| 4th Circuit Rules Against
Henrico Open Access Requirement |
7/11. The U.S.
Court of Appeals (4thCir) issued its opinion
in MediaOne
v. County of Henrico, affirming the District
Court's ruling that the County of Henrico's open access
requirement is preempted by federal law. The Appeals Court
held that "Henrico County violated § 541(b)(3)(D)"
of the Communications Act "when it conditioned the
transfer of control of MediaOne's cable franchise by requiring
MediaOne to unbundle its Road Runner service and provide open
access to its telecommunications facilities, that is, its
cable modem platform. Because the open access provision is
inconsistent with the federal Communications Act, it is
preempted."
Facts. MediaOne is a cable company with a license from
Henrico County (i.e., Richmond, Virginia). AT&T acquired
MediaOne in 1999. AT&T and MediaOne applied to Henrico for
approval of the transfer of control of MediaOne's license.
Henrico conditioned its approval with an open access
requirement. It required that AT&T and MediaOne
"shall provide any requesting Internet Service Provider
(ISP) access to its cable modem platform (unbundled from the
provision of content) on rates, terms, and conditions that are
at least as favorable as those on which it provides such
access to itself, to its affiliates, or to any other
person." (Parentheses in original.)
Trial Court. AT&T and MediaOne filed a complaint in
U.S. District Court (EDVa)
seeking a declaratory judgment that the open access condition
violates the First Amendment and the Commerce Clause, is
preempted by federal law, and is void under Virginia law.
AT&T and MediaOne moved for summary judgment on the
grounds that the open access requirement is preempted by the
Communications Act of 1934, and is unenforceable under
Virginia law. The district court granted AT&T and
MediaOne's motion for summary judgment on the grounds that the
open access condition was preempted by several provisions of
the Communications Act. (See, MediaOne v. Henrico, 97
F. Supp. 2d 712 (E.D. Va. 2000).)
Section 541(b)(3)(D). § 541(b)(3)(D) of the
Communications Act provides that "a franchising authority
may not require a cable operator to provide any
telecommunications service or facilities, other than
institutional networks, as a condition of the initial grant of
a franchise, franchise renewal, or a transfer of a
franchise."
4th Circuit Holding. The Court held that Henrico's
open access provision required MediaOne to provide
telecommunications facilities in violation of § 541(b)(3)(D).
However, the Court did not rule on the specific regulatory
classification of MediaOne's Road Runner service. The
Court merely reasoned as follows: "MediaOne's Road Runner
service combines the use of a cable modem platform with access
to the Internet. Road Runner's cable modem platform, separated
from its Internet service component, is a telecommunications
facility because it is a pipeline for telecommunications, that
is, for "the transmission . . . of information of the
user's choosing, without change in the form or content."
Id. § 153(43) (defining "telecommunications"). As a
condition for approving the change in control of the MediaOne
franchise, the County required MediaOne to provide its
"cable modem platform (unbundled from the provision of
content)" to "any requesting Internet Service
Provider." The provision unbundles Road Runner's Internet
access service from its cable modem platform and compels
MediaOne to offer the platform to unaffiliated ISPs for use as
a transmission pipeline for their services. The open access
provision therefore requires MediaOne to provide
"telecommunications ... facilities ... as a condition of
... a transfer of a franchise" in violation of §
541(b)(3)(D)."
FCC NOI Re Internet Access Over Cable. The Court also
noted that FCC has issued a Notice
of Inquiry [PDF] that seeks comment on whether cable modem
technology should be classified as a cable service, a
telecommunications service, or an information service, and the
implications of adopting any particular classification. (See,
GN Docket No. 00-185.) The Court then concluded that "we
do not have to reach the question of whether MediaOne's
bundled Road Runner service is a cable service, a
telecommunications service, or an information service. For the
time being, therefore, we are content to leave these issues to
the expertise of the FCC."
The three judge panel was composed of Judges Blane Michael,
William Wilkins and Emory Widener. Judge Michael wrote the
opinion of the court, in which Judge Wilkins joined. Judge
Widener wrote a concurring opinion. He concurred in the
result, but not the analysis. He wrote that it was unnecessary
to decide the federal preemption issue, because Henrico's
action was barred by Virginia state law.
Reaction. NCTA
P/CEO Robert Sachs said in a release
that "The Fourth Circuit's decision in the Henrico case
offers the strongest judicial affirmation yet that public
policy decisions regarding cable modem services are not within
the jurisdiction of local governments. Today's court decision
will further encourage the rapid deployment of high speed
cable Internet services to consumers." |
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| § 271 InterLATA Services
Means Both Data and Voice |
7/11. The FCC published in
the Federal Register a notice
of its final rule in "Implementation of the Non-
Accounting Safeguards of Section 271 and 272 of the
Communications Act of 1934," CC Docket No. 96-149. The
FCC ruled that the term "interLATA service" used in § 271
encompasses interLATA information services as well as
interLATA telecommunications services. See, Federal Register,
July 11, 2001, Vol. 66, No. 133, at Pages 36206 - 36208.
Background. Section 271 of the Communications Act of
1934 provides that the Bell companies may not provide "interLATA
services" until they have satisfied the FCC that they
have opened up their local networks to competitors. In a
previous Non- Accounting Safeguards Order, the FCC concluded
that the term "interLATA services" as used in
section 271 encompasses interLATA telecommunications services
and interLATA information services. The predecessor companies
of Verizon and Qwest petitioned for judicial review. However,
because their arguments had not been raised in the
administrative proceeding, the U.S. Court of Appeals (DCCir)
remanded this matter. The present rule is the reconsideration
on remand. |
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| FCC Delays Spectrum Auction |
7/11. The FCC's Wireless
Telecommunications Bureau announced that the auction of
licenses in the 747-762 and 777-792 MHz bands (Auction No.
31), previously scheduled to begin on September 12, 2001, have
been delayed to an unspecified date.
Tom Wheeler, P/CEO of the Cellular
Telecommunications & Internet Association, praised the
postponement. He stated that "Today’s decision by the
Wireless Bureau was a good one for the wireless industry, the
U.S. Treasury, and most importantly, for wireless consumers.
While the industry indeed faces a spectrum shortage, this
delay reflects the facts on the ground: no one today can
predict how or when this spectrum will be available or how it
will fit into a national, long-term spectrum policy. Until
other, related proceedings are concluded, this spectrum’s
full potential value cannot be realized. This delay will allow
government and industry to review their long-term spectrum
needs, give greater clarity to the spectrum allocation process
and ensure this spectrum earns its market value." See, CTIA
release. |
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| FCC Appointments |
7/1. David Sappington joined the FCC as Chief Economist. He was
previously an economics professor at the University of
Florida. He replaces Gerald Faulhaber, who is returning
to his position as Professor of Public Policy and Management
at the Wharton School of the University of Pennsylvania. See, FCC
release [PDF].
7/1. Jonathan Levy, who has been with the FCC since
1980, was appointed Deputy Chief Economist. He has specialized
in economic analysis of mass media, cable television, and
satellite television issues. Levy has also assisted in the
design and implementation of the FCC's spectrum auctions, in
particular the DBS and MMDS auctions. |
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| Court Limits Discovery
Regarding Identity of Anonymous Posters |
7/11. The Superior Court of New Jersey, Appellate Division,
issued its opinion
in Dendrite
International v. John Doe, a case regarding
discovery requests for the identity of anonymous posters to
message boards. The Court established a three part test that
must be met before the trial court may issue an order
compelling discovery from an ISP regarding the identity of an
anonymous poster to one of its message boards who has been
sued for defamation or other claims based on the content of
his posting.
Background. An anonymous poster, known in this
litigation as John Doe 3, posted messages on a Yahoo message
board critical of Dendrite
International, a business which provides software products
and support services for the pharmaceutical industry. Dendrite
filed a complaint in Superior Court of New Jersey against John
Doe 3, and other John Doe defendants, alleging various claims
for breach of contract, defamation and other actionable
statements on Yahoo's message board. Dendrite then sought
pre-trial discovery from Yahoo regarding the identities of the
anonymous defendants. The trial court denied a motion to
compel discovery. This appeal followed.
Holding. The appeals court affirmed the denial of the
motion to compel discovery. The appeals court articulated a
set of standards for reviewing such requests. The appeals
court wrote that "The trial court must consider and
decide those applications by striking a balance between the
well- established First Amendment right to speak anonymously,
and the right of the plaintiff to protect its proprietary
interests and reputation through the assertion of recognizable
claims based on the actionable conduct of the anonymous,
fictitiously- named defendants." In addition, the appeals
court listed three requirements. First, the plaintiff must
make efforts to notify the anonymous defendant of the
discovery request, including by posting to the message board
involved in the case. Second, the trial court must determine
that the plaintiff has plead a prima facie cause of action and
produced evidence in support. Third, the trial court must
balance the interests of the parties.
Notice to Anonymous Defendants. The appeals court wrote
that "the trial court should first require the plaintiff
to undertake efforts to notify the anonymous posters that they
are the subject of a subpoena or application for an order of
disclosure, and withhold action to afford the fictitiously-
named defendants a reasonable opportunity to file and serve
opposition to the application. These notification efforts
should include posting a message of notification of the
identity discovery request to the anonymous user on the ISP's
pertinent message board."
Prima Facie Case and Evidence. The appeals court wrote
that "The court shall also require the plaintiff to
identify and set forth the exact statements purportedly made
by each anonymous poster that plaintiff alleges constitutes
actionable speech. The complaint and all information provided
to the court should be carefully reviewed to determine whether
plaintiff has set forth a prima facie cause of action against
the fictitiously- named anonymous defendants. In addition to
establishing that its action can withstand a motion to dismiss
for failure to state a claim upon which relief can be granted
..., the plaintiff must produce sufficient evidence supporting
each element of its cause of action ..."
Balancing Test. The appeals court wrote that "the
court must balance the defendant's First Amendment right of
anonymous free speech against the strength of the prima facie
case presented and the necessity for the disclosure of the
anonymous defendant's identity to allow the plaintiff to
properly proceed."
Public Citizen and the
American Civil Liberties Union Foundation of New Jersey, which
participated as amici curiae, praised the decision, and called
it "a tremendous victory for free speech." See, PC release. |
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| Senate Committee Holds
Hearing on Online Privacy |
| 7/11. The Senate
Commerce Committee held a hearing on Internet privacy
issues. See, opening
statement [PDF] of Sen.
Ernest Hollings (D-SC), the new Chairman of the Committee:
"Clearly we need legislation that requires notice,
affirmative consent, reasonable access, and reasonable
security to protect individuals online." See also, opening
statement [PDF] of Sen.
John McCain (R-AZ), the ranking Republican. See also,
prepared testimony in PDF of witnesses: Marc
Rotenberg (EPIC), Fred
Cate (Indiana University School of Law), Paul
Schwartz (Brooklyn Law School), Paul
Misener (Amazon), Hans
Brondmo, Les
Seagraves (Earthlink), Ira
Rubinstein (Microsoft), Jason
Catlett (Junkbusters). |
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| Federal Chief Information
Officer |
| 7/11. The Senate
Governmental Affairs Committee held a hearing on S
803, a bill to establish a Federal Chief Information
Officer within the Office of Management and Budget. See,
prepared testimony of witnesses: Sean
O'Keefe (OMB), Anne
Altman (International Business Machines), Costis
Toregas (Public Technology, Inc.), Aldona
Valicenti (National Association of State Chief Information
Officers), Greg
Woods (Department of Education), Sharon
Hogan (University of Illinois at Chicago), Barry
Ingram (ITAA), Patricia
McGinnis (Council for Excellence in Government), Joseph
Wright (Terremark Worldwide). See also, testimony
[PDF] of David McClure (GAO). |
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| District Court Issues Order
in Napster Case |
| 7/11. The U.S.
District Court (NDCal), Judge Marilyn Hall presiding,
issued an order in A&M Records v. Napster requiring
Napster to block all
copying of infringing music files. Judge Hall also held a
closed meeting with the parties. Napster CEO Hank Berry issued
a statement
in which he said that "The Judge issued an order
prohibiting Napster from enabling file transfers unless
Napster reaches 100% success. The Court delegated to the
technical expert further examination and testing of the
Napster system. The Court's ruling today that Napster must
block all file transfers threatens all peer-to-peer file
sharing over the Internet and is at direct odds with the 9th
Circuit's ruling. While we are disappointed by this ruling, we
will work with the technical expert to enable file transfers
as soon as possible and we are continuing full steam ahead
toward the launch of our new service later this summer." RIAA
P/CEO Hillary Rosen had this reaction: "Judge Patel's
decision today that Napster should not resume operations until
it can show that it can comply with the court's modified
preliminary injunction was inevitable given its failure to
comply with the court's order for so long." |
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| More News |
7/11. President Bush issued a Memorandum
for the Heads of Executive Departments and Agencies
regarding government reform. It states, among other things,
that "Each agency head shall designate a Chief Operating
Officer ... [who] shall report directly to the agency head and
shall ... advance e-government, apply information policy and
technology policies ..."
7/11. The House
Commerce Committee's Subcommittee on Commerce, Trade and
Consumer Protection held a hearing titled "The Potential
for Discrimination in Health Insurance Based on Predictive
Genetic Tests."
7/11. The U.S.
Court of Appeals (5thCir) issued its opinion
in USA
v. Hill. Defendant, Hill, used an AOL account
to send image files containing child pormography
to 108 recipients, including an undercover law enforcement
officer. He was charged with, plead guilty to, and sentenced
for two counts of distributing child pormography and two
counts of receiving child pormography, in violation of 18
U.S.C. §§ 2252(a)(2) and 2252(b)(1). The appeal only
concerned sentencing issues. Affirmed. |
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| Lofgren Bill Would Ban
Sending Unmarked E-Smut Spam to Kids |
| 7/11. Rep. Zoe Lofgren
(D-CA) introduced the "Protect Children from E-Smut Act
of 2001", a bill to ban the sending of unmarked sexually
explicit e-mail advertisements to children. It would make it a
federal crime to create and/or forward unmarked sexually
explicit material to a minor's e-mail account. It would also
create a private right of action. The bill also would direct
the National Institute of
Standards and Technology (NIST) to help create a universal
electronic mark that must be affixed to sexually explicit
e-mails. Parents would then be able to set their children's
e-mail service to block e-mails containing such a mark or
designation. See, Lofgren
release. |
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| Thursday, July 12 |
9:30 AM. The Federal
Communications Commission will hold a meeting to announce
decisions in several matters, including a Fourth Report and
Order concerning the collocation obligations of incumbent
local exchange carriers. (See, Deployment of Wireline Services
Offering Advanced Telecommunications Capability, CC Docket No.
98-147). Location: FCC, Portals II, 445 12th Street, SW, Room
TW-C305.
10:00 AM. The Senate
Banking Committee will hold a hearing on several pending
nominations, and vote on several other nominations. The agenda
includes votes on the nominations of Roger Ferguson to be a
member of the Board of Governors of the Federal Reserve
System, Donald E. Powell to be Chairman of the FDIC, and
Donald Rosenfeld to be President of the Government National
Mortgage Association. Location: Room 538, Dirksen Senate
Office Building.
10:00 AM. The Senate
Judiciary Committee will hold an executive business
meeting. The agenda includes mark up of S 407, a bill to amend
the Trademark Act of 1946 to provide for the registration and
protection of trademarks used in commerce, in order to carry
out provisions of certain international conventions. Location:
Room 226, Dirksen Senate Office Building.
10:00 AM - 12:00 NOON. The American
Enterprise Institute (AEI) will host a panel discussion
titled Broadband Access - Competition, Regulation, and
Consumer Welfare. The speakers will be Harold Furchtgott-Roth,
James Glassman, Thomas Hazlett, and Christopher DeMuth. See, online registration
page. Location: AEI, 1150 17th Street, NW, Washington DC.
11:00 AM. The House
Judiciary Committee's Subcommittee on Courts, the
Internet, and Intellectual Property will hold a hearing titled
The Whois Database: Privacy and Intellectual Property
Issues. Location: Room 2141, Rayburn House Office
Building.
1:45 PM. The House
Ways and Means Committee will meet to mark up following:
• HJRes 50, disapproving the extension of the waiver
authority contained in § 402(c) of the Trade Act of 1974 with
respect to the People's Republic of China.
• HJRes 55, disapproving the extension of the waiver
authority contained in § 402(c) of the Trade Act of 1974 with
respect to Vietnam.
• HR 1954, the ILSA Extension Act of 2001.
Location: Room 1100, Longworth House Office Building.
2:00 PM. The House
Financial Service Committee's Oversight and Investigations
Subcommittee will hold a hearing on Internet gambling.
Location: Room 2128, Rayburn House Office Building. See, release.
The scheduled witnesses are:
• John Suarez (New Jersey Division of Gaming
Enforcement).
• Sebastian Sinclair (Christiansen Capital Advisors).
• Keith Whyte (National Council on Problem Gambling).
• Valerie Lorenz (Compulsive Gambling Center).
• Frank Fahrenkopf (American Gaming Association).
• Bill Saum (National Collegiate Athletic
Association).
• Mark MacCarthy (VISA).
• Sue Schneider (Interactive Gaming Council).
• Penelope Kyle (Virginia Lottery).
• Greg Avioli (National Thoroughbred Racing
Association). |
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| Friday, July 13 |
| 12:30 PM. FCC Commissioner Gloria
Tristani will address the Alliance for Community Media on
public, educational, and governmental access channels in an
era of consolidation and technological change in the cable
industry. Location: Renaissance Hotel, 999 Ninth St, NW,
Washington DC. |
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| House Subcommittee Approves
TEACH Act |
7/11. The House
Judiciary Committee's Subcommittee on Courts, the
Internet, and Intellectual Property approved S
487, the Technology, Education, and Copyright
Harmonization (TEACH) Act of 2001, unanimously and without
amendment. Rep. Howard
Coble (R-NC) and Rep.
Howard Berman (D-CA) emphasized that the Senate bill was
the product of a carefully negotiated compromise between
educators, copyright holders, and others, and should not be
amended. Rep. Rick
Boucher (D-VA), who introduced a competing version of the
bill, HR
2100, did not attend the mark up session.
This bill, which passed the Senate on June 7 by unanimous
consent, extends the distance learning exemption to
infringement contained in Section
110 of the Copyright Act to Internet technologies.
Rep. Zoe Lofgren
(D-CA) had raised concerns at the Subcommittee's June 27
hearing about the anti circumvention provision of the bill. It
requires that educational institutions "not engage in
conduct that could reasonably be expected to interfere with
technological measures used by copyright owners to prevent
such retention or unauthorized further dissemination". At
the July 11 mark up she stated that she would be satisfied by
language in the committee report that clarifies that it is the
intent of Congress not to limit the academic work of math
professors, and that the conduct prohibited by the bill is
"transmission specific." |
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| House Subcommittee Approves
HR 1992 |
7/11. The House
Science Committee's Subcommittee on 21st Century
Competitiveness amended and approved HR
1992, the "Internet Equity and Education Act of
2001," a bill to make it easier to obtain student loans
for Internet based education, and other distance learning. The
bill is sponsored by Rep.
Johnny Isakson (R-GA).
The bill would remove the burden of the "12-hour
rule" for non-traditional programs. This rule requires
educational institutions to keep voluminous attendance records
to demonstrate that their students attended certain types of
work sessions. The bill also makes exceptions to the 50%
requirement by allowing a limited number of institutions to
offer more than 50 % of their courses by telecommunications,
or to serve more than 50 % of their students through
telecommunications courses. The bill also addresses incentive
compensation provisions.
The Subcommittee approved an amendment in the nature of a
substitute offered by Rep. Isakson, as amended by by an
amendment offered by Rep.
David Wu (D-OR). The Wu amendment requires the Education
Department to prepare annual reports for the House and Senate
on the effectiveness of the provisions of the bill. Rep. Patsy Mink (D-HI),
the ranking Democrat on the Subcommittee, unsuccessfully
opposed the bill. She argued that it would remove safeguards
against fraud and abuse in the student loan program. |
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