Tech Law Journal Daily E-Mail Alert
November 9, 2001, 9:00 AM ET, Alert No. 305.
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NDCal: French Court Order Restricting Internet Speech is Unenforceable in U.S.
11/7. The U.S. District Court (NDCal) issued its Order Granting Motion for Summary Judgment [PDF] in favor of Yahoo in the case Yahoo v. LICRA. The case, which concerns a French court order limiting speech on Yahoo servers located in the U.S., involves constitutional and procedural issues raised by Internet speech. The District Court rejected the French defendants' procedural arguments that the U.S. District Court should not address the merits of the motion for summary judgment, and then held that the judgment of the French court is rendered unenforceable in the U.S. by the First Amendment.
French Action. Last year two French groups, LICRA and UEJF, obtained a judgment from a French court ordering Yahoo to "render impossible" access by persons in France to certain content on servers located in the United States. The French judgment pertained to Nazi related content. The French court issued the following order: "We order the Company YAHOO! Inc. to take all necessary measures to dissuade and render impossible any access via Yahoo.com to the Nazi artifact auction service and to any other site or service that may be construed as constituting an apology for Nazism or a contesting of Nazi crimes."
U.S. Action. Yahoo, which is a Delaware corporation based in San Jose, California, then filed a complaint in U.S. District Court (NDCal) seeking a declaratory judgment that the judgment the French court is unenforceable in the U.S. as contrary to the U.S. Constitution, and in particular, the First Amendment.
French Motion to Dismiss Previously Denied. The French defendants, who asserted French jurisdiction over Yahoo in their suit in France, asserted that the U.S. Court did not have jurisdiction over them in Yahoo's suit against them. They filed a Rule 12(b)(2) motion to dismiss the complaint in the U.S. District Court for lack of personal jurisdiction. The District Court issued its Order Denying Motion to Dismiss [PDF] on June 7. It held that it had personal jurisdiction over the defendants under California's long arm jurisdiction statute, which permits a court to exercise jurisdiction to the full extent authorized by the Due Process Clause of the Constitution. The Court stated that the purposeful availment requirement was met because defendants had written a demand letter to Yahoo in California, used U.S. Marshals in California to serve papers on Yahoo, and sought an order of the French court directing Yahoo's operations in California.
Substantial Controversy. Much of the District Court's 24 page November 7 opinion is devoted to the various procedural objections raised by the French defendants. The District Court wrote that "The threshold question in any declaratory action thus is whether 'there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.' " (Citation omitted.) The French defendants argued that the actual controversy requirement was not met in this case. They argued that Yahoo could yet appeal in French court, that the French court had not yet fixed a penalty, and that Yahoo, by removing certain Nazi items from its servers, was now in substantial compliance with the French court order. The U.S. District Court rejected these arguments.
The French defendants also argued that the District Court should decline to rule because of the abstention doctrine. The argued that Yahoo was forum shopping, and trying to relitigate an issue already decided by the French court. The District Court rejected this argument. It stated that "the French court has determined that Yahoo's auction site and website hosting on Yahoo.com violate French law." In contrast, "the purpose of the present action is to determine whether a United States court may enforce the French order without running afoul of the First Amendment. The actions involve distinct legal issues ..." Similarly, the District Court also rejected the argument of the French defendants that the French court order poses no real or immediate threat to Yahoo of violation of its First Amendment rights. It also rejected a comity argument.
Discovery. Finally, the District Court rejected the argument that it should delay its ruling while defendants conducted further discovery.
Underlying Issue. The Court began by stating the legal issue before the Court: "This is not a case about the moral acceptability of promoting the symbols or propaganda of Nazism. ... Nor is this case about the right of France or any other nation to determine its own law and social policies. A basic function of a sovereign state is to determine by law what forms of speech and conduct are acceptable within its borders. ... What is at issue here is whether it is consistent with the Constitution and law of the United States for another nation to regulate speech by a United States resident within the United States on the basis that such speech can be accessed by Internet users in that nation."
Holding. With little further explanation, the District Court held that the First Amendment precludes enforcement within the United States of a foreign court order intended to regulate the content of speech over the Internet.
DOJ Restricts Deliveries of HSR Premerger Filings
11/7. The U.S Department of Justice's Antitrust Division announced interim restrictions on the delivery of Hart Scott Rodino Premerger Filings. The DOJ announced that it will only accept documents hand delivered by employees of law firms or in house counsel. It cited security as the reason. See, notice.
People and Appointments
11/8. President Bush announced three nominations for the U.S. Court of Appeals for the Sixth Circuit: David McKeague, Susan Neilson, and Henry Saad. See, White House release. McKeague is a U.S. District Court Judge for the Western District of Michigan in Lansing. Nelson is a Judge on the 3rd Circuit Court, State of Michigan, in Detroit. Saad is a Judge on the Michigan Court of Appeals.
FCC to Phase Out CMRS Spectrum Cap
11/8. The Federal Communications Commission (FCC) announced that it adopted a Report and Order eliminating the 45 megahertz (MHz) cap on Commercial Mobile Radio Services (CMRS) spectrum aggregation. The cap is raised to 55 MHz immediately. The cap will be eliminated altogether on January 1, 2003. See, FCC release. (WT Docket No. 01-14.)
The FCC also announced that it is immediately eliminating the cellular cross interest rule in Metropolitan Statistical Areas (MSAs), but retaining the rule in Rural Service Areas (RSAs).
The FCC's spectrum cap rule prevents any entity from holding an attributable interest in a total of more than 45 MHz of licensed cellular, broadband personal communications service, and specialized mobile radio spectrum regulated as CMRS in any geographic area; however, there is currently an exception in areas designated by the FCC as RSA's, where licensees may hold attributable interests in a total of no more than 55 megahertz.
Commissioner Michael Copps released a statement dissenting from the decision of the majority. He wrote that "We have not adequately analyzed spectrum exhaustion scenarios in the short or near term. We have not adequately evaluated the prospects for economic concentration and the potential for wireless monopolies. We have not performed the extensive public interest evaluation required by statute and expected by Congress and which would include impacts upon small business, rural consumers, ownership diversity, efficient use of the spectrum and the encouragement of new technologies. Instead we simply remove the cap."
Rep. Cliff Stearns (R-FL), the Vice Chairman of the House Commerce Committee's Telecommunications Subcommittee, responded to the FCC's announcement. He stated in a release that "The current 45 MHz spectrum cap hampers innovation and competition in the wireless industry and should be repealed. Raising the cap to 55 MHz is a tentative step in the right direction, but the cap should be repealed now instead of waiting until 2003."
Rep. Stearns is also the sponsor of HR 2535, the Spectrum Resource Assurance Act. It would amend 47 U.S.C. 332(c) to provide that "The Commission shall not impose any limitation on spectrum aggregation for licenses for commercial mobile radio services."
Rep. Stearns stated that "The cap also results in the continued lag of U.S. companies behind Europe and Japan in deploying Third Generation wireless technologies. I will continue to push for repeal of the cap so industry can meet the growing demands for existing services and can deploy advanced services." Third Generation (3G) wireless services are intended to bring broadband wireless access to portable devices.
In contrast, on November 6, Rep. Ed Markey (D-MA), Sen. Ernest Hollings (D-SC), and Sen. Daniel Inouye (D-HI) wrote a letter [PDF] to Chairman Powell stating that "we see no pressing need to make changes to the spectrum cap." They also addressed 3G. They wrote that "some have argued that the cap needs to be eliminated or adjusted upwards so that companies can consolidate their spectrum resources within markets in order to launch new services, such as so-called "3G" services. As you know, in the vast majority of markets wireless companies are not currently constrained by the spectrum cap. Some companies are also offering advanced wireless services using their existing spectrum. Addressing additional spectrum needs for 3G or other services however, is a separate policy question from proposals regarding a rule ensuring competition in the marketplace. If additional spectrum is made available for auction or licensing, the cap can be adjusted without adversely affecting the current number of competitors in the marketplace."
Tom Wheeler, P/CEO of the Cellular Telecommunications & Internet Association (CTIA) praised the decision. He said in a prepared statement that "The decision to eliminate the spectrum cap is an important down payment on overcoming the current spectrum shortage. Unfortunately, the decision delays that down payment by thirteen months. We salute the Bush Administration and the over a dozen key members of Congress who urged the FCC to eliminate the cap immediately."
FCC Announces NPRM on Local Competition
11/8. The FCC announced that it adopted a Notice of Proposed Rulemaking (NPRM) to establish a core set of national performance measurements and standards for incumbent local exchange carriers (ILECs). See, FCC release and separate statements of Chairman Powell and Commission Copps. (CC Docket Nos. 98-56, 98-147, 98-147, 96-98, and 98-141.)
FCC Chairman Michael Powell stated that "With the adoption of this important Notice, the Commission begins a second phase in its implementation of the local competition provisions of the Telecommunications of 1996."
See also, reaction from the USTA, CompTel, and ALTS [PDF].
House Committees Hold Hearing on Identity Theft
11/8. The House Financial Services Committee's (HFSC) Oversight and Investigations Subcommittee and the House Ways and Means Committee's (HWMC) Social Security Subcommittee held a joint hearing titled "Preventing Identity Theft by Terrorists and Criminals".
See, prepared statements of Rep. Clay Shaw (R-FL), Chairman of the HWMC's Subcommittee on Social Security, Rep. Sue Kelly (R-NY), Chairman of the HFSC's Subcommittee on Oversight and Investigations, and Rep. Benjamin Cardin (D-MD). See also, witness statement of Marc Rotenberg, Executive Director of EPIC.
More News
11/8. The Software & Information Industry Association (SIIA) released a paper [PDF] titled "Stretching the Fabric of the Net: Examining the Present and Potential of Peer to Peer Technologies." Adam Ayer and Anne Griffith are the primary authors.
11/8. The Senate Judiciary Committee postponed until next week its consideration of S 986, a bill to allow media coverage of court proceedings. This bill had been scheduled for mark up on November 8.
SEC Chairman Pitt Addresses E-Disclosure
11/8. Securities and Exchange Commission (SEC) Chairman Harvey Pitt gave a speech in New York City to the PLI 33rd Annual Institute on Securities Regulation in which he addressed, among other things, corporate disclosures via electronic communications.
He discussed "the order the Commission issued in connection with a proposed variable annuity offering by American Life. The concept proposed by American Life was that investors could only subscribe to the new investment via the Internet. Before being allowed to subscribe, they must agree to take access to corporate disclosures only via the Internet, in return for which the cost savings of eliminating paper are passed on to investors. In accelerating the effectiveness of this registration statement, we recognized that the passage of a new law, commonly referred to as the E-Sign legislation, necessitates our taking a fresh look at our prior guidance concerning the Internet. We are anxious to undertake and complete this fresh look very quickly. As electronic communications become easier and more widespread, our regulations must keep apace with investor demands."
Chairman Pitt also addressed a future CTO position at the SEC. He stated that "The Commission also has much to do to join the current millennium. Among other things, we are seeking to create a new position of Chief Technology Officer, who can assist us, and those subject to our regulations, in making use of technology to achieve greater clarity for, and accessibility to, corporate information."
Friday, Nov 9
8:30 AM - 1:30 PM. The American Enterprise Institute (AEI) and the Brookings Institute will jointly host a conference titled "Practical Steps to Spectrum Markets". The price to attend is $5 (waived for AEI supporters, government employees, and media). See, online registration page. Location: Wohlstetter Conference Center, Twelfth Floor, 1150 17th Street, NW, Washington DC. The agenda is a follows:
  8:30 AM. Breakfast address by Sen. Ron Wyden (D-OR).
  9:00 AM. Panel I: "Enabling Bandwidth Markets". The speakers will be Thomas Hazlett (AEI), Gregory Rosston (Stanford), Michelle Farquhar (Hogan & Hartson), Evan Kwerel (FCC), and John Williams (FCC).
  10:45 AM. Panel II: "Unblocking Spectrum Allocation". The speakers will be Mike Chartier (Intel), Joe Mitola (Mitre), DeWayne Hendricks (Dandin Group), and Giancarlo Ibarguen (Francisco Marroquin University).
  12:15 PM. Luncheon address by Nancy Victory (NTIA chief).
10:00 AM. The House Government Reform Committee's Government Efficiency, Financial Management, and Intergovernmental Relations Subcommittee will hold a hearing titled Have Federal Agencies Failed to Protect Their Computer Systems? Room 2154, Rayburn Building.
Saturday, Nov 10
8:00 AM. There will be a press conference titled Deliberation, Democracy & the Internet. For more information, contact Lorie Slass, Annenberg Public Policy Center of the University of Pennsylvania, 202-879-6701. Location: Murrow Room, National Press Club, 529 14th St. NW, 13th Floor, Washington DC.
Monday, Nov 12
Veterans' Day.
Day one of a three day meeting of the ICANN titled "Security and Stability of the Internet Naming and Address Allocation Systems". Location: Marina Beach Marriott, Marina del Rey, California.
10:00 AM. There will be a press conference titled "U.S. Internet Council State of the Internet Report". For more information, contact Mark Rhoades at 703 536-5770. Location: Lisagor Room, National Press Club, 529 14th St. NW, 13th Floor, Washington DC.
Tuesday, Nov 13
Day two of a three day meeting of the ICANN titled "Security and Stability of the Internet Naming and Address Allocation Systems". Location: Marina Beach Marriott, Marina del Rey, California.
Deadline to submit applications to the Rural Utilities Service (RUS) for grants to finance the acquisition, construction and installation of equipment, facilities and systems to provide dial-up Internet access services in rural areas. This is a $2 Million pilot program to encourage entities to provide Internet service in areas where it is unavailable. See, notice in Federal Register, August 15, 2001, Vol. 66, No. 158, at Pages 42836 - 42838.
10:00 AM. The Senate Judiciary Committee will hold a hearing to examine homeland defense issues, focusing on sharing information with local law enforcement. Location: Room 226, Dirksen Building.
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