|1/4. The Antitrust
Division of the Department of Justice announced a
reorganization. Charles James,
who was appointed Assistant Attorney General in charge of the
Antitrust Division by President Bush early last year, stated
in a release
that this "positions the Antitrust Division to address
the challenges of the New Economy in the 21st Century while
strengthening enforcement capability in traditional
industries." See also, new organizational
There will be five Deputy Assistant Attorneys General (DAAGs)
for the following areas: Regulatory, Economic, Civil,
Criminal, and International.
Pate is the DAAG for the Regulatory area who was picked
last year. He was previously an antitrust lawyer for the law
firm of Hunton & Williams.
He will preside over three sections: Network & Technology
Section, Telecommunications & Media Section, and
Transportation, Energy & Agriculture Section. The Network
& Technology Section was previously named the
Computers and Finance Section. It will now "focus on
increasingly sophisticated high technology, networking, and
intellectual property issues." The Telecommunications
& Media Section was previously named the
Telecommunications Task Force. The DOJ release states that
"in this era of technology convergence this section's
work extends beyond telecommunications and to reflect the
permanent need for a section that concentrates on these
industries". The third section is Transportation, Energy
& Agriculture. The reorganization eliminates the Health
Care Task Force.
Katz is the DAAG for the Economic area; he was selected
for this post last summer. From 1994 through 1996 he was Chief
Economist at the FCC. More
recently, he was a professor of economics and business at the University of
California at Berkeley's Haas School. The Economic area
includes three sections: Economic Litigation, Economic
Regulation, and Competition Policy.
Herman, a former law partner of Charles James at Jones Day, is the DAAG for
the Civil area. This area will include Litigation I Section,
Litigation II Section, and Litigation III Section. Litigation
I and II Sections are being created by splitting up the old
Litigation II Section. Litigation III Section is the renamed
Civil Task Force. The DOJ release states only that "Each
of these sections will be responsible for the full range of
civil enforcement -- including merger and non-merger matters
-- in their assigned commodities."
Criminal. The former Litigation I Section will be
renamed the National Criminal Enforcement Section. It is part
of the Criminal area.
International. The International area contains just one
section: Foreign Commerce.
|People and Appointments
Nacchio, Ch/CEO of Qwest
Communications, will chair the next term of the Federal Communications Commission's
(FCC's) Network Reliability and
Interoperability Council (NRIC). The group provides
recommendations to the FCC and telecom industry regarding
optimal reliability and interoperability of public
telecommunications networks. In addition, in July of 2001,
President Bush picked Nacchio to be Vice Chairman of the National Security
Telecommunications Advisory Committee (NSTAC); he will be
Chairman starting in March of 2002.The outgoing chair of the
NRIC is James Crowe, P/CEO of Level
Beard retired from the law firm of Gibson Dunn & Crutcher.
He was Chairman of the firm from April 1991 until December
2001, and was also its Managing Partner from April 1991 until
1/2. The law firm of Latham &
Watkins named eight new partners, including Kenneth
Schuler, Raymond Grochowski, and Howard Armstrong. Kenneth
Schuler is based in the firm's Chicago office, where
he litigates cases involving intellectual property rights. Raymond
Grochowski is in the Communications Law Practice Group
in the Washington DC office; he focuses on federal regulation
of, and purchase, sale and financing of, broadcast stations,
satellite earth and space stations and mobile communications
services facilities and businesses; he also advises clients in
Internet related matters. Howard
Armstrong is in the Corporate Department and the
Telecommunications and Wireless Practice Group in the San
Diego office; he focuses on corporate finance, mergers and
acquisitions, commercial transactions, and general company
representation for public and private companies. See, L&W
1/2. The Venable law
firm named five new partners, including Marcia
Auberger, of the Washington DC office. She focuses on
domestic and international trademark prosecution, including
analysis of trademark searches, clearance of marks,
preparation of trademark applications, responding to Trademark
Office correspondence, maintenance of domestic and
international trademark portfolios, and represents client
before the Trademark Trial and Appeal Board. See, Venable
|DOJ Recommends Approval of
Verizon RI 271 Application
|1/4. The Antitrust
Division of the Department of Justice (DOJ) issued its Evaluation
[PDF] recommending that the Federal
Communications Commission (FCC) approve Verizon's Section 271
application to provide long distance services in the state of
Rhode Island. It cited the availability of facilities based
competition, especially cable telephony. However, it urged the
FCC to examine Verizon's pricing of unbundled network elements
(UNEs). See, DOJ
release and Verizon
Verizon has already gained approval from the FCC under 47 U.S.C.
§ 271 to provide in region interLATA services in the
states of Connecticut, Massachusetts, Pennsylvania, and New
York. The DOJ concluded that "Verizon has generally
succeeded in opening its local markets in Rhode Island to
competition and recommends approval of Verizon’s application
for Section 271 authority in Rhode Island, subject to the
Commission satisfying itself as to the pricing issues
The DOJ eleborated that "CLECs serve approximately 9.2
percent of all residential lines in Rhode Island. Most CLEC
service to residential customers in Rhode Island is facilities
based, including that provided over the cable television
facilities of Cox Communications. Cox’s cable telephony
service is available to between 75 and 95 percent of homes in
the state. The wide-spread availability of facilities based
competition, which is the type of competitive entry best able
to ensure healthy ongoing competition and deregulation, counts
heavily in favor of granting Verizon’s application."
However, the DOJ added that "Other CLECs serve
approximately 1.1 percent of all residential lines through
resale, and less than one-tenth of 1 percent of such lines by
means of the UNE-platform. ... While there is significantly
less competition to serve customers by means of the UNE
platform, the Department does not believe there are any
material non-price obstacles to competition in Rhode
Island." It concluded that the FCC should examine
Verizon's UNE pricing in Rhode Island to determine
"whether Verizon’s prices are cost-based."
|SEC Files Internet Stock
|1/2. The Securities and
Exchange Commission (SEC) filed a civil complaint
with the U.S.
District Court (NDCal) against Ned Sneiderman alleging
violation of federal securities laws in connection with the
posting of a fake press release on a Yahoo message board
regarding a stock traded on the NASDAQ.
The complaint states that he "posted a phony press
release on an Internet stock discussion board in which Extreme
Networks ... a Santa Clara technology company, purported to
announce a cash tender offer for Viasource Communications ...
a small Florida technology company. The fabricated press
release caused Viasource stock to double in price on volume
nearly seven times that of the previous trading day. The price
increase caused Viasource's market capitalization to be
artificially inflated by nearly $4.7 million. ... Minutes
before posting the false press release, Sneiderman had
purchased shares of Viasource stock."
The complaint elaborates that Sneiderman used his home
computer to post the phony release to the Yahoo stock
discussion board for Viasource, and that he used the same
computer to purchase shares of Viasource in his online
The complaint alleges violation of § 10(b) of the
Exchange Act, 15 U.S.C.
§ 78j(b), and Rule 10b-5, 17 C.F.R. §§ 240.10b-5,
thereunder. The complaint seeks injunctive and monetary
relief. This is D.C. No. C-02-0001 JW. See, SEC
|10th Circuit Rules in §
252 Interconnection Case
|1/4. The U.S. Court of Appeals (10thCir)
issued its opinion
West v. Sprint, holding the CLECs, when
negotiating interconnection agreements with ILECs, can opt
into tariff provisions.
Background. U.S. West (now known as Qwest) is an incumbent local
exchange carrier (ILEC) in the state of Colorado. Sprint and
MCI, as competitive local exchange carriers (CLECs), sought
entry to Qwest's market for local phone service. They each
attempted unsuccessfully to negotiate interconnection
agreements with Qwest. They each then filed petitions with the
Utilities Commission (CPUC), which arbitrated the
disputes. Qwest sought judicial review in the U.S. District
Court (DColo), which vacated portions of the arbitrations
orders. Sprint and MCI then brought the present appeal. The
Appeals Court reversed and remanded.
Section 251. § 251, enacted as part of the Telecom Act
of 1996, requires ILECs, including the Qwest, to open up their
networks to their competitors. 47 U.S.C.
§ 251(a)(1) provides that "... Each
telecommunications carrier has the duty - (1) to interconnect
directly or indirectly with the facilities and equipment of
other telecommunications carriers ..."
§ 251(c) further provides that ILECs have "The duty
to provide, for the facilities and equipment of any requesting
telecommunications carrier, interconnection with the local
exchange carrier's network -- (A) for the transmission and
routing of telephone exchange service and exchange access; (B)
at any technically feasible point within the carrier's
network; (C) that is at least equal in quality to that
provided by the local exchange carrier to itself or to any
subsidiary, affiliate, or any other party to which the carrier
provides interconnection; and (D) on rates, terms, and
conditions that are just, reasonable, and nondiscriminatory,
in accordance with the terms and conditions of the agreement
and the requirements of this section and section 252 ..."
A competitor can negotiate an agreement with an ILEC. Indeed,
251(c)(1) imposes a duty upon ILECs to negotiate in good
faith. Alternatively, if negotiation fails, either party can
petition the state commission that regulates local phone
service to arbitrate.
Section 252. This section provides procedures for
negotiation, arbitration, and approval of agreements. 47 U.S.C.
§ 252(i) provides that "A local exchange carrier
shall make available any interconnection, service, or network
element provided under an agreement approved under this
section to which it is a party to any other requesting
telecommunications carrier upon the same terms and conditions
as those provided in the agreement."
CPUC. MCI and Sprint sought provisions in their
interconnection agreements with Qwest giving them "most
favored nation", or "pick and choose", clauses
affording them the right to pick any clause from any other
interconnection agreement either agreed to or arbitrated by
any other carrier that interconnected with Qwest, and to
purchase services from Qwest out of any effective tariffs
filed by Qwest with the CPUC. The CPUC required Qwest to
"make available any interconnection, service, or network
element provided under an agreement approved under Section
252(i) of the Act to which it is a party to Sprint upon the
same terms and conditions as those provided in the
District Court. Qwest filed complaints in the District
Court challenging the CPUC's orders. The District Court
consolidated these cases. In particular, Qwest challenged the
right of CLECs to purchase services out of Qwest's Colorado
tariffs. The District Court ruled in favor of Qwest. It held
that neither § 252 nor the FCC's implementing regulation
permit CLECs to opt into tariff provisions. It wrote that such
a requirement "would eviscerate the provisions of 251 and
252 of the Act which require that the parties negotiate the
terms of an interconnection agreement and arbitrate those
terms that they are not able to agree to".
Appeals Court. The Tenth Circuit reversed. It held that
the tariff opt-in provisions of the CPUC orders do not violate
either § 252(i) or the FCC regulation. The Court
remanded to the District Court with instructions to enter
judgment in favor of Sprint and MCI.
|Monday, Jan 7
|9:15 AM. The U.S.
District Court (DC) will hold a hearing on Microsoft' motion
to amend the scheduling order (to delay the trial date) in the
government antitrust lawsuit. Nine of the state plaintiffs
have not joined in the settlement agreement negotiated by
Microsoft, the Department of Justice, and the other state
plaintiffs. See, order [PDF].
This is Civil Action No. 98-1233 (CKK), Judge Colleen Kotelly
10:00 AM. The U.S. Court of
Appeals (FedCir) will hear oral argument in Bowers v.
Baystate Technologies, No. 01-1108. Location: Courtroom
402, 717 Madison Place, NW, Washington DC.
5:30 PM. Judge
Stephen Williams of the U.S. Court of Appeals (DCCir)
will give a lecture titled "Radical Reform: Transitions
to Liberal Democracy and the Rule of Law". Location: American Enterprise Institute,
twelfth floor, 1150 Seventeenth St., NW, Washington DC.
Deadline to resubmit comments with the U.S. Department of
Justice (DOJ) regarding the proposed settlement in the
antitrust case titled U.S. v. 3d Systems Corp. and DTM Corp.
(D.C. No. 1:01CV01237). The original comment period closed on
November 26, 2001. However, because of disruption of the U.S.
Mail in Washington DC, the DOJ requests that comments be
resubmitted. The deadline is 15 after publication of a notice
in the Federal Register on December 21, 2001, which would fall
on Saturday, January 5. See, notice
in Federal Register, December 21, 2001, Vol. 66, No. 246, at
12:15 PM. The Federal
Communications Bar Association's Online Communications
Committee will host a brown bag lunch. Bruce Mehlman,
Assistant Secretary of Commerce for Technology Policy, will
give a talk titled "Broadband, When? A View from the
Administration." RSVP to Scott Harris.
Location: Lampert & O'Connor, 5th floor, 1750 K Street,
NW, Washington DC.
|Tuesday, Jan 8
|The Supreme Court
will hear oral argument in Festo Corporation v. Shoketsu
Kinzoku Koygo Kabushiki, No. 00-1543, a case regarding the
doctrine of equivalents in patent law.
|Wednesday, Jan 9
|10:00 AM. The U.S. Court of
Appeals (FedCir) will hear oral argument in Fantasy
Sports v. Sportsline.com, No. 01-1217, an appeal from the
U.S. District Court (EDVa). This is a patent infringement case
Patent 4,918,603, titled "Computerized Statistical
Football Game". (D.C. No. 99 CV 2131103; opinion at F.
Supp. 2d 886 (E.D.Va. 2000).) Location: Courtroom 402, 717
Madison Place, NW, Washington DC.
10:00 AM. The U.S. Court of
Appeals (FedCir) will hear oral argument in ManTech
Telecommunications v. US, No. 01-5090. Location: Courtroom
402, 717 Madison Place, NW, Washington DC.
12:15 PM. The Federal
Communications Bar Association's Telecom Competition
Issues Committee will host a brown bag lunch. Michael Katz,
a Deputy Assistant Attorney General for the DOJ's Antitrust
Division, and former Chief Economist of the FCC, will speak
about his observations on the similarities and differences
that characterize the two agencies' approach to competition
issues. Location: CTIA, 1250 Connecticut Ave., NW, 8th floor
conference room, Washington DC.
|Third Circuit Holds
Evidence Obtained in Computer Search Inadmissable
|1/4. The U.S.
Court of Appeals (3rdCir) issued its split opinion
v. Zimmerman, reversing a conviction that was
based upon evidence found in a computer.
Background. Several parents, students, and former
students of the defendant, a high school coach, provided local
police with information regarding improper sexual conduct by
the coach. Police obtained a search warrant which covered his
"Computer and any computer related or attached equipment,
including but not limited to hard drives, keyboard, mouse(s),
printers, terminals, display screens, modems and connectors,
cables, magnetic and optical media storage devices, any sexual
materials including photos, ..." Police conducted a
search of his computer, and found child pormography.
District Court. A grand jury of the U.S.
District Court (WDPenn) returned a one count indictment of
Zimmerman alleging possession of child pormography in
violation of 18
U.S.C. § 2252A(a)(5)(B). He filed a motion to suppress
evidence obtained from the search of his computer. The
District Court denied his motion. He entered a conditional
plea of guilty, and filed this appeal.
Appeals Court. The Appeals Court reversed, 2-1,
pursuant to the Fourth Amendment. Judge Barry opined that
police had probable cause to search for adult pormography, but
did not have fresh probably cause to search for child
pormography; hence, evidence of child pormography is
inadmissible under the exclusionary rule. Judge Alito wrote a
dissent in which he argued that the good faith exception to
the exclusionary rule should be applied in this case.
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