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January 30, 2002, 9:00 AM ET, Alert No. 357.
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Motorola & Nokia Sue Turkish Cellular Company for RICO Violations and Computer Hacking
1/28. Motorola Credit Corporation and Nokia Corporation filed a complaint in U.S. District Court (SDNY) against Kemal Uzan, other members of the Uzan family, and corporations controlled by the Uzan family, regarding cellular communications deals in the nation of Turkey. Motorola and Nokia allege "theft of more than $3 billion".
The complaint states that the defendants, who are politically well connected in Turkey, were awarded a Global System for Mobile Telephony (GSM) license by the Turkish government. Motorola then provided defendants loans to obtain base stations from Motorola, and Nokia provided loans to obtain switching equipment from Nokia. This equipment was then used to build a GSM and 2.5G wireless telecommunications system in Turkey. However, Motorola and Nokia did not get paid up front. And now, they allege they have been defrauded out of $3 Billion.
The complaint states that the defendants borrowed from Motorola and Nokia, and then intentionally and illegally diluted the value of stock pledged as collateral for the loans. The complaint also alleges that defendants manufactured transactions to transfer assets from the debtor companies.
The complaint alleges numerous violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962. It alleges that the predicate acts of racketeering are mail fraud, wire fraud, extortion, intimidation and computer hacking.
Computer Hacking. Count 8 alleges fraud in connection with computers in violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030(a)(4). Count 9 alleges interception of electronic communications in violation of the Electronic Communications Privacy Act, 18 U.S.C. § 2511(1)(a). Count 10 alleges X unlawful access to stored electronic communications in violation of the Electronic Communications Privacy Act, 18 U.S.C. § 2701(a)(2).
The complaint states that defendants twice recruited employees of Motorola Turkey to hack into the computer system of Motorola Inc. to obtain unauthorized access to proprietary and confidential information about Motorola Inc. and its customers. The complaint further states that the target of the hacking was "Motorola Inc.’s global customer contacts outside of North America", and that the second attempt succeeded. The allegations of fact pertaining to computer hacking are found at ¶¶ 165- 176.
Motorola's General Counsel, Peter Lawson, stated in a release that "We are taking the unusual step of jointly filing this action because it is clear to both companies that the Uzans had no intention of dealing in good faith with us in an effort to resolve this situation. ... This action is in recognition that this is not a normal commercial dispute between private parties - it is, rather, a premeditated and unlawful attempt by the Uzans to rob both Motorola and Nokia of our assets."
Motorola seeks compensatory damages of over $2 Billion. Nokia seeks compensatory damages of $700 Million. Both also seek treble damages under RICO, and punitive damages, and well as declaratory and injunctive relief.
The complaint contains 343 numbered paragraphs. It runs 117 pages as filed, excluding exhibits. It also alleges alleges fraud, and violations of Illinois state law. 
TOP Grants
1/29. The National Telecommunications and Information Administration (NTIA) published a notice in the Federal Register regarding the availability of Technology Opportunity Program (TOP) grants for FY 2002. All grants awarded for FY 2001 involved projects that make some use of the Internet. Some funded projects provide medical, public housing, and other information through web sites. Other projects provide networking and training. See, NTIA list of grantees for FY 2001.
Grant applications for FY 2002 are due by 8:00 PM EST, on March 21, 2002. See, Federal Register, January 29, 2002, Vol. 67, No. 19, at Page 4240.
State of the Union Address
1/29. President Bush delivered the State of the Union address to a joint session of the Congress. He focused on the war against terrorism, homeland defense, and the state of the economy. However, he also briefly touched upon two technology related issues.
He stated that "We will improve intelligence collection and sharing, expand patrols at our borders, strengthen the security of air travel and use technology to track the arrivals and departures of visitors to the United States." However, he did not elaborate further on the use of technology.
He also urged the Senate to pass legislation granting the President trade promotion authority, which is also known as fast track. He stated that "Good jobs depend on expanded trade. Selling into new markets creates new jobs, so I ask Congress to finally approve Trade Promotion Authority." The House has already passed its TPA bill, HR 3005.
Sen. Charles Grassley (R-IA) issued a release in which commented on the State of the Union address. It stated that he would "continue to work to advance trade promotion authority for the President, noting free trade is key to creating jobs." Sen. Grassley is the ranking Republican on the Senate Finance Committee, which has jurisdiction over TPA legislation.
People and Appointments
1/29. Steve Moore joined the Institute for Policy Innovation as a Senior Research Fellow. Moore is also the President of The Club for Growth.
EPIC Seeks Government Investigations of Microsoft's Passport
1/29. The Electronic Privacy Information Center (EPIC) announced that it will continue its efforts to induce government regulators to investigate Microsoft in connection its Passport and related services. It urged state attorneys general to take action under state unfair and deceptive trade practices statutes. It will also file a complaint with the FTC pertaining to the EU safe harbor provisions.
Last year, the EPIC unsuccessfully sought a Federal Trade Commission (FTC) investigation. See, original complaint [PDF] submitted on July 26, 2001, and updated complaint [PDF] submitted on August 15. EPIC requested that the FTC conduct an investigation of Microsoft, and enjoin a number of software features and services, that EPIC alleges violate § 5 of the Federal Trade Commission Act, 15 U.S.C. § 45. However, the FTC has not publicly announced that it has taken any action with respect to these complaints.
EPIC alleged in its complaints that this "concerns the privacy implications of the Microsoft XP operating system that is expected to become the primary means of access for consumers in the United States to the Internet. ... Microsoft has engaged, and is engaging, in unfair and deceptive trade practices intended to profile, track, and monitor millions of Internet users. Central to the scheme is a system of services, known collectively as ``.NET,´´ which incorporate ``Passport,´´ ``Wallet,´´ and ``HailStorm´´ that are designed to obtain personal information from consumers in the United States unfairly and deceptively. The public interest requires the Commission to investigate these practices and to enjoin Microsoft from violating Section 5" of the FTCA.
EPIC Legislative Counsel Chris Hoofnagle stated in a teleconference on January 29 that the EPIC is pursuing two other strategies. First, it just sent a letter to state attorneys general urging them "to take action to protect consumers against unfair and deceptive trade practices raised by Microsoft Corporation’s Passport service ..."
Second, Hoofnagle stated that EPIC intends to submit another complaint to the FTC in which it will allege that Microsoft's actions violate the safe harbor provisions of the EU directive on data protection.
Hoofnagle added that Microsoft is violating federal and state unfair and deceptive trade practices laws by not disclosing the security risks associated with Microsoft's Passport. However, he conceded that while there have been numerous security breaches involving the loss of personal information, none have involved Microsoft's Passport. He also stated that EPIC will not file its own private lawsuit against Microsoft.
More News
1/29. The Federal Communications Commission (FCC) released its it annual report [PDF] titled "Telecommunications Industry Revenues: 2000".
1/29. The General Accounting Office (GAO) released a report [PDF] titled "Defense Acquisitions: Collection and Reporting of Information Technology Purchases". The Floyd Spence National Defense Authorization Act for FY 20011 directed the Secretary of Defense to collect specific procurement data on the purchase of information technology products and services made by the military services and defense agencies, and to issue his first annual report to the Armed Services Committees by March 15, 2002. This brief report concludes that the DOD is making good progress in meeting these requirements.
1/28. The U.S. Court of Appeals (6thCir) issued its opinion in CDI v. Reno, an H1B visa case. Prakash Vaideeswaran received a non-immigrant, temporary employee visa pursuant to 8 U.S.C. § 1101(a)(15)(H)(i)(b). That is, he held an H1B visa that enabled him to work for a computer company. The Immigration and Naturalization Service (INS) denied a request to extend this visa on the grounds that he had moved from Oregon to Hawaii. The District Court upheld the INS decision. The Appeals Court ruled that it lacked jurisdiction. It referred to 8 U.S.C. § 1252(a)(2)(B)(ii), which provides that "no court shall have jurisdiction to review . . . (ii) any other decision or action of the Attorney General the authority for which is specified under this subchapter to be in the discretion of the Attorney General ..."
1/29. The U.S. Court of Appeals (FedCir) issued its opinion in In Re Kenneth Berger. Berger filed a patent application which described a shape for beverage cans. The patent examiner rejected certain claims, pursuant to 35 U.S.C. § 112, for being indefinite. The U.S. Patent and Trademark Office Board of Patent Appeals and Interferences affirmed. The Appeals Court affirmed.
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Wednesday, Jan 30
The House will not be in session. (The Republican retreat is being held on January 30 and 31.)
Day three of the COMNET Conference & Expo. Location: Convention Center.
Day one of the 2nd Annual Privacy & Data Security Summit, sponsored by the International Association of Privacy Officers. See, online brochure [PDF]. Location: Hyatt Regency, 400 New Jersey Ave., NW.
8:45 AM - 3:45 PM. The NIST Advanced Technology Program Advisory Committee will hold a partially closed meeting. See, notice in Federal Register. Location: NIST, Administration Building, Employees' Lounge, Gaithersburg, MD.
9:00 AM. The Global Business Dialogue will host a press conference on the Foreign Sales Corporation (FSC) tax regime. For more information, contact Judge Morris at 202 463-5075. Location: First Amendment Room, National Press Club, 529 14th St. NW, 13th Floor.
10:00 AM. The SEC, NASD Regulation, FTC and NASAA will hold a media briefing regarding online investor education initiatives. Location: Room 1C-30 (Douglas Room), SEC, 450 5th Street, NW. See, notice.
POSTPONED TO FEB 6. 10:00 AM - 12:00 NOON. The FCC's Advisory Committee for the 2003 World Radiocommunication Conference will meet. See, notice of postponement [PDF].
12:15 PM. The FCBA's Cable Practice Committee will host a luncheon. The speaker will be Stacy Robinson, Mass Media Legal Advisor to FCC Commissioner Kathleen Abernathy. The price to attend is $15. RSVP to Wendy Parish at Location: National Cable & Internet Association, 1724 Mass. Ave., NW.
Thursday, Jan 31
The House will not be in session. (The Republican retreat is being held on January 30 and 31.)
Day two of the 2nd Annual Privacy & Data Security Summit, sponsored by the International Association of Privacy Officers. See, online brochure [PDF]. Location: Hyatt Regency, 400 New Jersey Ave., NW. Highlights include:
 • 8:15 AM. Howard Beales (FTC Bureau of Consumer Protection) will speak on "Privacy Regulation and the Federal Trade Commission".
 • 8:45 AM. Phillip Bond (Dept. of Commerce) will speak on "Privacy and Commerce".
 • 9:15 AM. Amy Friend (Office of the Comptroller of the Currency) will speak on "Privacy and Financial Affairs".
 • 9:45 AM. Kathleen Fyffe (HHS Dept.) will speak on "Healthcare Privacy, Security and HIPAA Compliance".
 • 10:15 AM. Daniel Collins (Justice Dept.) will speak on "Prosecuting Privacy Violations".
 • 12:30 PM. Panel titled "Privacy in America Following the Terrorist Attacks on the WTC and the Pentagon". The participants will be Agnes Scanlan (FleetBoston Financial), Gary Clayton (Privacy Council), James Harper (, John Kamp (Wiley Rein & Fielding), Mark Rotenberg (EPIC), David Stampley (Office of the NY Attorney General), Zoe Strickland (USPS), Bruce Johnson (Davis Wright Tremaine).
10:00 AM - 12:00 NOON. The ITAA's Telecommunications Committee will meet. For more information, contact Thomas Vincent at Location: ITAA, 1401 Wilson Blvd., Suite 1100, Arlington, VA.
12:30 PM. John Browne, the Director of the Los Alamos National Laboratories, will speak at a luncheon. Location, Ballroom, National Press Club, 529 14th St. NW, 13th Floor.
12:30 - 2:00 PM. The FCBA's International Practice Committee will host a brown bag lunch with FCC Commissioner Kathleen Abernathy. Location: FCC, 445 12th St, SW, 8th Floor, Conference Room 1.
1:00 - 3:30 PM. The FCC's WRC-03 Advisory Committee, Informal Working Group 7: Regulatory Issues and Future Agendas, will meet. Location: The Boeing Company, 1200 Wilson Boulevard, Arlington, VA.
7:00 - 8:00 PM. There will be a panel discussion titled "The State of Online Journalism" featuring Rich Jaroslovsky (Wall Street Journal) and Doug Feaver (Washington Post). Location: National Press Club, 529 14th St. NW, 13th Floor.
Friday, Feb 1
The House will meet at 10:00 AM in pro forma session only.
Day three of the 2nd Annual Privacy & Data Security Summit, sponsored by the International Association of Privacy Officers. See, online brochure [PDF]. Location: Hyatt Regency, 400 New Jersey Ave., NW.
12:30 PM. The FCBA will host a luncheon. The speaker will be FCC Commissioner Kevin Martin. There will be a reception at 12:00 NOON. The price to attend is $45 for FCBA members, $35 for government and law student members, and $55 for non-members. Registrations and cancellations due by 5:00 PM on Tuesday, January 29. To register, contact Wendy Parish at wendy Location: Capital Hilton Hotel, 16th & K Streets NW.
12:30 - 2:00 PM. Harold Furchtgott Roth will give a speech titled "A Tough Act to Follow: The Telecommunications Act of 1996". To register, contact Linzey Powers at lpowers Location: AEI, Twelfth floor, 1150 17th St., NW.
Deadline to submit comments to the FEC in response to its requests comments on the second draft of the revisions to the 1990 national voluntary performance standards for computerized voting systems and the first draft of the revisions to the 1990 national test standards. See, notice in Federal Register.
12:00 NOON. Extended deadline to submit comments to the Office of the USTR regarding the operation and effectiveness of the WTO Basic Telecommunications Agreement, the telecommunications provisions of the NAFTA, and other telecommunications trade agreements. This request for comments is pursuant to an annual review of telecom agreements required by Section 1377. See, original notice and supplemental notice in Federal Register.
Monday, Feb 4
9:00 AM. The Cato Institute will release a study titled "The Digital Dirty Dozen" which lists and evaluates the worst high tech legislative proposals of this Congress. The speakers will be Wayne Crews and Adam Thierer. This study will be released at an invitation only press breakfast. For more information, contact Jerry Brito at 202 218-4621. Location: Cato, 1000 Mass. Ave., NW.
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Telecom Technical Services v. Siemens Rolm. Plaintiffs sued Seimens alleging violation of federal antitrust laws; they alleged monopolization of alleged markets for telecom equipment; they also sought class action status. Seimens asserted various counterclaims, including patent infringement. The U.S. District Court (NDGa) denied class action status. Location: Room 201, 717 Madison Place.
Deadline to submit petitions and comments to the FCC's Cable Services Bureau regarding the applications of Hughes Electronics Corporation and EchoStar Communications Corporation to the FCC requesting consent to the transfer of control of licenses and authorizations involved in the EchoStar DirecTV merger. See, FCC notice [MS Word]. Oppositions and responses are due by February 25, 2002. This is CS Docket No. 01-348.
Tuesday, Feb 5
9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in EchoStar v. FCC, No. 01-1032. Judges Ginsburg, Edwards and Sentelle will preside.
RESCHEDULED FOR FEB 12. 12:15 PM. The FCBA's Transactional Practice Brown Committee will host a brown bag lunch on wireless transactions.
1:30 PM. The U.S. International Telecommunication Advisory Committee (ITAC) will hold a meeting. See, notice in Federal Register. Location: State Department.
4:00 PM. The Cato Institute will host a book forum on Against the Dead Hand: The Uncertain Struggle for Global Capitalism [Amazon], by Brink Lindsey (Senior Fellow at the Cato Institute). The commenters will be Robert Zoellick (U.S. Trade Representative), Sebastian Mallaby (The Washington Post), and Douglas Irwin (Dartmouth University). See, online information and registration page. Location: The Cato Institute, 1000 Massachusetts Ave., NW.
Deadline to submit applications to the NTIA for planning and construction grants for public telecommunications facilities under the Public Telecommunications Facilities Program (PTFP) for FY 2002. See, notice in Federal Register.