News from August 1-5, 2003

Business Software Alliance Estimates Software Piracy In Each State

8/5. Business Software Alliance (BSA) released a study [14 pages in PDF] titled "U.S. Software State Piracy Study". The study estimates that the software piracy rate for the nation dropped from 25.1% in 2001 to 22.8% in 2002. The study also estimates that there were over $6 Billion in retail sales losses in 2002 due to piracy.

The states with the highest piracy rates were Mississippi (41.7), Wyoming (40.3), Alabama (39.5), Montana (37.6), and West Virginia (36.8). The study concluded that "The regions with the lowest population density tend to have the highest piracy rates".

The states with the lowest piracy rates were Illinois (13.5), Michigan (13.9), Indiana (14.5), New York (15.4), and Wisconsin (15.6).

The piracy rate in California is 19.6%. In Washington state, it is 19.0%.

The study explains its methodology. It is based on "comparing two sets of data, the demand for new software applications, and the legal supply of new software applications." The study elaborates that "PC shipments by state were estimated from a detailed review of the employment and population of each state and market research that surveyed the PC penetration rate of each state. On this basis, estimates of PC shipments could be made for each state."

"To estimate software demand, IPR developed ratios for the amount of software installed on each PC. This was developed from market research on the U.S. market." And, the study states, "To estimate the supply of legal software by state, IPR relied on detailed industry sales data. BSA member companies volunteer their proprietary shipment data to the study under non-disclosure agreements for the purpose of constructing an accurate estimate of the software industry’s 2002 shipments."

This study was conducted for the BSA by the International Planning and Research Corporation (IPR). See also, BSA release.

People and Appointments

8/5. Kevin Ryan, the U.S. Attorney for the Northern District of California (NDCal), made several changes in the U.S. Attorneys Office (USAO) for the NDCal. See, USAO release.

Ross Nadel, who has a background in prosecuting computer and intellectual property crimes, was named Chief of the Criminal Division. He was previously Chief of the San Jose Branch Office, and acting Chief of the Computer Hacking and Intellectual Property Unit (CHIP).

Nadel replaces Charles "Ben" Burch, who will return to the Oakland office, where he will be the interim Chief, while the Chief, Jack Laettner, continues to work full time on a homicide prosecution.

Christopher Sonderby was named Chief of the CHIP Unit. He will be based in the San Jose office. He was previously head of the Computer Crimes section and the Computer and Telecommunications Coordinator in the USAO for the Eastern District of California. Before that, he worked for the law firm of Sonnenschein Nath & Rosenthal in San Francisco.

Laurel Beeler was named Deputy Chief of the Criminal Division.

Joann Swanson was named Chief of the Civil Division.

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8/5. The Federal Communications Commission (FCC) published a notice in the Federal Register that recites and describes the changes to its media ownership rules, announced on June 2, 2003. The rules changes take effect on September 4, 2003. See, Federal Register, August 5, 2003, Vol. 68, No. 150, at Pages 46285 - 46358.

8/5. Nancy Victory, Director of the Department of Commerce's National Telecommunications and Information Administration (NTIA) submitted a comment to the Federal Communications Commission (FCC) in its proceedings titled "International Settlements Policy Reform", IB Docket No. 02-324, and "International Settlement Rates", IB Docket No. 96-261. She wrote that "The Commission currently has before it a proceeding to re-examine the international settlements policy (ISP) and associated benchmarks, and to inquire as to whether foreign mobile termination rates may be adversely affecting U.S. consumers and the market for U.S.-international services. Given recent trends towards increasing international fixed line termination rates above market prices, and intensifying international discussions on whether a cost-oriented scheme should be developed for international mobile rates, the Commission’s proceeding comes at a critical juncture and its decisions will have a significant impact on the international telecommunications marketplace. I write to urge the Commission to retain the ISP and associated benchmarks in a modified form, and to adopt a position of cost-orientation for international mobile rates to ensure the continued support of U.S. consumer and business interests."

Sen. Hollings Will Not Run in 2004

8/4. Sen. Ernest Hollings (D-SC) announced that he will not run for re-election to the Senate in 2004. He is the ranking Democrat on the Senate Commerce Committee, and the ranking Democrat on the Senate Appropriations Committee's Subcommittee on Commerce, Justice, State and the Judiciary, which also funds the Federal Communications Commission (FCC). See, transcript of retirement announcement.

The Democrat with the next most seniority on the Commerce Committee is Sen. Daniel Inouye (D-HI). He is up for re-election in 2004. He is now 78 years old, and will be 80 at the time of the election. Next in seniority is Sen. Jay Rockefeller (D-WV).

Sen. Hollings' speech was not gracious. He said that "we've got the weakest president and weakest government in the history of my 50 years of public service. I say weak president in that the poor boy campaigns all the time and pays no attention to what's going on in the Congress. Karl Rove tells him to do this or do that or whatever it is".

Sen. Ernest HollingsSen. Hollings (at right) also criticized free trade in his speech. He stated that "at the end of World War II we had 40 percent of our workforce in manufacturing. And now we're down to 10 percent. We've got 10 percent of the country working and producing, and we've got the other 90 percent talking and eating. That's all they're doing." He added, "we're eliminating jobs -- hard manufacture, service, high-tech -- all except the press and the politicians. They don't import us. If they'd imported us, they'd get rid of us, too."

On July 31, Sen. Hollings voted against  HR 2738, the "United States-Chile Free Trade Agreement Implementation Act". See, Roll Call No. 319. He also voted against HR 2739, the "United States-Singapore Free Trade Agreement Implementation Act". See, Roll Call No. 318. Both bills passed overwhelmingly in both the House and Senate.

Sen. Hollings has a record of supporting the interests of competitive local exchange carriers (CLECs) in the Senate. Russell Frisby, President of CompTel, stated in a release that "Sen. Hollings leaves behind many legacies after serving seven terms in the Senate, including his long-time advocacy of the principles of an open, competitive telecommunications marketplace. Sen. Hollings' heroic efforts to open the local telephone market to competition resulted in the Telecommunications Act of 1996. As a result, his constituents in South Carolina and consumers across the nation, now have the opportunity to select innovative, low-cost services from a variety of carriers."

Walter McCormick, P/CEO of the U.S. Telecom Association (USTA), a group that represents the interests of the incumbent local exchange carriers (ILECs), stated in a release that "Senator Hollings has had a distinguished career, has been a leading voice on telecommunications issues and has played a significant role in shaping today's communications marketplace."

In 2002 Sen. Hollings was responsible for derailing the DOJ FTC merger review agreement. Charles James, the previous Assistant Attorney General in charge of the Department of Justice's (DOJ) Antitrust Division reached an agreement Federal Trade Commission (FTC) Chairman Timothy Muris to divide responsibility for merger reviews. The two issued a Memorandum of Agreement in January 2002 concerning clearance procedures for merger reviews and other antitrust matters. The agreement attempted to define, by industry, which transactions would be reviewed by which agency.

However, this agreement was dropped following opposition from, and threats of appropriations cuts by, Sen. Hollings. See, story titled "DOJ & FTC Abandon Merger Review Agreement Under Threat from Sen. Hollings" in TLJ Daily E-Mail Alert No. 436, May 22, 2002.

Sen. Hollings cosponsored, along with Sen. John McCain (R-AZ), the Children's Internet Protection Act (CIPA), which requires that schools and libraries receiving e-rate subsidies to use filtering software on computers to block access to material that is harmful to minors.

More recently, Sen. Hollings has been one of the leading advocates in the Senate for rolling back the FCC's revisions to its media ownership rules.

Atlanta Lawyers at DOJ

8/4. George Bush has nominated numerous Georgia attorneys to top positions at the Department of Justice (DOJ). There have been several recent developments regarding the Georgia contingent at the DOJ.

The Attorney General, John Ashcroft, is not from Georgia. However, the Deputy Attorney General, which is the second highest position at the DOJ, is Larry Thompson. He was previously as partner in the law firm of King & Spalding in Atlanta, Georgia.

On June 27, the Senate confirmed Robert McCallum to be the Associate Attorney General, the third highest position at the DOJ. He was previously Acting Associate Attorney General, and before that, Assistant Attorney General in charge of the DOJ's Civil Division. And before that, he was a partner in the law firm of Alston & Bird, which is based in Atlanta, Georgia.

On July 31, the Senate confirmed Joe Whitley to be General Counsel of the Department of Homeland Security (DHS). He too was a partner in the law firm of Alston & Bird. He was previously U.S. Attorney for both the Northern and Middle Districts of Georgia. He has also held positions at the DOJ.

Meanwhile, Ralph Boyd, the outgoing Assistant Attorney General (AAG) in Charge of the Department of Justice's (DOJ) Civil Rights Division (CRD), and Robert Driscoll, the outgoing Chief of Staff and Deputy AAG in the CRD, will join the law firm of Alston & Bird. On July 31, the Senate confirmed Rene Acosta to replace Boyd.

On July 30, Sen. Charles Grassley (R-IA), a senior member of the Senate Judiciary Committee, stated that he has placed a hold on the nomination of Christopher Wray to be an AAG in charge of the DOJ's Criminal Division. He is currently Acting AAG. Wray previously worked for the law firm of King & Spaulding, which is based in Atlanta.

Sen. Grassley stated that "I have several outstanding written requests before the Department of Justice. Some of these requests are more than 6 months overdue. In addition, I am presently working with the Department of Justice to overcome a number of procedural issues directly affecting my ability, as a member of the Judiciary Committee to, among other things, conduct oversight of the Department of Justice, and the Federal Bureau of Investigations." See, Congressional Record, July 30, 2003, at S10258.

The DOJ's Computer Crimes and Intellectual Property Section (CCIPS) is a part of the Criminal Division. And, it should be noted, the head of the CCIPS, John Malcolm, is a Georgian.

And finally, on August 1, David Nahmias was named one of the Deputy Assistant Attorneys General in the Criminal Division. He replaces Alice Fisher, who left the DOJ on July 31. He will oversee the Counterterrorism, Fraud and Criminal Appellate sections of the Criminal Division, and the Capital Case Unit. See, DOJ release. Nahmias is a Georgian.

Nahmias has been Counsel to the Assistant Attorney General for the Criminal Division since October of 2001. He has coordinated investigations and prosecutions of Al Qaeda and other terrorist activity, assisted in policy making, and acted as Criminal Division liaison to other federal agencies on terrorism related issues. Before that he was an Assistant U.S. Attorney in Atlanta, Georgia.

People and Appointments

8/4. Anastasia Kelly was named EVP, General Counsel and Corporate Secretary of MCI WorldCom, effective immediately. She will report to Ch/CEO Michael Capellas. She will oversee legal, regulatory and public policy initiatives. She was previously General Counsel of Sears Roebuck. Before that, she worked for Fannie Mae. And before that, she worked for the law firm of Wilmer Cutler & Pickering. See, MCI WorldCom release.

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8/4. The Federal Communications Commission (FCC) announced that there is now public WiFi access "on the Twelfth Street, Courtyard, and Eighth Floor levels" of the FCC headquarters at 445 12th Street, SW, in Washington DC. The FCC supports 802.11a and 802.11b protocols. Visitors must use their own hardware. The FCC will provide no technical support. See, FCC release [PDF].

8/4. The U.S. Court of Appeals (5thCir) revised its July 16 opinion [28 pages in PDF] in Bell Atlantic v. AT&T. This opinion pertains to an interlocutory appeal by two plaintiffs, Rochelle Communications and Adroit Medical Systems, of the District Court's denial of class certification. The underlying case alleges that AT&T violated federal antitrust laws by refusing to permit the passage of caller identification data across its long distance telephone network. The Court of Appeals affirmed the District Court's denial of class certification, pursuant to Rule 23(b), because Rochelle and Adroit fail to satisfy the predominance requirement. The Court has not yet decided whether AT&T's conduct amounted to an attempt to monopolize the market for caller ID service. This is Bell Atlantic Corporation, et al. v. AT&T, et al., No. 02-40656, an appeal from the U.S. District Court for the Eastern District of Texas.

District Court Holds IBM Pension Plan Violates Age Discrimination Prohibitions of ERISA

8/1. The U.S. District Court (SDIll) issued a Memorandum and Order [24 pages in PDF] in Cooper v. IBM, in which the Court held that IBM's pension plan violates the age discrimination provisions of the ERISA.

Cathi Cooper, and others who have participated in IBM Personal Pension Plan, are the plaintiffs in this action. IBM's Pension Credit Formula (PCF), under which participants accrue a normal retirement benefit payable in the form of a life annuity commencing at age 65, is based on the number of "base points", which is determined by the employee's age in the year worked. Plaintiffs assert that this discriminates on the basis of age. That is, they assert that IBM's PCF causes an older employee to receive a lower rate of benefit accrual than an younger employee.

Cooper and others filed a complaint in U.S. District Court against The IBM Personal Pension Plan and IBM Corporation alleging that its pension plan violates the age discrimination provisions of the Employee Retirement Income Security Act (ERISA), which is codified at 29 U.S.C. §§ 1001-1461.

The District Court granted summary judgment to plaintiffs. IBM issued a release in which it stated that "IBM disagrees with the district court's ruling and believes that it will prevail on appeal. IBM's pension plan does not discriminate on the basis of age."

This case is Cathi Cooper, Beth Harrington, and Matthew Hillesheim v. The IBM Personal Pension Plan and IBM Corporation, S.D. Illinois, Civil No. 99-829-GPM.

Senate Democrats Continue Filibusters of Pryor, Estrada and Owen Nominations

8/1. Senate Democrats continue their long running filibuster of some of President Bush's judicial nominees. On July 31, the Senate rejected a motion to invoke cloture on the nomination of William Pryor to be a Judge of the U.S. Court of Appeals for the 11th Circuit by a vote of 53-44. See, Roll Call No. 316. Senate Democrats are filibustering a vote on confirmation. Invoking cloture is the only method for terminating a filibuster. Pursuant to Senate Rule 22, a cloture motion requires a three fifths majority for passage.

On July 30, the Senate rejected a motion to invoke cloture on the nomination of Miguel Estrada to be a Judge of the U.S. Court of Appeals for the District of Columbia by a vote of 55-43. See, Roll Call No. 312.

On July 29, the Senate rejected a motion to invoke cloture on the nomination of Priscilla Owen to be a Judge of the U.S. Court of Appeals for the 5th Circuit by a vote of 53-43. See, Roll Call No. 308.

The circuits which currently handle the most technology related cases are the 9th Circuit, which includes California, the 4th Circuit, which includes Virginia, and the District of Columbia Circuit, which hears many petitions for review of final orders of federal agencies, such as the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC). The DC Circuit also hears many non agency technology cases, such as the Eldred case regarding copyright terms, and the Microsoft antitrust case. It is also likely to soon hear RIAA v. Verizon, regarding use of DMCA subpoenas in the context of peer to peer music copying on the internet.

Also, more Supreme Court nominees are selected from the DC Circuit than any other Circuit. Clarence Thomas, Antonin Scalia, Ruth Ginsburg, Douglas Ginsburg, Robert Bork and Warren Burger were, or had been, Judges on the DC Circuit when they were nominated for the Supreme Court.

Hence, with respect to technology related cases, the nomination of Miguel Estrada is particularly important, while the nominations of William Pryor and Priscilla Owen are less significant.

Estrada is a partner in the Washington DC office of the law firm of Gibson Dunn & Crutcher. See, GDC biography. He previously worked in the Department of Justice's (DOJ) Office of the Solicitor General. See also, DOJ biography.

On August 1, President Bush released a statement on Senate filibusters of his judicial nominees. "This week, a minority of Senators continued to filibuster highly qualified judicial nominees who enjoy the support of a majority of Senators. These obstructionist tactics are unprecedented, unfair, and unfaithful to the Senate's constitutional responsibility to vote on judicial nominees."

He continued that "These highly qualified nominees have stellar records that represent the mainstream of American law and values, and strong bipartisan support from those who know them best. Instead of allowing an up-or-down vote, a minority of Senators have been filibustering Miguel Estrada for nearly five months and Priscilla Owen for three months, and are now obstructing the nomination of Bill Pryor. The failure to hold votes on these nominations not only is inconsistent with the Senate's constitutional responsibility, but also has caused extended judicial vacancies that are harmful to the American judicial system."

"Every judicial nominee should receive an up-or-down vote in the full Senate, no matter who is President or which party controls the Senate. It is time to move past the partisan politics of the past, and do what is right for the American legal system and the American people. Let each Senator vote how he or she thinks best, but give the nominees a vote", said Bush.

See also, statement of Sen. Patrick Leahy (D-VT), the ranking Democrat on the Senate Judiciary Committee, regarding the vote on the Pryor nomination, and statement regarding the Owen vote.

Several Senate Democrats have voted to end some or all of the filibusters, including Sen. Zell Miller (D-GA), Sen. John Breaux (D-LA), Sen. Ben Nelson (D-NE), and Sen. Bill Nelson (D-FL).

People and Appointments

8/1. The Senate confirmed Joel David Kaplan to be Deputy Director of the Office of Management and Budget (OMB). See, OMB release [PDF].

8/1. The Senate confirmed Josette Shiner to be a Deputy U.S. Trade Representative.

8/1. The Senate confirmed James Jochum to be an Assistant Secretary of Commerce.

8/1. The Senate confirmed Rene Acosta to be an Assistant Attorney General in charge of the Civil Rights Division.

8/1. The Senate has not confirmed Daniel Bryant to be an Assistant Attorney General in charge of the Office of Legal Policy (OLP), because Sen. Charles Grassley (R-IA) placed a hold on his nomination on August 1. The Senate Judiciary Committee approved his nomination on July 31. If confirmed, Bryant would replace Viet Dinh, who has returned to his teaching position at Georgetown University Law Center. The OLP is tasked with making recommendations to the Congress regarding anti-terrorism legislation, such as amendments to the PATRIOT Act. Sen. Grassley stated that "I have placed a hold on this individual because I have numerous outstanding issues that have yet to be resolved by the Department of Justice. More specifically, I have several outstanding written requests before the Department of Justice. Some of these requests are more that 6 months overdue. In addition, I am presently working with the Department of Justice to overcome a number of procedural issues directly affecting my ability, as a member of the Judiciary Committee to, among other things, conduct oversight of the Department of Justice, and the Federal Bureau of Investigations." See, Congressional Record, August 1, 2003, at S10898.

8/1. David Shillman was named an Associate Director of the Division of Market Regulation of the Securities and Exchange Commission (SEC). He will direct, with Elizabeth King, the Division's Office of Market Supervision. He replaces Alden Adkins, who left the SEC at the end of March. See, SEC release.

8/1. President Bush nominated Sandra Townes to be a Judge of the U.S. District Court for the Eastern District of New York. See, White House release. The President had previously announced his intent to nominate Townes. She is currently a Justice of the Appellate Division, Second Department (Brooklyn), in New York State. Before that, she was a Judge of the 5th Judicial District (Syracuse), in New York State. Before that, she was a Judge of the Syracuse City Court. And before that, she was an Assistant U.S. Attorney in Syracuse. Her nomination is supported by Sen. Charles Schumer (D-NY), who is a member of the Senate Judiciary Committee. See, Schumer release. Her nomination is also supported by New York Governor George Pataki. See, Pataki release.

8/1. Adam Falkoff was named Senior Director of Legislative Affairs at the Consumer Electronics Association (CEA). He will represent the CEA before the executive branch, Congress, and Federal Communications Commission (FCC) on spectrum allocation, digital rights management, HDTV compliance, and fair use. Rebecca Ellis was named Director of Environmental & Legal Affairs at the CEA. She will represent CEA at the state, national and international levels on environmental issues, including electronics recycling and energy use. Douglas Johnson was promoted to Senior Director, Technology Policy at the CEA. See, CEA release.

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8/1. The National Oceanic and Atmospheric Administration (NOAA) published a notice in the Federal Register that describes and recites its final rule regarding use of its space based data collection systems (DCS), including use in support of homeland security, national security, and law enforcement. The NOAA operates geostationary satellites and polar orbiting satellites with global coverage, for weather forecasting, climate research and search and rescue. See, Federal Register, August 1, 2003, Vol. 68, No. 148, at Pages 45160 - 45164.

8/1. Sen. Charles Grassley (R-IA), Sen. Orrin Hatch (R-UT), Sen. John Breaux (D-LA), Sen. Bob Graham (D-FL), and Sen. Trent Lott (R-MS) sent a letter [2 pages in PDF] to U.S. Trade Representative (USTR) Robert Zoellick urging him to initiate negotiations with Colombia on a U.S. Colombia free trade agreement.

8/1. Linton Wells, Principal Deputy Assistant Secretary of Defense for Networks and Information Integration, gave a briefing in Washington DC regarding the work of the U.S. Agency for International Development (USAID) and Bechtel on upgrading Iraq's telecommunications and information infrastructure. See, transcript.

8/1. The Office of Management and Budget (OMB) released a memorandum [13 pages in PDF] regarding "Implementation Guidance for the E-Government Act of 2002". This memorandum, M-03-18, states that it "(1) outlines new E-Government Act requirements for Federal agencies; (2) explains what agencies are expected to provide under the E-Gov Act to support ongoing initiatives and new activities, including reports; and (3) explains how the Act authorizes certain ongoing governmentwide initiatives. This guidance also explains, throughout the document, how the E-Government Act fits within existing IT policy, such as OMB Circulars A-11 and A-130."

8/1. The U.S. Court of Appeals (7thCir) issued its opinion [15 pages in PDF] in Berger v. Xerox, modifying and affirming the holding of the U.S. District Court (SDIll) that Xerox's pension plan violates the ERISA. This case is David Berger and Gerry Tsupros v. Xerox Corporation Retirement Income Guarantee Plan, No. 02-3674, an appeal from the U.S. District Court for the Southern District of Illinois, D.C. No. 00-584-DRH, Judge David Herndon presiding.

Go to News from July 26-31, 2003.