legal Affairs. She previously worked as Associate Counsel, and in other positions, at MCI WorldCom in Washington DC. See, ICANN release.
6/20. David Priebe joined the Palo Alto office of the law firm of Gray Cary Ware & Freidenrich as Special Counsel in the firm's securities litigation practice. He previously worked at Wilson Sonsini Goodrich & Rosati. He defends technology companies in securities litigation. See, release.
6/21. Floyd Chapman and David Kulik joined the Washington DC office of the law firm of Wiley Rein & Fielding as a partner and of counsel, respectively, in the firm's intellectual property practice. Both were formerly with the Washington DC office of the law firm of Brobeck Pheleger & Harrison. See, release.
6/22. The Federal Election Commission extended the temporary appointment of Acting General Counsel Lois Lerner until September 15, 2001." See, release.
Tax Deductions for Donated Computers
6/20. Rep. John Lewis (D-GA) and others introduced HR 2259, the Community Technology Assistance Act, a bill to amend the Internal Revenue Code to expand the enhanced deduction for corporate donations of computer technology to senior centers and community centers. It was referred to the House Ways and Means Committee.
6/21. Rep. William Jefferson (D-LA) and others introduced HR 2281, a bill to amend the Internal Revenue Code to extend and expand the enhanced deduction for charitable contributions of computers. It was referred to the House Ways and Means Committee.
Monday, June 25
10:00 AM. The U.S. International Trade Commission will hold a Section 337 evidentiary hearing regarding "Certain Field Programmable Gate Arrays and Products Containing Same." This is a matter in which Xilinx is the complainant and Altera is the respondent. See also, notice of investigation. (Inv. No. 337-TA-441.) Location: Courtroom B, ITC Building, 500 E Street SW, Washington DC.
12:00 NOON - 3:00 PM. National Science Foundation's Advisory Committee for Cyberinfrastructure will hold a meeting. There will be open teleconferencing. Persons who plan to attend should contact Richard Hilderbrandt at 703-292-7093 or See, notice in Federal Register. Location: Room 320, National Science Foundation, 4201 Wilson Blvd., Arlington, VA.
Tuesday, June 26
9:30 AM. The Senate Commerce Committee will hold a hearing on several nominations, including that of Samuel Bodman to be Deputy Secretary of Commerce; Location: Room 253, Russell Building.
10:00 AM - 12:00 NOON. The House Science Committee's Subcommittee on Research will hold a hearing titled Reinventing the Internet: Promoting Innovation in IT. Location: Room 2318, Rayburn Building.
10:00 AM - 12:00 NOON. The FCC's Network Reliability and Interoperability Council will meet. Location: FCC, 445 12th Street, SW, Room TW-C305, Washington, DC.
12:00 NOON - 2:00 PM. The American Enterprise Institute (AEI) will host a panel discussion titled "Free Trade vs. States' Rights: Globalization and the Challenges to Local Democratic Government." The panelists will be Michael Greve (Federalism Project), Mark Gordon (Columbia University), David Aaron (Dorsey & Whitney), and Earl Fry (Brigham Young University). Location: Wohlstetter Conference Center, Twelfth Floor, AEI, 1150 17th Street, NW, Washington DC.
2:30 PM. The House Judiciary Committee's Subcommittee on Commercial and Administrative Law will hold a hearing on HR 1552 and HR 1675, both of which are titled the "Internet Tax Nondiscrimination Act." Location: Room 2141, Rayburn Building.
6:30 - 8:30 PM. The Federal Communications Bar Association will host a CLE Seminar titled Music Licensing and the Internet. The first panel will focus on the issues involved in the Napster litigation. The second panel will focus on the on the new music licensing right when webcasters stream music over the Internet. For more information, contact Arlice Johnson at Location: Wiley Rein & Fielding, 10th Floor Conference Room, 1750 K Street, NW, Washington DC.
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