|Annual Wiretap &
Electronic Surveillance Report Released
|5/23. The Administrative Office of U.S. Courts (AOUSC)
released its annual wiretap and electronic surveillance report
[11 pages in PDF]. It is titled "Report of the Director
of the Administrative Office of the United States Courts on
Applications for Orders Authorizing or Approving the
Interception of Wire, Oral, or Electronic
Communications". See also, AOUSC
release [3 pages in PDF].
The report states that the total number of intercepts in 2001
was 1,491, that this represents a 25% increase over 2000, and
that drug related matters constitute 78%. The report also
states that 83% of intercepts were telephone wiretaps, and 6%
were electronic intercepts (which includes e-mail
surveillance). The report also states that "no federal
wiretap reports indicated that encryption was
FISA/Terrorism Not Covered. This report covers
intercepts concluded between January 1, 2001, and December 31,
2001. The report includes intercepts regulated by Title 18 of
the U.S. Code (Crimes and Criminal Procedure). It does not
include intercepts regulated by the Foreign Intelligence
Surveillance Act of 1978 (FISA), which is codified in Title 50
of the U.S. Code (War and National Defense). See, 50
U.S.C. § 1801 et seq. FISA intercepts are restricted to
foreign intelligence information. The FISA extends to "a
group engaged in international terrorism". Groups such as
Al Qaeda are subject to FISA surveillance. Hence, this report
does not reference terrorism, except in the context of stating
that the events of September 11, and mail delivery problems,
delayed its release by 30 days.
The report states that "The three major categories of
surveillance are wire communications, oral communications, and
electronic communications. In the early years of wiretap
reporting, nearly all intercepts involved telephone (wire)
surveillance, primarily communications made via conventional
telephone lines; the remainder involved microphone (oral)
surveillance or a combination of wire and oral interception.
With the passage of the Electronic Communications Privacy Act
of 1986, a third category was added for the reporting of
electronic communications, which most commonly involve digital
display paging devices or fax machines, but also may include
some computer transmissions. The 1988 Wiretap Report was the
first annual report to include electronic communications as a
category of surveillance."
Phone Wiretaps. "Telephone wiretaps accounted for
83 percent (1,171 cases) of intercepts installed in 2001. Of
those, 944 wiretaps involved cellular/mobile telephones,
either as the only type of device under surveillance (865
cases) or in combination with one or more other types of
telephone wiretaps (79 cases)." (Parentheses in
Electronic Surveillance. "The next most common
method of surveillance reported was the electronic wiretap,
which includes devices such as digital display pagers, voice
pagers, fax machines, and transmissions via computer such as
electronic mail. Electronic wiretaps accounted for 6 percent
(84 cases) of intercepts installed in 2001. Microphones were
used in 6 percent of intercepts (88 cases). A combination of
surveillance methods was used in 4 percent of intercepts (62
Encryption. The report also addresses the use of
encryption. It states that "Public Law 106-197 amended 18
U.S.C. 2519(2)(b) in 2000 to require that reporting should
reflect the number of wiretap applications granted in which
encryption was encountered and whether such encryption
prevented law enforcement officials from obtaining the plain
text of communications intercepted pursuant to the court
orders. In 2001, no federal wiretap reports indicated that
encryption was encountered. For state and local jurisdictions,
encryption was reported to have been encountered in 16
wiretaps in 2001; however, in none of these cases was
encryption reported to have prevented law enforcement
officials from obtaining the plain text of communications
|5th Circuit Affirms in Hugh
Symons Group v. Motorola
|5/28. The U.S.
Court of Appeals (5thCir) issued its opinion
Symons Group v. Motorola, affirming the
District Court's summary judgment in favor of Motorola.
Plaintiff filed a complaint in U.S. District Court (WDTex)
against Motorola alleging violation of Texas's Deceptive
Trade Practices Act (DTPA) in connection with allegations
that Motorola breached an oral contract, and acted
fraudulently and with negligent misrepresentation regarding
the quality, grade, and characteristics of its MPC
821 microprocessor. Plaintiff had considered using the MPC
821 in the production of a hand held computer. Federal
jurisdiction was based upon diversity of citizenship.
The District Court granted summary judgment to Motorola on the
grounds that plaintiff was not a consumer within the meaning
of the DTPA because it had over $25 million in gross assets
(see, § 17.44 of the DTPA), that plaintiff failed to
satisfy the statute of frauds, and that the tort claims
sounded in contract and failed because there was no breach of
contract. The Court of Appeals affirmed.
|Federal Circuit Rules on
Federal Jurisdiction in Patent License Disputes
|5/29. The U.S.
Court of Appeals (FedCir) issued its opinion in Pixton
v. B&B Plastics, a case regarding federal
jurisdiction in patent disputes.
Dennis Pixton holds U.S. Patent Nos. 5,025,586
both of which pertain to plastic fishing lures. Pixton granted
B&B Plastics an exclusive license to the patents. The
license agreement provided for royalty payments, and that if
sales dropped to such a level that the minimum royalty would
not be met, B&B could cover the shortfall, and if B&B
chose not to cover the shortfall, Pixton could either make the
agreement non-exclusive or terminate it. Pixton alleged breach
of the agreement, notified B&B of its termination, and
demanded that B&B cease infringing activity. B&B
argued that the agreement was still in effect.
Pixton filed a complaint in U.S.
District Court (SDFl) against B&B and others alleging
patent infringement. The District Court dismissed for lack of
federal jurisdiction, holding that the complaint sounded in
contract law, and did not arise under the patent laws.
The Appeals Court reversed. Relying on Air Products &
Chemicals v. Reichhold Chemicals, 755 F.2d 1559, (Fed. Cir.
1985), the Court wrote that "Pixton's well- pleaded
complaint expressly sets out an action for patent
infringement. The issue is not ownership; this is an action
for patent infringement in which the defendant has asserted
the defense of license. Jurisdiction in the federal courts is
not lost simply because the most efficient approach at trial
may be to address the license defense first." The Court
of Appeals vacated, and remanded to the U.S. District Court.
|Recording Industry Sues
Audiogalaxy for Copyright Infringement
|5/24. Zomba Records, and other members of the Recording Industry Association of
America (RIAA) and National
Music Publishers Association (NMPA), filed a complaint
[78 pages in PDF] in U.S.
District Court (SDNY) against Audiogalaxy and Michael
Merhej alleging contributory copyright infringement, vicarious
copyright infringement, and other causes of action. See also, RIAA release.
The complaint states that "Like the now enjoined music
file copying system and service run by Napster, Defendants
have built, maintain, and control an integrated computer
system and service, known as Audiogalaxy and accessible
through a website, www.audiogalaxy.com, that they knowingly,
willfully and intentionally designed specifically to
facilitate and encourage millions of individual anonymous
users to copy and distribute infringing copies of copyrighted
works by the millions, if not billions."
|SEC Sues Operators of
Investment Web Site
|5/28. The Securities and
Exchange Commission (SEC) filed a civil complaint
in U.S. District Court (NDGa)
against Gold- Ventures Club and Alexander Khamidouline, dba
www.gold-ventures.net, alleging violation of federal
securities laws in connection with the operation of an
Internet investment scam.
The complaint states that "Since at least March 2002, the
Defendants have offered an investment program through the
Gold- Ventures Website, located on the Internet at (www.gold-ventures.net).
The Defendants' short-term investment program promises an
exorbitant 200% return on principal investments of $250.00 to
$5000.00 in only 14 days. The Defendants claim to remit a 200%
return on the principal invested in a single payment at the
end of each 14-day investment term."
The complaint also alleges that defendants used spam to
promote their investment scam. The complaint also states that
defendants of impersonated an SEC attorney.
The only individual named in the complaint, Khamidouline, is
alleged to be a resident of Irkutsk, Russia. The web site is
hosted by Earthlink, in Atlanta, Georgia.
The first count of the complaint alleges violation of Sections
5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) and
77e(c). The second count alleges violation of Section 17(a) of
the Securities Act, 15 U.S.C. § 77q(a), Section 10(b) of the
Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R.
The complaint seeks an injunction against further violation of
federal securities laws, an asset freeze, an accounting,
disgorgement, and return of investments. It does not seek take
down of the web site, or transfer of domain names.
The SEC also announced that it obtained an ex parte temporary
restraining order, asset freeze and other relief. See, SEC
|Rights of Way Barriers to
|5/24. The Telecommunications Industry Rights of Way Working
Group (I-ROW) wrote a letter
[PDF] to the Federal
Communications Commission (FCC) regarding the adverse
effect of local governments' rights of way permitting on the
deployment of broadband networks. The letter also advocates
initiation of an FCC proceeding based upon Section 253 of the
I-ROW wrote that "broadband deployment is impeded when
the permitting process is undefined and open ended, or worse,
is misused to delay construction while the locality seeks to
extract from the provider unreasonable, unlawful fees or
in-kind compensation, or seeks to impose unlawful third tier
local regulation on the provider's business and services. A
locality charging fair and reasonable fees on a
nondiscriminatory basis has no need to negotiate fees with
each provider individually and, therefore, no reason to hold
up the construction permitting process while fees or other
terms unrelated to actual rights of way management are
It added that "localities should be charging an amount
calculated to: (1) administer the permitting process and any
other actual and direct costs incurred by the locality
directly resulting from the provider's use of the right of
way; and (2) encourage, not deter broadband deployment."
I-ROW also wrote that "broadband and the underlying
telecommunications networks necessary for these services are
key economic drivers; thus, Congress recognized in enacting
Section 253 as part of the 1996 Act that local, parochial
interests should not be allowed to delay or unduly burden
telecom deployment. For this reason, Section 253 was
written to preserve traditional local authority to manage the
physical occupation of the public rights of way, and to
collect fair and reasonable, non-discriminatory fees to offset
the cost of that management, while empowering the Commission
to preempt local requirements that exceed those bounds."
It concluded that the FCC should "commence a proceeding
to address governmental practices and fees that constitute
barriers to entry under Section 253(a), including (1) delays
in granting permits that prevent providers from providing
service, particularly those related to refusals to issue
permits in an effort to extract above-cost fees and other
concessions unrelated to rights-of-way management; and (2) the
level of compensation that local governments may require
consistent with the "fair and reasonable
compensation" standard in Section 253(c), which the
Commission would later apply in resolving Section 253(d)
petitions and to guide the courts."
U.S.C. § 253 provides in part that "No State or
local statute or regulation, or other State or local legal
requirement, may prohibit or have the effect of prohibiting
the ability of any entity to provide any interstate or
intrastate telecommunications service."
It also provides that "If, after notice and an
opportunity for public comment, the Commission determines that
a State or local government has permitted or imposed any
statute, regulation, or legal requirement that violates
subsection (a) or (b) of this section, the Commission shall
preempt the enforcement of such statute, regulation, or legal
requirement to the extent necessary to correct such violation
Martin Stern, an attorney with the law firm of Preston
Gates, and a member of I-ROW, is one of the two signers of
the letter. He is also scheduled to speak at a Congressional Internet Caucus
Advisory Committee panel discussion titled "Speeding
Broadband Deployment By Balancing of Rights of Way
Interests" today at noon. See, calendar.
I-ROW has submitted similar comments in FCC and NTIA
proceedings. FCC and NTIA officials have also addressed rights
of way issues in public speeches. For example, on February 12,
2002, NTIA Director Nancy
Victory gave a speech
titled "Together on the Right Track: Managing Access to
Public Roads and Rights of Way" to the National Association of
Regulatory Utility Commissioner's (NARUC) Committee on
Telecommunications. She stated that "we are concerned
that constraints on accessing public rights of way might be
inhibiting broadband network construction."
Similarly, on October 25, 2001, FCC
Chairman Michael Powell gave a speech
on broadband policy at a NARUC
convention. He listed several areas where regulatory barriers
might be removed. He stated: "Another example is the
regulations that govern rights of way, zoning, and building
codes. I often hear venture capitalists and broadband
providers complain that these local restrictions are some of
the most vexing problems in bringing new services to
consumers. No town likes a cell tower nestled among the fall
foliage. Few cities welcome trenches through their streets
during rush hour. Nonetheless, governments -- principally
state and local -- control the terms and conditions of local
upgrades and can be more pro-active in facilitating deployment
in their community, if they initiate broadband initiatives
that encompass judgments about these rules."
See also, October 26, 2001, speech
by Bruce Mehlman, Assistant Secretary of Commerce for
|JEC Releases Cyber Security
|5/29. The Joint Economic
Committee released a report [134
pages in PDF] titled "Security in the Information Age:
New Challenges, New Strategies". The report was produced
at the request of Sen.
Bob Bennett (R-UT). Sen. Bennett also sent a copy of the
report, and a letter, to Tom
Ridge, Director of the Office of Homeland Security, urging
that cyber security must be a part of national security. See
release and JEC
|BSA Releases Survey of
Attitudes on Software Piracy
|5/29. The Business Software
Alliance (BSA) announced that it commissioned a survey of
Internet software piracy attitudes and experiences. The BSA
stated that "The results uncover a disturbing consumer
trend toward piracy and the use of ``situational ethics´´ in
determining whether or not to download pirated software."
The BSA stated that the survey shows that "95 percent of
Internet users agree that software developers deserve to be
rewarded for their efforts" and that "85 percent of
users agree that intellectual property rights must be
protected so companies continue to invest in research and
development". Yet, the BSA stated that the survey found
that 25% of Internet users never pay for downloaded software,
and 32% seldom pay.
Robert Holleyman, P/CEO of BSA, stated in a release that
"This is the first time we've identified end user
attitudes about online theft, ... And what we found is a
disturbing behavioral trend that violates copyright laws and
costs billions of dollars and hundreds of thousands of jobs
The BSA stated that Ipsos Public Affairs
conducted the survey. The BSA stated that Ipsos conducted an
"online survey of 1,026 Internet users" that was
"conducted among a national cross- section of U.S.
households". However, neither the BSA's report
[2 pages in PDF] nor release
asserted that the respondents were randomly selected by the
surveyor. Also, neither document produced the text of the
questions posed to respondents.
|People and Appointments
|5/29. Alan Scrime was named Chief of the Office of Engineering and
Technology's (OET) Policy and Rules Division (PRD) at the Federal Communications Commission
(FCC). The PRD is responsible for promulgating rules
pertaining to the allocation of spectrum and technical issues
pertaining to radio equipment and electronic devices. The PRD
also handles the coordination of all spectrum issues with
other federal government entities. See, FCC
|5/28. The Cellular
Telecommunications and Internet Association (CTIA) wrote a
to the Office of
Management and Budget (OMB) containing its comments on the
OMB's Draft Report to Congress on the Costs and Benefits of
Federal Regulations. The letter lists regulations that the
CTIA argues should be eliminated, such as those pertaining to
wireless local number portability. The letter was sent from
Michael Altschul, SVP and General Counsel of the CTIA, to John
Morrall of the OMB's Office of Information and Regulatory
Affairs. See also, CTIA
5/29. The Federal Trade
Commission (FTC) published a notice
in the Federal Register that it has issued a Notice of
Proposed Rulemaking (NPRM) to amend its Telemarketing Sales
Rule (TSR). The new rule would impose user fees on
telemarketers, and their seller or telemarketer clients, for
their access to the national do not call registry, if
one is implemented. Comments are due by June 28, 2002. See,
Federal Register, May 29, 2002, Vol. 67, No. 103, at Pages
37362 - 37369. See also, FTC release.
5/29. The National
Telecommunications and Information Administration (NTIA)
published a notice
in the Federal Register requesting comments on the
effectiveness of Internet blocking and filtering technologies.
§ 1703 of the Children's
Internet Protection Act (CIPA) [PDF] directs NTIA to
initiate a notice and comment proceeding to evaluate whether
currently available Internet blocking or filtering technology
protection measures and Internet safety policies adequately
address the needs of educational institutions. It also directs
NTIA to make recommendations to Congress on how to foster the
development of technology protection measures that meet these
needs. Comments are due by August 27, 2002. See, Federal
Register, May 29, 2002, Vol. 67, No. 103, at Pages 37396 -
|Thursday, May 30
|The House is in recess until Tuesday, June 4.
The Senate is in recess until Monday, June 3.
9:00 AM - 5:30 PM. The FCC's Public
Safety National Coordination Committee will hold a series of
meetings. The Interoperability Subcommittee will meet from
9:00 - 11:30 AM. The Technology Subcommittee will meet from
12:30 - 3:00 PM. The Implementation Subcommittee will meet
from 3:00 - 5:30 PM. Location: FCC, Commission Meeting Room,
445 12th St., SW.
AM. The Broadband Alliance will hold a press conference. For
more information, contact Dan Rene at 202 496-1000 x244.
12:00 NOON. The Congressional
Internet Caucus Advisory Committee will host a panel
discussion titled "Speeding Broadband Deployment By
Balancing of Rights of Way Interests". The speakers will
be Marilyn Praisner (Montgomery County Council), Robert Nelson
(Michigan PSC), Martin Stern (I-ROW), and Sandy Wilson (Cox
Enterprises). Lunch will be served. RSVP to rsvp @netcaucus.org or
call Danielle at 202 638-4370. Location: Room HC-5, Capitol.
|Friday, May 31
|8:30 AM - 4:00 PM. The National
Science Foundation's (NSF) Advisory Committee for Computer
and Information Science and Engineering will hold an open
meeting. For more information, contact Gwen Blount at 703
292-8900. See, notice
in Federal Register. Location: 4201 Wilson Blvd., Room 1235,
9:30 AM - 12:30 PM. The FCC's Public
Safety National Coordination Committee will hold a General
Membership meeting. Location: FCC, Commission Meeting Room,
445 12th St., SW.
|Monday, June 3
|The Senate will meet at 1:00 PM.
10:00 AM. The U.S.
Court of Appeals (FedCir) will hear oral argument in Rambus
v. infineon Technologies, No. 01-1449, an appeal from the
U.S. District Court (EDVa) in a patent infringement case
involving semiconductor memory devices. At issue is the
existence and scope of the patent disclosure obligations that
arise as a result of participation in a standard setting body.
This is D.C. No. 3:00CV524; the District Court opinion of
August 9, 2001 is at 2001 WL 913972. Location: LaFayette
Square, at 717 Madison Place, NW.
2:00 - 3:30 PM. The FTC's Bureau of
Competition will hold a public workshop on merger
investigation best practices. This is the first workshop of a
seven part, five city, series. This event will focus on
electronic records. See, FTC release.
Location: FTC, Room 332, 600 Pennsylvania Ave., NW.
Extended deadline to submit reply comments to the FCC (FCC) in
response to its Notice of Proposed Rulemaking titled "In
the Matter of Appropriate Framework for Broadband Access to
the Internet over Wireline Facilities". This is CC Docket
No. 02-33. See, Order
[PDF] extending deadline from May 14 to June 3. See also, original
notice in Federal Register.
|Tuesday, June 4
|The House will meet at 2:00 PM for legislative business. No
recorded votes are expected before 6:00 PM. The House will
consider a number of measures under suspension of the rules.
POSTPONED TO JUNE 5.
AM. The House
Commerce Committee's Subcommittee on Telecommunications
and the Internet will hold a hearing titled "The FCC's
UWB Proceeding: An Examination of the Government's Spectrum
10:00 AM. The Senate
Health, Education, Labor, and Pensions Committee will hold
a hearing on legislation to authorize funding for the National Science Foundation.
Location: Room 430, Dirksen Building.
10:00 AM. The U.S.
Court of Appeals (FedCir) will hear oral argument in Insight
Development v. Hewlitt Packard, No. 01-1459, an appeal
from the U.S. District
Court (NDCal) in a patent infringement case involving web
imaging technology. Location: LaFayette Square, at 717 Madison
2:00 - 4:00 PM. The FCC's Advisory
Committee for the 2003 World Radiocommunication Conference (WRC-03 Advisory Committee)
will meet. See, notice
and agenda [PDF]. Location: FCC, Commission Meeting Room,
Room TW-C305, 445 12th Street, SW.
4:00 PM. The House
Judiciary Committee's Subcommittee on Crime will hold a
hearing and a mark up session for HR 4598,
the Homeland Security Information Sharing Act, sponsored by Rep. Saxby Chambliss
(R-GA). Audio webcast. Location: Room 2141, Rayburn Building.
|Wednesday, June 5
|10:00 AM. The House
Commerce Committee's Subcommittee on Telecommunications
and the Internet will hold a hearing titled "The FCC's
UWB Proceeding: An Examination of the Government's Spectrum
Management Process." Webcast. Press contact: Ken Johnson
or Jon Tripp at 202 225-5735. Location: Room 2123, Rayburn
2:00 PM. The House
Judiciary Committee's Subcommittee on Courts, the Internet
and Intellectual Property will hold a hearing titled
"DRM: The Consumer Benefits of Today's Digital Rights
Management Solutions." Audio webcast. Location: Room
2141, Rayburn Building.
Extended deadline to submit reply comments to the FCC in response
to its notice of proposed rulemaking regarding its unbundling
analysis under § 251
of the Communications Act and the identification of specific
unbundling requirements for incumbent local exchange carriers.
in the Federal Register. The FCC again extended the deadline
for filing reply comments in its Order
[PDF] adopted on April 30. This is CC Docket No. 01-338.
|Thursday, June 6
|10:00 AM. The House
Judiciary Committee will meet to mark up several bills,
including HR 3215,
the Combatting Illegal Gambling Reform and Modernization Act
(Goodlatte Internet gambling bill), and HR 4623,
the Child Obscenity and Pormography Prevention Act of 2002.
Audio Webcast. Press contact: Jeff Lungren or Terry Shawn at
202 225-2492. Location: Room 2141, Rayburn Building.
TIME? The Senate
Commerce Committee's Subcommittee on Communications will
hold a hearing titled Universal Service Fund. Press
contact: Andy Davis 224-6654. Location: Room 253, Russell
8:00 AM - 5:00 PM. The Institute
for International Research (IIR) and ComCare will host a
conference titled e-SAFETY: Delivering Communications &
Information Technology Solutions for 21st Century Public
Safety. Sen. Conrad
Burns (R-MT) will give a keynote address at 8:30 AM. The
price to attend is $695. See, IIR notice.
Location: Ronald Reagan Building, 1300 Pennsylvania Ave., NW.
Deadline to submit comments to the SEC regarding
its proposed rule amending the Investment Advisers Act of 1940
to exempt certain investment advisers that provide advisory
services through the Internet from the prohibition on SEC
registration set out in § 203A of the Act. The
amendments would permit these advisers to register with the
SEC instead of with state securities authorities. See, notice
in the Federal Register.
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