|EU and Microsoft Fail to Reach
3/18. The European Union (EU) and
Microsoft announced that they have failed to reach a settlement. The EU did
not identify what action it may take against Microsoft.
Monti, the EC Commissioner for Competition, wrote in a
statement released on March 18, that "a settlement on
the Microsoft case has not been possible."
"I therefore intend to propose to my colleagues in the Commission next
Wednesday to adopt a decision, which has already received the unanimous backing
of Member States", wrote Monti.
Monti (at right)
praised the cooperation and professionalism of Microsoft's negotiators, and stated
that "We made substantial progress towards resolving the problems which have arisen
in the past but we were unable to agree on commitments for future conduct."
"In the end, I had do decide what was best for competition and consumers in
Europe. I believe they will be better served with a decision that creates a strong
precedent." He concluded that "It is essential to have a precedent which
will establish clear principles for the future conduct of a company with such a strong
dominant position in the market."
The U.S. Department of Justice's (DOJ)
Antitrust Division stated in a
that "It is premature to speculate on the contents or substance of whatever
decision, remedies, or penalties the EU may eventually decide to impose."
The DOJ added that the US and EU "enjoy a strong working relationship
on matters relating to competition policy and have a shared interest in avoiding
divergent enforcement approaches. Our cooperation with the European commission on
antitrust issues will continue under the provisions of our 1991 agreement on antitrust
cooperation and we will use these channels to address issues as they arise."
The DOJ added that it "will continue the work of enforcing the consent decree
entered in its case against Microsoft, which in the Government's view provides
the appropriate framework for marketplace competition in this important sector."
Steve Ballmer, CEO of Microsoft, stated in a
release that "I believe negotiations between Microsoft and the European
Commission broke down because we were unable to agree on a set of consumer
driven principles on issues that might arise in the future."
Brad Smith, SVP and General Counsel of Microsoft, stated in another
release that "We have to ensure that the law is not just about competitors'
complaints about the impact of new features. There needs to be consideration of
the needs of consumers for new innovations. Consumers must be part of the
equation. Perhaps the courts will provide the clarity that is necessary to
resolve these issues ... Today is just another step in what could be a long
Ed Black, P/CEO of the Computer &
Communications Industry Association (CCIA), an interest group that complains
to antitrust enforcement authorities regarding Microsoft, stated in a release
that "the decision we can expect from the Commission next week will be a
watershed in efforts by competition regulators to reign in the long-standing
anti-competitive behavior of Microsoft. It will be a first step to restoring consumer
choice and innovation in multiple markets subject to the stranglehold of a
|More People Write DOJ and FCC Regarding
Whether to Seek Cert in TRO Case
3/18. Legislators, state officials, and interest groups continue to write the
Department of Justice (DOJ) and
Federal Communications Commission (FCC)
expressing their views regarding whether or not the DOJ and FCC should file a
petition for writ of certiorari with the U.S. Supreme Court seeking review of
the Appeals Court opinion overturning parts of the FCC's
triennial review order [576 pages in PDF].
On March 2, 2004 the U.S.
Court of Appeals (DCCir) issued its
opinion [62 pages in PDF] in USTA v. FCC overturning key parts
of the FCC's triennial review order (TRO). The opinion leaves largely untouched those
portions of the TRO in which the FCC refrained from unbundling next generation broadband
facilities. The opinion vacates those portions of the TRO in which the FCC delegated
decision making authority to the states to make impairment findings. See,
titled "Appeals Court Overturns Key Provisions of FCC Triennial Review Order",
also published in TLJ Daily E-Mail Alert No. 848, March 3, 2004.
On March 17, leaders of the House
Commerce Committee wrote a
to Attorney General John
Ashcroft and the Commissioners of the FCC to "strongly urge the Department
of Justice not to seek a rehearing or appeal of the D.C. Circuit's sound
decision" in USTA v. FCC.
The letter was signed by Rep. Joe
Barton (R-TX), the Chairman of the Committee,
Rep. John Dingell (D-MI), the
ranking Democrat on the Committee, Rep.
Fred Upton (R-MI), the Chairman of the Subcommittee on Telecommunications
and the Internet, and Rep. Rick Boucher
(D-VA), a senior Democrat on the Subcommittee. (Rep. Ed Markey (D-MA), the ranking
Democrat on the Subcommittee, did not sign the letter.)
(at left) and the others wrote that "The Commission's
TRO, released in August 2003, was the third and most recent of the Commission’s
efforts to implement the unbundling requirement of Section 251 of the
Communications Act of 1934, which was added to statute as part of the
Telecommunications Act of 1996. The U.S. Supreme Court (once) and the D.C.
Circuit (twice) have invalidated Commission rules implementing Section 251 on
three successive occasions. It is time for the Commission to recognize that, in
a government based upon the rule of law, it cannot adopt regulations that are
inconsistent with the statutes enacted by Congress. Further appeals will not
affect the outcome when the regulations adopted by the Commission are so
completely at odds with the statutory language cited by the courts."
(Parentheses in original.)
On March 18, a group state
public utilities commission (PUC) members wrote a
to Ted Olson, the
Solicitor General, suggesting that filing a petition for writ of certiorari
"would not best serve the nation's consumers". The signers include
Florida's Charles Davidson (at right), and some of the other more market
oriented PUC commissioners.
They wrote that "Regardless of the ultimate decision rendered, an
appeal to the Supreme Court would result in a continued delay of the specific guidance
necessary to restore some sense of certainty to the ailing telecommunications sector.
It has been eight years since the Telecommunications Act of 1996 was passed, and the
D.C. Circuit has, on more than one occasion, sent strong signals regarding the FCC’s
responsibilities with respect to the unbundling provisions. Further delay will only serve
to keep the industry in a prolonged state of uncertainty and flux."
The signers include members of the PUCs of the states of Florida, Colorado,
Connecticut, Missouri, Maryland, North Dakota, District of Columbia. The
majority of the PUC commissioners support the FCC's attempt to delegate decision
making authority to the states to make impairment findings. Hence, this letter
states that "it is frequently represented that the state regulators
speak with unanimity on this issue. They do not."
On March 8, the National Association of
Regulatory Utility Commissioners (NARUC) wrote a
[PDF] urging appeal.
Also, the Consumer Federation of
America, the Consumers Union, and other interest groups, wrote a letter to FCC
Chairman Michael Powell on March 17 urging the FCC "to appeal the court's decision
to the Supreme Court".
Also, on March 15, Sen. Ernest
Hollings (D-SC) and other Senators on the
Senate Commerce Committee, wrote a
[PDF] to Attorney General John Ashcroft urging him to appeal. See, story titled
"Four Senators Urge AG Ashcroft to Appeal in Unbundling Case" in TLJ Daily
E-Mail Alert No. 857, March 17, 2004.
|FCC General Counsel Submits Letter Brief in
Media Ownership Case
2/27. John Rogovin, General Counsel of the
Federal Communications Commission (FCC), submitted a
brief [1 page in PDF] to the U.S. Court
of Appeals (3rdCir) in Prometheus Radio Project v. FCC, a case
involving the FCC's media ownership rules.
The case has been briefed, and the Court heard oral argument on February 11,
Rogovin wrote that "this letter is to advise the Court of the decision in
Cellco Partnership v. FCC, No. 02-1262 (D.C. Cir. Feb. 13, 2004) (copy
attached), upholding the FCC’s interpretation of ``necessary in the public
interest´´ under the biennial review provisions of Section 11 of the
Communications Act, 47 U.S.C. § 161. The Cellco decision holds, among other
things, that the FCC reasonably interpreted the phrase "necessary in the public
interest´´ to mean ``advanc[ing] a legitimate regulatory objective´´ and that
the FCC may rely on ``predictive judgment or properly-supported inferences in
determining to retain a regulation.´´ Slip Op. 12, 16. The decision thus
directly supports the FCC’s interpretation of the same statutory phrase in
Section 202(h) of the Telecommunications Act of 1996, discussed at pp. 23-27 of
the government’s brief in this case."
On February 13, 2004, the U.S.
Court of Appeals (DCCir) issued its
[24 pages in PDF] in Cellco Partnership v. FCC, petitions for review of
certain parts of the FCC's biennial regulatory reviews. See, story titled
"Appeals Court Addresses Meaning of "Necessary" in FCC Biennial Review
Process" in TLJ Daily E-Mail Alert No. 837, February 16, 2004.
The media ownership case is Prometheus Radio Project et al. v. FCC & USA,
No. 03-3388, and consolidated actions, U.S. Court of Appeals for the Third
Circuit, petitions for review of a final order of the FCC.
The FCC announced its a Report and Order revising its media ownership rules
on June 2, 2003. See, story titled "FCC Announces Revisions to Media Ownership
Rules" in TLJ Daily
E-Mail Alert No. 672, June 3, 2003. The FCC released the Report and Order on
July 2, 2003. See, story titled "FCC Releases Media Ownership Order and NPRM" in
TLJ Daily E-Mail
Alert No. 692, July 7, 2003.
|FTC Obtains TRO Against Computer Sales Scam
3/12. The U.S. District Court (CDCal)
Temporary Restraining Order [35 pages in PDF] in FTC v. Unicyber
The Federal Trade Commission (FTC) filed a
complaint against Unicyber Technology, Inc. and others on March 9, 2004,
alleging that it violated Section 5(a) of the FTC Act, which is codified at 15
U.S.C. § 45 (a), in connection with a fraudulent computer sales scheme.
The complaint alleges that the defendants offered complete computer systems
for three payments of $199. However, after the first payment, consumers received
only peripherals, such as keyboards. Some consumers then made no further
payments, and received no further equipment. Others who made full payment
received computer equipment that was salvaged, damaged,
did not work, and/or could not run current software.
See also, FTC release.
This case is Federal Trade Commission v. Unicyber Technology, Inc. et al., U.S.
District Court for the Central District of California, Western Division,
D.C. CV04-1569LGB (MANx).
3/17. The Federal Communications Commission
(FCC) published a
notice in the Federal Register summarizing, and setting comments deadlines
for, its notice of proposed rulemaking (NPRM) regarding broadband over
powerline systems. Comments are due by May 3, 2004. Reply comments are due
by June 1, 2004. The FCC adopted this NPRM on February 12, 2004. See, story
titled "FCC Adopts Broadband Over Powerline NPRM" in
TLJ Daily E-Mail
Alert No. 836, February 13, 2004. The FCC released the text of this NPRM on
February 23, 2004. This NPRM is FCC 04-29 in ET Docket Nos. 03-104 and 04-37.
See, Federal Register, March 17, 2004, Vol. 69, No. 52, at Pages 12612-12618.
3/18. The Federal Communications Commission
(FCC) published a
notice in the Federal Register that summarizes, and sets comments deadlines
for, its notice of proposed rulemaking regarding whether certain rules should be
repealed or modified because they are no longer necessary in the public interest.
Comments are due by April 19, 2004. Reply comments are due by May 3, 2004. The FCC
released this NPRM on January 12, 2004. This item is FCC 03-337 in WC Docket No.
02-313. See, Federal Register, March 18, 2004, Vol. 69, No. 53, at Pages 12814-12826.
|US Complains to WTO About PR China's Tax
Preference for Domestic Producers of Integrated Circuits
3/18. The U.S. filed a complaint with the World Trade
Organization (WTO) against the People's Republic of China stating that the PRC's
preferential tax treatment of integrated circuits produced in the PRC is
discriminatory, and a violation of the PRC's WTO obligations.
U.S. Trade Representative (USTR)
stated in a release [PDF]
that "U.S. manufacturers of semiconductors and other products have a right
to compete on a level playing field with Chinese firms ... As a WTO member,
China must live up to its WTO obligations; it cannot impose measures that
discriminate against U.S. products. We have been pressing these and other
concerns with the Chinese. These discussions will continue because we prefer
compliance rather than litigation. However, the bottom line is that China is
discriminating against key U.S. technology products, it’s wrong, and it’s time
to pursue a remedy through the WTO."
The USTR release explains the tax preference. "U.S. exports of
integrated circuits to China are subject to a 17 percent value-added tax (VAT),
costing approximately $344 million. However, China taxes domestic products
significantly less, by allowing firms producing integrated circuits in China to
obtain a partial refund of the 17 percent VAT. As a result of the refund policy,
the effective VAT rate on domestic products can be as low as 3 percent. China
also allows for a partial refund of VAT paid on integrated circuits designed in
China but manufactured abroad."
Sen. Charles Grassley (R-IA)
praised the USTR. "I fully support the Administration's decision to get tough
with China. Last week I chaired a hearing of the Finance Committee on the Administration's
trade agenda. Ambassador Zoellick testified that we might need to bring a case against
China. It's apparent that discussions with the Chinese over their blatant discriminatory
tax policy have gone nowhere. So, we're forced to take the next step. I commend
Ambassador Zoellick for his stand to assert our rights in the WTO."
Grassley (at right) continued: "Now, there's no question the United States has
already benefited from China's membership in the WTO. But we can do better. It's
been over two years since China joined the WTO. The honeymoon's over. The time
for excuses is over. The message here is simple. China has to comply with its
international trade obligations. This discriminatory tax is only one of a host
of issues we have with the Chinese. They need to do a better job of enforcing
intellectual property rights. They need to ensure that sanitary and
phytosanitary measures are not used as disguised barriers to trade. And they
need to avoid using technical commercial standards to exclude foreign
participation in their economy. By that I'm referring to China's wireless
encryption standard that's due to take effect in June."
The Semiconductor Industry Association
(SIA) is pleased that the U.S. has acted. George Scalise, President of the SIA, stated
in a release that the "SIA has been working in cooperation with USTR for more
than a year to resolve our problems with China’s discriminatory Value Added Tax regime
on semiconductors ... The USTR and the U.S. semiconductor industry believe in
resolving this dispute through diplomacy. Once it became clear that continued
discussions had not been productive, it became necessary to begin the formal
consultation process of the dispute resolution procedures provided for in the
The PR China joined the WTO in 2001. This is the first complaint that
has been submitted to the WTO against the PR China.
|Washington Tech Calendar
New items are highlighted in red.
|Friday, March 19
9:30 AM. Phil Bond,
of the Department of Commerce's Technology Administration, will speak on "the
importance of math and science education" at the FIRST (For Inspiration and
Recognition of Science and Technology) Robotics Competition. Location: Naval
Academy, Annapolis, MD.
the acting head of the U.S. Patent and
Trademark Office (USPTO) will give a luncheon address on "the importance
of intellectual property to the business community" at the Eighth Annual
Alexandria Technology Achievement Week. The price is $40. For more
information, call 703 549-1000 ext. 207. Location: Radisson Hotel Old Town,
901 North Fairfax Street, Alexandria, VA.
2:30 - 4:30 PM. 9:00 AM - 1:00 PM. The
DC Bar Association will host a continuing
legal education (CLE) program titled "How Electronic Filing is Changing
Litigation". Prices vary. For more information, call 202 737-4700.
Location: Ronald Reagan Building and International Trade Center, 1300
Pennsylvania Ave., NW.
TIME? The Oracle Corporation and the
George Washington University Law School will host a symposium titled "Willful
Patent Infringement". The event is free, and open to the public, but
registration is required. See,
event web site. For
more information, contact Laura Heymann at
email@example.com or 202
994-0420. Location: Jacob Burns Moot Court Room, GWU Law School, 2000 H
Deadline for state and local law enforcement agencies to submit
applications to the
Department of Justice's (DOJ) Office of
Juvenile Justice and Delinquency Prevention (OJJDP) to participate in the
Crimes Against Children Task Force Program. See,
notice in the Federal Register, February 3, 2004, Vol. 69, No. 22, at
Pages 5187 - 5193.
|Tuesday, March 23
10:00 AM. The Senate
Committee on Aging will hold a hearings to examine the impact of internet
fraud on seniors. Location: Room 628, Dirksen Building.
10:30 AM. The
Committee's Subcommittee on Commerce, Justice, State, and the Judiciary will
hold a hearing on the transformation of the Federal
Bureau of Investigation (FBI), focusing on information technology,
management and training. Location: Room 116, Dirksen Building.
2:30 PM. The
Senate Judiciary Committee
will hold a hearing regarding counterfeiting and theft of tangible
intellectual property. Location: Room 226, Dirksen Building.
|Wednesday, March 24
9:30 AM. The
Senate Foreign Relations Committee will hold a hearing on intellectual
property piracy issues. Location: Room 419, Dirksen Building.
10:00 AM. The
Senate Judiciary Committee
will hold a hearing on the nomination of Paul Diamond to be Judge of
the U.S. District Court for the Eastern District of Pennsylvania. Location:
Room 226, Dirksen Building.
2:30 PM. The House Government
Reform Committee's Subcommittee on Technology, Information Policy,
Intergovernmental Relations and the Census will hold a hearing titled "Electronic
Government: A Progress Report on the Successes and Challenges of
Government-wide Information Technology Solutions". Location: Room 2154,
Deadline to submit comments to the
Copyright Office (CO) regarding its
proposed rules governing the service of complaints, summonses, subpoenas and
other legal process on the CO and its employees in their official capacities.
notice in the Federal Register, February 23, 2004, Vol. 69, No. 35, at
Pages 8120 - 8126.
|Thursday, March 25
8:00 - 9:30 AM. The
Republican Technology Council and the
U.S. Chamber of Commerce will host a
panel discussion titled "Global Competitiveness: Countering Economic
Isolationism". The speakers will include
Sen. Bob Bennett (R-UT), Rep. Darrell
Issa (R-CA), and Robert Goodman (Kentron Technologies). RSVP by March 23
to 202 467-4424 or firstname.lastname@example.org.
Location: American Gas Association, 400 North Capital Street.
9:00 AM - 5:00 PM. The
Federal Communications Commission (FCC) will
host a meeting title "Emergency Communications and Homeland Security --
Working with the Disability Community". See,
notice [PDF]. Location: FCC, 445 12th Street, SW.
10:00 AM. The
House Commerce Committee will
hold a hearing titled "The State of U.S. Industry". Secretary of Commerce
Donald Evans will
testify. The hearing will be webcast. Press contact: Larry Neal or Jon Tripp
at 202 225-5735. Location: Room 2123, Rayburn Building.
12:00 NOON. The Progress and Freedom
Foundation (PFF) will host a debate between Stanford Law School Professor
Lawrence Lessig and
PFF Fellow James DeLong. Lessig will also release his latest book, titled
Free Culture: How Big Media Uses Technology and the Law to Lock Down Culture
and Control Creativity [Amazon order page]. The PFF
states that "Those interested in attending should register by contacting
Brooke Emmerick at 202-289-8928 or
email@example.com. Members of the media should contact David Fish at 202
289-8928 or firstname.lastname@example.org. Location: First
Amendment Lounge, National Press Club, 529
14th St. NW, 13th Floor.
12:00 NOON. The Federal Communications Bar
Association's (FCBA) Common Carrier Practice Committee will host a brown
bag luncheon titled "Distribution of Universal Service Support to High Cost
Areas: Reflections on the Joint Board 'Portability' Proceeding". The
speakers will be Matthew Brill (Senior Legal Advisor to Commissioner Kathleen
Abernathy), Karen Brinkmann (Latham & Watkins), Joel Lubin (AT&T), David
Sieradzki (Hogan & Hartson). RSVP to Cecelia Burnett at 202-637-8312 or
email@example.com. Location: Hogan &
Hartson, 555 13th St., NW, Lower Level.
2:00 PM. The House
Appropriations Committee's Subcommittee on Commerce, Justice, and State,
the Judiciary, and Related Agencies will hold a hearing on the proposed
budget for the
U.S. Trade Representative (USTR). USTR
Zoellick is scheduled to testify. Location: Room H-309, Capitol Building.
2:00 PM. The
House Armed Services Committee's
Subcommittee on Terrorism, Unconventional Threats and Capabilities will hold a
hearing on the President's FY 2005 budget request for Department of Defense
science and technology policy programs. The witnesses will be Ronald Sega
(Director, Defense Research and Engineering), Anthony Tether (Defense Advanced Research Projects Agency),
Thomas Killion (Deputy Assistant Secretary of the Army for Research and
Technology), Rear Admiral Jay Cohen (Chief of Naval Research), and James Engle
(Deputy Assistant Secretary of the Air Force for Science, Technology and
Engineering). Location: Room 2212, Rayburn Building.
4:00 PM. Joseph
Scott Miller (Lewis and Clark Law School) will present a paper titled "Roles
and Rules for Dictionaries in the Patent Office and the Courts". For more
Robert Brauneis at 202 994-6138 or
George Washington University Law School,
Faculty Conference Center, Burns Building, 5th Floor, 716 20th Street, NW.
|Friday, March 26
9:00 AM - 4:00 PM. The
Federal Communications Commission's (FCC)
Consumer Advisory Committee will hold a meeting. See,
agenda [PDF]. Location: FCC, Room TW-C305,
445 12th Street, SW.
9:30 AM. The
Consumer Federation of America (DFA)
will host an event titled "Network Neutrality for the Broadband Internet".
The speakers will include Federal Communications Commission (FCC) Commissioner
Lawrence Lessig (Stanford University), and
Vinton Cerf (MCI WorldCom). To attend, contact Mark Cooper (CA) at
firstname.lastname@example.org or 301 384-2204. Location: an undisclosed room on
12:15 PM. The Federal Communications Bar
Association's (FCBA) Young Lawyers Committee will host a brown bag lunch
regarding emerging technologies. The speakers will be Jeff Campbell (Cisco),
Mark Murphy (Ericsson), Bill Lane (FCC Office of Strategic Planning), Kenneth
Carter (FCC Office of Strategic Planning). For more information, contact Ken
Kenneth.Carter@fcc.gov or Pam
Slipakoff at Pam.Slipakoff@fcc.gov.
Location: Willkie Farr & Gallagher, 1875 K Street, NW.
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