Tech Law Journal Daily E-Mail Alert
March 20, 2002, 9:00 AM ET, Alert No. 392.
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House Delays Consideration of Two Tech Bills
3/19. The House leadership delayed consideration of two technology related bills that had been scheduled for floor votes this week: and HR 3924, the "Freedom to Telecommute Act of 2002", and HR 3925, the "Digital Tech Corps Act of 2002".
Both bills were introduced on March 12 by Rep. Tom Davis (R-VA). Both are cosponsored by Rep. Dan Burton (R-IN), the Chairman of the House Government Reform Committee. Both were marked up by that committee on March 14. HR 3924 had been scheduled for consideration under suspension of the rules on Tuesday, March 19. This procedure allows for quick consideration, with no amendments, but requires a two thirds majority for passage. HR 3295 had been scheduled for consideration on Wednesday or Thursday, March 20 or 21.
The House goes on recess at the end of this week, thus delaying consideration of these bills at least until the House returns.
The Freedom to Telecommute Act of 2002 is a bill to permit the use of telecommuting by employees of federal contractors in the performance of contracts with executive agencies.
The Digital Tech Corps Act of 2002 would establish an exchange program between the federal government and the private sector in order to promote the development of expertise in information technology management. The bill states that "On request from or with the agreement of a private sector organization, and with the consent of the employee concerned, the head of an agency may arrange for the assignment of an employee of the agency to a private sector organization or an employee of a private sector organization to the agency. An eligible employee is an individual who (1) works in the field of information technology management; (2) is considered an exceptional performer by the individual's current employer; and (3) is expected to assume increased information technology management responsibilities in the future."
Senate Subcommittee Holds Hearing on FTC Budget
3/19. The Senate Appropriations Committee's Subcommittee on Commerce, Justice, State, and the Judiciary held a hearing on the proposed budget estimates for Fiscal Year 2003 for the Federal Trade Commission (FTC), and other agencies.
See, prepared testimony of FTC Chairman Timothy Muris, prepared testimony of FTC Commissioner Sheila Anthony, and prepared testimony of FTC Commissioner Mozelle Thompson.
Sen. Ernest Hollings (D-SC) used this event to once again state his opposition to the Memorandum of Agreement between the FTC and the Antitrust Division of the Department of Justice that divides responsibility for merger reviews between the two agencies according to industry. He threatened to reduce funding.
Verizon Withdraws New Jersey Long Distance Application
3/19. Verizon withdrew its Section 271 application to Federal Communications Commission (FCC) to provide in region interLATA service in the state of New Jersey. It stated in a letter [PDF] to the FCC that "process concerns have been raise with respect to an issue that has been the focus of dispute between the parties -- the non-recurring charge for performing a hot cut. To address these concerns, Verizon hereby provides notice that it is withdrawing its application and will shortly file to initiate a new application."
A hot cut is the process used to disconnect a line over which a customer already is receiving service and to connect it to another carrier's switch.
Verizon SVP Tom Tauke stated in a release that "Verizon will refile promptly". This is CC Docket No. 01-347.
DOJ Report Blames Human Error - Not Computers - for McVeigh Delay
3/19. The Department of Justice's (DOJ) Office of the Inspector General (OIG) released its report [198 pages in PDF] on the delayed production of investigative documents in the Timothy McVeigh prosecution. The report concludes that, contrary to earlier assertions by the FBI that computer systems caused the delay, the cause was human error. See also, the OIG's executive summary [14 pages in PDF] and DOJ release.
Sen. Charles Grassley (R-IA), a senior member of the Senate Judiciary Committee, who has been pressing the FBI on this issue, commented on the OIG report. He stated that "The FBI's excuse that 'the computer ate my homework' simply doesn't add up."
Inspector General Glenn Fine issued the report. The report states that "On May 8, 2001, one week before McVeigh's scheduled execution date, the Department of Justice and the FBI revealed to McVeigh's and Nichols' attorneys that over 700 investigative documents had not been disclosed to the defendants before their trials. The government acknowledged that it had violated a discovery order in the case, and the Attorney General stayed McVeigh's execution for one month in order to resolve the legal issues arising from the belated disclosure."
The report continues that "we did not conclude that the computer system was the cause of the belated production of documents. The FBI's computer system is antiquated and in need of substantial improvement, but we found that human error, not the inadequate computer system, was the chief cause of the failure to provide the defense with these items. The failures that we observed stemmed from individual mistakes, the FBI’s complex document processing systems, inconsistent interpretations of FBI policies and procedures, agents' failures to follow FBI policies, agents' lack of understanding of the unusual discovery agreement in this case, and the tremendous volume of material being processed within a short period of time."
However, the OIG report states that "We also recommend substantially enhanced computer training and suggest that the FBI should consider making computer usage part of the core skills needed to graduate from the new agents training academy."
Sen. Grassley added that "the McVeigh case reveals a management meltdown. Documents were mishandled, procedures were ignored, and when mistakes were discovered, supervisors in the field covered them up and managers in headquarters promoted those responsible. ... Those problems jeopardize criminal investigations."
More News
3/19. The Office of the U.S. Trade Representative (USTR) released its annual report titled "2002 Trade Policy Agenda and 2001 Annual Report of the President of the United States on the Trade Agreements Program".
3/19. Net2Phone and Adir Technologies filed a complaint in U.S. District Court (DNJ) against Cisco Systems alleging breach of contract, theft of trade secrets, unfair competition, fraud and other claims.
3/19. The General Accounting Office (GAO) released a report [PDF] titled "Information Technology: Enterprise Architecture Use across the Federal Government Can Be Improved".
DOJ Official Addresses Antitrust, Politics and Technology
3/18. William Kolasky gave a speech titled "Comparative Merger Control Analysis: Six Guiding Principles for Antitrust Agencies -- New and Old" to antitrust regulators in Cape Town, South Africa. He offered general principles for antitrust regulators. He also focused on the politics of antitrust enforcement, and the problems of applying antitrust principles to new technologies.
Kolasky is a Deputy Assistant Attorney General in the Antitrust Division of the Department of Justice. He spoke to the International Bar Association's Conference on Competition Law and Policy in a Global Context.
He stated that "Rigorous enforcement of antitrust laws is essential in preserving and extending the gains that open markets have brought to national economies and the global economy as a whole. But it is equally critical that antitrust enforcement not become a bureaucratic obstacle to efficient transactions and that antitrust enforcers not unnecessarily regulate -- and thereby stifle -- the competitive forces we mean to protect."
Six Principles of Antitrust Enforcement. He offered six basic principles to guide antitrust officials. First, "Antitrust enforcers should not be in the business of picking winners or protecting losers." Second, "efficiencies should play a central role in our analysis of mergers and other allegedly anticompetitive conduct." Third, "we must do everything we can to prevent antitrust from becoming politicized." Fourth, "Antitrust authorities should be law enforcers, not industrial policy makers who try to move industries in a certain direction or dictate particular market results." Fifth, "we must work hard to ensure that the antitrust laws do not themselves become bureaucratic roadblocks to efficient transactions." And sixth, "We must make sure that antitrust adapts to changes in technology and in the economy."
Politics of Antitrust Enforcement. Kolasky went into detail on how politics can corrupt antitrust regulation. He stated that "As an economy grows, and the stakes become ever larger, firms are naturally driven to seek protection and help from their governments. They can be expected to try to use antitrust as a weapon to be wielded against their competitors. This is a problem faced by new antitrust agencies and old -- newer agencies can expect to see their legitimacy challenged, and more mature agencies are increasingly confronted by lobbyists and public relations experts seeking to influence decisions, not through arguments on the competitive merits, but through the media and otherwise."
Kolasky continued that "The best thing that both new and old antitrust enforcement regimes can do to prevent antitrust from becoming politicized is to make sure our decisions are soundly grounded in economic theory and fully supported by the empirical and factual evidence. When complaints -- particularly those of competitors -- are brought to us, they must be tested against what Joseph Schumpeter called ``the cold metal of economic theory.´´ We must also ensure that our decision making is transparent and fair. Senior enforcement officials should give merging parties and complainants an opportunity to engage them substantively before reaching a decision, and should bring their own mature judgment to cases and not rely uncritically on the advice of their staffs. And, we must have in place effective mechanisms for judicial review."
New Technologies and Antitrust. Kolasky concluded with a discussion of new technologies. He said that "we should recognize that in our new, knowledge based economy, competition in some markets is driven more by innovation than price. New economy industries frequently require very large and risky upfront investments that will not be made without the promise of a substantial return. They also are often characterized by large network effects and low marginal product costs. All of this means that the most efficient outcome in some markets may be for a single firm to serve the entire market for at least a period of time."
He added that "In the new economy, the costs of regulatory missteps are therefore very high. Too much government interference will frustrate innovation and discourage efficient practices to the detriment of consumers worldwide. On the other hand, a totally hands-off approach could lead to high prices and frustrate the emergence of potentially superior technologies -- also to the detriment of consumers. The fact that many of the new economy industries are global in nature, coupled with the reality that numerous enforcement agencies may now be looking at the same transactions, make it that much more important -- and that much more difficult -- to get it right."
9th Circuit Rules in AT&T v. Coeur D'Alene Tribe
3/19. The U.S. Court of Appeals (9thCir) issued its opinion in AT&T v. Coeur D'Alene Tribe, a case regarding whether AT&T must provide toll free telephone service to an Indian tribe's gambling lottery that is offered interstate by telephone. The case involves the jurisdiction of federal and tribal courts, the Indian Gaming Regulatory Act (IGRA), gambling law, and telecommunications law.
The Coeur D'Alene Tribe engages in gambling activities pursuant to the Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et seq. It created a National Indian Lottery that allowed off reservation participants to purchase tickets by telephone from outside of the state of Idaho. It sought toll free telephone service from AT&T for this lottery. AT&T refused, citing 18 U.S.C.§ 1084(d), which provides, in part that "When any common carrier, subject to the jurisdiction of the Federal Communications Commission, is notified in writing by a Federal, State, or local law enforcement agency, acting within its jurisdiction, that any facility furnished by it is being used or will be used for the purpose of transmitting or receiving gambling information in interstate or foreign commerce in violation of Federal, State or local law, it shall discontinue or refuse, the leasing, furnishing, or maintaining of such facility ..." It had received such letters from states.
The tribe filed a complaint in the Coeur D'Alene tribal court against AT&T seeking declaratory and injunctive relief pursuant to the common carrier obligations of the Communications Act. The Act, at 47 U.S.C. § 201(a) provides, in part, that "It shall be the duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor ..." The tribal court held that the telephone lottery was lawful under the IGRA, and enjoined AT&T from refusing to provide the requested service.
AT&T then filed a complaint in U.S. District Court (DIdaho) against the tribe challenging the jurisdiction of the tribal court, and its interpretation of federal statutes. The District Court did not address tribal jurisdiction, but granted AT&T declaratory relief that it was not obligated to provide the toll free service, since the lottery was illegal for allowing off reservation participation.
The Court of Appeals held that the tribal court lacked jurisdiction, but reversed the District Court holding that the lottery violated the IGRA. It reversed and remanded. Judge Betty Fletcher wrote the opinion. Judge Ronald Gould dissented in part. He would have also affirmed the District Court's holding that the lottery was illegal.
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Wednesday, March 20
9:30 AM. The Senate Commerce Committee will hold a hearing on HR 1542, the Tauzin Dingell bill. Sen. Ernest Hollings (D-SC) will preside. Location: Room 253, Russell Building.
9:30 AM - 4:30 PM. The FTC and the Department of Justice (DOJ) Antitrust Division will continue their joint hearings titled "Competition and Intellectual Property Law and Policy in the Knowledge Based Economy." From 9:30 AM until 12:00 NOON, there will be presentations on "Business Perspectives on Patents: Hardware and Semiconductors". From 1:30 until 4:30 PM there will be presentations on "Business Perspectives on Patents: Software and the Internet". See, agenda. Location: Room 432, FTC, 600 Pennsylvania Ave., NW, Washington DC.
10:00 AM. The Federal Election Commission (FEC) will hold a public hearing on its Notice of Proposed Rulemaking [PDF] regarding campaign activity on the Internet. The witnesses will be Robert Bauer (Perkins Coie), Alex Vogel (National Republican Senatorial Committee), Laurence Gold (AFL-CIO), and James Bopp (James Madison Center for Free Speech). See, FEC notice. Location: FEC, 9th floor meeting room.
10:00 AM. The Senate Judiciary Committee's Subcommittee on Technology, Terrorism, and Government Information will hold a hearing on identity theft. Sen. Dianne Feinstein (D-CA) will preside. Howard Beales, Director of the FTC Bureau of Consumer Protection, will testify. See, witness list. Location: Room 226, Dirksen Building.
CANCELLED. 10:00 AM. The FCC's Technological Advisory Council will hold a meeting. See, notice in Federal Register. See, cancellation notice in Federal Register. The next meeting is April 26; see, FCC notice of March 12.
12:15 PM. The FCBA's Cable Committee will host a luncheon. The speaker will be Catherine Bohigian, Legal Advisor to FCC Commissioner Kevin Martin. The price to attend is $15. RSVP to Wendy Parish at wendy by 5:00 PM on March 18.
12:30 PM. Roy Stewart will speak at a luncheon hosted by the Association of Federal Communications Consulting Engineers. Stewart is currently Chief of the FCC's Mass Media Bureau; he will become Chief of the Office of Broadcast License Policy in the new Media Bureau. For more information, contact Noel Luddy at luddyen or 301 299-2270. Location: Wyndham City Center Hotel, 1143 New Hampshire Ave., NW.
1:30 - 2:15 PM. FTC Chairman Timothy Muris will speak at the National Association of Attorneys General's spring meeting. Location: Marriott Hotel, Metro Center, Washington DC.
2:00 PM. The House Appropriations Committee's Subcommittee on Commerce, Justice, State, and the Judiciary will hold a hearing on the proposed budget for FY 2003 for the USTR. Location: Room H-309, The Capitol.
6:00 - 8:00 PM. The FCBA will host a Continuing Legal Education (CLE) seminar titled Telecommunications 201. Location: Capital Hilton Hotel, 16th and K Streets, NW.
Thursday, March 21
8:30 AM - 12:00 NOON. The law firm of Steptoe & Johnson and The Open Group will host a workshop titled "Liability and Information Assurance: The Role of Law, Regulation, and Self Regulation". The workshop will focus on allocating liability for breaches of information security, and the various roles that law, regulation, and private contractual agreements can or should play in the allocation of responsibility for information security failures. RSVP to salbertaz For more information, contact mschneck Location: 1330 Connecticut Avenue, NW.
10:00 AM. The Senate Appropriations Subcommittee's Subcommittee on Commerce, Justice, State, and the Judiciary will hold a hearing on the administration's proposed budget estimates for FY 2003 for the Federal Bureau of Investigation, Immigration and Naturalization Service, and the Drug Enforcement Administration. Location: Room 116, Dirksen Building.
10:00 AM. The House Financial Services Committee will hold a hearing titled "The Effects of the Global Crossing Bankruptcy on Investors, Markets, and Employees". Location: Room 2220, Rayburn Building.
11:00 AM. The House Commerce Committee will meet to mark up HR 3833, the Dot Kids Implementation and Efficiency Act of 2002. Location: Room 2123, Rayburn Building.
11:30 AM. FTC Chairman Timothy Muris will be the keynote speaker at the Privacy & American Business Eighth Annual Conference: Managing the New Privacy Revolution. Location: Omni Shoreham Hotel, 2500 Calvert Street, NW.
12:15 PM. The FCBA's Transactional Practice Committee will host a brown bag lunch on satellite and other international telecommunications transactions. RSVP to Brian Madden at 202 416-6770. Location: Leventhal Senter & Lerman, 2000 K Street, NW.
2:00 PM. The House Government Reform Committee's Technology and Procurement Policy Subcommittee will hold a hearing on titled "How The Federal Government Can Transition From Old Economy Speed to Become A Model for Electronic Government". Location: Room 2154, Rayburn Building.
POSTPONED. 2:30 PM. The Senate Commerce Committee's Subcommittee on Science, Technology, and Space will hold hearing to examine federal research and development issues.
3:30 PM. Margaret Radin (Stanford University Law School) will give a lecture titled "Contract Today and Tomorrow: Binding Commitment in the Networked World". Location: Georgetown University Law Center, Faculty Lounge, 5th Floor, McDonough Hall, 600 New Jersey Ave., NW.
8:00 PM. Deadline to submit applications to the National Telecommunications and Information Administration (NTIA) for Technology Opportunity Program (TOP) grants for FY 2002. See, notice in Federal Register.
Friday, March 22
The House will not be in session.
9:00 AM. The House Government Reform Committee's District of Columbia Subcommittee will hold a hearing titled "Privacy v. Security: Electronic Surveillance in the Nation's Capital". Location: Room 2154, Rayburn Building.
10:00 AM - 1:00 PM. The Network Reliability and Interoperability Council (NRIC) will hold a meeting. See, FCC notice [PDF] of March 14, and notice in Federal Register. Location: Room TW-C305, FCC, 445 12th St. SW.
Monday, March 25
The House will be in recess for the Spring District Work Period. (The House will return on Monday, April 8). The Senate will also be in recess.
Tuesday, March 26
8:00 AM - 5:15 PM. The Michigan State University Quello Communications Law and Policy Symposium will host its Third Annual Rethinking Access conference. See, schedule of speakers. Location: Willard Intercontinental Hotel.