| Sen. Hollings Introduces
Structural Separation Bill |
8/3. Sen. Ernest
Hollings (D-SC), the Chairman of the Senate Commerce
Committee, and Sen.
Conrad Burns (R-MT) introduced the Telecommunications
Competition Enforcement Act of 2001. This bill would require
structural separation of the Regional Bell Operating Companies
(RBOCs) into wholesale and retail units.
Walter McCormick, the P/CEO of the USTA,
and group which represents the interest of the RBOCs, stated
that "This proposal to carry out a split of local
telephone companies has been wisely and repeatedly rejected in
the past for one reason: consumers are the biggest losers. If
you force phone companies to unbundle the services they offer
to consumers, you force the newly split companies to make up
for these legislated inefficiencies by either increasing their
prices or decreasing their quality of service." See, USTA
release.
In contrast, Russell Frisby, P/CEO of CompTel, stated that
"Given the Bells' refusal to honor their legal
commitments to open their local networks as codified in the
Telecommunications Act of 1996, there really is no other
choice ... . CompTel has long maintained that separating the
Bells into wholesale and retail units is the only way to
ensure that Bells give up their local phone monopolies."
See, CompTel
release. |
|
|
| Computer Security Lacking
at the Commerce Department |
8/3. The House
Commerce Committee's Subcommittee on Oversight and
Investigations held a hearing titled "How Secure is
Sensitive Commerce Department Data and Operations? A Review of
the Department's Computer Security Policies and
Practices." Witnesses from the General Accounting Office (GAO)
and Department of Commerce
(DOC) testified that the Department's systems are not secure.
Rep. Jim Greenwood
(R-PA), the Chairman of the Subcommittee, said in his opening
statement that the "GAO’s team of ethical hackers
identified and exploited vulnerabilities in the computer
systems of these divisions to gain virtually unlimited access
to them internally, from within the Department’s network,
and externally, from the Internet. Not only could these
systems be accessed without authorization, but the information
contained in them could be read, modified, or deleted at will
– even with respect to the most sensitive systems and data
files within these seven divisions. And with such access also
comes the power to completely disrupt critical Department
operations." See also, prepared
statement of Rep.
Billy Tauzin (R-LA), Chairman of the full Committee.
Robert Dacey of the GAO stated in his prepared
testimony that "controls intended to protect
information systems and critical data from unauthorized access
are ineffectively implemented, leaving sensitive systems
highly susceptible to intrusions or disruptions." He
continued that "Commerce is not adequately (1) preventing
intrusions before they occur, (2) detecting intrusions as they
occur, (3) responding to successful intrusions, or (4)
reporting intrusions to staff and management. Thus, there is
little assurance that unauthorized attempts to access
sensitive information will be identified and appropriate
actions taken in time to prevent or minimize damage."
Finally, he stated that "Commerce does not have an
effective departmentwide information security management
program to ensure that sensitive data and critical operations
are adequately addressed and that appropriate security
controls are in place to protect them".
See also, prepared
testimony of Johnnie Frazier (DOC Inspector General) and prepared
testimony of Samuel Bodman (DOC Assistant Secretary for
Technology Policy). |
|
|
| Freedom of Information
Limited by State Copyright |
8/2. The U.S.
Court of Appeals (2ndCir) issued its opinion
in Suffolk
County v. First American, a case involving
state freedom of information law and copyright law. The
Appeals Court held that states may assert copyright to prevent
the dissemination of public records obtained under freedom of
information laws.
First American and others published copies of official tax
maps made by Suffolk County, without permission. Suffolk
County has registered copyrights in these maps. Suffolk County
filed a complaint in U.S. District Court (SDNY)
against First American and others alleging copyright
infringement. Defendants argued that New York's Freedom of
Information Law prevents the County from asserting copyright.
The District Court agreed, and dismissed the complaint. This
appeal followed.
The Appeals Court ruled that states, and their political
subdivisions, may possess copyrights; that the tax maps in
question have sufficient originality to be copyrightable; that
the tax maps in question are not in the public domain; that
New York's state freedom of information law does not abrogate
copyright interests; and that Suffolk County may pursue an
infringement suit against defendants. Reversed and remanded. |
|
|
| More Court Opinions |
8/3. The U.S.
Court of Appeals (9thCir) issued its opinion
[PDF] in Pool
Water Products v. Olin, a private antitrust
action brought under Section 5 of the Clayton Act.
8/2. The U.S.
Court of Appeals (2ndCir) issued its opinion
in Morris
v. Business Concepts, a copyright
infringement case involving registration requirements.
7/31. The U.S. Court
of Appeals (10thCir) issued its opinion
in Qwest v. FCC, a consolidation of petitions for
review of the FCC's orders establishing a federal funding
mechanism to support universal telecommunications services in
high-cost areas. The Appeals Court reversed and remand the
Ninth Order of the FCC "because it does not provide
sufficient reasoning or record evidence to support its
reasonableness." However, the Appeals Court upheld the
Tenth Order, the FCC's computer model of the costs of
providing service in a given area. |
|
|
| New Documents |
Cannon:
Music
Online Competition Act, 8/3 (HTML, TLJ).
USCA:
opinion
in Suffolk County v. First American re state freedom of
information law and copyrights, 8/2 (HTML, USCA).
USDC:
opinion
in NAB v. LOC re streaming music, 8/1 (HTML, TLJ).
USCA:
opinion
in Morris v. Business Concepts re copyright registration, 8/2
(HTML, USCA).
USCA:
opinion
in Pool Water Products v. Olin, 8/3 (PDF, USCA).
USCA:
opinion
in Qwest v. FCC re FCC universal service support orders, 7/31
(HTML, USCA).
GAO:
GAO-01-1004T
re weaknesses in information security at the DOC, 8/3 (PDF,
GAO). |
|
|
|
| Reps. Cannon and Boucher
Introduce Internet Music Copyright Bill |
8/3. Rep. Chris
Cannon (R-UT) and Rep.
Rick Boucher (D-VA) introduced the Music
Online Competition Act of 2001 (MOCA), a bill to amend
several sections of the Copyright Act regarding music and the
Internet.
The bill would expand the in store exemption to include
playing music segments over the Internet, expand the software
backup exemption to include copying digital music for backup
or incidental purposes, and expand the ephemeral copy
exemption by allowing broadcasters and webcasters to make
multiple copies. It would also require record companies that
license an affiliate to also license independent non
affiliated distribution services. It would also amend the
compulsory licensing section to address certain digitally
delivered music.
The bill will go to the House Judiciary
Committee, and its House Courts, Internet, and
Intellectual Property Subcommittee, of which both Rep. Cannon
and Rep. Boucher are members. However, a recent hearing of the
subcommittee revealed that some other members, and some
industry groups, do not favor some of the provisions contained
in the bill.
 Rep. Cannon (right)
said on August 3 that "The copyright law's present music
licensing system is unique in its complexity and problems. The
Internet has demonstrated a need for streamlining and
clarification. Under current law, it is impossible for any
online company - whether a behemoth like MusicNet or a small
company like Listen.Com - to obtain the necessary licenses in
a timely and efficient way." See, Rep. Cannon's statement.
Rep. Boucher stated that the bill will "promote a
legitimate online music marketplace" by removing
obstacles in the copyright laws. See, Rep. Boucher's statement
and summary
of the bill. |
|
|
| Summary of the MOCA |
The bill was printed on 18 pages. It is organized in seven
sections. Section 1 is the title of the bill.
Section
2 expands the in store exemption to infringement (17
U.S.C. § 110(7)) to include sampling over the Internet.
Currently, it is not an infringement of copyright if a store
plays music, if there is no admission charge, and "the
sole purpose of the performance is to promote the retail sale
of copies". Section 2 expands this exemption to include
the playing of up to 30 seconds of a song (up to 60 seconds
for long recordings) "by digital audio transmission, by
or through a digital online service open to the public at
large".
Section
3 makes changes to the emphemeral recordings
exception to exclusive rights (17 U.S.C.
§ 112). Current law allows a broadcaster to make one copy
"for purposes of archival preservation or security".
Section 3 of the bill would allow broadcasters and webcasters
to make "one or more copies". Rep. Boucher explained
that the purpose of this is "to accommodate the need for
different bit rates (e.g., dial-up, broadband), different
formats (e.g., RealPlayer or Windows Media Player), and
caching throughout the network to ensure efficient and timely
delivery to consumers."
Section
6 expands the software backup exemption to
infringement (17 U.S.C.
§ 117) to include digital music. Under current law the
owner of a copy of a computer program is allowed to make a
backup copy. Section 6 of the bill would expand this to
include back up copies of music files acquired by digital
delivery. The bill would also permit copying of digital music
files that "is incidental to the operation of a device in
the ordinary course of the use of a work", thereby
permitting buffer copies to be made in the course of browsing
or webcasting.
Section
4 changes existing law regarding licensing for
transmission (17 U.S.C.
§ 114). It would, among other things, require record
companies to license independent non- affiliated
distribution services. It provides that "If the copyright
owner of a sound recording licenses an affiliated entity the
right to reproduce the copyrighted work, to distribute the
copyrighted work to the public by means of a digital
phonorecord delivery or to perform the copyrighted work
publicly, the copyright owner shall make the licensed sound
recording available on no less favorable terms and conditions
to all bona fide entities that offer similar services".
Section
5 changes existing law regarding compulsory licensing
(17
U.S.C. § 115) with respect to compulsory licensing of
digital music. However, Rep. Cannon insisted that "RIAA
has said that MOCA contains a compulsory license for
performance rights. That is just not true."
Section
7 requires the Copyright
Office to conduct an evaluation, and write a report that
includes recommendations for further legislation by the
Congress. |
|
|
| RIAA Reaction to MOCA |
8/3. The Recording Industry
Association of America (RIAA) opposes the bill, and
promises to fight it. Hillary Rosen, the P/CEO of the RIAA had
this to say: "A protracted legislative fight will not
move us closer to where the music industry wants to be -
delivering music to fans through a variety of different,
innovative websites. Unfortunately, the Cannon/Boucher bill
introduced today will divert time, energy and resources from
achieving that goal. It is essentially a solution -- a very
bad solution -- in search of a problem."
Rosen continued: "The bill substitutes government
regulation for the marketplace. This is not only wrong, it is
also inconsistent with the strongly held views of experts and
the private sector that government regulation of the Internet
would be a disastrous mistake. Many in the industry will fight
this bill aggressively because we know that the marketplace is
already moving in the right direction and that consumers will
be served well by both the current and coming plans for online
music services." See, RIAA release. |
|
|
| More New Bills |
8/2. Sen. Joe
Lieberman (D-CT) introduced S 1324, the Senate companion
bill to the House bill
to reform the Alternative Minimum Tax (AMT) treatment of
Incentive Stock Options (ISOs). The bill would provide relief
to some workers at high tech companies who exercised stock
options before their companies' stock prices plummeted in
2000. The bill was referred to the Senate Finance
Committee.
8/2. Sen. Maria Cantwell
(D-WA) introduced S 1337, a bill to provide for national
digital school districts. The bill was referred to the
Committee on Health, Education, Labor, and Pensions.
8/2. Sen. Byron Dorgan
(D-ND) and Sen. Ted
Stevens (R-AK) S 1342, a bill to allocate H-1B visas for
demonstration projects in rural areas. The bill was referred
to the Senate
Judiciary Committee.
8/2. Sen. Max Baucus
(D-MT) and Sen. Robert Byrd
(D-WV) introduced S 1347, a bill to establish a Congressional
Trade Office. The bill was referred to the Committee on
Governmental Affairs. |
|
|
|
| Court Upholds Copyright
Office Rule on Webcasting Music |
8/2. The U.S. District Court (EDPenn)
issued its opinion
in Bonneville v. Peters (also known at National Association of
Broadcasters v. Copyright Office), regarding the Copyright Office's
rules regarding webcasting music over the Internet.
The Copyright Office (CO) adopted new
rules [PDF] on December 11, 2000. It determined that AM/FM
broadcast signals transmitted simultaneously over a digital
communications network, such as the Internet, are not exempted
by Section
114(d)(1)(A) of the Copyright Act from paying royalties.
Plaintiffs filed a complaint
in U.S. District Court on January 25, 2001, against Marybeth
Peters, the Register of Copyrights, seeking to have this rule
overturned. On August 1, the District Court upheld the rule.
Edward Fritts, the P/CEO of the NAB stated that
"Broadcasters, record companies and consumers have long
enjoyed a symbiotic relationship whereby airplay on radio
stations benefits all parties, along with generating enormous
revenues for the record labels. We’re disappointed that this
unique relationship will be disrupted by the court ruling.
Broadcasters currently pay in excess of $300 million annually
in music licensing fees to compensate songwriters and music
publishers. Any additional fee to compensate record companies
would be unfair and unreasonable, and for that reason, we are
reviewing our options." See, NAB
release.
Hillary Rosen, P/CEO of the RIAA,
had this to say: "We are pleased that the court upheld
the rights of artists and record companies. We now look
forward to working with the broadcasters for a smooth
transition into this marketplace." See, RIAA release. |
|
|
| Monday, August 6 |
9:00 AM - 5:00 PM. The FCC's Consumer/Disability
Telecommunications Advisory Committee will meet. Location:
FCC, 445 12th Street, SW, Room TW-C305, Washington DC.
Deadline for FCC to file
petition for rehearing before the U.S. Court of Appeals (DCCir)
in NextWave v. FCC, in the never ending battle over
cancellation of the bankrupt NextWave's spectrum
licenses. See, June 22, 2001 opinion
of the Appeals Court. |
|
|
| Tuesday, August 7 |
10:00 AM. The U.S. Court of
Appeals for the Federal Circuit will hear oral argument in
Xerox v. 3Com, No. 00-1464, a patent infringement case
involving handwriting recognition software. Location:
Courtroom 402, 717 Madison Pl., NW, Washington DC.
10:00 AM. The U.S. Court of
Appeals for the Federal Circuit will hear oral argument in
Taiwan Semiconductor v. ITC, No. 01-1060. Location:
Courtroom 402, 717 Madison Pl., NW, Washington DC. |
|
|
| People and Appointments |
8/2. The Senate
Judiciary Committee, and then the full Senate, approved
the nomination of William Riley to be U.S. Circuit
Judge for the Eighth Circuit.
7/31. The law firm of Howrey Simon
announced the addition of nine new partners in its Houston and
Chicago offices, six of whom focus on intellectual property. Edward
O’Toole, Richard Schnurr, Anthony Nimmo
and Christine Dudzik joined the Chicago office from Marshall O'Toole
Gerstein Murray & Borun. Michael Padden joined
the Chicago office from Gardner
Carton & Douglas. Stephen Lundwall joined the
Houston office. See, HS
release. |
|
|
| FCC NOI Re Video
Competition |
| 8/3. August 3 was the deadline to file comments with the FCC
in its Notice
of Inquiry [PDF] regarding video competition. On June 20,
2001 the FCC adopted a Notice of Inquiry (NOI) into the status
of competition in the market for the delivery of video
programming. The FCC stated in a release
that "The NOI seeks information that will allow the FCC
to evaluate the status of competition in the video
marketplace, prospects for new entrants to that market, and
its effect on the cable television industry and consumers. The
NOI also solicits information regarding the extent to which
consumers have choices among video programming distributors
and delivery technologies." See, for example, comment
submitted by Motorola and comment
submitted by AT&T. Reply comments are due by September 5.
See, CS Docket No. 01-129. |
|
|
| More News |
8/3. The ICANN
released an agenda
for its September 9 meeting in Montevideo, Uraquay.
8/2. USTR General Counsel
Peter Davidson gave testimony
to the U.S.-China Security Review Commission regarding the PR
China's imminent accession to the WTO.
8/2. The Department of Justice
fined Unisys $1,430,000
for failing to disclose information to the government during
1990 contract negotiations. See. DOJ
release.
8/3. Department of Defense (DOD), General Services
Administration (GSA), and National Aeronautics and Space
Administration (NASA) published a notice
in the Federal Register that withdraws Federal Acquisition
Regulation (FAR) case 2000-014, Signing and Retention of
High-Technology Workers. This FAR, which was published in the
Federal Register on December 28, 2000, proposed to explicitly
make allowable signing and retention bonuses in order to
recruit and retain workers that have critical technical
skills. The August 3 stated that a reason for the withdrawal
is that signing and retention bonuses were already
permissible. See, Federal Register, Aug. 3, 2001, Vol. 66, No.
150, at Pages 40837 - 40838. |
|
|
| About Tech Law Journal |
Tech Law Journal is a free access web site
and e-mail alert that provides news, records, and analysis of
legislation, litigation, and regulation affecting the computer
and Internet industry. This e-mail service is offered free of
charge to anyone who requests it. Just provide TLJ an e-mail
address.
Number of subscribers: 1,927.
Contact: 202-364-8882; E-mail.
P.O. Box 15186, Washington DC, 20003.
Privacy
Policy
Notices
& Disclaimers
Copyright 1998 - 2001 David Carney, dba Tech Law Journal. All
rights reserved. |
|
|