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October 28, 2002, 9:00 AM ET, Alert No. 536.
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APEC Forum Produces Digital Economy Statement
10/27. The Asia Pacific Economic Cooperation (APEC) Plenary in Los Cabos, Mexico agreed to a Statement to Implement APEC Policies on Trade and the Digital Economy. It addresses electronic commerce, tariffs on information technology products, protection of digital intellectual property, education and universal access, and other issues.

The Statement begins with the observation that "The exponential growth in Internet connectivity and use of electronic commerce as a channel for international business require the development of trade policies that promote a networked world." It continues that APEC members "need to make constructive efforts to liberalize the trading environment with effective trade rules for the digital economy where products and services can be exchanged using electronic networks free of tariffs and other barriers."

The Statement provides that "The digital economy should continue to flourish in a liberal and open trade environment, which will lead to greater development of e-commerce and economic growth." Also, "Where legitimate policy objectives require domestic regulations that affect trade in products and services using electronic networks, such regulations should be transparent, non-discriminatory and least restrictive on trade, taking Economies' international commitments into account."

It also states that the APEC "Economies support a long term moratorium on customs duties on electronic transmissions."

The Statement also addresses the Information Technology Agreement, and provides that APEC economies will work towards "eliminating tariffs on additional information technology products at the broadest level possible".

The Statement also recites that "APEC Economies identified and exchanged information on the following services related to electronic commerce: telecommunications and value added services, subscription video services (including via cable or satellite and excluding broadcasting), computer and related services, advertising, distribution (including products distributed electronically), express delivery, and video rental/leasing (including online rentals)." (Parentheses in original.)

It continues that "For services it identifies as critical to electronic commerce, each Economy will: (a) reduce progressively or eliminate limitations on the number of suppliers permitted to supply such services; (b) reduce progressively or eliminate limitations on ownership and control that: (i) prevent significant foreign investment in the supply of telecommunications services; and (ii) prevent majority ownership or control of suppliers of other services; and (c) otherwise accord market access and national treatment with a minimum of exceptions."

Intellectual Property. The Statement provides that the APEC "Economies will fully implement and enforce the WTO Agreement on Trade Related Aspects of Intellectual Property Rights" and "will ratify and fully implement the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty as soon as possible."

It also provides that "Economies will ensure through adequate oversight mechanisms that their government entities use only legal software or other content." Finally, it provides that each economy "to the largest extent possible ensure that the internet and e-commerce does not facilitate trade in infringing and counterfeit goods, and will put into place appropriate regulatory and enforcement systems aimed at curtailing these activities."

Education and Access. In a separate agreement titled "APEC Economic Leaders' Declaration", the APEC countries wrote that "We noted the contribution of the e-APEC Strategy, the Beijing Initiative on Human Capacity Building and the APEC Human Capacity Building Strategy for the New Economy as an effective response to the need for transforming the digital divide into a digital opportunity. We welcomed the expansion of cyber education and called for more activities aimed at improving teacher quality, promoting language study and facilitating more use of distance learning. We also welcomed significant progress in the revitalization of the APEC Education Foundation and expansion of the Consortium for APEC Cyber Education Cooperation."

It also states that "We reiterated our commitment to realizing our goal of universal access by the year 2010 and we recognized the importance of focusing on further action on connectivity for rural areas; micro, small and medium enterprises; women; youth; and the disabled." See, text.

The APEC forum was established in 1989 to promote economic cooperation and integration in the Pacific region. The  APEC countries that participated in this meeting were Brunei Darussalam, Hong Kong China, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, The Philippines, Singapore, Chinese Taipei, Thailand, United States, and Vietnam. This APEC meeting also addressed other issues, such as terrorism, and North Korean nuclear weapons.

FTC Official Addresses Merger Enforcement
10/24. Joseph Simons, Director of the Federal Trade Commission's (FTC) Bureau of Competition, gave a speech in Santa Monica, California titled "Merger Enforcement at the FTC". He addressed the continuity of merger policy, the level of merger activity, vertical mergers, including the Synopsis merger, and international merger review coordination.

He also discussed at length the FTC's October 4, 2002 cruise line decisions. See also, FTC release, closing letter [PDF] to Royal Caribbean, closing letter [PDF] to Carnival, closing letter [PDF] to Princess Cruises, statement of the FTC, and dissenting statement of FTC Commissioners Sheila Anthony and Mozelle Thompson.

Simons gave the keynote address to the Tenth Annual Golden State Antitrust and Unfair Competition Law Institute, hosted by the Antitrust and Unfair Competition Law Section of the State Bar of California.

People and Appointments
10/24. The Securities and Exchange Commission (SEC) named William Webster to be Chairman of the Public Company Accounting Oversight Board (PCAOB). The PCAOB was created by the Sarbanes Oxley Act of 2002 to oversee the audits of the financial statements of public companies. The SEC also named Kayla Gillan, Daniel Goelzer, Willis Gradison, and Charles Niemeier to be members of the PCAOB. Webster is a former judge of the U.S. District Court (EDMO) and U.S. Court of Appeals (8thCir), and a former Director of the Federal Bureau of Investigation (FBI) and Central Intelligence Agency (CIA). He is currently a partner in the law firm of Milbank Tweed. See, SEC release, with biographies of appointees.

10/25. Sen. Paul Sarbanes (D-MD), Chairman of the Senate Banking Committee, said that Securities and Exchange Commission (SEC) Chairman Harvey Pitt should resign, because of the SEC's appointment of William Webster to head the Public Company Accounting Oversight Board (PCAOB). Pitt and fellow Republican SEC Commissioners Cynthia Glassman and Paul Atkins favored Webster, while Democratic Commissioners Harvey Goldschmid and Roel Campos, and Sen. Sarbanes, favored John Biggs, of the TIAA-CREF pension fund. Sen. Sarbanes stated in a release that "Chairman Pitt failed to build a consensus within the Commission, as he publicly promised he would do, for a strong Oversight Board that would command instant respect by the investing public. That the selection process appears to have been shaped by political and industry influences only compounds this failure. The country would be best served if Mr. Pitt stepped down as Chairman of the SEC."

10/22. The Consumer Electronics Association (CEA) elected Kathy Gornik, President of Thiel Audio Products, to be Chair of the CEA's Board of Directors and Executive Board, effective January 1, 2003. Loyd Ivey, Ch/CEO of Mitek Corporation, was elected Vice Chair. Jerry Kalov, of Kay Associates, was re-elected as Industry Executive Advisor. See, CEA release for other selections.

10/18. Archie Dunham, Chairman of Conoco Phillips, was elected chairman of the National Association of Manufacturers (NAM). See, NAM release.

DOJ Recommends Approval of BellSouth Long Distance Applications for Florida and Tennessee
10/25. The Department of Justice's (DOJ) Antitrust Division releases its evaluation [19 pages in PDF] of BellSouth's Section 271 application with the Federal Communications Commission (FCC) to provide in region interLATA service in the states of Florida and Tennessee. It conditionally recommended approval.

The DOJ wrote that "The Commission should review the concerns expressed in this Evaluation, and if it is satisfied that these concerns have been addressed, the Department recommends that the Commission approve BellSouth’s application." The DOJ expressed concerns regarding several areas of the process through which upgrades to operations support systems (OSS) software are developed and prioritized. It also expressed concerns about the measurements used to track the performance of those systems.

BellSouth has previously obtained Section 271 approvals for the states of Georgia, Louisiana, Alabama, Kentucky, Mississippi, North Carolina, and South Carolina. The deadline for the FCC to decide on this application is December 19. This is WC Docket No. 02-307. See, DOJ release and BellSouth release.

FCC Approves Transfer of Licenses to Intelsat
10/25. The Federal Communications Commission (FCC) released an Order and Authorization [MS Word] approving the transfer of common carrier and non-common carrier earth station licenses, private land mobile radio (PLMR) licenses, and international section 214 authorizations from Comsat, a subsidiary of Lockheed Martin, to Intelsat. This is IB Docket No. 02-87.

FCC Commissioner Michael Copps wrote in a separate statement [MS Word] that "I am always troubled when the Federal Communications Commission allows foreign government controlled entities to obtain U.S. licenses. As I have stated before, I believe that foreign government control represents a serious potential threat to U.S. consumers and to competition. There is a fundamental difference between companies that operate in a free market and state-run corporations that may act counter to free market forces. Here, foreign governments control -- through government-owned monopoly corporations, holding companies, and other devices -- approximately 30 percent of Intelsat. While the privatization of Intelsat has clearly made great progress, it is still substantially owned by foreign governments."

Sniper Capture Spurs Debate over Databases and Privacy
10/25. The use by law enforcement agencies of computerized databases to solve the Washington DC area sniper case has spurred debate over the development, use, and sharing of databases by law enforcement and other government agencies.

For example, Jonathan Alter, Newsweek Senior Editor and columnist, wrote an opinion article published in the MSNBC web site titled "Actually, the Database Is God".

Alter wrote that "Computerized fingerprinting triumphed. It was by matching a print found on a gun catalog at a crime scene in Montgomery, Ala., to one in an INS database in Washington state that the Feds cracked open the case and paved the way for the arrest of the two suspected snipers."

He then criticized arguments that have been advanced by civil libertarians. He wrote: "So if gathering as much as information as possible on databases and then sharing it among law enforcement agencies is so effective, why don’t we see more of both? Part of the explanation is the usual bureaucratic inertia and squabbling, but there's a deeper reason. Even after September 11, privacy concerns still carry plenty of clout in this country. Commonsense reforms -- like printing visa expiration dates on the driver’s licenses of immigrants -- are still resisted by many civil liberties groups. And because it’s always easier to stop a new idea than to implement one, the database approach to preventing terrorism is not moving as quickly as it should. This is one of those cases where civil libertarians and the gun lobby are together on the wrong side."

Alter concluded, " ``Database coordination.´´ It's not much of a campaign slogan, but it might save your life."

In contrast, the Center for Democracy and Technology (CDT) argued in its October 25 CDT Policy Post that "it seems that the case was broken when the alleged sniper (or someone who knew him) called police and gave them crucial information." (Parentheses in original.)

The CDT acknowledged the role of fingerprint databases. It wrote that "The alleged sniper was identified in part because a fingerprint lifted from a Montgomery, Alabama robbery murder was matched with a fingerprint taken by law enforcement authorities from the 17 year old companion of the accused following the youth's arrest in connection with an altercation in Washington state."

However, the CDT added, "But the key point is this: The database at issue (actually now a networked series of databases) is woven through with a series of rules intended to limit its use and protect privacy." (Parentheses in original.)

The Brady Campaign, a pro gun control organization, wrote in its web site that "In the Maryland sniper shootings, police rapidly matched bullet fragments from each victim to prove that the same gun was used in all of the shootings. The technology to match bullets to firearms is known as ``ballistic fingerprinting.´´ It worked and provided police with important crime leads. But what was missing, what police desperately needed, was a nationwide database of the ballistic fingerprint of every gun before it is sold so that police could determine not just that the bullets came from the same gun, but which specific gun -- manufacturer, model, serial number -- the bullets were fired from. That would have helped police trace the sniper after the very first victim." See, item titled "Ballistic Fingerprints Help Solve Crimes".

The National Rifle Association (NRA) opposes maintaining a database of ballistic fingerprints. See, October 17 statement of NRA officers Wayne LaPierre and Chris Cox.

District Court Enjoins Insider Traders
10/23. The U.S. District Court (NDIll) entered an Order of Permanent Injunction against Joseph Sidoryk, Gary Camp, Todd Camp, and Thomas Siska. On July 23, 2002 the Securities and Exchange Commission (SEC) filed a civil complaint against the four alleging insider trading in the stock of Three Five Systems in violation of federal securities laws. Sidoryk is Director of Strategic Accounts at Three Five and primary liason to Motorola. Three Five designs, develops and manufactures display systems employing liquid crystal display (LCD) and liquid crystal on silicon (LCoS) microdisplay technology.

The Order permanently enjoins Sidoryk, Gary Camp, Todd Camp, and Siska from future violations of § 17(a) of the Securities Act of 1933, § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Order also requires payment of disgorgement, interest and civil penalties. See, SEC release.

More News
10/25. The U.S. Court of Appeals (9thCir) issued its opinion in Bank of America v. San Francisco, affirming the summary judgment of the District Court enjoining cities from enforcing city ordinances prohibiting banks from charging ATM fees to non-depositors. The Appeals Court held that the ordinances were preempted by the Home Owners’ Loan Act (HOLA), 12 U.S.C. §§ 1461-1470, and the National Bank Act, 12 U.S.C. § 24. It also held that the Electronic Fund Transfer Act (EFTA), 15 U.S.C. §§ 1693-1693r, does not permit cities to regulate ATM fees as a consumer protection measure.

10/25. The World Intellectual Property Organization (WIPO) announced in a release that the WIPO and Educause, the administrator of the .edu top level generic domain, have signed an agreement which makes the WIPO the sole dispute resolution service provider for the .edu domain. The WIPO stated that "WIPO's Arbitration and Mediation Center will apply the .edu Domain Name Dispute Resolution Policy (eduDRP) -- a modified version of the Uniform Domain Name Dispute Resolution Policy (UDRP) -- a low cost and speedy alternative to litigation, in the drive to resolve ``cybersquatting´´ disputes arising in the .edu domain."

Monday, October 28
The Senate will meet at 10:30 AM in pro forma session only.
Tuesday, October 29
9:30 AM - 4:30 PM. The Securities and Exchange Commission (SEC) will hold a full day hearing on issues relating to the structure of the U.S. equity securities markets. The SEC stated in a release that the topics will include "the collection, consolidation and dissemination of market data through intermarket plans; broker dealers' duty of best execution and corresponding marketplace rules relating to intermarket access, trade throughs, and price protection; the role of national securities exchanges, electronic communications networks (ECNs), and alternative trading systems; and the self regulatory system". See also, schedule and list of participants. Location: SEC, 450 5th Street, NW.

8:45 AM - 3:45 PM. The National Institute of Standards and Technology's (NIST) Advanced Technology Program (ATP) Advisory Committee will hold a partially closed meeting. The agenda includes a review of ATP policy, organization, and budget, and an update from an international community panel on technology programs. Pre-registration is required to attend; contact Carolyn Peters by Thursday, October 24, at carolyn.peters or 301 975-5607. See, notice in Federal Register. Location: NIST, Administration Building, Lecture Room B, Gaithersburg, MD.

12:15 PM. The FCBA's Common Carrier Committee will host a brown bag lunch. The speaker will be Bill Maher, Chief of the FCC's Wireline Competition Bureau. Location: Willkie Farr & Gallagher, 1875 K Street, 2nd Floor, NY conference Room.

Deadline for the DOJ's Antitrust Division to release its evaluation of SBC's Section 271 application with the FCC to provide in region interLATA service in the state of California. This is WC Docket No. 02-306.

Wednesday, October 30
POSTPONED TO APRIL 30, 2003. The FCC will hold Auction No. 46. This is the 1670-1675 MHz band auction. See, notice of postponement in Federal Register, October 10, 2002, Vol. 67, No. 197, at Pages 63095 - 63096.

9:00 AM - 12:00 NOON. The Telecommunications Service Priority (TSP) System Oversight Committee will hold a meeting. The agenda includes TSP/WPS program update, TSP sponsorship policies, and OSS concept. For more information, contact Deborah Bea at 703 607-4933. See, notice in the Federal Register. October 11, 2002, Vol. 67, No. 198, at Page 63452. Location: National Communications System (NCS), second floor conference room, 701 South Court House Road, Arlington, VA.

10:00 AM - 12:00 NOON and 2:00 - 4:00 PM. The FTC and the DOJ's Antitrust Division will hold the final workshops in their joint series titled "Competition and Intellectual Property Law and Policy in the Knowledge Based Economy" on October 25 and 30 and November 6. The October 30 event is titled "Competition, Economic, and Business Perspectives on Substantive Patent Law Issues: Non-Obviousness and Other Patentability Criteria". Location: FTC, Room 432, 600 Pennsylvania Ave., NW.

12:00 NOON. Deadline to submit comments to the Office of the U.S. Trade Representative (USTR) regarding the acts, policies, and practices of trading partners of the U.S. that are relevant to the decision as to whether they should be identified under Section 182 of the Trade Act of 1974 (19 U.S.C. § 2242). Section 182, which is commonly referred to as the "Special 301" provisions in the Trade Act, requires the USTR to identify countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. The USTR also requests comments on the U.S. Government's 1998 Memorandum of Understanding with Paraguay on intellectual property matters, including enforcement. See, notice in the Federal Register

12:30 PM. The FCBA's Online Communications Committee will hold a brown bag lunch. The topic will be the role of ISPs in security and law enforcement compliance. The speakers will be Christopher Bubb (AOL Time Warner) and Betty Ellen Shave (Associate Chief for International Matters, Computer Crime and Intellectual Property Section, Department of Justice. Location: Cole Raywid & Braverman, 1919 Pennsylvania Ave., NW, No. 200.

EXTENDED TO DECEMBER 6. Deadline to submit comments to the FCC in response to its Notice of Proposed Rulemaking (NPRM) [15 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Copy Protection". This NPRM proposes that the FCC promulgate a broadcast flag rule, and seeks comment on this, and related questions. This is MB Docket No. 02-230. See also, FCC release [PDF]. See also, Order [PDF] of October 11, 2002 extending deadlines.

Thursday, October 31
The Senate will meet at 10:30 AM in pro forma session only.

8:30 AM- 4:15 PM. Day one of a two day CLE seminar hosted by the FCBA titled "Communications Law 101: A Practitioner's Primer". The price to attend is $250 for lawyers and paralegals in private practice or corporate positions, and $125 for those in government service, non-profit positions or in law school. Location: Georgetown University Law Center, 600 New Jersey Ave., NW.

12:00 NOON - 1:00 PM. The National Telecommunications Cooperative Association (NTCA) will host a luncheon to release the results of its 2002 Wireless Survey. RSVP to Donna Taylor at 703 351-2086 or by October 28. Location: NTCA Headquarters, 4121 Wilson Blvd., 10th floor, Arlington, VA. If traveling by Metro, go to the Ballston/MU on the orange line.

2:30 - 4:30 PM. The FCC's WRC-03 Advisory Committee will meet. See, notice in the Federal Register. Location: FCC, 445 12th Street, SW, Room TW-C305 (Commission Meeting Room).

Friday, November 1
8:30 AM - 1:00 PM. Day two of a two day CLE seminar hosted by the FCBA titled "Communications Law 101: A Practitioner's Primer". The price to attend is $250 for lawyers and paralegals in private practice or corporate positions, and $125 for those in government service, non-profit positions or in law school. Location: Georgetown University Law Center, 600 New Jersey Ave., NW.

Deadline to submit reply comments to the FCC regarding BellSouth's Section 271 application with the FCC to provide in region interLATA service in the states of Florida and Tennessee. This is WC Docket No. 02-307. See, FCC notice [PDF].

Deadline to submit reply comments to the FCC regarding the petition for declaratory ruling in CC Docket No. 01-92 requesting that the FCC determine that wireless termination tariffs are not a proper mechanism for establishing reciprocal compensation arrangements between local exchange carriers (LECs) and commercial mobile radio service (CMRS) providers. See, FCC notice [PDF].

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