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October 8, 2003, 9:00 AM ET, Alert No. 755.
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10th Circuit Stays District Court Injunction of Implementation of Do Not Call Registry

10/7. The U.S. Court of Appeals (10thCir) issued an order [24 pages in PDF] staying the September 25 order of the U.S. District Court (DColo) that barred the Federal Trade Commission (FTC) from implementing its national telemarketing do not call registry. The FTC and FCC may now proceed to implement and enforce their rules pertaining to the do not call registry.

While this order issues a stay only, and at least nominally, does not address the merits of the appeal, to find cause for issuing the stay, the Appeals Court first had to find the FTC had demonstrated a substantial likelihood of success on the merits. That is, the Appeals Court found that there is a substantial likelihood that the District Court erred in its constitutional analysis. This may foretell how the Court of Appeals will ultimately rule on the merits.

On September 25, the District Court in Denver, Colorado issued its Memorandum Opinion and Order [34 pages in PDF] holding that FTC's do not call registry violates the First Amendment free speech rights of telemarketers.

The District Court case is Mainstream Marketing Service, TMG Marketing Inc., and American Teleservices Association v. Federal Trade Commission, et al., D.C. No. 03-N-0184, U.S. District Court for the District of Colorado, Judge Edward Nottingham presiding.

The FTC appealed. The Appeals Court case is Federal Trade Commission, et al. v. Mainstream Marketing Service, TMG Marketing Inc., and American Teleservices Association, Appeals Court No. 03-1429. Judges  Seymour, Ebel and Henry issued the per curiam order staying the District Court.

See also, stories titled "Colorado District Court Holds That Do Not Call Registry Violates 1st Amendment" in TLJ Daily E-Mail Alert No. 747, September 26, 2003, "FTC Appeals District Court Ruling That Do No Call Registry Violates 1st Amendment" in TLJ Daily E-Mail Alert No. 748, September 29, 2003; "Do Not Call Registry Developments" in TLJ Daily E-Mail Alert No. 749, September 30, 2003; and "Senate Commerce Committee Holds Hearing on Do Not Call Registry" in TLJ Daily E-Mail Alert No. 750, October 1, 2003.

The Appeals Court wrote that "To obtain a stay under these rules, the FTC must address the following factors: (1) the likelihood of success on appeal; (2) the threat of irreparable harm if the stay or injunction is not granted; (3) the absence of harm to opposing parties if the stay or injunction is granted; and (4) any risk of harm to the public interest."

With respect to likelihood of success on the merits, the Court wrote that "Regulation of such commercial speech passes constitutional muster if (1) the government asserts a substantial interest to be achieved by the restrictions; (2) the restriction directly advances that governmental interest; and (3) the restriction is narrowly tailored to meet that interest." The Appeals Court, like the District Court, cited the Supreme Court case of Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980) as the controlling precedent.

The Appeals Court applied Central Hudson to the facts of this case and concluded that "there is a substantial likelihood that the FTC will be able to show a reasonable fit between the substantial governmental interests it asserted and the national do-not-call list or, in other words, that the list directly advances the government’s substantial interests and is narrowly tailored." And consequently, the Appeals Court found that "After reviewing the record and the parties’ submissions, we are satisfied the FTC has met its burden."

The Appeals Court opinion also contains the following order. "We ORDER the district court’s permanent injunction preventing implementation of the FTC’s national do-not-call list stayed pending final resolution of this appeal on the merits. We further ORDER that the petition for review on the merits be expedited. The FTC shall file its opening brief on October 17. Mainstream Marketing shall file its responsive brief on October 31. The FTC shall file any reply on November 7. Oral argument will be held in Tulsa, Oklahoma, on November 10, 2003."

FTC Chairman Timothy Muris issued a statement: "I am heartened that the court of appeals has granted our request to stay the order of the U.S. District Court for the District of Colorado enjoining enforcement of the FTC's Do-Not-Call Rule. This is an important victory for American consumers. We believe the Rule fully satisfies the requirements of the U.S. Constitution, and we will now proceed to implement and enforce the Do Not Call Registry."

FCC Chairman Michael Powell stated in a release [PDF] that "We're pleased that the FTC will now be allowed to move forward with their Do Not Call registry.  The ability to cooperate with the FTC will make our enforcement efforts more efficient and more effective. This means better protection from unwanted calls for the tens of millions of Americans who asked not to be bothered."

Rep. Billy Tauzin (R-LA), the Chairman of the House Commerce Committee also issued a release. He stated that "This decision is great news for consumers and families. In effect it says ‘hello’ to common sense. Finally, a federal court has recognized that Americans have a right to say ‘goodbye’ to unwanted calls from pesky telemarketers. I’m confident that the constitutionality of the do-not-call registry will ultimately be upheld by the courts."

President Bush also released a statement: "Today's decision by the U.S. Court of Appeals for the 10th Circuit to allow the FTC to enforce the Do Not Call Registry is a victory for Americans who want to reduce the nuisance of unwanted telephone solicitations. The American people have the right to limit annoying telemarketing calls, and I am pleased that both the Federal Trade Commission and the Federal Communications Commission will now be able to ensure that Americans have that choice while the courts continue to consider the issues."

FCC Finally Releases R&O and FNPRM in Secondary Spectrum Markets Proceeding

10/7. The Federal Communications Commission (FCC) released its Report and Order and Further Notice of Proposed Rulemaking [198 pages in PDF] in it proceeding titled "In the Matter of Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets".

The FCC adopted this item on May 15, 2003, but did not release it until October 7, 2003, almost five months later. See, TLJ story titled "FCC Adopts Order Allowing Some Secondary Leasing of Spectrum", May 15, 2003. This is FCC 03-113 in WT Docket No. 00-230.

The FCC also announced deadlines for comments. Initial comments are due by December 5, 2003. Reply comments are due by January 5, 2004.

This item is part of WT Docket No. 00-230, which was opened in 2000, during the tenure of former Chairman William Kennard. The FCC adopted its original Notice of Proposed Rulemaking [61 pages in PDF] on November 9, 2000. See, TLJ story titled "FCC Discusses Secondary Markets for Wireless Spectrum", and TLJ news analysis titled "Mobile Internet Access Devices and the Internet", both dated November 10, 2000.

This R&O and FNPRM also builds upon the work of the FCC's Spectrum Policy Task Force (SPTF), which Chairman Powell formed in June of 2002. The SPTF solicited comments and held hearings, outside of the context of WT Docket No. 00-230, or any other rule making proceeding. See, story titled "Powell Creates Task Force to Conduct Spectrum Inquiry" in TLJ Daily E-Mail Alert No. 446, June 7, 2002. The FCC announced the completion of a SPTF report on November 7, 2002. See, story titled "FCC Announces Report on Spectrum Policy" in TLJ Daily E-Mail Alert No. 545, November 8, 2002. The SPTF released this Report [73 pages in PDF] on November 15, 2002. One of the many topics addressed by the report is moving towards markets for spectrum. The report recommends that "spectrum policy must evolve towards more flexible and market oriented regulatory models."

This item states that "we revise the Commission’s de facto control standard for interpreting Section 310(d) requirements in the context of spectrum leasing, replacing the outdated Intermountain Microwave standard that has been in place since 1963 with a refined standard that better accords with our contemporary market-oriented spectrum policies, fast-changing consumer demands, and technological advances." (Intermountain Microwave is published at 12 FCC 2d 559 (1963).)

It further states that "we implement two different options for spectrum leasing. One option enables licensees and ``spectrum lessees´´ to enter into leasing arrangements, without the need for Commission approval, so long as the licensee retains de facto control of the leased spectrum under the newly refined standard. The other option permits parties to enter into arrangements in which the licensee transfers de facto control to the lessee pursuant to streamlined approval procedures.

This item also includes a further notice of proposed rule making. It states that "we seek comment on how to encourage the development of information and clearinghouse mechanisms that will facilitate secondary market transactions between licensees and new users in need of access to spectrum. We also seek comment on further streamlining of application processing for leasing, transfers, and assignments, expanding leasing to additional services not covered by today’s order, and modifying or eliminating other regulatory barriers impeding secondary market transactions."

The item further comments that "The Commission’s objectives in ``managing´´ spectrum usage have significantly evolved in recent years in response to statutory, technological, and marketplace changes. We are increasingly seeking to ensure that spectrum is put to its highest valued use, which generally can be most efficiently determined by operation of market forces. In pursuit of that goal, the Commission has increasingly granted flexibility to its licensees to enable them to put spectrum to its highest and best uses, consistent with preventing unacceptable interference."

"Innovative technological changes and substantially increased demand have reinforced the need for the Commission to revisit its traditional approaches. It is in this vein that the Report and Order and the Further Notice posit an end goal of an overall spectrum policy under which licensees have much greater ability and incentive to make unused spectrum -- whether by frequency bandwidth, geographic area, or time (or any combination thereof) -- available to third parties. These parties may be current spectrum operators requiring additional spectrum to meet customer needs over either the short- or long-term, new entrants seeking to serve a limited area or narrowly targeted end-user market, small businesses trying to deliver services in rural communities, diverse entities unable or unwilling to participate in spectrum auctions or that otherwise do not have a license through which they can access spectrum to meet consumer needs, or innovative spectrum users seeking to provide services by means of opportunistic spectrum devices." (Parentheses in original.)

Finally, perhaps it is noteworthy that the first sentence of the first paragraph of this R&O and FNPRM uses the phrase "spectrum usage rights". Heretofore, the FCC has used the word "rights" sparingly in the context of spectrum. Still, the R&O and FNPRM does not refer to U.S. "property rights" in spectrum. Although, FCC Commissioner Kathleen Abernathy wrote in her concurring statement that "We must have an effective and legally defensible secondary market if the property-like rights driven license model for spectrum-based services is to succeed."

GAO Reports on Distance Learning at Minority Serving Institutions

10/6. The General Accounting Office (GAO) released a report [PDF] titled "Distance Education: More Data Could Improve Education's Ability to Track Technology at Minority Serving Institutions". The GAO surveyed three categories of Minority Serving Institutions (MSIs), Historically Black Colleges, Hispanic Serving Institutions, and Tribal Colleges, and found differences. It is the Tribal Colleges, which are located mostly in the upper midwest and western states, that have the most interest in offering distance learning courses. And, they face technological obstacles.

The report found that MSIs "take into account two key factors in deciding whether to offer distance education,". First, there is "their preferred teaching method. About half of Historically Black Colleges and Universities that currently do not offer distance education to undergraduates indicated that a primary reason for not offering distance education was that they prefer teaching in the classroom."

Second, there is "limited resources for technology". The report found that some MSIs "said they wanted to offer more distance education but had limited technology to do so. For example, officials from the 10 Tribal Colleges that do not offer any distance education indicated that improvements in technology would be helpful."

The report also states that "from a broader context, Minority Serving Institutions reported that they view distance education as just one of many goals for technology -- with varying degrees of priority depending on the college. In response to our survey, officials from Historically Black Colleges and Universities and Hispanic Serving Institutions more frequently indicated, for example, that relative to goals such as increasing the use of technology in the classroom, distance education ranks lower. At these schools, training faculty in the use of technology and improving the use of information technology in the classroom are higher priorities than distance education. By contrast, officials at Tribal Colleges more frequently placed distance education as a higher priority, reflecting their struggle to provide educational opportunities to populations across large geographic areas."

There are two bills pending in the Congress that would authorize the appropriation of funding for a grant program to provide technology for MSIs for, among other things, distance learning.

First, there is S 196, the "Minority Serving Institution Digital and Wireless Technology Opportunity Act of 2003", which was introduced by Sen. George Allen (R-VA) on January 17, 2003. The Senate passed S 196 on April 30, 2003 by a vote of 97-0. See also, stories titled "Sen. Allen Introduces Bill to Create Technology Grant Program for MSIs", TLJ Daily E-Mail Alert No. 586, January 20, 2003; "Senate Committee Approves Technology Grant Program for Minority Serving Institutions" in TLJ Daily E-Mail Alert No. 623, March 14, 2003; and "Senate Passes Technology Grant Bill" in TLJ Daily E-Mail Alert No. 655, May 5, 2003.

Second, there is HR 2183, the "Minority Serving Institution Digital and Wireless Technology Opportunity Act", which was introduced on May 21, 2003 by Rep. Randy Forbes (R-VA). The House Science Committee has held a hearing on the bill. See, stories titled "Rep. Forbes Introduces Bill to Provide Grants for Digital and Wireless Technology for MSIs" in TLJ Daily E-Mail Alert No. 669, May 29, 2003; and "House Science Committee Holds Hearing on MSI Tech Grant Bill" in TLJ Daily E-Mail Alert No. 695, July 10, 2003.

There is also HR 3039, the "Expanding Opportunities in Higher Education Act of 2003", which was introduced by Rep. Tom Cole (R-OK) on September 9, 2003. This bill would amend the Higher Education Act to allow MSIs to use a portion of their funds to expand internet capabilities and other distance learning capabilities.

Sen. Grassley Writes PR China Regarding WTO Obligations

10/7. Sen. Charles Grassley (R-IA), the Chairman of the Senate Finance Committee, wrote a letter [4 pages in PDF] to Lu Fuyuan, Minister of Commerce of the People’s Republic of China, in which he urged China to abide by its World Trade Organization (WTO) accession agreement.

He wrote that "there are multiple reports stating that China is failing to fulfill its WTO obligations, including: in its use of insufficient regulatory transparency; by utilizing unreasonable standards for agricultural biotech products; in its application of agricultural and industrial quotas and tariff-rate quotas (TRQs); through its use of export subsidies; by utilizing discriminatory tax policies on imports; by failing to provide protection for U.S. intellectual property rights; and, in maintaining high capital requirements for establishing service businesses. It is time to take more action."

Sen. Charles GrassleySen. Grassley (at right) continued that "although China has good intellectual property rights (IPR) laws on its books, it is sorely lacking in enforcement and coordination. U.S. businesses continue to experience significant IPR problems in China that cost them billions of dollars each year in lost sales. It is estimated that counterfeits account for 15 to 20 percent of all products made in China. Chinese factories violating copyright, trademark, and patent laws are not being shut down and violators are not being prosecuted. China should make an example of these offenders through stiffer penalties and by imposing prison sentences. This could go a long way toward slowing down the illegal trade."

With respect to transparency, he wrote that "certain Chinese agencies are selectively choosing who they will bring in for consultations on rule-making issues, are providing short and ineffective comment periods for new regulations, and are making their final decisions in a black box."

He added that "Nontransparent actions by government agencies and high capitalization requirements are keeping U.S. service providers out of the market."

Wednesday, October 8

The House will meet at 10:00 AM for legislative business. The House will consider several items under suspension of the rules, including HR 3159, the "Government Network Security Act of 2003". This bill, which is sponsored by Rep. Henry Waxman (D-CA), Rep. Tom Davis (R-VA), and others, would require federal government agencies to develop and implement plans to protect the security and privacy of government computer systems from the risks posed by peer-to-peer file sharing. See, story titled "House Committee Passes Bill to Restrict P2P File Sharing on Computers and Networks of Federal Agencies" in TLJ Daily E-Mail Alert No. 749, September 30, 2003, See, Republican Whip Notice.

The Senate is in adjournment until Tuesday, October 14, at 9:30 AM.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Soitec v. Silicon Genesis, No. 03-1080. This is an appeal from the U.S. District Court (DMass) in a patent infringement case. Soitec SA alleged that Silicon Genesis's silicon-on-insulator (SOI) wafer fabrication technology infringes various patents. This is D.C. No. 99 CV 10826. Location: Courtroom 203, 717 Madison Place, NW.

1:00 - 5:15 PM. The Global Justice Information-Sharing Initiative Federal Advisory Committee will meet to discuss the Global Justice Information-Sharing Initiative. The meeting will continue on October 9. See, notice in the Federal Register, August 21, 2003, Vol. 68, No. 162, at Pages 50556 - 50557. Location: Sheraton Crystal City Hotel, 1800 Jefferson Davis Highway, Arlington, VA.

Thursday, October 9

The House will meet, but no votes are expected. Conference reports may be brought up. See, Republican Whip Notice.

8:00 AM - 5:00 PM. The Business Software Alliance will host an event titled "Global Tech Summit". The agenda includes panels titled "The Next Wave of Innovation", "Transforming Today's Challenges into Tomorrow’s Realities", and "The Great Digital Transformation". Secretary of Homeland Security Tom Ridge will give the luncheon address. Location: Atlantic Studios, 650 Massachusetts Ave, NW.

CANCELLED. 8:30 - 10:00 AM. The Progress and Freedom Foundation (PFF) will host an event titled "Future of the Internet". The speakers will include Meg Whitman (CEO of eBay) and Phil Bond (Undersecretary of Commerce for Technology). See, notice. To attend, contact Rebecca Fuller at 202 289-8928 or Location: East Room, Washington Mayflower Hotel, 1127 Connecticut Ave., NW.

8:30 AM - 12:00 NOON. The Global Justice Information-Sharing Initiative Federal Advisory Committee will meet to discuss the Global Justice Information-Sharing Initiative. See, notice in the Federal Register, August 21, 2003, Vol. 68, No. 162, at Pages 50556 - 50557. Location: Sheraton Crystal City Hotel, 1800 Jefferson Davis Highway, Arlington, VA.

12:00 NOON - 2:00 PM. The Intellectual Property Section of the D.C. Bar Association will host a luncheon program titled "Intellectual Property Licensing in the High Technology Area". The speakers will be Jon Grossman (Dickstein Shapiro) and Bradley Wright (Banner & Witcoff). The prices to attend vary. Location: D.C. Bar Conference Center, 1250 H Street, NW, B-1 level.

6:00 - 9:00 PM. The Federal Communications Bar Association (FCBA) will host its 2nd Annual Oktoberfest Reception honoring the Federal Communications Commission's (FCC) bureau chiefs. Location: J.W. Marriott Hotel, 1331 Pennsylvania Avenue, NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding telecommunication relay services (TRS) and speech-to-speech services for individuals with hearing and speech disabilities. This is CG Docket No. 03-123. See, notice in the Federal Register, August 25, 2003, Vol. 68, No. 164, at Pages 50993 - 50998.

Friday, October 10

The House will meet, but no votes are expected. Conference reports may be brought up. See, Republican Whip Notice.

9:15 AM - 5:30 PM. Howard University School of Law (HUSL) will host a one day conference on intellectual property law. At 12:30 PM Judge Paul Michel of the U.S. Court of Appeals (FedCir) will deliver the luncheon address. At 4:30 PM there will be a panel titled "Practicing in the Public Interest: Reshaping IP Policy in a Digital World"; the speakers will be Robert Kasunic (Copyright Office) and Michael Shapiro (U.S. Patent and Trademark Office). See, agenda [PDF]. The price to attend ranges from $150 to $250. Location. HUSL, 2929 Van Ness Street, NW.

10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Gemstar-TV Guide v. ITC, No. 03-1052. Location: Courtroom 203, 717 Madison Place, NW.

Monday, October 13

Columbus Day. The FCC will be closed. The Senate will not meet.

Tuesday, October 14

The Supreme Court will hear oral argument in Verizon v. Law Offices of Curtis Trinko, No. 02-682. This is a case involving the application of Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2, in the context of telecommunications. See, TLJ story titled "Supreme Court Grants Certiorari in Verizon v. Trinko", March 10, 2003.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Mobilfone Service, Inc. v. FCC, No. 02-1197. Judges Henderson, Tatel and Roberts will preside. Location: 333 Constitution Ave. NW.

10:00 AM. The Senate Banking Committee will consider several nominations including Harvey Rosen and Kristin Forbes to be members of the Council of Economic Advisers, Julie Myers and Peter Lichtenbaum to be Assistant Secretaries of Commerce for Export Enforcement. The Committee will then hold a hearing on the renominations of Roger Ferguson to be Vice Chairman of the Board of Governors of the Federal Reserve System, and Ben Bernanke to be a member of the Board of Governors. See, notice. Location: Room 538, Dirksen Building.

12:00 NOON - 2:00 PM. The Forum on Technology & Innovation will host a briefing titled "International Challenges to Controlling Spam". For more information, contact Bill Bates at 202 969-3395.

2:00 - 4:00 PM. The Department of Homeland Security's (DHS) National Infrastructure Advisory Council (NIAC) will meet telephonically. The agenda provides that the NIAC will receive the findings and propose recommendations developed by its working groups on Cross Sector Interdependencies and Risk Assessment Guidance and Regulatory Guidance, and receive status briefings on the continuing activities of its working groups on Vulnerability Disclosure Guidelines and the Evaluation and Enhancement of Information Sharing and Analysis. The NIAC is also accepting written comments. To listen only, call 1-877-888-4034. See, notice in the Federal Register, October 7, 2003, Vol. 68, No. 194, at Page 57914.

4:00 PM. Clarisa Long (University of Virginia School of Law) will present a draft paper titled "The Patent/Copyright Interface". See, notice. For more information, contact Robert Brauneis at 202 994-6138 or Location: George Washington University Law School, Faculty Conference Center, Burns Building, 5th Floor, 716 20th Street, NW.

Deadline to submit comments to the LOCAL Television Loan Guarantee Board's regarding the information and recordkeeping requirements of the proposed regulation to implement the LOCAL Television Loan Guarantee Program, as authorized by the Launching Our Communities' Access to Local (LOCAL) Television Act of 2000. The purpose of the Act is to facilitate access to signals of local TV stations in nonserved areas and underserved areas. The Act establishes a LOCAL Television Loan Guarantee Board to approve guarantees of up to 80% of loans totaling no more than $1.25 Billion. The regulation proposes to establish eligibility and guarantee requirements, the application and approval process, the administration of guarantees, and the process through which the Board will consider applications under the priority considerations required in the Act. See, notice in the Federal Register, August 15, 2003, Vol. 68, No. 158, at Pages 48814 - 48833. See also, Treasury release.

Wednesday, October 15

12:15 PM. The Federal Communications Bar Association's (FCBA) Transactional Practice Committee will host a brown bag lunch titled "Anatomy of a Commercial Agreement and Contract Provisions Regarding Performance Requirements". For more information, contact Laurie Sherman at or 703 216-3150. RSVP to Ava Smith at or 202-371-7201. Location: Skadden Arps, 1440 New York Avenue, 11th floor.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft [137 pages in PDF] of NIST Special Publication 800-61, titled "Computer Security Incident Handling Guide". See also, story titled "NIST Publishes Draft of Computer Security Incident Handling Guide" in TLJ Daily E-Mail Alert No. 741, September 17, 2003.

More News

10/7. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property postponed its meeting, scheduled for 5:00 PM on Tuesday, October 7. It had been scheduled to continue its mark up of HR 2517, the "Piracy Deterrence and Education Act of 2003". The Subcommittee began this markup on Thursday, October 2.

10/7. The House approved HR 1303, a bill to amend the E-Government Act of 2002 with respect to rulemaking authority of the Judicial Conference, by a voice vote.

10/7. Microsoft and Sun Microsystems announced an agreement under which Microsoft will extend its support for the Microsoft Java Virtual Machine (MSJVM) until September 30, 2004. See, Microsoft release and Sun release.

10/7. The Copyright Office (CO) published a notice in the Federal Register announcing that it is "making a non-substantive technical amendment to its final regulations adjusting the royalty rates and terms under the Copyright Act for the statutory license for the use of sound recordings by preexisting subscription services for the period January 1, 2002, through December 31, 2007." See, Federal Register, October 7, 2003, Vol. 68, No. 194, at Pages 57814 - 57815.

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