7/14. Rep. Billy Tauzin (R-LA), Chairman of the House Commerce Committee, and Rep. James Greenwood (R-PA) wrote a letter to Sam Palmisano, CEO of IBM, asking for information regarding IBM's involvement in the Federal Communications Commission's (FCC) e-rate program. The Committee asks, for example, for information about whether IBM has ever offered financial assistance to any e-rate applicant to help it meet its required share of e-rate-funded costs.

The two also wrote a similar letter to Paul Karas, President of Alpha Communications. Both letters state that the Committee "is investigating the potential for waste, fraud, and abuse in the E-rate program -- the mechanism of the Universal Services Fund (USF) that subsidizes the deployment of telecommunications services to schools and public libraries."

The letters further state that "In the course of our work, we have been examining documents produced by both the FCC and the Universal Service Administrative Company (USAC), which administers the E-rate program for the FCC. We also have received preliminary information from certain vendors and applicants participating in the program, and have conducted interviews with relevant individuals. Based on our review to date, we have identified your company as having significant involvement in the E-rate program, and thus are writing to you today to seek additional information to assist our review."

Both letters ask the two companies to provide the Committee with information -- both records and answers to questions.

The FCC's Universal Service Administrative Company (USAC) administers the schools and libraries program, which is also known as the e-rate. The program was created by the FCC after enactment of the Telecom Act of 1996 under the rubric of Section 254, which codifies the FCC's universal service programs. Under the e-rate program, phone companies are taxed, to enable the USAC to provides subsidies to schools and libraries for telecommunications services, internet access, and internal wiring. The e-rate program provides subsidies of up to 90%. The program is plagued by fraud and abuse.

The letter to IBM asks, "Has any employee of your company ever received any request from a potential E-rate applicant, or ever made any offer, promise, commitment or agreement, whether written or oral, to or with any potential E-rate applicant, under which your company would provide, either directly or indirectly through any third party, financial assistance to such applicant to help it meet its required share of E-rate-funded costs, including but not limited to any request or offer of free or reduced cost services or equipment or assistance?  If so, please describe such requests or commitments."

It also requests that IBM produce "All records relating to any request, offer, promise, commitment or agreement, whether written or oral, between you and any potential E-rate applicant, under which your company would provide, either directly or indirectly through any third party, financial assistance to such applicant to help it meet its required share of E-rate-funded costs, including but not limited to any request or offer of free or reduced cost services or equipment or assistance."

Rep. Tauzin is the Chairman of the Committee. Rep. Greenwood (at right) is the Chairman of the Oversight and Investigations Subcommittee.

On April 29, 2003, the Committee subpoenaed Cheryl Parrino, the CEO of the USAC, to obtain unredacted records. See, story titled "House Commerce Committee Subpoenas USAC for E-Rate Records" in TLJ Daily E-Mail Alert No. 652, April 30, 2003.

See also, stories titled "FCC Inspector General Reports on E-Rate Fraud" in TLJ Daily E-Mail Alert No. 449, June 12, 2002; "Reps. Tauzin & Greenwood Write Powell Re Waste Fraud & Abuse In E-Rate Program" in TLJ Daily E-Mail Alert No. 624, March 17, 2003; "FCC Announces Order and NPRM Regarding E-Rate Subsidies" in TLJ Daily E-Mail Alert No. 648, April 24, 2003.

7/14. The U.S. Court of Appeals (8thCir) issued its opinion [5 pages in PDF] in PMA v. KPMG, a case involving application of the Securities Litigation Uniform Standards Act of 1998 (SLUSA) to a class action lawsuit alleging state causes of action.

Professional Management Associates, Inc. Employees' Profit Sharing Plan (PMA) held stock in Green Tree Financial Corporation. KPMG is an independent auditing and accounting firm that reviewed Green Tree's financial statements. PMA filed a class action complaint in state court in Minnesota against KPMG alleging state law claims for violations of the Minnesota Consumer Fraud Act, for aiding and abetting a breach of fiduciary duty of disclosure under Delaware law, and for violations of the common law doctrines of negligence and negligent misrepresentation. PMA alleged that KPMG made or assisted in making misrepresentations or omissions of material fact about Green Tree.

KPMG removed the action to the U.S. District Court (DMinn). The District Court held that PMA's complaint implicitly alleged misrepresentations and omissions in connection with the purchase of a covered security, and dismissed the complaint, pursuant to the SLUSA, 15 U.S.C. §§ 77p(b)-(c), 78bb(f)(1)-(2), which provides for removal to federal court and immediate dismissal of certain class actions based on state law alleging an untrue statement or omission of a material fact made in connection with the purchase or sale of a covered security.

The Appeals Court affirmed.

7/15. The House is scheduled to take up HR 1950, the "Foreign Relations Authorization Act, Fiscal Years 2004 and 2005", on Tuesday, July 15. On July 14 the House Rules Committee adopted a structured rule for consideration of the bill. The bill contains several tech related provisions.

The rule allows for consideration of an amendment [3 pages PDF scan] to be offered by Rep. Ellen Tauscher (D-CA) and Rep Doug Bereuter (R-NE) that would allow exporters of commercial communications satellites to share marketing information with prospective customers in NATO countries, and in Japan, Australia, and New Zealand. The amendment would not allow the transfer of any sensitive encryption and/or source code data, detailed design data, engineering analysis, or manufacturing know-how.

The bill already includes a version of the Consider Global Internet Freedom Act, which had previously been introduced as a stand alone bill by Rep. Chris Cox (R-CA) and Rep. Tom Lantos (D-CA). It would authorize funding for a new Office of Global Internet Freedom, which would "develop and implement a comprehensive global strategy to combat state-sponsored and state-directed Internet jamming and persecution of those who use the Internet." See, story below.

This bill also contains an authorization of appropriations of $10 Million for combatting piracy of United States copyrighted materials in countries that are not members of the Organization for Economic Cooperation and Development (OECD). See, story below.

7/15. The House is scheduled to take up HR 1950, the "Foreign Relations Authorization Act, Fiscal Years 2004 and 2005", on Tuesday, July 15. This bill contains the "Global Internet Freedom Act of 2003".

This is a watered down version of HR 48, titled the Global Internet Freedom Act of 2003, which was introduced on January 7, 2003 by Rep. Chris Cox (R-CA), Rep. Tom Lantos (D-CA) and others. Sen. Sen. Jon Kyl (R-AZ) and Sen. Ron Wyden (D-OR) introduced S 1183, the companion bill in the Senate on June 4, 2003. Rep. Cox and Rep. Lantos introduced a similar bill in the 107th Congress, HR 5524, while Sen. Wyden and Sen. Kyl introduced a similar bill, S 3093, in the 107th Congress.

The Foreign Relations Authorization Act includes, at Section 521-524, a modified version of the Global Internet Freedom Act. The version contained in HR 1950 states in its findings that "All people have the right to communicate freely with others, and to have unrestricted access to news and information, on the Internet", but that various governments, including the People's Republic of China, "are taking active measures to keep their citizens from freely accessing the Internet and obtaining international political, religious, and economic news and information."

The bill creates an Office of Global Internet Freedom, which "shall develop and implement a comprehensive global strategy to combat state-sponsored and state-directed Internet jamming and persecution of those who use the Internet."

However, the version contained in HR 1950 is a weakened version of HR 48 and S 1183. HR 1950 removes language specifying the nature of internet blocking, jamming and monitoring; it removes language identifying jamming activities by China; it removes from the purposes of the new office the task of developing technologies to counter the jamming of the internet; and, it reduces the authorization for appropriations from $50 Million per year to $8 Million per year.

HR 48 provides that "Intergovernmental, nongovernmental, and media organizations have reported the widespread and increasing pattern by authoritarian governments to block, jam, and monitor Internet access and content, using technologies such as firewalls, filters, and `black boxes'. Such jamming and monitoring of individual activity on the Internet includes surveillance of e-mail messages, message boards, and the use of particular words; `stealth blocking' individuals from visiting websites; the development of `black lists' of users that seek to visit these websites; and the denial of access to the Internet." S 1183 contains similar language. However, this language is not in HR 1950.

HR 48 and S 1183 also provide that "To date, the Voice of America and Radio Free Asia have committed a total of $1,000,000 for technology to counter Internet jamming by the People's Republic of China. This technology, which has been successful in attracting 100,000 electronic hits per day from the People's Republic of China, has been relied upon by Voice of America and Radio Free Asia to ensure access to their programming by citizens of the People's Republic of China, but United States Government financial support for the technology has lapsed. In most other countries there is no meaningful United States support for Internet freedom." This language is not in HR 1950.

HR 1950 also deletes the key finding of the stand alone bills that "Unrestricted access to news and information on the Internet is a check on repressive rule by authoritarian regimes around the world."

HR 1950 also deletes from HR 48 two of the enumerated purposes of the Office of Global Internet Freedom, "to authorize the commitment of a substantial portion of United States international broadcasting resources to the continued development and implementation of technologies to counter the jamming of the Internet", and "to utilize the expertise of the private sector in the development and implementation of such technologies, so that the many current technologies used commercially for securing business transactions and providing virtual meeting space can be used to promote democracy and freedom".

See also, story titled "AEI Panel Advocates ``Freeing the Chinese Internet´´" in TLJ Daily E-Mail Alert No. 416, April 23, 2002, and TLJ story titled "Cox and Wyden Introduce Global Internet Freedom Act", October 10, 2002.

This bill is separate and different from the Bush administration's Digital Freedom Initiative, which involves foreign aid for developing countries to develop information and communication technology, training by Peace Corps volunteers, and involvement by U.S. technology companies, such as Cisco and HP. See, TLJ story titled "Bush Administration Announces Digital Freedom Initiative", March 4, 2003.

7/15. The House is scheduled to take up HR 1950, the "Foreign Relations Authorization Act, Fiscal Years 2004 and 2005", on Tuesday, July 15. This bill contains an authorization of appropriations of $10 Million for combatting piracy of United States copyrighted materials in countries that are not members of the Organization for Economic Cooperation and Development (OECD).

This funding would be used for: "(1) Provision of equipment and training for foreign law enforcement, including in the interpretation of intellectual property laws. (2) Training for judges and prosecutors, including in the interpretation of intellectual property laws. (3) Assistance in complying with obligations under appropriate international copyright and intellectual property treaties and agreements."

This bill also provides that "the Department of State should make every effort to consult with, and provide appropriate assistance to, the World Intellectual Property Organization to promote the integration of non-OECD countries into the global intellectual property system."

The Senate version of the bill is S 925, the State Department FY2004-2005 Authorizations bill. The Senate began consideration last week. The Senate adopted by voice vote an amendment providing for combatting piracy of U.S. copyrights.

7/14. Ginger Clark, Confidential Assistant to Federal Communications Commission (FCC) Commissioner Kevin Martin, has "decided to pursue other opportunities" at the FCC. See, FCC release [PDF].

7/14. President Bush nominated Margaret Rodgers to be a Judge of the U.S. District Court for the Northern District of Florida. See, White House release.

7/14. The House passed HR 2673, the "Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, 2004" by a vote of 347-64. See, Roll Call No. 358. This bill includes funding for, among other things, rural telecommunications, distance learning and telemedicine, and broadband telecommunication programs. See, story titled "House to Take Up Ag Approps Bill, With Distance Learning, Telemedicine & Broadband Provisions" in TLJ Daily E-Mail Alert No. 697, July 14, 2003.

7/14. Yahoo and Overture announced that "they have signed a definitive agreement under which Yahoo! will acquire Overture. Under the terms of the agreement, each outstanding common share of Overture will receive 0.6108 shares of Yahoo! common stock and $4.75 in cash, reflecting an aggregate purchase price of approximately $1.63 billion, or $1.52 billion net of Overture's March 31, 2003 cash balance, less the amounts earmarked for their two recently closed transactions." See, Yahoo release and similar Overture release.

Overture provides commercial search services on the internet. Terry Semel, Ch/CEO of Yahoo stated in the release that "Together, the two companies will be able to provide the most compelling and diversified suite of integrated marketing solutions around the globe, including branding, paid placement, graphical ads, text links, multimedia, and contextual advertising."

This transaction requires approval by Overtures shareholders. It also requires regulatory approval.

7/14. PeopleSoft and J.D. Edwards announced that "the companies have received early termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976". See, PeopleSoft release and J.D.Edwards release.

The two companies added that "PeopleSoft's exchange offer for J.D. Edwards will expire at 12:00 midnight EDT, Thursday, July 17, 2003 at which time PeopleSoft expects to complete the acquisition."

On June 2, J.D. Edwards and PeopleSoft announced a definitive agreement under which PeopleSoft will acquire J.D. Edwards. See, PeopleSoft release [4 pages in PDF] and J.D. Edwards release.

On June 6, Oracle made a hostile bid for PeopleSoft. Oracle stated in a release [PDF] that it will "commence a cash tender offer to purchase all of the outstanding shares of PeopleSoft ... for $16 per share, or approximately $5.1 billion." On June 19, Oracle announced that it "will increase its cash tender offer to purchase all of the outstanding shares of PeopleSoft, Inc. to $19.50 per share".

See also, stories titled "Oracle Makes Hostile Bid for PeopleSoft" in TLJ Daily E-Mail Alert No. 676, June 9, 2003, and "J.D. Edwards Files Complaint Against Oracle" in TLJ Daily E-Mail Alert No. 680, June 13, 2003.

7/14. The House Government Reform Committee's Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census announced that Craig Conway, P/CEO of PeopleSoft, and Kevin Fitzgerald, SVP of Oracle, will both testify before the Subcommittee on Tuesday, July 15. However, the hearing is not about mergers and hostile bids.

Rather, the two are scheduled to testify at the Subcommittee's hearing titled "Federal Information Systems Integration and Consolidation: Maximizing Technology Investment Across Agency Boundaries". The Subcommittee announced that the hearing will focus on "the progress being made by the federal government to modernize agency information technology management around so-called common ``lines of business´´ that cross agency boundaries."

The hearing will be held at 10:00 AM in Room 2154 of the Rayburn Building. Rep. Adam Putnam (R-FL) is the Chairman of the Subcommittee.

7/14. The National Telecommunications and Information Administration (NTIA) announced that it will hold a public briefing at 3:00 PM on July 22, 2003 on its creation of a second level domain within the .us country code domain that is restricted to material that is not harmful to minors.

The Dot Kids Implementation and Efficiency Act of 2002, HR 3833 in the 107th Congress, Public Law No. 107-317, requires the NTIA to create this second level domain. The briefing will be held in the House Commerce Committee's main hearing room, Room 2123 of the Rayburn Building. Rep. John Shimkus (R-IL), the sponsor of the bill, and Rep. Ed Markey (D-MA), lead cosponsor of the bill, are both members of the Committee.

This briefing will provide information about the domain, instructions about registering a kids.us address, content guidelines and restrictions, and an overview of the content review process. See, NTIA notice.

President Bush signed the bill on December 4, 2002. Rep. Shimkus and Rep. Markey first introduced a bill, HR 2417, that would have required a "top-level, International domain", but later settled for a second level domain within the .us country code domain. See, stories titled "Reps. Shimkus and Markey Seek a .kids Domain" in TLJ Daily E-Mail Alert No. 234, July 25, 2001; "House Subcommittee Holds Hearing on Kids Domain" in TLJ Daily E-Mail Alert No. 300, November 2, 2001; "House Passes Dot Kids Domain Bill" in TLJ Daily E-Mail Alert No. 436, May 22, 2002; and "Bush Signs Dot Kids Bill" in TLJ Daily E-Mail Alert No. 561, December 5, 2002.

The House will meet at 9:00 AM for morning hour and at 10:00 AM for legislative business. It will consider several items, including HR 1950, the "Foreign Relations Authorization Act for Fiscal Years 2004 and 2005", which includes the "Global Internet Freedom Act of 2003", and authorization for funding for combatting copyright piracy abroad. See, Republican Whip Notice.

10:00 AM. The House Government Reform Committee's Subcommittee on Technology, Information Policy, Intergovernmental Relations and the Census will hold a hearing titled "Federal Information Systems Integration and Consolidation: Maximizing Technology Investment Across Agency Boundaries". Location: Room 2154, Rayburn Building.

10:00 AM. Federal Reserve Board Chairman Alan Greenspan will testify before the House Financial Services Committee. He will deliver his semiannual report on monetary policy. See, notice. Press contact: Peggy Peterson or Scott Duncan at 202 226-0471. Location: Room 2128, Rayburn Building.

10:00 AM. The Senate Finance Committee will hold a hearing titled "An Examination of U.S. Tax Policy and Its Effect on the International Competitiveness of U.S.-Owned Foreign Operations." The scheduled witnesses include Sen. George Allen (R-VA), Sen. Barbara Boxer (D-CA), Sen. John Ensign (R-NV), Pamela Olson (Deputy Assistant Secretary, Department of the Treasury),  Dan Kostenbauder (Hewlett Packard), David Rosenbloom, (Caplin & Drysdale), James Hines (University of Michigan Business School), Charles Hahn (Dow Chemical), Mike Gaffney (Merrill Lynch), and Stephen Shay (Ropes & Gray). Location: Room 215, Dirksen Building.

Deadline to submit to the Internal Revenue Service (IRS) outlines of topics to be discussed at the IRS's September 10, 2003, hearing on proposed regulations relating to the definition of toll telephone service for purposes of the communications excise tax. See, notice in the Federal Register, June 17, 2003, Vol. 68, No. 116, at Pages 35828 - 35829.

The House will meet at 10:00 AM for legislative business. It will consider several non tech related items. See, Republican Whip Notice.

The Federal Communications Commission's (FCC)  Public Safety National Coordination Committee's (PSNCC) subcommittees will hold 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, 445 12th Street, SW, Room TW-C305 (Commission Meeting Room).

9:30 AM. The Senate Commerce Committee will hold a hearing on proposed legislation to make permanent the moratorium on taxes on Internet access. See, notice. Location: Press contact: Rebecca Hanks (McCain) 202 224-2670 or Andy Davis (Hollings) at 202 224-6654. Room 253, Russell Building.

10:00 AM. The House Judiciary Committee will hold a meeting to mark up several bills, including HR 49, the "Internet Tax Nondiscrimination Act". The meeting will be webcast. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

10:00 AM - 12:00 NOON. The House Science Committee will hold a hearing titled "Supercomputing: Is the U.S. on the Right Path?" Press contact: Heidi Tringe at 202 225-4275. Location: Room 2318, Rayburn Building.

10:00 AM. Federal Reserve Board Chairman Alan Greenspan will testify before the Senate Banking Committee. Location: Room 538, Dirksen Building.

10:30 AM. The House International Relations Committee will hold a hearing titled "Intellectual Property Crimes: Are Proceeds From Counterfeited Goods Funding Terrorism?" Location: Room 2172, Rayburn Building.

12:00 NOON - 2:00 PM. The Federal Communications Bar Association's (FCBA) International Practice Committee and the Computer & Telecommunications Law Section of the D.C. Bar Association will host a brown bag lunch (with admission charges) titled "Is There a Worldwide Consensus on Implementing New Wireless Services? - A Debriefing of the 2003 World Radiocommunications Conference". The scheduled speakers include John Giusti (FCC's International Bureau), Jennifer Manner (Legal Advisor to FCC Commissioner Abernathy), Cecily Holiday (State Department), Karl Nebbia (NTIA's Office of Spectrum Management), James Voorhies (NTIA International Spectrum Plans Program Manager), Audrey Allison (Boeing), Jennifer Warren (Lockheed Martin). The moderators will be Lisa Choi (FCC's International Bureau), and Troy Tanner (Swidler Berlin). Location: Wilmer Cutler & Pickering, 2400 N St., NW, Concourse Level. For more information contact laurabsherman @hotmail.com.

The House will meet at 10:00 AM for legislative business. It will consider several non tech related items. See, Republican Whip Notice.

9:30 AM. The Senate Commerce Committee will meet to consider pending calendar business. Press contact: Rebecca Hanks (McCain) 202 224-2670 or Andy Davis (Hollings) at 202 224-6654. See, notice. Location: Room 253, Russell Building.

9:30 AM. The Senate Judiciary Committee will hold an executive business meeting. See, notice. Press contact: Margarita Tapia at 202 224-5225. Location: Room 226, Dirksen Building.

9:30 AM - 2:30 PM. The Federal Communications Commission's (FCC)  Public Safety National Coordination Committee (PSNCC) will hold a general membership meeting. See, notice in the Federal Register, June 20, 2003, Vol. 68, No. 119, at Pages 6989 - 36990. Location: FCC, 445 12th Street, SW, Room TW-C305 (Commission Meeting Room).

1:00 PM. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property will hold a hearing on HR 2517, the "Piracy Deterrence and Education Act of 2003." The hearing will be webcast. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, Rayburn Building.

9:30 AM. The Senate Judiciary Committee will hold a hearing on several pending judicial nominations: Steven Colloton (U.S. Court of Appeals for the Eighth Circuit), Henry Floyd (District of South Carolina), Brent McKnight (Western District of North Carolina), David Proctor (Northern District of Alabama). The hearing will also include the nomination of Rene Acosta to be an Assistant Attorney General in charge of the Civil Rights Division. Press contact: Margarita Tapia at 202 224-5225. Location: Room 226, Dirksen Building.

Deadline to submit comments to the Federal Trade Commission (FTC) regarding its proposed consent agreement with Guess?, Inc. and Guess.com, Inc. (Guess) pertaining to the FTC's allegations of false or misleading representations Guess made to consumers about the security of personal information collected online through www.guess.com, Guess' online store. See, notice in the Federal Register, June 24, 2003, Vol. 68, No. 121, at Pages 37496 - 37498.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Notice of Inquiry (NOI) pertaining to the possibility of incorporating receiver performance specifications into the FCC's spectrum policy. This NOI follows the recommendations of the FCC's Spectrum Policy Task Force (SPTF) report [PDF] of November 15, 2002. See, story titled "FCC Announces NOI Re Receiver Performance Standards" in TLJ Daily E-Mail Alert No. 624, March 17, 2003. See also, notice in the Federal Register, May 5, 2003, Vol. 68, No. 86, at Pages 23677 - 23686. This is ET Docket No. 03-65, FCC 03-54. For more information, contact Hugh Van Tuyl at the FCC's Office of Engineering and Technology (OET) at 202 418-7506 or hvantuyl@fcc.gov.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its notice in the Federal Register requesting public comments regarding changes needed to implement a Patent Cooperation Treaty (PCT) style Unity of Invention standard in the U.S. See, Federal Register, May 20, 2003, Vol. 68, No. 97, at Pages 27536 - 27539. For more information, contact Robert Clarke at 703 305-9177 or robert.clarke@uspto.gov.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking, released on April 30, 2003, regarding changes to its rules implementing the FCCs policy to carry forward unused funds from the schools and libraries universal support mechanism (aka e-rate subsidies) in subsequent funding years. See, notice in the Federal Register, June 20, 2003, Vol. 68, No. 119, at Pages 36961 - 36967.