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August 19, 2003, 9:00 AM ET, Alert No. 721.
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FCC Extends Effective Date of Portions of New Unsolicited Fax Rule

8/18. The Federal Communications Commission (FCC) adopted and released an Order on Reconsideration [6 pages in PDF] in its proceeding titled "In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991". This Order on Reconsideration amends the FCC's recent Report and Order pertaining to unsolicited faxes. It extends the effective date of the Report and Order's determination that an established business relationship will no longer be sufficient to show that an individual or business has given express permission to receive unsolicited faxes. This is CG Docket No. 02-278.

This Order on Reconsideration pertains to the FCC's Report and Order [164 pages in PDF], which was adopted on June 26, 2003, and released on July 3, 2003. The Report and Order amends the FCC's rules implementing the Telephone Consumer Protection Act (TCPA). The Report and Order addresses several subjects, including unwanted telephone solicitations, establishment of a national do not call registry, transmission of caller ID information, and unsolicited faxes. See, Paragraphs 185-203, which address unsolicited faxes, and Appendix A, which contains the rules changes.

The FCC published a notice in the Federal Register on July 25, 2003 regarding this Report and Order. It provides that the effective date of the unsolicited faxes provisions is August 25, 2003. See, Federal Register, July 25, 2003, Vol. 68, No. 143, at Pages 44143 - 44179. 

The FCC's Order on Reconsideration (OR) states that "we issue this limited reconsideration of the Report and Order and extend, until January 1, 2005, the effective date of our determination that an established business relationship will no longer be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile advertisements. We also extend, until January 1, 2005, the effective date of amended rule 47 C.F.R. § 64.1200(a)(3)(i)."

The OR elaborates that "Section 64.1200(a)(3)(i), as amended, requires the sender of a facsimile advertisement to first obtain from the recipient a signed, written statement that includes the facsimile number to which any advertisements may be sent and clearly indicates the recipient's consent to receive such facsimile advertisements from the sender."

The OR also offered an explanation for the extension. It states that "many organizations may need additional time to secure this written permission from individuals and businesses to whom they fax advertisements."

The OR adds that "the only effective dates of the Commission's Report and Order extended by this Order are: 1) the determination that an established business relationship will no longer be sufficient to show that an individual or business has given express permission to receive unsolicited facsimile advertisements; and 2) the requirement that the sender of a facsimile advertisement first obtain the recipient’s express permission in writing. Therefore, until the amended rule at 47 C.F.R. § 64.1200(a)(3)(i) becomes effective on January 1, 2005, an established business relationship will continue to be sufficient to show that an individual or business has given express permission to receive facsimile advertisements. The effective date of our amended definition of an ``established business relationship´´ is not affected by our determination here."

4th Circuit Affirms Dismissal of Antitrust Action Against Washington Post

8/18. The U.S. Court of Appeals (4thCir) issued its unpublished opinion [13 pages in PDF] in Berlyn v. Gazette Newspapers, in which the Appeals Court affirmed the District Court's dismissal of an antitrust action against the Washington Post and subsidiaries. This action pertains to regional weekly print publications, and not to either the Washington Post daily print newspaper, or the Washington Post web site.

Berlyn, Inc., and other plaintiffs are small, community oriented, weekly print newspaper publishers in the Washington DC and Baltimore areas.

The Washington Post Company publishes the Washington Post. It also owns The Gazette Newspapers, Inc., which publishes numerous weekly, community newspapers in the area. The Gazette is a 50% owner of the Washington and Baltimore Suburban Press Network, Inc. (Press Network), which is an organization designed to provide advertisers with one-stop shopping for placing ads in a series of local papers throughout the region.

The plaintiffs filed a complaint in the U.S. District Court (DMd) against the Washington Post, Gazette, and  Press Network alleging violations of federal and state antitrust laws. The complaint also includes state law claims of unfair competition, breach of contract, and tortious interference with contract.

More specifically, the plaintiffs alleged violations of Section 1 of the Sherman Act (15 U.S.C. § 1), Section 2 of the Sherman Act (15 U.S.C. § 2), Section 7 of the Clayton Act (15 U.S.C. § 18), and Section 11-204(a)(1) of the Maryland Antitrust Act. They alleged that the Press Network's bylaws, which gave Gazette effective veto power over which newspapers could become members of the Press Network, violated Section 1 of the Sherman Act. They alleged that the Gazette and the Washington Post have been engaged in an attempt to monopolize, and they and the Press Network have conspired to monopolize the community newspapers business throughout Southern Maryland, including Prince George's and Montgomery Counties, in violation of Section 2 of the Sherman Act. They also alleged that the Gazette's acquisition of a regional newspaper in southern Maryland violated Section 7 of the Clayton Act.

The District Court dismissed all claims.

The Court of Appeals affirmed. It wrote that "Two essential elements of Appellants' federal and state antitrust claims are proof of the relevant product and geographic markets. ... That is, in order to determine whether any antitrust violation has occurred, ``we must first define the relevant market because the concept of competition has no meaning outside its own arena, however broadly that arena is defined. The plaintiff in an antitrust case bears the burden of proof on the issue of the relevant product and geographic markets.´´ ... A relevant product market ``is composed of products that have reasonable interchangeability for the purposes for which they are produced ...´´" (Citations omitted.)

The Court summarized the plaintiffs' argument as follows: "the product market consists of the legal and commercial advertising services provided by weekly community newspapers and the Post Company's Extra. Excluded from this proposed market are other forms of print advertising, such as direct mail and fliers, along with non-print media advertising on radio or local cable television."

The Court wrote that this is a flawed argument. "The consumers in this case are the advertisers, and from the advertisers' perspectives, direct mail and other forms of advertising may well be ``reasonably interchangeable.´´"

The Appeals Court also wrote that "There is an additional, fundamental weakness with Appellants' definition of the relevant product market. While their market definition is underinclusive as explained above, it is also overinclusive, because it places legal advertising in the same market as commercial advertising." The Court therefore concluded that the plaintiffs "have failed to meet their burden to establish the relevant product market".

The Appeals Court also held that the plaintiffs' allegation of per se violation of the Sherman Act fails. Therefore, the District Court was correct to dismiss the action.

The Appeals Court also wrote that "Unpublished opinions are not binding precedent in this circuit. See Local Rule 36(c)." However, it is not apparent from the text of the opinion why the Appeals Court designated this opinion as "unpublished".

This case is Berlyn, Inc. et al. v. The Gazette Newspapers, Inc., Washington Post, No. 02-2152, an appeal from the U.S. District Court for the District of Maryland, at Baltimore, Judge Frederic Smalkin presiding, D.C. No. CA-01-606-S.

BXA Announces Fine of Computer Exporter

8/18. The Bureau of Industry and Security (BIS), which is also still known as the Bureau of Export Administration (BXA), announced an action pertaining to E&M Computing Ltd. The BIS stated that it charged E&M with violating the Export Administration Regulations (EAR) by selling and servicing computers and computer components to customers in Israel, including a nuclear research center.

The BIS stated in a release that it "charged that E&M caused the export of central processing units (CPUs), a workstation, a server, and a high performance computer to Israel without the required export licenses. BIS also charged that E&M evaded the EAR by purchasing computers from another vendor after learning that BIS would deny the first vendor’s license application to export the items."

The BIS stated that it fined E&M $165,000, and that it imposed a three year denial of export privileges, but suspended the denial, for three years.

People and Appointments

8/18. Former Rep. Steve Largent (R-OK) will replace Tom Wheeler as P/CEO of the Cellular Telecommunications & Internet Association (CTIA), effective November 2003. Largent is a former member of the House Commerce Committee, and its Telecommunications and Internet Subcommittee. He resigned at the end of 2001 to run for Governor of Oklahoma. He lost in the general election. See, CTIA release.

Marsha MacBride8/18. Marsha MacBride (at right) is resigning as Chief of Staff of the Federal Communications Commission (FCC). She has worked at the FCC since 1991. She has been Chief of Staff since January of 2001, when Michael Powell became Chairman. She worked for Disney before joining the FCC. The FCC release [PDF] announcing her resignation did not state what she will do next.

NTIA Releases Report to Congress Re Internet Filtering Technology

8/18. The National Telecommunications and Information Administration (NTIA) released a report to Congress titled "Children's Internet Protection Act: Study of Technology Protection Measures". See also, NTIA release.

The Children's Internet Protection Act (CIPA), which the Congress passed in October of 2000, requires, at Section 1703, that the NTIA prepare this report.

The CIPA requires that schools and libraries receiving federal subsidies for telecommunications, internet access or internal connections adopt an internet safety policy and employ technological protections that block or filter certain visual depictions deemed obscene, pornographic, or harmful to minors. The CIPA also requires the NTIA to (1) evaluate whether the technology measures currently available adequately address the needs of educational institutions, and (2) evaluate the development and effectiveness of local Internet safety policies. The NTIA first requested and received comments from the public.

The report concludes that "currently available technology measures have the capacity to meet most, if not all, of [the] needs and concerns" expressed by commenters. The report elaborates that "Based on the comments, existing technology protection measures are helping to meet the concerns of educational institutions to protect children from inappropriate materials they may encounter while using the Internet. The occurrence of overblocking and underblocking, however, has resulted in some dissatisfaction and frustration by users with the existing technology protection measures."

See, for example, comment submitted by the Center for Democracy and Technolgy ("filtering technology and products will both overblock and underblock access to Internet content with respect to any content-based standard"), and comment submitted by the American Library Association ("No filtering tool exists which can be perfectly calibrated to block out only material that is not protected by the Constitution, without blocking access to material that has constitutional protection.").

The report also makes two legislative recommendations. First, "Technology vendors should offer training services to educational institutions on the specific features of their products." Second, "CIPA's definition of ``technology protection measure´´ should be expanded to include more than just blocking and filtering technology in order to encompass a vast array of current technological measures that protect children from inappropriate content."

Tuesday, August 19

The House is in recess until September 3. Senate is in recess until September 2. The Supreme Court is in recess until October 6.

Deadline to submit reply 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.

Wednesday, August 20

10:00 AM. Federal Communications Commission (FCC) Chairman Michael Powell will hold a news conference to "discuss issues that the FCC will be taking up in the Fall". Location: FCC, Commission Meeting Room, 445 12th Street, SW.

12:00 NOON. Gordon England, Deputy Secretary of the Department of Homeland Security (DHS), will give a speech titled "Leading the Department of Homeland Security: Progress and Challenges of Transition during the War on Terrorism". See, notice. Location: Lehrman Auditorium: Heritage Foundation, 214 Massachusetts Ave NE.

Thursday, August 21

9:30 AM. The U.S. District Court (DC) will hold an initial conference in EPIC v. DHS, D.C. No. 1:2003cv1255. The Electronic Privacy Information Center (EPIC) filed suit against the Department of Homeland Security (DHS) under the Freedom of Information Act (FOIA). Location: Courtroom 11, 333 Constitution Ave. NW.

10:00 AM. Ed Thomas, Chief of the Federal Communications Commission's (FCC) Office of Engineering and Technology (OET) will hold a press briefing and tour at the FCC's Columbia, Maryland laboratory facility. For more information, contact Lauren Van Wazer at 202 418-0030 or Location: 7435 Oakland Mills Road, Columbia, MD.

2:00 PM. The U.S. District Court (DC) will hold an status conference in Communications Workers of America v. Verizon, D.C. No. 1:2001cv2633. Location: Courtroom 11, 333 Constitution Ave. NW

Friday, August 22

Deadline to submit comments to the Department of Homeland Security's (DHS) Bureau of Customs and Border Protection (CBP) regarding its proposed rule to require that CBP must receive, by electronic data interchange system, information pertaining to cargo before the cargo is either brought into or sent from the U.S. by any mode of commercial transportation. See, notice in the Federal Register, July 23, 2003, Vol. 68, No. 141, at Pages 43573 - 43606.

Monday, August 25

10:00 AM - 4:00 PM. The Commerce Department's National Medal of Technology Nomination Evaluation Committee will hold a closed meeting to discuss the relative merits of persons and companies nominated for the medal. See, notice in the Federal Register, July 24, 2003, Vol. 68, No. 142, at Page 43716. Location: Room 4813, U.S. Department of Commerce, 1401 Constitution Ave., NW.

More News

8/18. The U.S. Trade Representative (USTR) released an Information Circular [3 pages in PDF] regarding the 5th Ministerial Conference of the World Trade Organization (WTO) scheduled for September 10-14, 2003 in Cancún, Mexico. This document provides information for persons planning to attend as representatives of non-government organizations.

8/18. The U.S. Court of Appeals (7thCir) issued its opinion [34 pages in PDF] in Learning Curve Toys v. Playwood Toys, a trade secrets case. Playwood Toys, which make toy trains, filed a complaint in the U.S. District Court (NDIll) against Learning Curve Toys. It obtained a jury verdict for misappropriation of a trade secret, and awarding 8% for a license that would have been negotiated, absent the misappropriation. The District Court granted judgment as a matter of law, holding that PlayWood did not have a protectable trade secret. The Appeals Court reversed, and reinstated the jury verdict. This is Learning Curve Toys, Inc. v. Playwood Toys, Inc., No. 02-1916, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 94 C 6884, Judge Rebecca Pallmeyer presiding.

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