Tech Law Journal Daily E-Mail Alert
July 19, 2001, 9:00 AM ET, Alert No. 230.
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Rep. Stearns Introduces Spectrum Caps Bill
7/17. Rep. Clifford Stearns (R-FL) introduced HR 2535, a bill pertaining to the amount of spectrum that may be licensed to wireless carriers. It was referred to the House Commerce Committee, of which Rep. Stearns is a member. FCC rules prohibit a single entity's interests in the licenses of broadband PCS, cellular, and SMR services from cumulatively exceeding more than 45 MHz of spectrum within the same geographic area.
Rep. Stearns stated in a release that "The current 45 MHz spectrum cap is beginning to impact innovation and competition in the wireless industry. ... The cap now works to limit competition by denying wireless providers access to open markets, thereby denying consumers the benefits that arise from additional competition, such as lower prices and innovative services. Additionally, continuation of the spectrum cap will result in the continued lag of U.S. companies behind Europe and Japan in the deployment of wireless Third Generation technologies."
Bills Introduced on Media Ownership
7/17. Sen. Ernest Hollings (D-SC), Sen. Daniel Inouye (D-HI), and Sen. Byron Dorgan (D-ND) introduced S 1189, a bill to require the FCC to amend its daily newspaper cross ownership rules. It was referred to the Senate Commerce Committee; all three are members. Sen. Hollings stated that "This legislation is necessary to stem the tide toward concentration in the broadcast and newspaper industries and force a thorough and reasoned examination of the claims that further consolidation will serve the public interest."
7/17. In contrast, Rep. Clifford Stearns (R-FL) introduced HR 2536, a bill to amend the Communications Act of 1934 to reduce restrictions on media ownership. This bill was referred to the House Commerce Committee.
Bill Would Allow Media Coverage of Courts
7/17. Rep. Steve Chabot (R-OH) and Rep. Bill Delahunt (D-MA) introduced HR 2519 a bill to allow media coverage of court proceedings. It was referred to the House Judiciary Committee.
Napster News
7/18. The U.S. Court of Appeals (9thCir) issued an order stating the order of July 12 of the U.S. District Court (NDCal) in A&M Records v. Napster is "stayed pending a further order of this court." The stayed order had required that Napster block all songs that had been identified as copyrighted. The RIAA's Cary Sherman had this reaction: "We are confident that after a thorough review, the Ninth Circuit Court of Appeals will uphold Judge Patel's decision. The evidence in this case clearly shows that Napster has not done all it can to police its system. The Ninth Circuit Court has previously ruled that Napster's conduct required an injunction and we expect them to do so again after a full review of the facts. It is important to note that today's ruling does not change in any way the fact that Napster must prevent copyrighted works from appearing on its system as previously ordered by the Court." See, RIAA release.
New Documents
Microsoft: petition for rehearing in antitrust case, 7/18 (HTML, MSFT).
USCA: opinion in Bock v. CAI re construction of severance agreement, 7/18 (HTML, USCA).
USAO: criminal complaint in USA v. Sklyarov, 7/7 (PDF, USAO).
Powell: speech re digital divide and digital development, 7/18 (HTML, FCC).
NCTA: report on cable telephony, 7/17 (PDF, NCTA).
Sachs: speech on cable broadband and open access, 7/17 (PDF, NCTA).
Bush: speech re trade, 7/17 (HTML, WH).
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DMCA Anti Circumvention Criminal Case
7/17. The U.S. Attorney's Office (NDCal) charged Dmitry Sklyarov by criminal complaint [PDF] with one count of trafficking in a product designed to circumvent copyright protection measures in violation of the Digital Millennium Copyright Act (DMCA), at 17 U.S.C. § 1201. The complaint states that Sklyarov developed for sale and distribution a program that can convert Adobe's eBooks into naked files that can be read, copied, and stored on any computer.
Adobe Systems makes the eBook Reader, a program which can read books in an electronic format named eBook. The program is downloadable at Adobe's web site. Users can then purchase encrypted electronic books in eBook format from online bookstores, such as, and read them with the eBook Reader. The books are encrypted to protect copyright interests.
An affidavit of an FBI Agent made a part of the complaint states that "Adobe is being victimized by a Russian company name Elcomsoft. Elcomsoft is distributing a key over the Internet in the form of a software program that illegally unlocks copyright protections on the e-Book files. This unlocking key is available for purchase on the Internet at http://www.elcomsoft. com/aebpr.html. The commercial name given by Elcomsoft to this unlocking key program is Advanced eBook Processor (AEBPR)." The affidavit further states that Sklyarov was scheduled to speak on July 15 at a hacker conference titled Defcon 9 in Las Vegas, Nevada.
The Department of Justice stated in a release that Sklyarov was arrested, and "made his initial appearance in federal court in Las Vegas, yesterday, July 16, 2001. Mr. Sklyarov was detained without bail and ordered removed to the Northern District of California. No dates have been set for the defendant's next appearance."
See also, USAO release.
Elcomsoft's web site states that Sklyarov is an employee of the company, and that he developed the AEBPR. The web site is also still selling the AEBPR.
The Statute: Anti Circumvention. 17 U.S.C. § 1201(a)(1)(A) provides, in part, that "No person shall circumvent a technological measure that effectively controls access to a work protected under this title." 17 U.S.C. § 1201(b)(1) provides that "No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that (A) is primarily designed or produced for the purpose of circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; (B) has only limited commercially significant purpose or use other than to circumvent protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; or (C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof.
The Statute: Criminal Penalties. 17 U.S.C. § 1204 provides, in part, that "Any person who violates section 1201 or 1202 willfully and for purposes of commercial advantage or private financial gain (1) shall be fined not more than $500,000 or imprisoned for not more than 5 years, or both, for the first offense; and (2) shall be fined not more than $1,000,000 or imprisoned for not more than 10 years, or both, for any subsequent offense." 
Bock v. Computer Associates
7/18. The U.S. Court of Appeals (7thCir) issued its opinion in Bock v. Computer Associates, an ERISA case involving a severance pay agreement for executives of a software company. The Plaintiff, Kevin Bock, was an employee of Platinum Technology, a software company acquired by Computer Associates International (CAI). There was a severance agreement that provided that employees would receive "aggregate severance pay" consisting of a "bonus amount" added to twice the sum of their highest base salary plus their highest 12-month amount of "incentive compensation." In 1998, Bock had a salary of $145,000 and commissions of $674,333. When CAI bought Platinum in 1999 it terminated Bock, and gave him severance pay of $290,00, or twice his salary. Bock filed a complaint to enforce the severance agreement, asserting that commissions constituted "incentive compensation." The U.S. District Court (NDIll) entered judgment for Bock. CAI appealed. Vacated and remanded.
Compaq Group Fined by FEC
7/18. The Federal Election Commission (FEC) made public its disposition of its self initiated review of the Compaq Citizenship Fund's (CCF) failure to timely file a disclosure report, as required by the Federal Election Campaign Act. The FEC and CCF reached a conciliation agreement under which the CCF will pay a $2,300 civil penalty. The Compaq Citzenship Fund is connected with Compaq Computer Corporation. See, FEC release. (FEC MUR 5193.) The Treasurer is Michele Blair. 
Microsoft Seeks Rehearing on Single Issue
7/18. Microsoft filed a Petition for Rehearing with the U.S. Court of Appeals (DCCir) in Microsoft v. USA on the sole issue of commingling of certain software code specific to web browsing with software code used for other purposes in certain files in Windows 98. Microsoft stated that the June 28 opinion of the U.S. Court of Appeals "accepted the district court’s conclusion that such "commingling" had occurred and that it violated Section 2 of the Sherman Act. The Court’s ruling with regard to "commingling" of software code is important because it might be read to suggest that OEMs should be given the option of removing the software code in Windows 98 (if any) that is specific to Web browsing. ... The Government, however, did not seek such relief on appeal."
Thursday, July 19
10:00 AM. The Senate Banking Committee will hold a hearing on the nomination of Harvey Pitt to be Chairman of the Securities and Exchange Commission. Location: Room 538, Dirksen Building.
10:00 AM. The Senate Judiciary Committee will hold a business meeting. The agenda includes many items, including consideration of the nomination of Ralph Boyd to be Assistant Attorney General for the Civil Rights Division, and the nomination of Robert McCallum to be Assistant Attorney General for the Civil Division. The agenda also includes mark up several bills, including S 407, the Madrid Protocol Implementation Act, a bill to amend the Trademark Act of 1946 to provide for the registration and protection of trademarks in order to carry out provisions of certain international conventions. Location: Room 226, Dirksen Building.
10:00 AM. The House Judiciary Committee will hold a mark up session. The agenda includes HR 2047, the Patent and Trademark Office Authorization Act of 2002. Location: Room 2141, Rayburn Building.
2:00 PM. The Senate Appropriations Committee will hold a business meeting to mark up the Commerce, Justice, and State, the Judiciary, and related agencies appropriation bills. Location: Room S-128, U.S. Capitol Building.
Friday, July 20
8:00 AM. FTC Chairman Timothy Muris will speak at the National Chamber Foundation Democratic Privacy Retreat. Location: Lansdowne Resort, Leesburg, Virginia.
9:30 AM. The House Commerce Committee's Subcommittee on Telecommunications and the Internet will hold a a hearing titled "An Examination of the Entertainment Industry's Efforts to Curb Children's Exposure to Violent Content ." The scheduled witnesses are: Lee Peeler (FTC), Douglas Lowenstein (Interactive Digital Software Association), Jack Valenti (Motion Picture Association of America), Hilary Rosen (Recording Industry Association of America), Doug McMillon (Wal-Mart Stores), and Daphne White (The Lion & Lamb Project). Location: Room 2322, Rayburn Building.
More News
7/18. The House passed HR 2500, the FY 2002 appropriations bill for the Departments of Commerce, Justice, and State, for the Judiciary, and for related agencies, including the FCC, FTC, and SEC.
7/17. The Senate Commerce Committee approved new subcommittee assignments for the Committee. The Subcommittee on Communications is chaired by Sen. Daniel Inouye (D-HI). The other Democratic members are Sens. Ernest Hollings (SC), John Kerry (MA), John Breaux (LA), John Rockefeller (WV), Byron Dorgan (ND), Ron Wyden (OR), Max Cleland (GA), Barbara Boxer (CA), John Edwards (NC), and Jean Carnahan (MO). The ranking Republican is Sen. Conrad Burns (R-MT). The other Republicans on the Subcommittee are Sens. Ted Stevens (AK), Trent Lott (MS), Kay Hutchison (TX), Olympia Snowe (ME), Sam Brownback (KS), Gordon Smith (OR), Peter Fitzgerald (IL), John Ensign (NV), and George Allen (VA). See, release.
7/18. The FCC adopted its Sixth Annual Report on the state of competition in the wireless marketplace. See, FCC release.
7/18. FCC Chairman Michael Powell gave a speech to the Tenth African Telecommunications and Information Technology Conference (AFCOM 2001) in Arlington, Virginia. He spoke about digital divides and digital development. AFCOM opened its three day conference on July 18.
7/18. Federal Reserve Chairman Alan Greenspan appeared before the House Financial Services Committee to present the Federal Reserve's semiannual report on monetary policy. He provided an assessment of the current economic situation, with particular attention to the technology sector. See, prepared testimony and semiannual report.
7/18. AT&T's Board of Directors voted unanimously to reject Comcast's proposal to acquire AT&T Broadband. See, AT&T release.