|DOJ Approves AT&T BellSouth
10/11. The Department of Justice's (DOJ)
Antitrust Division announced its approval
of AT&T's pending acquisition of BellSouth.
Thomas Barnett, the Assistant Attorney General in charge of the Antitrust Division
stated in a release
that "After thoroughly investigating AT&T’s proposed acquisition of BellSouth,
the Antitrust Division determined that the proposed transaction is not likely to reduce
competition substantially. The Division investigated all areas in which the two companies
currently compete – including residential local and long distance service,
telecommunications services provided to business customers, and Internet services -- and
the merger’s impact on future competition for wireless broadband services."
Barnett (at right) continued that "The
presence of other competitors, changing regulatory requirements and the emergence of new
technologies in markets for residential local and long distance service indicate
that this transaction is not likely to harm consumer welfare. The proposed
acquisition does not raise competition concerns with respect to Internet
services markets or `net neutrality´. The merged firm would continue to face
competition from other facilities-based rivals in the provision of telecommunications
services to business customers including local private line services."
He added that "The combination would not significantly increase concentration in
the ownership of spectrum in any geographic area or give AT&T control over a large
enough share of all spectrum suitable for wireless broadband services to raise
competitive concerns. Finally, the merger would likely result in cost savings
and other efficiencies that should benefit consumers."
The DOJ release adds that it "investigated whether the merger would create
competitive problems in Internet services, including ``net neutrality´´ concerns
regarding the merged firm’s ability or incentive to favor its own Internet
content over that of its rivals. The Division found that the merger would
neither significantly increase concentration in markets for the provision of
broadband services to end users nor increase Internet backbone shares
significantly. Although the merger would increase the number of subscribers on
AT&T’s broadband network, the large majority of the nation’s residential and
small business ``eyeballs´´ remain with other large broadband Internet service
providers (such as Verizon, Qwest, Comcast, and Time Warner)." (Parentheses and
quotation marks in original.)
It added that "The merger is not likely substantially to lessen competition
in the provision of wireless broadband services. The combination would not
significantly increase concentration in the ownership of spectrum in any
geographic area or give AT&T control over a large enough share of spectrum
suitable for wireless broadband services to raise competitive concerns."
The Federal Communications Commission (FCC) is
conducting a redundant antitrust merger review. It has announced that it will consider
an order regarding the AT&T BellSouth merger at its meeting of October 12, 2006. See,
BellSouth stated in a
that "We are pleased that the Department of Justice has approved the merger between
BellSouth and AT&T. We look forward to getting approval from the Federal
Communications Commission in the very near future. This merger will create a communications
industry leader capable of providing customers across the BellSouth region with the latest
in wireline, wireless, broadband and video technologies and innovation."
Ben Scott, of the Free Press, a
Washington DC based interest group that advocates network neutrality mandates,
stated in a release
that "The merger of AT&T and Bell South
would take a big step toward the resurrection of Ma Bell, and its magnitude
demands thorough scrutiny and careful review. Instead, the officials charged
with protecting the public interest are rubber-stamping the deal in the most
irresponsible manner imaginable. The consent decree and subsequent judicial
review have been tossed out the window. It appears the fix is in."
He continued that "The public interest is not served by handing out favors to
large corporations without any safeguards. We are witnessing a wave of
concentration in the telecommunications market that threatens to sweep away the
free and open Internet. Yet the watchdogs in Washington can't be bothered to
require even the most basic consumer protections."
He concluded that "The new AT&T wants all the market power of its old monopoly
without any consumer protections. The FCC must not sign off on this deal without
applying serious conditions that prevent discrimination and foster broadband
competition. First and foremost, this merger should not be allowed to proceed
without permanent, binding protections for Net Neutrality."
|DOJ Fines Oracle $98.5
10/10. The Department of Justice (DOJ)
announced in a
that Oracle will give $98.5 Million to the
U.S. to settle the DOJ's claim that Oracle violated the False Claims Act by engaging in
"defective pricing disclosures".
The DOJ further stated that its claims date back to March 17, 1997, and
involved PeopleSoft. Oracle acquired PeopleSoft in 2005. Hence, the DOJ release
states that Oracle "inherited PeopleSoft's liability".
The DOJ further disclosed that $17.7 Million will be paid to the PeopleSoft
employee who initially made the allegations.
The DOJ's release does not assert that Oracle, or PeopleSoft, made a claim
for goods or services that it did not provide, or
that it failed to provide software or services as contracted. Rather, the DOJ's assertion
is that PeopleSoft "made pricing disclosures to GSA that were not current, accurate
and complete concerning the sale of software licenses and related maintenance services"
prior to entering into contracts with the government.
Rod Rosenstein, the U.S. Attorney of the District of Maryland, spoke at a news
conference on October 10, 2006. He stated in the prepared text of his speech that "The
contract resulted in approximately $127 million of software sales and $77 million in
maintenance sales before it ended in September 2005."
The DOJ and Oracle executed a 17 page document titled "Release and Settlement
Agreement" on October 10, 2006. It recites that "Oracle denies all the
allegations ... and denies that it has any liability for PeopleSoft's actions",
and that it enters into the agreement "without admission of fault or
Neither the DOJ's release, Rosenstein's speech, nor the settlement agreement disclosed
whether or not the DOJ's present action, or the size of
the fine, is related to, or in retaliation for, Oracle's successful opposition to the
DOJ's failed attempt to block Oracle's acquisition of PeopleSoft in 2004. That legal
action in the U.S. District Court (NDCal)
resulted in a complete and humiliating defeat for the DOJ.
TLJ spoke with a representative of the U.S. Attorneys Office for the District of
Maryland on October 11, 2006, who stated that there is no connection between the present
action and the 2004 antitrust action.
On February 26, 2004, the DOJ and several states filed a
complaint in U.S. District
Court (NDCal) against Oracle alleging that its proposed acquisition of PeopleSoft would
lessen competition substantially in interstate trade and commerce in violation of
Section 7 of the Clayton Act, which is codified at
15 U.S.C. § 18. The
DOJ sought an injunction of the proposed acquisition. See, story titled
"Antitrust Division Sues Oracle to Enjoin Its Proposed Acquisition of
PeopleSoft" in TLJ
Daily E-Mail Alert No. 846, March 1, 2004.
However, while almost companies faced with the threat of legal action by the
DOJ to block a merger or acquisition capitulate or negotiate a settlement,
Oracle fought back. It won a prompt and decisive legal victory.
The District Court held that the government failed to meet its burden of showing by a
preponderance of the evidence that the proposed merger is likely substantially
to lessen competition in a relevant product and geographic market. Hence, the
Court directed the entry of judgment against the government, and in favor of
Oracle. See, story titled "DOJ Loses Oracle Case" in
TLJ Daily E-Mail
Alert No. 974, September 10, 2004.
After its 2004 defeat, the then head of the DOJ's Antitrust Division, Hewitt Pate,
stated in a
that "The Department is considering its options."
The False Claims Act is codified at 31 U.S.C. §§ 3729-33.
31 U.S.C. § 3729 provides, in part, that "Any person who--
(1) knowingly presents, or causes to be presented, to an officer or
employee of the United States ... a false or fraudulent claim for payment or
(2) knowingly makes, uses, or causes to be made or used, a false record
or statement to get a false or fraudulent claim paid or approved by the
(3) conspires to defraud the Government by getting a false or fraudulent
claim allowed or paid;
(4) has possession, custody, or control of property or money used, or to
be used, by the Government and, intending to defraud the Government or willfully
to conceal the property, delivers, or causes to be delivered, less property than
the amount for which the person receives a certificate or receipt;
Oracle was represented by
Johnson of the Washington DC office of the law firm of Latham & Watkins.
The U.S. Constitution provides, in the 8th Amendment, that "Excessive bail
shall not be required, nor excessive fines imposed, ..."
|SEC Official Addresses Online
Identity Theft and Securities Fraud
10/5. John Walsh, Associate Director and Chief Counsel of the
Securities and Exchange Commission's (SEC) Office of
Compliance Inspections and Examinations, gave a
"Compliance Professionals versus Identity Thieves" at the NRS 21st Annual Fall
Compliance Conference in Scottsdale, Arizona.
He spoke about identity theft in the context of accessing online accounts to
commit securities fraud. He identified four
main categories of fraud. There is "family fraud", where "a relative,
usually a spouse, child, or in-law, uses personal knowledge of the customer to gain
access to the customer's account. Most commonly, the identity thief then loots the
There is the "classic account takeover", where "a stranger ... gains
access to the account and then loots it. In many cases the looting is implemented by
selling all the positions in the account and wiring the proceeds to a foreign
jurisdiction, usually a very distant foreign jurisdiction."
There is "alias fraud", where "identity thieves play with their own
money but they use the victim's identity as cover. Generally, they steal the victim's
identity and use that identity to open an account. The thief then funds the account and
uses it for trading or money laundering schemes." He said that this scheme makes it
appear that "the victim is responsible for whatever bad conduct is going on.".
Walsh also pointed out that this and other types of fraud cause more than
direct financial loss to the victims. He said that victims "may find themselves
unable to engage in basic financial activities, such as opening a brokerage
account, obtaining credit, or cashing checks. In some cases victims may find
civil or criminal records attributed to their identity, and may suffer
significant consequences, such as being prevented from obtaining employment."
Finally, he discussed a fourth type of fraud, "trading account takeover",
where "a stranger takes control of an account, but removes no money. Instead, he
or she uses the account to trade".
He elaborated that "In some cases the account may be used to buy securities the
identity thief wants to unload. In other cases, it may be used to run a pump-and-dump
manipulation; heavily trading a security to run up its price; and then, when the price
gets high enough, taking profits out of a separate unaffiliated account."
Walsh noted that this type of fraud "avoids all the back-end controls you have
in place to prevent funds from being improperly removed from your firm". Hence,
he suggested that companies work with their IT personnel on front end security.
He also discussed a trading account takeover involving a computer hacker named Van
Dinh. He said that Dinh "tricked a visitor to an investment analysis web site, who
thought he was downloading a new stock-charting tool, into downloading malicious code --
a secret keystroke logging program ..."
This program allowed Dinh "to monitor activity on the victim's home computer,
including identifying the victim's on-line brokerage account, and log-in and
password information", which Dinh then used to take over the victim's account.
Dinh then placed "orders to buy certain options that he held that were about to
expire worthless. He managed to unload the options, and in doing so he depleted
virtually all the available cash in the victim's account."
The SEC filed its
in the U.S. District Court (EDMass) against Van T. Dinh on October 9, 2003.
Dinh used the victim's account to purchase from Dinh worthless put option contracts
for Cisco stock. Dinh was also criminally prosecuted, and sentenced to 13 months
in prison. He also paid full restitution.
These cases are SEC v. Van T. Dinh, D.C. No. 03-CV-11964-RWZ, and
United States v. Van T. Dinh, Criminal No. 03-40035-NMG. See also, SEC
October 9, 2003, and SEC
May 6, 2004.
Walsh said that "This is an increasingly popular variation. In fact, if you are
looking for a single ``hot topic´´ in the world of identity theft, this is it."
|Washington Tech Calendar
New items are highlighted in red.
|Wednesday, October 11
The House will not meet. It may return from it elections recess on
Monday, November 13, 2006. The adjournment resolution,
provides for returning on Thursday, November 9, at 2:00 PM.
The Senate will not meet. See,
6:00 - 8:00 PM. The
Federal Communications Bar Association (FCBA) will host a continuing legal education
(CLE) seminar titled "FCC's Media Ownership Rules". Registrations and
cancellations are due by 5:00 PM on October 9. The price to attend ranges from $50 to
registration form [PDF]. Location: Dow Lohnes,
Suite 800, 1200 New Hampshire Ave., NW.
|Thursday, October 12
9:00 AM. The Department of Commerce's (DOC)
Bureau of Industry and Security's (BIS)
Deemed Export Advisory Committee (DEAC) will meet. See,
notice in the Federal Register, September 22, 2006, Vol. 71, No. 184, at
Pages 55429. Location: main lobby of the DOC's Hoover Building,
14th Street between Constitution and Pennsylvania Avenues, NW.
9:30 AM. The Federal Communications
Commission (FCC) will hold a meeting. The event will be webcast by the FCC.
Location: FCC, 445 12th Street, SW, Room TW-C05 (Commission Meeting Room).
9:30 AM. The U.S. Court
of Appeals (DCCir) will hear oral argument in BellSouth Telecommunications v.
FCC, App. Ct. No. 05-1032. The case pertains to whether BellSouth discriminated
in favor of its long distance subsidiary in violation of
47 U.S.C. § 272. However, the precise nature of either the facts or issues in this
proceeding is not public information. See for example, heavily redacted
[81 pages in PDF] of the Federal Communications
Commission (FCC). Judges Tatel, Kavanaugh and Williams will preside. Location:
Courtroom 20, 333 Constitution Ave., NW.
12:30 - 1:45 PM. The
Federal Communications Bar Association's (FCBA) Transactional Practice Committee
will host a brown bag lunch. The FCBA states that the topic will be the "forms of
financing available to communications companies -- angel, VC, mezzanine, private equity,
traditional loans, public offerings". The speakers will include Tara Giunta (Paul
Hastings Janofsky & Walker) and Rebecca Arbogast (Stifel Nicolaus). RSVP to Christine
Crowe at ccrowe at wbklaw dot com or 202-383-3334. Location: Paul Hastings, 875 15th
2:00 - 3:00 PM. The
President's National Security
Telecommunications Advisory Committee (NSTAC) will hold a partially closed meeting by
teleconference. The open portion of the meeting will pertain to the Emergency Communications
and Interoperability Task Force (ECITF). The closed portion of the meeting will include a
discussion of, and vote on, the Global Infrastructure Resiliency (GIR) Report. See,
notice in the Federal Register, October 2, 2006, Vol. 71, No. 190, at Page
2:00 - 5:30 PM. The
U.S. Chamber of Commerce will host an event
titled "The Global Fight Against Counterfeiting and Piracy: A Forum on
International Enforcement". The speakers will include Chris Israel
(International IPR Enforcement Coordinator at the U.S. Department of Commerce), Jorge
Amigo (Director, Intellectual Property Office, Mexico), Benoit Battistelli (Director,
Intellectual Property Office, France), Doug George (Director, Intellectual Property
Information and Trade Policy Division, Foreign Affairs and International Canada), Ken
Hansen (Director, Federal Enforcement Branch, Royal Canadian Mounted Police), and Brian
Isaac (Canadian Anti-Counterfeiting Network). The notice of the event states that
"Credentialed Members of the Media are Invited to Attend. For more
information, or to register, reporters may ... call 202-463-5682." Location:
U.S. Chamber of Commerce, 1615 H St., NW.
6:30 - 8:30 PM. The
Federal Communications Bar Association's (FCBA) Legislative Practice Committee and
Young Lawyers Committee will host an event title "Happy Hour". For more
information, contact Paula Timmons at paula at paulatimmonsconsulting dot com or
202-255-1627 or Chris Fedeli at cfedeli at crblaw dot com or 202-828-9874. Location:
Lounge 201, 201 Massachusetts Ave., NE.
Day one of a two day conference titled "Standards
Bodies and Patent Pools: Key Legal and Business Developments". FTC
Commissioner Pamela Harbour will give a speech titled "Standards Bodies and
Patent Pools: Key Legal and Business Developments" on October 12. See,
agenda. Location: Wyndham Washington DC Hotel, 1400 M St., NW.
|Friday, October 13
9:00 - 11:00 AM. The
Progress & Freedom Foundation's (PFF)
Digital Age Communications Act Project (DACA)
will release a report containing recommendations of its Institutional Reform Working
Group. The speakers will include Randolph May
(Free State Foundation) and
John Duffy (George
Washington University School of Law). See,
page. See also,
titled "PFF Announces Digital Age Communications Act Project" in
TLJ Daily E-Mail Alert No.
1,068, February 2, 2005. Breakfast will be served. Location: First Amendment Lounge,
National Press Club, 529 14th St. NW, 13th
12:15 - 1:45 PM. The
Federal Communications Bar Association's (FCBA) HLS/Emergency Communications Committee
will host a brown bag lunch to plan future events. For more information contact Jennifer
Manner at 703-390-2730 or jmanner at msvlp dot com. Location: Pillsbury Winthrop Shaw
Pittman, 2400 N St., NW.
Day two of a two day conference titled "Standards
Bodies and Patent Pools: Key Legal and Business Developments". See,
agenda. Location: Wyndham Washington DC Hotel, 1400 M St., NW.
|Monday, October 16
6:00 - 8:15 PM. The
Federal Communications Bar Association (FCBA) will host a continuing legal education
(CLE) seminar titled "Client Creation, Conflicts and Confidentiality in the
Administrative Process". The price to attend ranges from $50 to $125. See,
[PDF]. The deadline to register is 5:00 PM on October 12. Location: Wiley Rein & Fielding, 1776 K St., NW.
6:00 - 9:15 PM. The DC Bar Association
will host a continuing legal education (CLE) seminar titled "How to Protect and
Enforce Trademark Rights: A Primer". The speakers will include Shauna Wertheim
(Roberts Mardula & Wertheim) and Steven Hollman (Hogan & Hartson). The price to
attend ranges from $90-$135. For more information, call 202-626-3488. See,
Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
Deadline to submit comments to the European Commission (EC) in response
to its public consultation regarding possible regulation of "the use of mobile
phones by children and young people". The EC seeks comments "linked to content
and behaviour, such as access to harmful or illegal content, bullying (e.g. distribution
of abusive or compromising messages and photos amongst children), grooming (e.g. strangers
“making friends” with children with a view to meeting them), risks to the privacy of
children, and the risk of unexpectedly high expense." See, EC
|Tuesday, October 17
6:00 - 8:15 PM. There will be a brown bag lunch
titled "Deploying IP-based Services in Rural Areas". The
Federal Communications Bar Association states that
this event is hosted by Common Carrier Committee and IP-Based Communications Practice
Committee will host a brown bag lunch. For more information, contact Andy Morentz at
amorentz at gci dot com. Location: Federal Communications Commission (FCC), 6th Floor
South Conference Room, 445 12th St., SW.
|Wednesday, October 18
6:00 - 8:15 PM. The DC Bar Association
will host a continuing legal education (CLE) seminar titled "Introduction to Export
Controls". The speakers will include Thomas Scott (Weadon & Associates) and
Carol Kalinoski (Kalinoski & Associates). The price to attend ranges from $90-$135.
For more information, call 202-626-3488. See,
Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.
Day one of a two day meeting of the Department of Labor's
(DOL) Bureau of Labor Statistics' (BLS)
Business Research Advisory Council (BRAC). See,
notice in the Federal Register, October 2, 2006, Vol. 71, No. 190, at
Pages 58013-58014. Location: Conference Center, Postal Square Building, 2
Massachusetts Ave., NE.
Day one of a two day conference hosted by the
National Institute of Standards and Technology (NIST)
titled "Moving Towards Interoperability -- Technologies for Affordable, Accessible
notice. The price to attend is $195. Location: NIST, Red Auditorium, 100 Bureau Drive,
|People and Appointments
10/11. Courtney Reinhard was named staff counsel for the
House Commerce Committee (HCC). She will
work on internet, broadcast decency, and other telecommunications issues. She previously
worked for Sen. Jim DeMint (R-SC), a member of the
Senate Commerce Committee (SCC). She has also
worked for Sen. Sam Brownback (R-KS) and
Rep. John Shimkus (R-IL). She worked on Rep.
Shimkus' DOT KIDS Act, the Broadcast Decency Enforcement Act, and the just enacted WARN
Act. Several staff members have left the HCC in recent months, including Kelly Kohl,
who went to the National Association of Broadcasters (NAB),
Jaylyn Jensen, who went to Lenovo, and
Nordwind, who went to the law firm named
10/10. Pete Leon joined Comptel as
VP of Legislative Affairs. He previously worked as legislative director for
Rep. Eliot Engel (D-NY). See, Comptel
10/11. The Federal Trade Commission (FTC)
announced in a release
that it now hosts a web site titled "Tech-ade
Blog", which pertains to the FTC's hearing titled "Protecting Consumers in
the Next Tech-ade", to be held on November 6 through 8, 2006, in Washington DC.
See also, event web site and
10/10. The Federal Trade Commission (FTC) released a
[61 pages in PDF] titled "Municipal Provision of Wireless Broadband". The
report describes wireless internet technologies that are currently in use or being developed,
summarizes the legal status of wireless internet, and describes operating models
being used to provide wireless internet service. It also summarizes arguments in
favor of municipal wireless internet provision, including its commercial and
noncommercial uses, and arguments for limiting or prohibiting municipal wireless
internet provision. It also covers competition policy issues. See also,
|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
P.O. Box 4851, Washington DC, 20008.
Copyright 1998 - 2006 David Carney, dba Tech Law Journal. All