News from August 26-31, 2004

Federal Circuit Rejects Anti-Circumvention Claim in Garage Door Opener Case

8/31. The U.S. Court of Appeals (FedCir) issued its opinion [46 pages in MS Word] in Chamberlain v. Skylink, a case involving the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA), and interoperability of after market products. In this case, the product is portable radio frequency transmitting devices that activate garage door openers (GDO). Chamberlain asserted that Skylink, by selling GDOs that interoperate with its equipment, is trafficking in devices that circumvent a technological measure that effectively controls access to a copyrighted work. The District Court rejected Chamberlain's claim. The Court of Appeals affirmed.

Following a lengthy and intricate examination of the Section 1201 of the DMCA, the Court of Appeals concluded that Chamberlain's DMCA claims fails because Chamberlain failed to prove that it had not authorized its customers to use devices such as Skylinks, and because Chamberlain failed to prove a nexus between the "access" and some protection of copyright.

The Appeals Court concluded that "A copyright owner seeking to impose liability on an accused circumventor must demonstrate a reasonable relationship between the circumvention at issue and a use relating to a property right for which the Copyright Act permits the copyright owner to withhold authorization -- as well as notice that authorization was withheld.  A copyright owner seeking to impose liability on an accused trafficker must demonstrate that the trafficker's device enables either copyright infringement or a prohibited circumvention." See, full story.

WTO Arbitrator Allows Sanctions for Byrd Amendment

8/31. The World Trade Organization (WTO) released arbitrator decisions permitting Europe and seven other countries to impose retaliatory trade sanctions upon the U.S. for violating provisions of the WTO agreements on anti-dumping and subsidies. See, WTO web page with links to decisions. See also, EU release.

On January 16, 2003, the WTO Appellate Body upheld a panel finding that the US Continued Dumping and Subsidy Offset Act of 2000, which is also known as the CDSOA, or the Byrd Amendment, violates WTO agreements. The just released decisions allow various countries to impose sanctions for this violation of up to $150 Million. See, story titled "WTO Appellate Body Holds Byrd Amendment Inconsistent With WTO Agreements" in TLJ Daily E-Mail Alert No. 585, January 17, 2003.

Sen. Charles Grassley (R-IA), the Chairman of the Senate Finance Committee, stated in a release [PDF] that "the Byrd amendment was slipped into an appropriations conference report without full debate in the Senate. The Finance Committee, as the committee of jurisdiction, never had a chance to review the amendment. I’m not surprised that a bill that was never considered by the committee of expertise or even the full Senate was found to violate our international commitments. That’s why we have committees -- to help make sure things like that don’t happen."

Sen. Grassley added that "Aside from the WTO ruling, there are a number of other problems with the way the Byrd amendment operates. For example, earlier this year the Congressional Budget Office issued a report in which it found that, regardless of the economic harm that can be caused by retaliation, the Byrd amendment is detrimental to the overall economic welfare of the United States. An earlier report issued by the Department of Treasury’s Inspector General found that the Bureau of Customs and Border Protection made $25 million in overpayments when disbursing Byrd amendment funds."

The Office of the U.S. Trade Representative (USTR) issued a statement which states that "Today's determination will not affect the ability of the United States to continue enforcing its trade laws to impose duties on countries that sell unfairly dumped or subsidized products in the U.S. market. The Byrd Amendment simply deals with how the funds collected from such duties are disbursed by the Treasury."

The Byrd amendment is a protectionist measure that was backed by members of the U.S. steel industry. It provides for the distribution of the anti-dumping and countervailing duties to the companies that brought or supported the complaints. Hence, it incents U.S. companies to pursue protectionist barriers. It also undermines claims by the U.S. that it is committed to free trade and to a rules based international trading system. This, in turn, harms efforts to obtain the benefits of free trade for other sectors, such as technology, that export products and services.

People and Appointments

8/31. David Wonnenberg was named Press Secretary of the Senate Commerce Committee, which is chaired by Sen. John McCain (R-AZ). As of September 7, 2004, Wonnenberg can be reached at 202 224-2670 or He will replace Rebecca Fisher.

8/31. Rebecca Fisher will join the Federal Communications Commission's (FCC) Media Bureau as spokesperson and media liaison, on September 7, 2004. Her e-mail address will be See, FCC release [PDF].

8/31. Solveig Singleton was named a Senior Adjunct Fellow at the Progress & Freedom Foundation. She has previously held positions at the Cato Institute, the Competitive Enterprise Institute, and the Federalist Society for Law & Public Policy Studies.

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8/31. Kevin P. Hannon plead guilty in U.S. District Court (SDTex) to one count of conspiracy to commit securities and wire fraud, in violation of 18 U.S.C. § 371, 15 U.S.C. §§ 78j(b) and 78(ff), 17 C.F.R. §§ 240.10b-5 and 240.10b5-1, and 18 U.S.C. § 1343. He is a former Chief Operating Officer of Enron Broadband Services. See, DOJ release.

FTC Brings First Action for Violation of TSR for Calling Numbers on Do Not Call Registry

8/30. The Federal Trade Commission (FTC) filed a civil complaint [7 pages in PDF] in U.S. District Court (DNev) against Braglia Marketing Group (BMG), and its principals, Frank and Kate Braglia, alleging violation of FTC's Telemarketing Sales Rule (TSR), 16 C.F.R. Part 310, and Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). The complaint alleges that the defendants made telemarketing calls to individuals whose numbers are on the National Do Not Call Registry, abandoned calls, and failed to pay the fee required to access the National Do Not Call Registry.

The FTC wrote in a release that "This is the first time the agency has sought civil penalties for violations of the Registry".

The complaint alleges that BMG is a telemarketing business based in Nevada that is owned by Frank and Kate Braglia. It alleges that "On or after October 1, 2003, in connection with telemarketing, BMG has placed, or caused others to place, more than 300,000 calls to consumer' telephone numbers that are on the National Do Not Call Registry." The complaint alleges that they made calls to induce consumers to purchase goods or services from Flagship Resort Development Corporation and Atlantic Palace Development, LLC.

This case is Federal Trade Commission v. Braglia Marketing Group, et al., U.S. District Court for the District of Nevada, D.C. CV-S-04-1209-DWH-PAL.

People and Appointments

8/30. The Federal Communications Commission (FCC) announced numerous changes to the management team of the FCC's Wireless Telecommunications Bureau's (WTB) Spectrum & Competition Policy Division. See, FCC release [PDF].

More Court Opinions

8/30. The U.S. Court of Appeals (1stCir) issued its opinion in Paul Revere Life Insurance Company v. Paul Bromberg, an Employee Retirement Income Security Act (ERISA) case involving a claim of repetitive stress injury by a computer programmer who asserted injury caused by using a computer keyboard. Paul Revered filed a complaint in U.S. District Court (DMass) against its insured, Bromberg, a computer software engineer previously employed by Ascent Technologies, seeking a declaratory judgment of non-coverage. The District Court dismissed the complaint for lack of subject matter jurisdiction. The Court of Appeals reversed and remanded.

8/30. The U.S. Court of Appeals (11thCir) issued its opinion [23 pages in PDF] in AT&T Broadband v. Tech Communications, holding that the Cable Communications Policy Act (CCPA), which is codified at 47 U.S.C. § 553, empowers the District Court to issue an ex parte order authorizing a freeze of assets or a search and seizure of property belonging to an alleged violator. Subsection (c)(2)(A) provides that "The court may ... grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain violations of subsection (a)(1) of this section".

8/30. The U.S. District Court (SDNY) issued its Stipulated Permanent Injunction Order [14 pages in PDF] in FTC v. Silverman. The Federal Trade Commission (FTC) filed a complaint in the District Court on November 9, 2002 alleging violation of FTC Act in connection with the defendants' sale of laptop computers via internet auction websites, including eBay. The defendants auctioned merchandise, collected payment, but did not always make delivery. The individual defendants are Brian E. Silverman and John Engholm aka John Patterson. This case is FTC v. Brian E. Silverman, et al., D.C. No. 02-8920 (GEL), Judge Gerald Lynch presiding.

10th Circuit Rules in MDU Inside Wiring Case

8/27. The U.S. Court of Appeals (10thCir) issued its divided opinion in Time Warner Entertainment v. Everest Midwest, a case regarding the Federal Communications Commission's (FCC) cable television inside wiring rules.

The Atriums is a mult-unit retirement complex located in Overland Park, Kansas. Time Warner is a cable company, and the successor to TeleCable of Overland Park. Back in 1987 The Atriums and TeleCable entered into a non-exclusive license agreement to provide cable TV service in The Atriums. TeleCable proceeded to install a cable distribution system. The contract provided that TeleCable (now Time Warner) retains property ownership of the equipment installed.

The Atriums now wants to allow Everest Midwest Licensee to compete with Time Warner in the provision of cable television and high speed internet services. At issue in this dispute is access to home run wiring.

The Atriums demanded Time Warner elect to abandon, sell, or remove its home run wires in The Atriums which were not currently being used by Time Warner subscribers, pursuant to FCC regulations.

The home run wiring is the wires that run from the riser through the hallway ceilings on each floor and toward each individual apartment. The riser is the cable that runs into the building through a utility closet on the ground floor, and up through utility closets on each of the floors.

Time Warner refused, arguing that under FCC regulations, a multiple dwelling unit (MDU) owner may invoke the regulations only when the incumbent provider lacks a legally enforceable interest in maintaining the home run wires on the property. Time Warner asserted that is retained a legally enforceable interest.

The relevant regulations were promulgated pursuant to the 1992 Cable Television Consumer Protection and Competition Act, which required the FCC to write rules to foster multichannel video programming distributor (MVPD) competition in MDUs.

47 C.F.R. § 76.804(b) provides, in part, that if a MVPD owns the home run wiring in an MDU and does not "have a legally enforceable right to maintain any home run wire dedicated to an particular unit on the premises against the MDU owner's wishes, the MDU owner may permit multiple MVPDs to compete for the right to use the individual home run wires dedicated to each unit in the MDU".

Time Warner filed a complaint in U.S. District Court (DKansas) against Atrium Partners and Everest Midwest Licensee seeking a declaratory judgment that 47 C.F.R. § 76.804 does not apply to its home run wiring in The Atriums.

The District Court held that Time Warner had a legal right to the home run wires running to apartments of current Time Warner subscribers, but that for the home run wires running to apartments of non-subscribers, The Atriums could invoke § 76.804(b), thereby requiring Time Warner to abandon, sell, or remove those home run wires.

Time Warner appealed. The Appeals Court affirmed.

The Appeals Court applied the state contract law to determine whether the original 1987 contract provided Time Warner a legally enforceable right to maintain home run wiring. Following a lengthy analysis of the contract the Court concluded that the contract gave Time Warner the right to maintain its facilities only when it was providing service to a tenant.

The Court also noted that "Time Warner is required, under the new FCC regulations, to sell, abandon, or remove home run wiring which it lacks a legally enforceable right to maintain. ... As a result, under our reading of the license agreement, should a tenant cancel service with Time Warner, Time Warner would have to sell its lines to a competitor. Similarly, if the tenant then cancelled its subscription with a competitor, and wished to subscribe with Time Warner, that competitor would then be obligated to sell the lines to Time Warner under the regulations."

This case is Time Warner Entertainment Company and Liberty Cable of Missouri, Inc. v. Everest Midwest Licensee, LLC, Atrium Partners, et al., U.S. Court of Appeals for the 10th Circuit, App. Ct. No. 03-3005, an appeal from the U.S. District Court for the District of Kansas, D.C. No. D.C. No. 02-CV-2343-CM  Judge Lucero wrote the opinion, in which Judges McKay joined. Judge Hartz wrote a dissent.

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8/27. The Federal Communications Commission (FCC) published in its web site its previously filed brief [46 pages in PDF] for the U.S. Court of Appeals (DCCir) in USTA v. FCC, a case regarding intermodal local number portability. The U.S. Telecom Association, CenturyTel, the National Telecommunications Cooperative Association (NTCA), and the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO) challenged the FCC's Memorandum Opinion and Order and Further Notice of Proposed Rulemaking [35 pages in PDF] released on November 10, 2003, in which the FCC clarified that the obligation imposed by the Telecommunications Act of 1996, as implemented in the FCC's First Portability Order, requires local exchange carriers (LEC) to port numbers to a commercial mobile radio services (CMRS) carrier in certain circumstances. See, story titled "FCC Releases LNP Order That Addresses Wireline to Wireless" in TLJ Daily E-Mail Alert No. 776, November 11, 2003. This case is U.S. Telecom Association v. FCC and USA, U.S. Court of Appeals for the District of Columbia Circuit, App. Ct. Nos. 03-1414 and 03-1443, petitions for review of a final order of the FCC. In addition, the FCC will hold a meeting on September 9 at which it will consider a Second Further Notice of Proposed Rulemaking seeking comment on the recommendation of the North American Numbering Council (NANC) for reducing the time interval for intermodal porting.

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8/26. The U.S. District Court (DMass) issued its opinion [70 pages in PDF] in Global Naps v. Verizon, a case regarding a state public utilities commission's interpretation of an interconnection agreement.

8/26. Attorney General John Ashcroft and others held a press conference to review recent prosecutions and investigations by the Department of Justice, U.S. Postal Service, Federal Trade Commission, U.S. Secret Service, and Bureau of Immigration and Customs Enforcement involving online fraud, identity theft, and computer related crimes  See, Ashcroft transcript.

8/26. The U.S. District Court (CDCal) issued it Order Dismissing Antitrust Claim with Prejudice and Declining to Exercise Supplemental Jurisdiction Over Remaining State Law Claims [16 pages in PDF] in VeriSign v. ICANN. This case is VeriSign, Inc. v. Internet Corporation for Assigned Names and Numbers, U.S. District Court for the Central District of California, D.C. No. CV-01-1292 AHR(CTx), Judge Howard Matz presiding.

People and Appointments

8/26. John Pistole was named Deputy Director of the Federal Bureau of Investigation (FBI). He has worked for the FBI since 1983. He replaces Bruce Gebhardt, who retired. The FBI stated in a release that "Pistole will oversee all operational and investigative matters in the FBI, with a particular emphasis oversight of the FBI's reengineering efforts".

Go to News from August 21-25, 2004.