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September 4, 2001, 9:00 AM ET, Alert No. 260.
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FCC Updates Licensing Records to Reflect Court Mandate In Nextwave Case
8/31. The FCC announced that its "Wireless Telecommunications Bureau will update its licensing records to reflect the court's mandate" in NextWave v. FCC. The FCC added that "The United States and the Commission have indicated their intention to ask the Supreme Court of the United States to review the D.C. Circuit decision. In addition, related litigation is pending in the Bankruptcy Court for the Southern District of New York, Case No. 98 B 21529 (ASH); and there are potential or ongoing related regulatory proceedings before the Commission. These litigation and/or regulatory matters may affect the status of the involved licenses." See, FCC release.
NextWave Communications obtained spectrum licenses at FCC auctions in 1996. The FCC permitted NextWave to obtain the licenses under an installment plan, thus creating a debtor creditor relationship between NextWave and the FCC. NextWave did not make payments required by the plan, and filed a Chapter 11 bankruptcy petition. The FCC was blocked by the bankruptcy court, citing 525 of the Bankruptcy Code. The U.S. District Court (SNDY) affirmed. The U.S. Court of Appeals (2ndCir) 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, VoiceStream and other successful bidders, which intend to use it for 3G wireless, and other, services.
However, NextWave petitioned the FCC to reconsider its cancellation of its licenses. The FCC refused, and NextWave petitioned for review by the Court of Appeals in the District of Columbia. The DC Circuit ruled on June 22 that the 2nd Circuit had not already addressed NextWave's bankruptcy claims. It also wrote in its opinion that the FCC is prevented from canceling the spectrum licenses by 525 of the Bankruptcy Code. It 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." See, NextWave Personal Communications Inc. v. FCC, 254 F.3d 130 (D.C. Cir. 2001).
DOJ Argues Supreme Court Should Deny Certiorari in Microsoft Case
8/31. The Department of Justice (DOJ) filed with the Supreme Court of the United States its brief in opposition to Microsoft's petition for writ of certiorari. Microsoft's petition raises the sole issue of whether Judge Jackson's improper out of Court contacts warrant vacating Judge Jackson's finding of fact and conclusions of law in their entirety.
The DOJ argues in its brief that Microsoft's petition should be denied for three reasons. First, it argues that this is an interlocutory appeal in a case that could later generate another petition for writ of certiorari; the Supreme Court should not take interlocutory appeals.
Second, the DOJ argues that "Microsoft's assertion that the court of appeals' decision conflicts with decisions of this Court and other courts of appeals rests squarely on a mischaracterization of the court of appeals' ruling, which simply applies the controlling authority, Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847 (1988), to the facts of this case."
Third, the DOJ argues that "the court of appeals' unanimous en banc decision properly applied Liljeberg, which specifically recognizes that courts of appeals have considerable discretion in resolving the factbound question of the proper remedy for specific instances of judicial misconduct."
EU Initiates Proceeding Against Microsoft
8/30. The European Commission announced that Microsoft "may have violated European antitrust rules by using illegal practices to extend its dominant position in the market for personal computer operating systems into the market for low-end server operating systems. Low-end server systems are cheaper servers usually used as file and print servers as well as Web servers. In a Statement of Objections, the Commission also alleges that Microsoft is illegally tying its Media Player product with its dominant Windows operating system. This Statement of Objections supplements one sent to the company a year ago and adds a new dimension to the Commission's concerns that Microsoft's actions may harm innovation and restrict choice for consumers. A Statement of Objections is a formal step in European antitrust proceedings, which does not prejudge the final outcome." See, EU release.
Microsoft issued a release in which it asserted that the EU's latest action is "a constructive step in the ongoing dialogue on these issues." Microsoft also stated that it "confirmed today in discussions with European Commission staff that the Commission has no plans to seek to block the launch of Windows XP or any other Microsoft product in Europe."
Jean Philippe Courtois, President of Microsoft EMEA, stated in the same release that "We are confident that once it has completed its investigation, the European Commission will be assured that we run our business in full compliance with EU law".
Ken Wasch, President of the SIIA, an anti Microsoft group based in Washington DC, stated that "The filing of this case confirms that Microsoft's anti- competitive practices are not confined to the desktop. Rather than replaying the debate about the desktop, applications and the browser, the Commission has appropriately focused on the new challenges resulting from Microsoft's leveraging its monopoly on the PC." See, SIIA release.
Franchising for Profit
8/30. The U.S. Court of Appeals (5thCir) issued its opinion in USA v. Williams, affirming a conviction of a city councilman, who as a member of a local franchising authority, sought a cash bribe for voting for a renewal of a cable TV franchise.
The Defendant, Robert Williams, was a City Councilman for the City of Jackson, Mississippi. Time Warner sought a renewal of its cable TV franchise. Williams sought $150,000 in cash from Time Warner for his vote. He was convicted of conspiracy to commit extortion and solicitation of bribery payments. The Court of Appeals affirmed.
Bush Addresses Deployment of Broadband Internet Access
8/31. President Bush stated at a press conference that broadband deployment is resulting from market activity, and that broadband access in rural areas will come from "over the air" rather than wireline service.
President and Mrs. Bush held a press conference to announce revisions to the White House web site at which President Bush was asked, "what role should the federal government play in helping deploy high speed Internet access?" He responded, "Well, a lot of that is going to be taking place through the market. And technology is such that areas that might not get access quickly as a result of no economies of purchase, or economies of scale, will be able to have Internet access. I think, for example, of Crawford, Texas. It's a place where you're not going to generally get a lot of fiber-optics, although I think there may be some there as a result of Laura's and my presence. Hopefully that high speed access will come as a result of -- over the air, as opposed to through fiber-optics. And once we get over the air high speed access, then a lot of rural America that heretofore hasn't had access will get it. The technologies are evolving. One of my concerns, of course, is the economic slowdown will perhaps slow down some of the progress made, as far as high speed access. And we've done something about it. I'm going to remind Congress that they need not overspend, and should not overspend. It's going to affect economic growth; that all of us in Washington need to be thinking about how to grow the economy. ..." See, transcript.
CDT Releases Privacy Report
8/30. The Center for Democracy and Technology (CDT) released a report [7 MB in PDF] regarding the privacy practices of online financial services providers. The CDT report states that out of 100 banks studied that offer their customers the ability to open accounts online and use other banking services online, only 22% provide their customers equally convenient online means of preventing information sharing with other companies.
The CDT also submitted a complaint to the Federal Trade Commission (FTC) in which it stated that five mortgage companies (Advantage Mortgage, Ameriwest Mortgage, Central New England Mortgage, GM Mortgage, and Online Mortgage Corporation) are in violation of FTC regulations promulgated pursuant to the Gramm Leach Bliley Act. The complaint states that these companies collect personally identifiable financial information on their web sites in connection with granting mortgages to consumers, but do also offer clear and conspicuous notice of their privacy policies. The complaint also requests that the FTC initiate an investigation of the privacy practices of the five companies.
HP to Purchase Compaq
9/3. Hewlett Packard and Compaq Computer announced a definitive merger agreement. Carly Fiorina, currently C/CEO of HP, will continue as C/CEO of the merged entity. Michael Capellas, C/CEO of Compaq, will be President. HP stated in a release that "Under the terms of the agreement, unanimously approved by both Boards of Directors, Compaq shareowners will receive 0.6325 of a newly issued HP share for each share of Compaq, giving the merger a current value of approximately $25 billion. HP shareowners will own approximately 64% and Compaq shareowners 36% of the merged company. The transaction, which is expected to be tax-free to shareowners of both companies for U.S. federal income tax purposes, will be accounted for as a purchase." The transaction is subject to regulatory and shareholder approvals. See also, Compaq release.
WIPO Releases Second Report on Rights in Domain Names
9/3. The WIPO released its report (and executive summary) titled "The Recognition of Rights and the Uses of Names in the Internet Domain Name System: Report of the Second WIPO Internet Domain Name Process." The first WIPO report on the domain name process addressed trademarks and domain names. It recommended the establishment of the existing dispute resolution procedure to deal with disputes concerning the bad faith registration and use of trademarks as domain names. This second report addresses International Nonproprietary Names (INNs) for pharmaceutical substances, names and acronyms of international intergovernmental organizations (IGOs), personal names, geographical identifiers, and trade names which are the names used by enterprises to identify themselves.
INNs. The report recommended that "a simple mechanism be established which would protect INNs against identical domain name registrations."
IGOs. The report recommended that "States, as the constituents of IGOs, should work towards the establishment of an administrative dispute- resolution procedure, akin to the UDRP, where an IGO could bring a complaint that a domain name was the same or confusingly similar to the name or acronym of the IGO, that it has been registered without legal justification and that it is likely to create a misleading association between the holder of the domain name registration and the IGO in question."
Personal Names. The report concluded that "it was found that there are no existing international norms dealing with their protection and that national legal systems provide for a wide diversity of legal approaches to their protection ... it is suggested that the international community needs to decide whether it wishes to work towards some means of protection of personal names against their abusive registration as domain names."
Geographical Identifiers. The report states that there is "considerable evidence of the widespread registration of the names of countries, places within countries and indigenous peoples as domain names by persons unassociated with the countries, places or peoples. However, these areas are not covered by existing international laws and a decision needs to be taken as to whether such laws ought to be developed."
Trade Names. The report recommended that no action be taken to protect trade names.
Copyright Infringement
8/30. The U.S. Court of Appeals (6thCir) issued its opinion in Murray Hill Publications v. ABC, a case involving claims of copyright infringement, violation of the Lanham Act, and other claims. The Appeals Court affirmed the District Court's grant of summary judgment to defendant, ABC (dba WJR Radio).
Copyright Office Releases DMCA Report
8/30. The Copyright Office (CO) released its report on the effects of Title 1 of the Digital Millennium Copyright Act (DMCA) and the development of electronic commerce and associated technology on the operation of 109 and 117 of Title 17. The report also evaluates the relationship between existing and emerging technology and the operation of those sections. The report was required by 104 of the DMCA.
People and Appointments
9/4. Robert Mueller begins as Director of the FBI.
8/31. Scott Marcus was named Senior Advisor for Internet Technology at the FCC. He was previously CTO of Genuity. The FCC stated in a release [PDF] that his "research interests include the economics and public policy implications of internet backbone interconnection, the measurement and prediction of Internet usage, the management and operation of data networks, and general data network design." He is also the author of Designing Wide Area Networks and Internetworks: A Practical Guide (Amazon sales rank: 60,573). See also, Genuity bio.
8/31. President Bush announced his intent to nominate Rockwell Schnabel to be Representative of the U.S. to the European Union. He is currently Co-Chairman of Trident Capital, a private equity venture capital firm that focuses on information services companies. It is based in Los Angeles, California. See, White House release.
Tuesday, September 4
The Senate returns from its August recess. It is scheduled to begin several days of debate on S 149, the Export Administration Act of 2001.
12:30 PM. Rod Paige, Secretary of Education, will speak at a National Press Club luncheon. Location: 529 14th St. NW, 13th Floor, Washington DC.
Wednesday, September 5
The House returns from its August recess.
3:30 PM. The Senate Intelligence Committee will hold a hearing to examine the FY 2002 Intelligence Authorization Bill, focusing on information leak provisions. Location: Room 216, Hart Building.
Deadline to file reply comments with the FCC in its Notice of Inquiry (NOI) regarding video competition. On June 20, 2001 the FCC adopted a 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, CS Docket No. 01-129.
Thursday, September 6
9:30 AM. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral argument in Verizon v. FCC, No. 00-1207. Judges Ginsburg, Edwards and Sentelle will preside. Location: 333 Constitution Ave., NW, Washington DC.
9:30 AM. The U.S. Court of Appeals for the District of Columbia Circuit will hear oral argument in National Association of Broadcasters v. FCC, No. 00-1054. Judges Henderson, Rogers and Tatel will preside. Location: 333 Constitution Ave., NW, Washington DC.
10:00 AM. The Senate Judiciary Committee will hold an executive business meeting. Location: Room 226, Dirksen Building.
USPTO Rules
8/30. The USPTO published a notice in the Federal Register that it is temporarily amending its rules regarding the timing of national stage commencement in the U.S. for Patent Cooperation Treaty (PCT) applications. It is amending its regulations to include the current statutory provisions that define when national stage commencement occurs in an application filed under the PCT. See, Federal Register, August 30, 2001, Vol. 66, No. 169, at Pages 45775 - 45777.
8/30. The USPTO published a notice in the Federal Register regarding its notice of proposed rulemaking (NPRM) proposing to amend its rules to make electronic filing of trademark documents mandatory, subject to certain exceptions. Comments must be received by October 29, 2001. A public hearing will be held at 10:00 AM on October 12, 2001, in Room 911, Crystal Park 2, 2121 Crystal Drive, Arlington, Virginia. Requests to present oral testimony are due by October 5, 2001. See, Federal Register, August 30, 2001, Vol. 66, No. 169, at Pages 45792 - 45797.
Indictment Returned for Violation of Export Rules
8/31. A grand jury of the U.S. District Court (NDCal) returned an indictment [PDF] of Berkeley Nucleonics Corporation (BNC) and three of its employees, David Brown, Richard Hamilton, and Vincent Delfino, alleging violation of 18 U.S.C. 371 and the Export Administration Regulations regarding exports to India in violation of 50 U.S.C. 1705(b).
The indictment alleges that BNC and its employees solicited business for and knowingly exported nuclear pulse generators and related parts to various entities in India without the export license required by the Bureau of Export Administration of the Department of Commerce. Jeff Cole and Candace Kelly are the Assistant U.S. Attorneys who are prosecuting the case.
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