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March 25, 2004, 9:00 AM ET, Alert No. 863.
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European Commission Seeks 497 Million Euros and Code Removal from Microsoft

3/24. The European Commission (EC) announced, but did not release the text of, a decision that imposes a record fine upon Microsoft of 497.2 Million Euros, orders Microsoft to make changes to its software sold in Europe, and orders Microsoft to disclose certain information to its competitors.

The EC issued a short press release describing its decision. It states that "Microsoft is required, within 120 days, to disclose complete and accurate interface documentation which would allow non-Microsoft work group servers to achieve full interoperability with Windows PCs and servers."

The decision also addresses Microsoft's Windows Media Player (WMP), which allows users to, among other things, play music and video on their computers. The EC release states that "Microsoft is required, within 90 days, to offer to PC manufacturers a version of its Windows client PC operating system without WMP."

The EC asserted that the basis for these actions is that Microsoft "broke European Union competition law by leveraging its near monopoly in the market for PC operating systems (OS) onto the markets for work group server operating systems and for media players".

The EC also issued a second press release.

Ed Black, President of the Computer & Communications Industry Association (CCIA), an anti-Microsoft interest group, praised the EC decision. He stated in a release that "The European Commission's decision today is another confirmation of Microsoft's anti-competitive and illegal business tactics."

He added a criticism of the U.S. Department of Justice. "The past has shown all to well that many authorities lack the sustained will to effectively check the abuses of such a powerful firm. It is with this dubious past in mind that we look towards the enforcement process as a key to restoring the competitive landscape to the software market."

Microsoft announced that it will challenge the decision in the European Court of First Instance. See, following story, titled "Microsoft Will Challenge EC Decision in Court".

The U.S. Department of Justice, which has already sued and settled with Microsoft, issued a statement that is critical of the EC decision. See, following story, titled "US Antitrust Chief Says EU's Microsoft Decision Could Harm Innovation and Consumers".

US Antitrust Chief Says EU's Microsoft Decision Could Harm Innovation and Consumers

3/24. Hewitt Pate, the Assistant Attorney General in charge of the U.S. Department of Justice's (DOJ) Antitrust Division, issued a statement criticizing the action taken by the European Commission against Microsoft. He stated that the code removal requirement "risks protecting competitors, not competition, in ways that may ultimately harm innovation and the consumers that benefit from it". He also criticized the fine, stating that "For this fine to surpass even the fines levied against members of the most notorious price fixing cartels may send an unfortunate message about the appropriate hierarchy of enforcement priorities."

Hewitt PatePate (at right) first reviewed the history of the US antitrust action against Microsoft. He then wrote that "The United States' Final Judgment provides clear and effective protection for competition and consumers by preventing affirmative misconduct by Microsoft that would inhibit competition in 'middleware' programs, such as the web browser that was the subject of the United States' lawsuit and the media player that is the subject of the EC's action today. The Final Judgment, for example, prohibits the use by Microsoft of exclusive contracts or other provisions that inhibit competition, prohibits anticompetitive manipulation of icons and default settings, and requires Microsoft to provide information to allow 'interoperability' of competitors' software. The United States continues to be active in its enforcement of Microsoft's compliance with the Final Judgment, and this work has resulted in substantial changes to Microsoft's business practices."

In contrast, wrote Pate, "The EC has today pursued a different enforcement approach by imposing a 'code removal' remedy to resolve its media player concerns. The U.S. experience tells us that the best antitrust remedies eliminate impediments to the healthy functioning of competitive markets without hindering successful competitors or imposing burdens on third parties, which may result from the EC's remedy. A requirement of 'code removal' was not at any time -- including during the period when the U.S. was seeking a breakup of Microsoft prior to the rejection of that remedy by the court of appeals -- part of the United States' proposed remedy."

Pate continued that "Imposing antitrust liability on the basis of product enhancements and imposing 'code removal' remedies may produce unintended consequences. Sound antitrust policy must avoid chilling innovation and competition even by 'dominant' companies. A contrary approach risks protecting competitors, not competition, in ways that may ultimately harm innovation and the consumers that benefit from it. It is significant that the U.S. district court considered and rejected a similar remedy in the U.S. litigation."

He then criticized the fine. "While the imposition of a civil fine is a customary and accepted aspect of EC antitrust enforcement, it is unfortunate that the largest antitrust fine ever levied will now be imposed in a case of unilateral competitive conduct, the most ambiguous and controversial area of antitrust enforcement. For this fine to surpass even the fines levied against members of the most notorious price fixing cartels may send an unfortunate message about the appropriate hierarchy of enforcement priorities."

Pate did not offer any criticism of the interoperability remedy, which requires Microsoft to license technologies used by Microsoft server software to communicate with other Microsoft software on a network, at this time.

Microsoft Will Challenge EC Decision in Court

3/24. Steve Ballmer, CEO of Microsoft, stated at a press conference regarding the European Commission's announcement that "the legal review process begins". Brad Smith, SVP and General Counsel of Microsoft, added that "we now will move forward with the legal process in Europe. We will file our appeal in accordance with the timetable set by the European Court of First Instance, and we will ask the court to suspend many or perhaps all of the sanctions that the European Commission ordered today." See, transcript.

Bradford SmithSmith (at right) added that "We will definitely ask the court to suspend a number of the sanctions, including the code-removal sanction that was addressed in the Media Player decision today."

Smith offered his assessment of the US and EC antitrust actions. "We think that today's decision is a step in the wrong direction. It's an unfortunate step and it's an unnecessary step. The U.S. government spent over five years addressing these issues, and at the conclusion of that process it put in place the consent decree that addresses these issues, including Windows Media Player. The Department of Justice put in place a regime that created new opportunities for our competitors and new opportunities for PC manufacturers to install competing media players, and change the default setting on PCs, and even remove end-user access if they wish to our Windows Media Player."

"In contrast," said Smith, "the code-removal approach that the commission pursued today is an approach that in our view will help a small number of competitors -- at least that is its theory -- at the expense not only of our innovation but at the expense of consumers as well. And it's worth noting that the same competitors that have sought this outcome in Europe also sought it in the United States. They encouraged the states' attorneys general to ask the District Court in Washington, D.C. in 2002 to issue a code-removal remedy. And the District Court in D.C. listened to over 60 days of testimony from witnesses, and then issued a very considered opinion. The court rejected the precise code-removal remedy that the commission has endorsed.

Smith then recited three quotes from the District Court: "innovation would be stifled"; "this would disrupt the industry, harming independent software vendors and consumers"; and "clear and certain harm to the entire personal computer ecosystem".

He continued that "So our competitors had their day in court, and it's unfortunate that after that day came and went they simply chose to move across the Atlantic to try to have a day in another court. And we think it's especially unfortunate that the European Commission today embarked on a remedy that shows so little regard for the work and decision-making of the U.S. government, and so little regard for the comity proceedings or processes that are established under the commission's 1991 treaty with the Department of Justice. This is a case that started in the United States. Microsoft is an American company. The complainant companies are American companies. The software is designed in the United States, and the U.S. government dealt with the issues thoroughly. There was no need for the commission to disrupt that regime with this conflicting approach in which it's embarked today."

4th Circuit Affirms That Section 230 Immunity Extends to Federal Civil Rights Action

3/24. The U.S. Court of Appeals (4thCir) issued its opinion [2 pages in PDF] in Noah v. AOL, affirming the District Court's opinion that Section 230 of the Communications Act immunizes AOL from claims that it violated the Civil Rights Act of 1964 when it provided chat rooms in which subscribers mocked Noah's religious beliefs.

The interactive computer service immunity clause, which is codified at 47 U.S.C. § 230, was enacted as a part of the Communications Decency Act. Since then, AOL and other interactive computer services have prevailed in numerous cases by invoking Section 230.

However, this case is significant, because most earlier cases involved state law tort claims of defamation or negligence. In the present case, the District Court held, and the Appeals Court affirmed, that Section 230 immunity extends to claims under federal statutes.

The case may also be significant because of the District Court's alternative basis for dismissing the case -- that an internet chat room is not a "public accommodation" within the meaning of Title II of the Civil Rights Act. The District Court's analysis may be noteworthy because there are situations were an online activity may not qualify for interactive computer service immunity, but might assert that it is not a "public accommodation". For example, the Americans with Disabilities Act (ADA) prohibits discrimination against people with disabilities in public accommodation. A website operator that is sued or prosecuted under the public accommodation provision of the ADA might assert the present case as authority for the proposition that it is not a public accommodation.

Although, the Department of Justice's Civil Rights Division may not share the 4th Circuit's understandings of either Section 230 immunity or public accommodations.

Background. Saad Noah is a Muslim who was a subscriber to America Online's (AOL) interactive computer service. AOL operates online chat rooms that enable subscribers to post messages. Two of these chat rooms were named "Beliefs Islam" and "Koran".

Noah states that other AOL subscribers posted messages in these chat rooms that insulted, threatened, mocked, ridiculed, and spread misinformation about Islam. Indeed, 20 pages of the 29 pages of his first complaint recite vulgar posts in these chat rooms.

On August 30, 2001, Saad Noah filed a complaint [29 page PDF scan] in U.S. District Court (EDVa) against AOL Time Warner and AOL. The two count complaint alleged violation of Title II of the Civil Rights Act of 1964 by discrimination in public accommodation (42 U.S.C. § 2000a), and breach of contract. Noah sought class action status. The alleged class is all Muslims who subscribed to AOL and whose religious beliefs were insulted. He subsequently filed a pro se complaint on September 3, 2002.

AOL and AOL TW filed a motion to dismiss plaintiff's claims on January 22, 2003.

The Statutes. 47 U.S.C. § 230(c)(1) provides that "No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider."

47 U.S.C. § 230(f)(2) provides that "The term ``interactive computer service´´ means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions.

47 U.S.C. § 2000a provides, in part, that "All persons shall be entitled to the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and accommodations of any place of public accommodation, as defined in this section, without discrimination or segregation on the ground of race, color, religion, or national origin." The statute goes on to define public accommodations as hotels, restaurants, theaters, and related facilities.

District Court Opinion. The District Court issued its opinion on May 13, 2003 granting the motion to dismiss. It wrote that "Plaintiff's Title II claim fails for two alternate and independent reasons. First, plaintiff's claim against AOL is barred because of the immunity granted AOL, as an interactive computer service provider, by the Communications Decency Act of 1996, 47 U.S.C. § 230. Second, plaintiff's claim fails because a chat room is not a ``place of public accommodation´´ as defined by Title II, 42 U.S.C. § 2000a(b)."

The Court wrote, citing Zeran v. AOL, that "the ``plain language´´ of § 230 ``creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service. ... In other words, ``§ 230 precludes courts from entertaining claims that would place a computer service provider in a publisher's role,´´ and ``lawsuits seeking to hold a service provider liable for its exercise of a publisher's traditional editorial functions -- such as deciding whether to publish, withdraw, postpone, or alter content -- are barred.´´ ... By specific statutory exclusion, certain causes of action are not barred by § 230;  namely, causes of action based on (i) federal criminal statutes, (ii) intellectual property law, (iii) state law ``that is consistent with this section,´´ and (iv) the Electronic Communications Privacy Act of 1986."

The District Court continued that "Congress's purpose in providing such immunity is evident. As the Fourth Circuit noted in Zeran, ISPs such as AOL have millions of users who generate a ``staggering´´ amount of content or information;  thus it is ``impossible for service providers to screen each of their millions of postings for possible problems.´´  ... If ISPs faced tort liability for information posted through their services by third parties, they might be forced to restrict access to their public forums. ... Such a result would be counter to the statutory purpose of ensuring that the Internet remain a ``forum for true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity.´´"

The District Court also wrote that "relying on the fact that his claim is brought under Title II, not state defamation or negligence law, plaintiff contends that the claim treats AOL as the owner of a place of public accommodation, not a ``publisher.´´  This argument, though novel, is unpersuasive. An examination of the injury claimed by plaintiff and the remedy he seeks clearly indicates that his Title II claim seeks to ``place´´ AOL ``in a publisher's role,´´ in violation of § 230."

Finally, the District Court wrote that "Nor can it be plausibly argued that § 230 is limited to immunity from state law claims for negligence or defamation. Such a limitation is flatly contradicted by § 230's exclusion of some specific federal claims. Those exclusions would be superfluous were § 230 immunity applicable only to certain state claims. Moreover, the exclusion of federal criminal claims, but not federal civil rights claims, clearly indicates, under the canon of expressio unius est exclusio alterius, that Congress did not intend to place federal civil rights claims outside the scope of § 230 immunity."

The Appeals Court affirmed the District Court in a brief non-precedential per curiam opinion.

The body of the opinion, states, as follows: "Saad S. Noah appeals the district court’s order granting Defendants' motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) and dismissing Noah’s cause of action. Noah also appeals from the scheduling order entered by the magistrate judge. We have reviewed the record and find no reversible error. Accordingly, we affirm for the reasons stated by the district court."

The Appeals Court did not explain why it wrote only a brief non-precedential opinion in a case of such importance. One explanation might be that since this was a pro se case, Saad Noah might not have litigated and briefed the case with sufficient zeal and expertise to place the pertinent arguments and authorities before the court.

This case is Saad Noah v. AOL Time Warner, Inc. and America Online, Inc., U.S. Court of Appeals for the 4th Circuit, App Ct. No. 03-1770, an appeal from the U.S. District Court for the Eastern District of Virginia, D.C. No. 02-1316-A, Judge T.S. Ellis presiding.

More News

3/24. The U.S. Supreme Court issued its opinion [28 pages in PDF] in Nixon v. Missouri Municipal League reversing the U.S. Court of Appeals. TLJ will publish a story on this important case in the tomorrow's edition.

3/24. The House passed HR 1768, the "Multidistrict Litigation Restoration Act of 2004" by a vote of 418-0. See, Roll Call No. 79.

3/24. The Senate Foreign Relations Committee postponed its hearing on intellectual property piracy issues, which had been scheduled for Wednesday, March 24.

3/23. The Recording Industry Association of America (RIAA) announced in a release that "on behalf of the major record companies, brought a new round of legal action against individual computer users offering substantial amounts of copyrighted music files for free on peer-to-peer networks, including illegal file sharers at 21 different universities."

3/23. Pascal Lamy, the European Union's Trade Commissioner, gave a speech in Brussels, Belgium on "What role for fair trade in EU Policies?"

3/23. BellSouth issued a release regarding its contracts with competitive local exchange carriers (CLECs) for access to its network. The release, quoting various BellSouth officers, states that "Three times the mandated unbundling rules that govern our current arrangements have been found illegal by federal courts. It is inevitable that the below-cost rates we now charge will go away and that true market-based rates will replace them. What we are offering is in keeping with a call for a transition period which was issued by Federal Communications Commission Chairman Michael Powell." See, March 10 speech [PDF] by Michael Powell, and story titled "Powell Offers Timetable for FCC's Fourth Attempt to Write Unbundling Rules" in TLJ Daily E-Mail Alert No. 854, March 11, 2004. BellSouth added that it is offering CLECs "predictable rates and a 42-month transition with modest increases phased in beginning January 1, 2005 ... The offer bridges our regulatory past with our anticipated free market future."

Washington Tech Calendar
New items are highlighted in red.
Thursday, March 25

The House will meet at 10:00 AM for legislative business. The House will take up several items under suspension of the rules. See, Republican Whip Notice.

The Senate will meet at 9:30 AM for morning business, and at 10:30 AM to begin consideration of HR 1997, the "Unborn Victims of Violence Act of 2004".

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 See, notice. Location: American Gas Association, 400 North Capital Street.

9:00 AM - 4:30 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.

9:30 AM. The Senate Commerce Committee will hold a hearing titled "Escalating Cable Rates: Causes and Solutions". The witnesses will be Mark Goldstein (General Accounting Office), James Robbins (P/CEO of Cox Communications), George Bodenheimer (President of ESPN and ABC Sports), Gene Kimmelman (Director of the Consumers Union), and Rodger Johnson (P/CEO of Knology). The hearing will be webcast by the Committee. See, notice. Location: Room 253, Russell Building.

10:00 AM. The House Judiciary Committee's (HJC) Subcommittee on the Constitution will hold a hearing on HRes 568, which expressing the sense of the House that judicial determinations regarding the meaning of the laws of the U.S. should not be based on judgments, laws, or pronouncements of foreign institutions. The hearing will be webcast by the HJC. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, 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 notice states that "Those interested in attending should register by contacting Brooke Emmerick at 202-289-8928 or Members of the media should contact David Fish at 202 289-8928 or 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 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 Robert 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.

2:00 PM. The House Judiciary Committee's (HJC) Subcommittee on Crime, Terrorism, and Homeland Security, and the House Homeland Security Committee's Subcommittee on Intelligence and Counterterrorism, will hold a joint hearing titled "Progress in Consolidating Terrorist Watchlists -- The Terrorist Screening Center (TSC)". The witnesses will be Donna Bucella (Director, Terrorist Screening Center, FBI), Charlie Bartoldus (Director, National Targeting Center, Customs and Border Protection, DHS), Jim McMahon (Director, Office of Public Security, New York), and Jerry Berman (Center for Democracy and Technology). The hearing will be webcast by the HJC. Press contact: Jeff Lungren or Terry Shawn at 202 225-2492. Location: Room 2141, 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 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.

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 (CFA) will host an event titled "Network Neutrality for the Broadband Internet". The speakers will include Federal Communications Commission (FCC) Commissioner Michael Copps, Lawrence Lessig (Stanford University), Vinton Cerf (MCI WorldCom), and Timothy Wu (University of Virginia Law School), Andrew McLaughlin (Google), and Earl Comstock. To attend, contact Mark Cooper (CFA) at or 301 384-2204. Location: Room 628, Dirksen Building, Capitol Hill.

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 Carter at or Pam Slipakoff at Location: Willkie Farr & Gallagher, 1875 K Street, NW.

Monday, March 29

8:30 AM - 4:15 PM. The Consumer Electronics Association (CEA) will host its event titled "HDTV Summit: Partnership, Policy and Profits". Rep. Fred Upton (R-MI), the Chairman of the House Commerce Committee's Subcommittee on Telecommunications and the Internet, will be the keynote speaker at 9:40 AM. Prices vary. See, CEA notice. Location: Washington DC Convention Center, 801 Mount Vernon Place, NW.

9:30 AM. The U.S. Court Appeals (DCCir) will hear oral argument in SBC Communications v. FCC, No. 03-1118. Judges Sentelle, Rogers and Tatel will preside. Location: 333 Constitution Ave.

Deadline to submit comments to various federal agencies regarding whether these agencies agencies should consider amending existing regulations that implement sections 502 and 503 of the Gramm Leach Bliley Act (GLB) to allow or require financial institutions to provide alternative types of privacy notices. The agencies are the Board of Governors of the Federal Reserve System, Commodity Futures Trading Commission (CFTC), Federal Deposit Insurance Corporation (FDIC), Federal Trade Commission (FTC), National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and the Securities and Exchange Commission (SEC). See, notice in the Federal Register, December 30, 2003, Vol. 68, No. 249, at Pages 75164 - 75174.

Tuesday, March 30

9:00 AM. The President's Council of Advisors on Science and Technology (PCAST) will hold a meeting. The agenda includes "(1) Discuss a draft report from its workforce-education subcommittee; and (2) continue its discussion of nanotechnology and its review of the federal National Nanotechnology Initiative ... " See, notice in the Federal Register, March 17, 2004, Vol. 69, No. 52, at Page 12694. Location: Crystal Ballroom, St. Regis Hotel, 923 16th Street, NW.

10:00 AM. The House Appropriations Committee's Subcommittee on Homeland Security will hold a hearing on the proposed budget for the Science and Technology directorate at the Department of Homeland Security (DHS). Charles McQueary, Under Secretary for Science and Technology, is scheduled to testify. Location: Room B-308, Rayburn Building.

10:00 AM - 1:00 PM. The Federal Communications Commission's (FCC) Network Reliability and Interoperability Council will meet. See, notice [PDF] and agenda [PDF]. Location: FCC, Commission Meeting Room (TW-C305), 445 12th Street, SW.

11:00 AM. The Heritage Foundation will host a panel discussion titled "Leveraging Cutting-Edge Commercial Technology For Defense". Joseph Mait (Center for Technology and National Security Policy), Stephen Prior (Potomac Institute for Policy Studies), Robert Bott (Boeing Company), James Jay Carafano (Heritage), and Jack Spencer (Heritage). See, notice. Location: Heritage, Lehrman Auditorium, 214 Massachusetts Ave NE.

12:00 NOON. Deadline to submit written comments to the U.S. Trade Representative's (USTR) Trade Policy Staff Committee (TPSC) regarding negotiating objectives for the proposed free trade agreement (FTA) between the U.S. and four Andean countries (Colombia, Peru, Ecuador, and Bolivia). See, notice in the Federal Register, February 17, 2004, Vol. 69, No. 31, at Pages 7532 - 7534.

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 Departments of Commerce, Justice and State. The purpose of this hearing is to allow Members of Congress to testify. Location: Room H-309, Capitol Building.

2:30 PM. The Senate Commerce Committee will hold a hearing an several pending nominations, including that of Theodore Kassinger to be Deputy Secretary of Commerce. Location: Room 253, Russell Building.

Wednesday, March 31

10:00 AM. The House Commerce Committee will hold a hearing titled "U.S.-China Trade: Preparations for the Joint Commission on Commerce and Trade". Press contact: Larry Neal or Jon Tripp at 202 225-5735. The hearing will be webcast. Location: Room 2123, Rayburn Building.

10:00 AM. 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 Federal Communications Commission (FCC). FCC Chairman Michael Powell is scheduled to testify. Location: Room H-309, Capitol Building.

12:15 PM. The Federal Communications Bar Association's (FCBA) Online Communications Practice Committee will host a brown bag lunch titled "Digital Rights Management". The speakers will be Mark Cooper (Consumer Federation of America), and Paul Glist (Cole Raywid & Braverman). RSVP to Evelyn Opany at 202-689-7163. Location: Cole, Raywid & Braverman, 1919 Pennsylvania Ave., NW, Suite 200.

2:00 - 3:30 PM. Federal Communications Commission (FCC) World RadioCommunication 2007 (WRC-07) Advisory Committee's Informal Working Group on Regulatory Issues will meet. The FCC notice [PDF] states that "Non-U.S. citizens who wish to attend must preclear 24 hours in advance of the meeting by e-mailing their name, nationality and company affiliation to" Location: The Boeing Company, 1200 Wilson Boulevard. The nearest metro stop is Rosslyn Station.

The Office of the U.S. Trade Representative (USTR) may conclude its review regarding the operation and effectiveness of, and the implementation of and compliance with, the World Trade Organization (WTO) Basic Telecommunications Agreement, other WTO agreements affecting market opportunities for U.S. telecommunications products and services, the telecommunications provisions of the North American Free Trade Agreement (NAFTA), Chile FTA and Singapore FTA, and other telecommunications trade agreements. See, notice in the Federal Register, December 8, 2003, Vol. 68, No. 235, at Pages 68444 - 68445.

6:00 PM. Deadline to submit applications to the National Telecommunications and Information Administration (NTIA) for grants under the Public Telecommunications Facilities Program (PTFP). See, NTIA notice.

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding Level 3 Communications' petition for forbearance requesting the FCC to forbear from application of 47 U.S.C. § 251(g), the exception clause of § 51.701(b)(1) of the FCC's rules, and § 69.5(b) of the FCC's rules to the extent those provisions could be interpreted to permit local exchange carrier (LECs) to impose interstate or intrastate access charges on internet protocol (IP) traffic that originates or terminates on the public switched telephone network (PSTN), or on PSTN-PSTN traffic that is incidental thereto. This is WC Docket No. 03-266. See, FCC notice [3 pages in PDF].

Deadline to submit comments to the Federal Trade Commission (FTC) in response to its notice in the Federal Register requesting comments regarding a National Do Not E-mail Registry. Section 9 of S 877, the "Controlling the Assault of Non-Solicited Pormography and Marketing Act of 2003" (CAN-SPAM Act), requires the FTC to write a report to the Congress on establishing a nationwide Do Not E-Mail Registry. It is due by June 16, 2004. See, story titled "FTC Announces CAN-SPAM Act Rulemaking" in TLJ Daily E-Mail Alert No. 855, March 15, 2004. The notice is published in the Federal Register, March 11, 2004, Vol. 69, No. 48, at Pages 11775-11782. See also, FTC release summarizing the notice.

Evans Opposes Isolationist Response to Outsourcing

3/24. Secretary of Commerce Donald Evans testified before a House Commerce Committee hearing titled "The State of U.S. Industry". He argued that isolationism is not the appropriate policy response to the outsourcing of jobs to other countries. He also addressed federal research and development spending, protection of intellectual property rights, piracy in the PR China, extending the internet tax moratorium, voice of internet protocol, broadband over powerline, and other technology related issues.

Donald EvansFree Trade. Evans (at right) wrote in his prepared testimony that "New foreign investments occur regularly, although they do not seem to attract the attention devoted to investment offshore. But foreign investments made here are creating many times more jobs than are being offshored from the United States."

He continued that "jobs are at risk if this country begins to engage in the isolationism that would cause us to close down global labor markets. America cannot turn back from a global marketplace of goods and services. Engagement with the world adds jobs and growth, while a policy of economic isolation destroys them."

"It is important to have the facts: according to the Bureau of Labor Statistics, only one percent of job losses in large layoffs are associated with overseas relocation, with another two percent due to import competition", said Evans. "IBM, for example, recently won a contract from Nokia, the Finnish telecommunications company, worth over $5 billion. Alone, this contract equals almost one-third of the entire Indian information technology software and services industry in 2003."

Research and Development Spending. Evans also addressed R&D spending. "We will spend a record $126 billion on federal R&D this year, and the President has proposed $132 billion next year."

He added that "the Administration continues to support the unique capabilities of national labs and universities, including establishing cooperative research programs for the benefit of small and medium-sized businesses. In addition, this Administration is promoting the process of manufacturing technology transfer to ensure that the benefits of R&D are diffused broadly throughout the manufacturing sector, particularly to small and medium-sized enterprises."

Intellectual Property and Piracy. Evans wrote that "Business leaders emphasize the importance of adequately and effectively protecting intellectual property rights, and the corrosive effect of the failure of some of our trading partners to enforce these rights. Intellectual property protection is essential in ensuring the virtuous cycle of innovation that raises our productivity and meets the needs of consumers around the world. That is why the Department of Commerce continues to strengthen the Patent and Trademark Office, enhancing intellectual property protection and increasing the availability of new products and services."

He also focused on IPR theft in the People's Republic of China. He stated that "Nothing hurts innovation like having your ideas stolen from you. We are working hard to make sure that does not happen. The World Trade Organization (WTO) has agreements barring the theft of intellectual property. Piracy by foreign businesses, particularly in China, for example, is a chronic problem for many American firms. Last fall, I led a mission to China and highlighted China's lack of IPR enforcement. I met with high-ranking Chinese officials and reiterated our continuing concern; that effective IPR protection requires that criminal penalties for intellectual property theft and fines are large enough to be a deterrent rather than a business expense."

"I believe in the strong enforcement of our trade laws, especially intellectual property protection, and we are taking proactive measures to combat piracy. I have tasked Commerce agencies, such as the Patent and Trademark Office and the new Office of Investigations and Compliance, to coordinate their efforts to vigorously pursue allegations of IPR violations wherever they occur, especially in China."

Finally, he testified that "The Administration is committed to exercising the legal remedies available under the WTO and under U.S. law when clear violations occur. As a matter of fact, the United States Trade Representative announced the filing of a case at the WTO regarding China's discriminatory tax rebate policy for integrated circuits." (See, story titled "US Complains to WTO About PR China's Tax Preference for Domestic Producers of Integrated Circuits", March 18, 2004.)

Other Issues. He advocated passage of the Internet Non-Discrimination Act. He stated that President Bush "urges the Congress to make the moratorium permanent". (For a summary of this bill and related bills, see story titled "Sen. Alexander Introduces Bill Regarding Internet Tax Moratorium", February 12, 2004.)

Evans stated that "The Administration also supports policies that will ensure that Voice-over-Internet Protocol is also free from unnecessary economic regulation."

He also stated that "The Administration is working to ensure that Broadband-over-Power Lines can be beneficially deployed as quickly as possible."

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