|Microsoft Appeals to
|8/7. Microsoft filed a Petition
for Writ of Certiorari with the Supreme Court.
Microsoft also filed a motion
titled "Appellant's Motion for Stay of the Mandate
Pending Petition for Writ of Certiorari" with the U.S. Court of Appeals (DCCir).
See also, PDF
copy in USCA web site.
Microsoft seeks to have the entirety of U.S. District Court
Judge Thomas Jackson's findings of fact and conclusions of law
vacated. Microsoft submits that the question presented
for review is "Whether the court of appeals erred in not
disqualifying the district judge as of the date of his
earliest known violation of 28 U.S.C.
§ 455(a) and the Code for Conduct of United States
Judges, thus requiring that his findings of fact and
conclusions of law be vacated."
On June 28 the U.S.
Court of Appeals (DCCir) issued its en
banc opinion in USA v. Microsoft. This is an antitrust
action brought by the Department of Justice's Antitrust Division and by
individual states. The Court of Appeals affirmed in part,
reversed in part, and remanded in part the District Court's
judgment assessing liability. The Appeals Court affirmed in
part the Judge Jackson's judgment that Microsoft violated
§ 2 of the Sherman Act by employing anticompetitive
means to maintain a monopoly in the operating system market.
It vacated in full the Final Judgment containing the break up
order. Finally, it remanded the case to a different trial
judge, because Judge Jackson "engaged in impermissible ex
parte contacts by holding secret interviews with members of
the media and made numerous offensive comments about Microsoft
officials in public statements outside of the courtroom,
giving rise to an appearance of partiality."
ProComp, an anti
Microsoft group, released a statement
on August 2 in which it stated that "It is clear that
Microsoft has gone into its four-corners offense, trying to
run out the clock until its unlawful product, Windows XP, is
shipped to consumers. It should not be surprising if Microsoft
next appeals to the U.S. Supreme Court".
Steve DelBianco, VP of the Association
for Competitive Technology (ACT), a pro Microsoft group,
stated on August 7 that "It's ironic that some, including
AOL Time Warner, would discount Microsoft's decision as a
delaying tactic, when it is clear that they are desperately
trying to delay Windows XP as they continue to play catch-up
on the innovation they've neglected while whining to Congress
and the courts. If AOL and the state Attorneys General had a
credible case to block Windows XP, they could file for
injunction at any time. But they don’t have a case,
and they can't be so foolish as to stop the rollout of a
product that will give a much needed shot in the arm to the
for Writ of Certiorari, 8/7 (HTML, MSFT).
for stay in USA v. Microsoft, 8/7 (HTML, MSFT).
re antitrust, 8/7 (HTML, FTC).
in Pavlovich v. Superior Court re personal jurisdiction over
non resident web site operator, 8/7 (PDF, CalApp).
to Commerce Sec. Evans re ICANN and TLDs, 8/7 (HTML, TLJ).
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|Muris Promises Continuity
of Antitrust Enforcement
|8/7. FTC Chairman Timothy Muris
gave a speech
in Chicago to the American
Bar Association's Antitrust Section Annual Meeting titled
"Antitrust Enforcement at the Federal Trade Commission:
In a Word -- Continuity". He stated that "I am fully
committed to the institution and its mission of protecting
consumers through actively enforcing our antitrust and
consumer protection laws" and that "Continuity will
be the norm, with changes at the margins."
He summarized the purpose of antitrust enforcement by the FTC:
"Although there are disagreements about specific cases,
there is widespread agreement that the purpose of antitrust is
to protect consumers, that economic analysis should guide case
selection, and that horizontal cases, both mergers and
agreements among competitors, are the mainstays of
antitrust." He also stated that press reports that
"the Bush administration will relax antitrust
enforcement" are unfounded.
He told the gathering of antitrust practitioners that "if
you come in with transactions that would not fly in the past,
you are likely to "crash" unless you have
compelling, stubborn facts on your side. To some of you, let
me say it more bluntly. A few members of the merger bar have
been telling the press that we are going to have more relaxed
standards. Those folks will be doing their actual or potential
clients a big disservice if those clients act on that
Antitrust and High Tech. Muris also addressed high tech
companies. He stated that "Merger analysis in "high
tech" industries is not fundamentally different than in
other industries. The basic Guidelines analysis can be
applied. We should proceed, however, cognizant of our lesser
experience in high tech industries. Moreover, the high tech
arena, by its nature, is constantly changing. New high tech
industries, often with new technical issues, continue to be
born and to change. One aspect of high tech may warrant
especially close scrutiny. The fierce competition for success
in these industries often results in the "winner"
enjoying a (perhaps short-lived) monopoly. We should be
especially reluctant to allow those firms to merge with actual
(or potential) competitors. This was part of the basis for my
criticism of the Clinton Antitrust Division's failure to
challenge the Microsoft-Web TV merger."
More on Microsoft. Muris also addressed non merger
enforcement. "There are several important issues here,
such as competition in pharmaceuticals and intellectual
property issues. ... More recent developments confirm the
importance of a strong non-merger agenda. We used to believe
that antitrust counseling, at least for major companies, would
generally deter anticompetitive conduct. We have learned,
however, from ADM, the vitamins case, numerous other
price-fixing cases, and from Microsoft."
|California Has Personal
Jurisdiction over Non Resident DeCSS Poster
|8/7. The Court of Appeal of California (6th Appellate
District) issued its opinion
[PDF] in Pavlovich
v. Superior Court, holding that California's
long-arm jurisdiction statute reaches owners, publishers, and
operators of web sites when, in violation of California law,
they make available for copying or distribution trade secrets
or copyrighted material of California companies.
Jurisdictional Issue. This opinion does not address the
merits of the case; that is, it does not address whether or
not the defendant did violate the trade secrets or copyrights
of the plaintiff. Rather, this opinion deals only with
jurisdiction; that is, it addresses whether the California
courts have authority to try this case. California's long arm
jurisdiction statute authorizes California courts to
"exercise jurisdiction on any basis not inconsistent with
the Constitution of this state or of the United States."
DVD CCA Complaint. The DVD
Copy Control Association (DVD CCA) filed a complaint in
the Superior Court for Santa Clara County California against
Matthew Pavlovich and others alleging misappropriation of
trade secrets and other claims.
Defendant. Pavlovich published the DeCSS program in a
web site which he owned and operated. He is not a resident of
California. However, he is the President of a technology start
up company, and a leader of the open source movement. He also
testified that he knew that the movie industry was based in
California, and that DeCSS would harm that industry. He sought
to quash the summons.
DVD and DeCSS. DVD is sometimes known as Digital
Versatile Disc. CSS is a Content Scrambling System for DVD to
protect intellectual property rights by means of encryption.
DeCSS is a decryption tool that facilitates piracy.
Holding. The Court of Appeal held that the exercise of
jurisdiction over Pavlovich is consistent with California's
long arm statute. The Court relied heavily on the Supreme
Court of the United States' opinion in Calder
v. Jones, 465 U.S. 783 (1984), which held that the
California courts could exercise jurisdiction in a defamation
case over a non resident Floridian who published an article in
the National Enquirer, a print publication that circulated in
California. The defendant in Calder, like Pavlovich, had
sufficient minimum contacts with the California that it would
not offend traditional notions of fair play and substantial
justice to exercise jurisdiction, notwithstanding non resident
status. In both cases the defendant knew that his activities
were actionable, and were causing injury in California. The
Court stated that Pavlovich's knowledge that the movie
industry was based in California was significant.
|Representatives Write Sec. Evans re TLDs
|8/7. Rep. Billy
Tauzin (R-LA), Rep.
John Dingell (D-MI), Rep.
Fred Upton (R-MI), and Rep. Ed Markey (D-MA)
sent a letter
to Commerce Secretary Donald Evans regarding the ICANN
process for selecting new Internet Top Level Domain Names (TLDs).
The four want the "ICANN to expeditiously initiate a new
TLD round", and want the Department of Commerce to
monitor the ICANN with respect to this. The four are the
Chairman and ranking Democrat of the House Commerce Committee,
and the Chairman and ranking Democrat on the Telecom and
Internet Subcommittee, respectively.
They also wrote that "there is pending in the
Telecommunications and the Internet Subcommittee a bill that
would require the Department of Commerce to negotiate with
ICANN to chose an entity to operate a “.kids” domain.
“.kids” would provide a safe place for children to access
the Internet, a goal we all strongly support." See, HR
2417, the Dot Kids Domain Name Act of 2001, sponsored by Rep. John Shimkus
(R-IL) and Rep. Markey.
|Wednesday, August 8
|1:00 PM. There will be a press conference titled
"Surveillance vs. Privacy." For more information,
contact David Saddler of the Security
Industry Association at 703-683-0276. Location: National Press Club, Murrow
Room, Washington DC.
|Thursday, August 9
|9:30 AM. The FCC will hold a meeting. See, agenda.
Location: FCC, 445 12th Street, SW, Room TW- C305.The agenda
includes the following:
• A Third Notice of Inquiry concerning the
availability of advanced services pursuant to Section 706 of
the Telecom Act in preparation for its Third Report on the
Deployment of Advanced Telecommunications Capability to all
Americans. (CC Docket No. 98-146)
• The Commission will consider a Memorandum Opinion
and Order and Further Notice of Proposed Rule Making exploring
additional frequency bands below 3 GHz to support the
introduction of advanced wireless service, resolving in part
petitions for reconsideration of 2 GHz MSS band arrangements,
and addressing petitions for rulemaking concerning the 2 GHz
MSS and Unlicensed PCS bands.
9:30 AM. There will be a panel discussion titled
"Perspectives on China's Accession Into the WTO."
The speakers will be Rick Dunham (Business Week), Pieter
Bottelier (Harvard University), Will Martin (World Bank), Don
Phillips, James Tsao (Journal of Asian Economics). Location: National Press Club,
|BellSouth Seeks to Redefine
released a paper
[PDF] titled "Measuring Local Competition in a Changing
Telecommunications Market". It was written by Steve
Pociask, and funded by BellSouth. The paper argues "once
separate industries are converging to form an Information
Sector, and with this convergence comes heightened
inter-industry competition between the various means of
transporting electronic information. However, while the
Information Sector is rapidly changing, government
measurements of competition have not".
The paper states that currently, "telecommunications
industry policymakers rely on old measurements that understate
and underestimate the actual level of the competition."
Instead, the paper asserts that any measures of the level of
competition should include use of cell phones and Internet
data services, including email messaging, instant messaging,
voice over internet protocol, IP teleconferencing and virtual
PBX services. See, also BS
The paper does not address the competition goals of the
Telecom Act of 1996. One of the main goals of the 1996 Act was
to end the incumbent local exchange carriers' (ILECs) monopoly
control over local wireline phone service. These ILECs, such
as BellSouth, own almost all of the local facilities,
including the central offices and the copper wires that run
from the local offices into homes and businesses. § 151
of the Telecom Act requires telecommunications carriers to
interconnect with other telecommunications carriers. It also
mandates many specific things which ILECs must do for their
competitors. ILECs have the duties to negotiate, to
interconnect, to provide unbundled access to their network
elements, to offer communication services at wholesale rates,
and to allow collocation of equipment of competitive local
exchange carriers (CLECs) in their central offices. However,
the Bells have dragged their feet, and as a result,
competition in the local loop has fallen far short of the
goals of the authors of the 1996 Act.
BellSouth's paper advocates an abandonment of the goal of
local wireline competition as envisioned by the 1996 Act. What
now matters, according to BellSouth's paper, is competition
between wireline service and wireless and Internet services,
not competition among wireline service providers.