|Supreme Court Grants Certiorari in Wire
4/5. The Supreme Court
granted certiorari, without opinion, in Pasquantino v. U.S., No. 03-725.
List [10 pages in PDF] at page 2. This case involves the scope of the federal wire
While the Court has agreed to hear this appeal, oral argument will not likely
be held until next fall.
Canada and its Province of Ontario place much higher taxes on the sale of
alcohol than the U.S. and the state of Maryland. This creates a black market in
alcohol that is illegal in Canada. David and Carl Pasquinto and Arthur Hilts
purchased large quantities of alcohol in Maryland, trucked it to New York, and
then smuggled it across the border into Ontario hidden in cars. They then sold
the alcohol in Canada, without paying the required excise taxes, in violation of
Canadian law. The defendants made phone calls related to this scheme.
The present case was brought -- not in Canada -- but in federal court in the
state of Maryland under U.S. law. Specifically, the defendants were charged with
violation of wire fraud statute, which is codified at
18 U.S.C. § 1343.
The statute provides that "Whoever, having devised or intending to devise any
scheme or artifice to defraud, or for obtaining money or property by means of
false or fraudulent pretenses, representations, or promises, transmits or causes
to be transmitted by means of wire, radio, or television communication in
interstate or foreign commerce, any writings, signs, signals, pictures, or
sounds for the purpose of executing such scheme or artifice, shall be fined
under this title or imprisoned not more than five years, or both. If the
violation affects a financial institution, such person shall be fined not more
than $1,000,000 or imprisoned not more than 30 years, or both."
A trial jury of the U.S. District
Court (DMd) returned verdicts of guilty, and the District Court entered
judgment against the defendants. The defendants appealed. A divided three judge
panel of the U.S. Court of Appeals
(4thCir) reversed in an opinion reported at 305 F.3d 291. However, an en
banc panel of the Court of Appeals then affirmed the convictions in an
opinion released on July 18, 2003, and reported at 336 F.3d 321.
This petition for writ of certiorari followed. The defendants/petitioners
argue that in light of the common law revenue rule, the U.S. may not bring a
wire fraud prosecution against persons who use the wires in this country to
defraud a foreign government of tax revenue. The common law revenue rule is the
common law doctrine that courts of one sovereign state will not enforce the
final tax judgments or unadjudicated tax claims of other sovereign states.
The Solicitor General submitted a
brief in which he argued that the Supreme Court should deny certiorari. He
wrote that the text of the wire fraud statute "contains no exception based on
the identity of the victim of the fraud or the nature of the property that is
the object of the fraud. Consistent with the terms of the wire fraud statute,
courts have held that the wire fraud statute applies to schemes to defraud
foreign governments, foreign corporations, and foreign individuals."
This case is David Pasquantino, Carl Pasquantino, and Arthur Hilts, aka
Butch v. U.S.A., Sup. Ct. No. 03-725, a petition for writ of certiorari to
U.S. Court of Appeals for the 4th Circuit, App. Ct. Nos. 01-4463, 01-4464, and
01-4465. The appeal to the Court of Appeals came from the U.S. District Court
for the District of Maryland, D.C. No. CR-00-202-JFM, Judge Frederick Motz
|SBC and Sage Announce Agreement to Replace
4/5. SBC Communications and
Sage Telecom announced that
"they have reached an historic seven-year commercial agreement for SBC to
provide wholesale local phone services to Sage covering all 13 states comprising
SBC's local phone territory. The agreement also contains provisions relating to
data and internet services." See SBC
release and substantially identical Sage
SBC is an incumbent local exchange carrier (ILEC), and a regional Bell
operating company (RBOC). Sage is a competitive local exchange carrier (CLEC).
It is the third largest CLEC in SBC's territory, with more than one-half million
local service customers.
The two companies stated that "This is the first such agreement between a
Bell operating company and a local competitor in the four weeks since a federal
court overturned wholesale rules imposed by the FCC late last year."
Regarding unbundled network elements - platform (UNE-P), SBC and Sage
stated that "The seven-year pact will replace the regulatory
mandated UNE-P with a private commercial agreement. Given the proprietary nature
of the agreement, most terms were not released, but the average monthly price
over the life of the contract is expected to be below $25.00 per line."
They added that "SBC has offered to negotiate comparable terms and conditions
with any similarly-situated competitor."
SBC and Sage did not release the text of their agreement.
On March 31, 2004, all five of the Commissioners of the
Federal Communications Commission (FCC) wrote
a letter to telecommunications carriers and trade associations regarding the
opinion [62 pages in PDF] of the
U.S. Court of Appeals (DCCir) in USTA v. FCC, vacating parts of the
FCC's latest rules (contained in the triennial review order) regarding the unbundling
requirements of ILECs. The letter states that the FCC will seek an extension of the
Court of Appeals' stay of its vacatur. The letter also encourages the incumbent and
competitive carriers, and their trade groups, to use this time to negotiate. See,
letter [PDF] sent to CompTel, and
statement [PDF] released by the FCC. See also,
titled "FCC to Seek Extension of Stay of DC Circuit Vacatur of
TRO" in TLJ Daily E-Mail Alert No. 867, April 1, 2004.
The triennial review order (TRO) addresses the
unbundling obligations of ILECs. Unbundled network elements (UNEs) are those portions
of telephone networks that the ILECs, such as SBC,
must make available to competing carriers at regulated rates, such as AT&T and
MCI WorldCom, seeking to provide
Michael Powell (at right) stated
release [PDF] on April 5 that "This is an encouraging sign that companies have taken
the Commission's call for negotiations to heart. And more importantly, this
demonstrates that commercial, market-based agreements can be accomplished. I
hope this paves the way for further negotiations and contracts -- so that
America's telephone consumers have the certainty they deserve."
Similarly, FCC Commissioner
Kathleen Abernathy stated in a
release [PDF] that "I am extremely pleased by the announcement that SBC
Communications and Sage Telecom, a UNE-P provider, have reached a commercial
agreement that will govern Sage's use of SBC’s network over the next seven
years. I applaud the parties for coming to the bargaining table in good faith."
She added that "This agreement illustrates that searching for compromise is a
worthwhile endeavor. I hope that incumbent LECs and competitors will soon reach
additional agreements that narrow the range of disputed issues and eliminate the
need for continued litigation. Consumers will be the winners if companies devote
their resources to competing in the marketplace, rather than in the courtroom."
USTA P/CEO Walter McCormick stated in a
release that "This is proof positive that free markets can work in
telecommunications as they do throughout the U.S. economy. Just days after
Chairman Powell's call, we have our first agreement. This is real-world
evidence that we do not need to spend months and years in court defending the
past and putting future telecom investment and job creation on hold. All it
takes to move forward constructively for the country is reasonable people
sitting down in good faith at the negotiating table." The USTA membership
CompTel/ASCENT and the Association for
Local Telecommunications Services
(ALTS) released a proposed
framework for negotiations.
|Abernathy Addresses Telecommunications
4/2. Federal Communications Commission
Kathleen Abernathy gave a
speech titled "Telecommunications Security: Key Issues Affecting the Public
and Private Sectors" at the 7th Annual Midwestern Telecommunications Conference.
She briefly reviewed recent security related actions, and ongoing proceedings,
at the FCC.
She began with the observation that "We used to worry about things like
earthquakes and ice storms, and perhaps teenage computer hackers, but terrorism
was not a major concern. Of course, 9-11 changed all of that -- it propelled
security issues into the forefront".
(at right) also stated that "the FCC’s ongoing rulemakings on broadband services
and voice over IP have focused on security issues -- something that probably
would not have occurred before 9-11."
One of the points that she made was that "the FCC recently revised
its rules concerning the universal service subsidy mechanism for rural health care
clinics, and one of our primary objectives in doing so was to ensure that regional
hospitals and rural clinics are interconnected in the event of a bioterrorism
This is a reference to the FCC's "Order, Order on Reconsideration,
and Further Notice of Proposed Rulemaking" in WC Docket No. 02-60, announced
on November 13, 2003, and released on November 17. In the entirety of this 69 page
and order [PDF], the word "bioterrorism" appears in only one footnote.
The report and order also gives brief reference to "biological" attacks, but
only as one possible scenario in the broader category of natural disasters and public
Commission Michael Copps mentioned "bio-terrorism" in his
separate statement [PDF], and Commissioners Michael Powell and Jonathan
Adelstein referenced biological attacks in their statements. But, Commissioner
Abernathy did not mention this issue in her
separate statement [PDF].
See also, story titled "FCC Expands Universal Service Support
for Rural Clinics and Telemedicine" in
TLJ Daily E-Mail
Alert No. 779, November 14, 2003.
|Google's New Free E-Mail Service Starts
4/5. Google announced on April 1 that it "is testing a preview
release of Gmail -- a free search-based webmail service with a storage capacity of up to
eight billion bits of information, the equivalent of 500,000 pages of email. Per
user." See, Google
release. The announcement has initiated discussions of the privacy
consequences of its Gmail service.
web page Google states that "There are no pop-ups or banner ads in Gmail.
Gmail does include relevant text ads that are similar to the ads appearing on
the right side of Google search results pages. The matching of ads to content is
a completely automated process performed by computers using the same technology
that powers the Google AdSense program. This technology already places targeted
ads on thousands of sites across the web by quickly analyzing the content of
pages and determining which ads are most relevant to them. No humans read your
email to target the ads, and no email content or other personally identifiable
information is ever provided to advertisers."
While many chat room and discussion thread participants have
praised the new service, and Google, some people, such as Simon Davies of
Privacy International and
Kevin Bankston of the Electronic Frontier Foundation, have complained about privacy
implications of computer scanning of the content of e-mail in order to match ads.
Meanwhile, Rob Atkinson of the Progressive Policy
Institute (PPI), wrote a
essay titled "Google E-mail, What's All the Fuss
About?" that defends Google's new service.
Atkinson is the Director of the PPI's
Technology and New Economy Project. The PPI is a
Washington DC based think tank associated with the New Democrats.
He wrote that "we shouldn't let paranoid rhetoric from privacy advocates stop
this or other similar types of consumer-friendly services."
He first reviewed the benefits of free e-mail services. For example, he points
out that "For some low-income Americans who access the Internet at places like
libraries and community centers, free email allows them an opportunity to have a
mail address without paying monthly ISP fees."
Atkinson continued that "The costs of establishing these free email services
are not trivial. Companies must pay for servers and software, as well as staff
to run the systems -- the anti-spam efforts alone require a small
army of workers. These companies provide this expensive service at no cost to
the consumer the way other media companies provide expensive services like free
over-the-air TV or free neighborhood newspapers: they pay for it with
"In an all too predictable response the privacy advocates are howling in
protest. Oh no, companies will be reading your email!", said Atkinson. "The
reality is much simpler. If companies, either ISP's or free email services,
wanted to read your email they could. After all the messages go through their
servers. The reality is they all have privacy policies stating very clearly they
will not read their user's email nor share it with others. Google's service is
or other information without your consent.´´"
Atkinson concluded that "Those that do mind the advertising can choose
another service and pay for the storage. If privacy advocates are worried about
this, they have a simple choice -- don't sign up for G-mail. But it
would be a shame if their paranoid rhetoric shut down Google's new service and
denied that choice to the rest of us."
Also, in addition to privacy, some commenters have raised other
policy issues. For example, posters to Slashdot have suggested that the huge
amount of free storage could be used by some subscribers to facilitate the
distribution of digital pormography.
4/5. The Supreme Court denied certiorari in
Skippy v. Lipton Investments, No. 03-1146, a trademark case
involving Skippy peanut butter and a once famous cartoon character named Skippy.
Order List [10 pages in PDF] at page 4.
4/1. The Dow Jones & Company announced that "American International Group
Inc., Pfizer Inc., and Verizon Communications Inc. will replace AT&T Corp.,
Eastman Kodak Co. and International Paper Co. in the Dow Jones Industrial
Average, effective with the opening of trading on April 8". See,
|Five Indicted for Mail Fraud in Connection with
FCC E-Rate Subsidy Program
4/5. The Department of Justice's (DOJ)
Antitrust Division announced that a grand jury of the
U.S. District Court (EDWisc) returned
an indictment charging five people with conspiracy, mail fraud, and money
laundering in connection with a scheme to defraud the
Federal Communications Commission's (FCC)
e-rate subsidy program. See, DOJ
The indictment charges Haider Bokhari, his wife, Kelly Bokhari, his mother,
Shahida Bokhari, and his brothers Qasim Bokhari and Raza Bokhari. The government arrested all
but Raza Bokhari in the U.S. The DOJ stated that he "is believed to be residing in
The DOJ stated that the indictment alleges that Haider Bokhari and Qasim
Bokhari submitted false invoices and other documents to the FCC's Universal
Service Administrative Company (USAC), and that the USAC paid them over $1.2
million dollars for goods and services that were not provided to schools.
The indictment charges various of the defendants with conspiracy to commit
mail fraud charge and mail fraud in violation of
18 U.S.C. §§ 371 and
conspiracy to commit money laundering in violation of
18 U.S.C. § 1956(h), and
money laundering in violation of 18 U.S.C. § 1956(a).
The e-rate program was created by the Federal
Communication Commission by its
May 8, 1997. It is a cross subsidy program. It provides subsidies to schools,
libraries, and rural health clinics for telecommunications services,
internet access, and computer networking.
It is loosely based upon the Telecommunications Act of 1996.
Section 254 of the
Act codified the long standing practice of providing "universal service" support
for telephone service in high cost and rural areas. However, the Act also
included a subsection that extended universal service support to any school,
library and rural health clinic.
The subsidies are funded by charges imposed on telephone carriers, which in
turn, pass these charges on to their customers.
There were numerous efforts to terminate, limit, or provide a sunset
provision for, the e-rate program in 1998 and 1999. No legislation passed.
However, the FCC capped the program at $2.25 Billion per year, and its first
President, Ira Fishman, was replaced. There has been little effort in Congress
to change the e-rate program since the 106th Congress.
The DOJ's description of the e-rate program is notable. It states that the
e-rate "subsidizes the provision of Internet access and telecommunications
services, as well as internal computer and communications networks". The FCC
does not acknowledge that the e-rate is a subsidy program, or that it is funded
by the collection of a tax on carriers. Although, individual persons, such as
former FCC Commissioner Harold Furchtgott-Roth, have identified the program in
terms of subsidies and taxes.
The DOJ stated that this investigation is being conducted by the Antitrust
Division, FBI, IRS Criminal Investigation Division, FCC's
Office of the Inspector General, and the
U.S. Attorney's Office for the Eastern
District of Wisconsin.
In addition, the House Commerce
Committee's Subcommittee on Oversight and Investigations has been conducting
an investigation of waste, fraud and abuse in the e-rate program. Moreover, the
new Chairman, Rep. Joe Barton (R-TX),
stated at a press conference on March 4, 2004 that the Oversight Subcommittee
will hold hearings. See, story titled "Rep. Barton Plans to Examine E-Rate
Subsidies" in TLJ Daily E-Mail Alert No. 850, March 5, 2004.
See also, stories titled "Reps. Tauzin & Greenwood Request GAO
Report on E-Rate Waste, Fraud & Abuse As Prelude to Oversight Hearing" in
TLJ Daily E-Mail
Alert No. 791, December 3, 2003; "House Commerce Committee Requests
Information from IBM in E-Rate Fraud Investigation" in
TLJ Daily E-Mail
Alert No. 698, July 15, 2003; "FCC Inspector General Reports on E-Rate
Fraud" in TLJ Daily
E-Mail Alert No. 449, June 12, 2002; "Reps. Tauzin & Greenwood Write Powell
Re Waste Fraud & Abuse In E-Rate Program" in
TLJ Daily E-Mail
Alert No. 624, March 17, 2003; and "FCC Announces Order and NPRM Regarding
E-Rate Subsidies" in
TLJ Daily E-Mail
Alert No. 648, April 24, 2003.
|Washington Tech Calendar
New items are highlighted in red.
|Tuesday, April 6
The House will be in recess from April 5 through April 16 for the Spring
recess. It will next meet on Monday, April 19.
The Senate will meet at 10:00 AM for morning
business, and at 11:00 AM to resume consideration of the motion to proceed to
the Pregnancy and Trauma Care Access Protection Act.
The Supreme Court is in
recess until April 19, 2004.
|Wednesday, April 7
10:00 AM. The Senate Judiciary
Committee Subcommittee on Administrative Oversight and the
Courts will hold a hearing on a proposal to split the Ninth Circuit. See,
Room 226, Dirksen Building.
10:00 AM. The
Committee's Subcommittee on Transportation, Treasury and General Government will
hold a hearing to examine tax law enforcement and information technology challenges
at the Internal Revenue Service (IRS).
Location: Room 138, Dirksen Building.
12:30 - 1:30 PM. The Center Strategic
and International Studies (CSIS) will host a program on cybersecurity.
The speakers will be
Steve Ballmer (CEO of Microsoft), John Hamre (P/CEO of
the CSIS), Robert Holleyman (P/CEO of the Business Software
Alliance). Press contact: Mark Schoeff at 202-775-3242 or
firstname.lastname@example.org or Gina Maffei at
Location: CSIS, 1800 K Street, NW, B-1 conference level.
12:30 PM. Virginia Attorney General
Jerry Kilgore will speak on "Technology
and the Law". Location: George
Mason University School of Law.
12:30 PM - 2:00 PM. The
DC Bar Association's Section on Criminal
Law and Individual Rights will host a brown bag lunch (with admission charge)
titled "Federal Practice Series: Handling Electronic Evidence: From Authentication
to Admissibility to Minimizing that Damaging E-mail". The speaker will be Adam Rosman (Zuckerman Spaeder). Prices vary. For more information, call 202 626-3463.
Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
Deadline to submit reply comments to the
Federal Communications Commission (FCC)
regarding its proposed rules regarding universal service subsidies for rural
health clinics. Comments are due by February 23, 2004. Reply comments are due
by April 7, 2004. See,
notice in the Federal Register, December 24, 2003, Vol. 68, No. 247, at
Pages 74538 - 74541.
|Thursday, April 8
10:00 AM. The Senate
Judiciary Committee will
hold a hearing on several pending judicial nominations, including William
Duane Benton (to be a Judge of the U.S.
Court of Appeals for the 8th
Circuit), Robert Bryan Harwell (District of South Carolina), George Schiavelli
(Central District of California), and Curtis Gomez (Virgin Islands). See,
Location: Room 226, Dirksen Building.
11:00 AM. The Senate Commerce
Committee will hold a business meeting. The agenda includes consideration of
several non technology related bills and several nominations, including that of
Theodore Kassinger to be Deputy Secretary of the
Department of Commerce. Press
contact: Rebecca Hanks at 202 224-2670. Location: Room 253, Russell Building.
1:30 - 3:00 PM. Federal Communications
Commission (FCC) World RadioCommunication 2007 (WRC-07) Advisory Committee's
Informal Working Group on Satellite Services and HAPS will meet. See, FCC
[PDF]. Location: Leventhal Senter & Lerman, 2000 K Street, NW, 7th Floor Conference
6:00 - 8:00 PM. The Federal Communications
Bar Association (FCBA) will
host a continuing legal education (CLE) seminar titled "FCC's Environmental
and Historic Preservation Action Plan - One Year Later". Prices vary. To
register, contact Wendy Parish at email@example.com.
Location: Wiley Rein & Fielding, 1750 K Street,
NW, 10th Floor.
|Monday, April 12
The Senate will not meet from April 12 through April 16.
10:00 AM - 12:00 NOON. The
American Enterprise Institute (AEI) will
host a panel discussion titled "The Development of European Regulatory
Agencies: What the European Union Should (or Shouldn’t) Learn from the
American Experience". The speakers will be Judge Stephen Williams (U.S.
Court of Appeals) and Greg Sidak (AEI). Location: AEI, 12th floor, 1150 17th
Day one of a three day conference hosted by the
National Institute of Standards and Technology
(NIST), National Institutes of Health (NIH), Internet2, USENIX, and OASIS
titled "Public Key Technology R&D Workshop". See,
and conference website.
The price to attend is $105. Location: NIST, Gaithersburg, MD.
Deadline to submit reply comments to the
Federal Communications Commission (FCC)
regarding its Third Report and Order and Second Further Notice of Proposed
Rulemaking pertaining to the administration of the FCC's e-rate subsidy
program for schools and libraries. See,
notice in the Federal Register, February 10, 2004, Vol. 69, No. 27, at
Pages 6229 - 6238. This item is FCC 03-323 in Docket No. 02-6. The FCC adopted
this item at its December 17, 2003 meeting. See, FCC
release [PDF] describing this item. The FCC released the text of this item
on December 23, 2003.
Deadline to submit comments to the
Federal Communications Commission (FCC) in
response to the Department of Justice's (DOJ) petition for a rulemaking proceeding
regarding surveillance of voice over internet protocol (VOIP), regulation of
VOIP related technologies, the Communications Assistance for Law Enforcement Act
(CALEA), and related issues. This is RM 10865. See, FCC notice (DA 04-700).
Deadline to submit comments to the
Federal Trade Commission (FTC) in response to its
notice in the Federal Register requesting comments regarding various
regulations and reports required by the CAN-SPAM Act. Several provisions in
the "Controlling the Assault of Non-Solicited Pormography and Marketing Act of
2003" (CAN-SPAM Act) instruct the FTC to write regulations implementing the
Act. Other provisions require the FTC to prepare reports for the Congress.
See, S 877,
which is now Public Law No. 108-187. See also, 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.
Deadline to submit comments to the
Copyright Office regarding its rule
making proceeding "to amend its regulations governing the content and service
of certain notices on the copyright owner of a musical work. The notice is
served or filed by a person who intends to use a musical work to make and
distribute phonorecords, including by means of digital phonorecord deliveries,
under a compulsory license." See,
notice in the Federal Register, March 11, 2004, Vol. 69, No. 48, at Pages
The Copyright Office's interim
regulations, announced on March 11, specifying notice and recordkeeping
requirements for use of sound recordings under two statutory licenses under
the Copyright Act, take effect. See,
notice in the Federal Register, March 11, 2004, Vol. 69, No. 48, at Page
|People and Appointments
4/5. Rep. Amo Houghton
(R-NY) will not seek re-election to the House, according
to reports published by the Associated Press.
The Leader, a newspaper published
in Corning, New York, states that Houghton will officially announce his decision
on Tuesday in Corning. Houghton is a senior member of the
House Ways and Means Committee, and
Chairman of its Subcommittee on Oversight. Three other Republican members of the Committee
will not seek re-election to the House in November.
Rep. Jennifer Dunn (R-WA), previously
announced that she will retire. Rep.
Mac Collins (R-GA) will run for the Senate.
Rep. Scott McGinnis (R-CO) will not
4/5. Matthew Well was named Director of the Office of Public Affairs at
the Securities and Exchange Commission (SEC). He
will be the SEC's principal spokesman.
He will report to the Managing Executive for External Affairs, Laura Cox, who is
responsible for management of public affairs, legislative and intergovernmental affairs,
and investor education at the SEC. Before joining the SEC, Well was Director of
Public Affairs at the American Tort Reform Association. See, SEC
|About Tech Law Journal
|Tech Law Journal publishes a free access web site and
subscription e-mail alert. The basic rate for a subscription
to the TLJ Daily E-Mail Alert is $250 per year. However, there
are discounts for subscribers with multiple recipients. Free one
month trial subscriptions are available. Also, free
subscriptions are available for journalists,
federal elected officials, and employees of the Congress, courts, and
executive branch. The TLJ web site is
free access. However, copies of the TLJ Daily E-Mail Alert are not
published in the web site until one month after writing. See, subscription
Contact: 202-364-8882; E-mail.
P.O. Box 4851, Washington DC, 20008.
Copyright 1998 - 2004 David Carney, dba Tech Law Journal. All