TLJ News from March 6-10, 2008

District Court Enjoins Spyware Distributor

3/10. The U.S. District Court (DNev) issued a final order [11 pages in PDF] in FTC v. ERG Ventures on January 3, 2008. The order permanently enjoins ERG Ventures, Timothy P. Taylor and others from distributing spyware software.

The Federal Trade Commission (FTC) issued a release on March 10, 2008, that states that the defendants tricked consumers into downloading malicious software "by hiding it within seemingly innocuous free programs, including screensavers and video files. Once downloaded, the malware silently activated itself and installed programs that changed consumers' home pages, tracked their Internet activity, altered browser settings, degraded computer performance, and disabled anti-spyware and anti-virus software. Many of the malware programs installed by the defendants were extremely difficult or impossible for consumers to remove from their computers."

The order bars the defendants from distributing, installing, or downloading software that "tracks consumers' Internet activity or collects other personal information; changes consumers' preferred Internet homepage settings; inserts a new advertising toolbar onto consumers' Internet browsers; generates numerous ``pop up´´ advertisements on consumers' computer screens even when consumers' Internet browsers are closed; adds advertising icons to the computer s desktop; tampers with, disables, or otherwise alters the performance of other programs including anti-spyware and anti-virus programs; alters Internet browser security settings, including the list of safe or trusted websites; or installs other advertising Software on consumers' computers."

The District Court issued an order on October 3, 2007, that covered most of the defendants. The January 3, 2008, order covers defendant Timothy P. Taylor. It also imposes a token monetary fine on Taylor. It also requires compliance monitoring, compliance reporting, and recording keeping by the defendants.

This case is FTC v. ERG Ventures LLC, et al., U.S. District Court for the District of Nevada, D.C. No. 3:06-CV-00578-HDM-VPC , Judge Howard McKibben presiding.

House Approves 911 Resolution

3/10. The House approved HRes 537 by a vote of 381-0. See, Roll Call No. 108. This resolution "supports the designation of an appropriate month as ``National 9-1-1 Education Month´´ and the goals of such designation".

This resolution does not recite these "goals". However, the resolutions' findings, and the floor statements of some of the supporters of this resolution, suggest expanding the range of technologies covered by the Federal Communications Commission's (FCC) 911 and E911 regulatory regime.

For example, the resolution does contain the following finding: "Whereas a growing segment of the population ... are increasingly communicating with nontraditional text, video, and instant messaging communications services, and anticipate that these services will be able to connect directly to 9-1-1".

It also contains this: "Whereas the growth and variety of means of communication, including mobile and Internet Protocol-based systems, impose challenges for accessing 9-1-1 and implementing enhanced 9-1-1".

Rep. Lynn Westmoreland (R-GA) stated in the House that "We must also continue to modernize this vital tool. There is a growing population of citizens, otherwise unable to communicate clearly, who are learning to communicate through new technologies such as text, video, and instant messaging. We should strive to connect the use of emerging technologies to the 9-1-1 system." See, Congressional Record, March 10, 2007, at Page H1422.

FCC Files Opposition to Stay in Challenge to Its Latest Wireless E911 Location Tracking Mandates

3/10. The Federal Communications Commission (FCC) filed its opposition [24 pages in PDF] to wireless carriers' emergency motion for stay [27 pages in PDF] of the FCC's wireless E911 location accuracy requirements.

Last September the FCC issued another in a series of orders related to mandating and increasing the accuracy of location tracking of wireless devices, including VOIP.

The FCC adopted its order on September 11, 2007, and released the text on November 20, 2007. See, story titled "FCC Adopts E911 Location Tracking Accuracy Benchmarks" in TLJ Daily E-Mail Alert No. 1,640, September 17, 2007. This order is FCC 07-166 in PS Docket No. 07-114, CC Docket No. 94-102, WC Docket No. 05-196, FCC 07-166.

AT&T, Verizon Wireless, T-Mobile, Sprint-Nextel, and the Rural Cellular Association (RCA) filed petitions for review, and motion for stay, pending resolution of the underlying petitions. These petitions argue that the order is procedurally flawed because the FCC failed to comply with the Administrative Procedure Act and imposed requirements that have no support in the FCC's record. They further argue that they are unable to comply with the order, and hence would be irreparably harmed by it.

FCC Commissioner Robert McDowell wrote in a statement [PDF] associated with the September order that it "is fraught with highly dubious legal and policy maneuvering that bypasses a still developing record on what should be the reasonable and appropriate implementation details".

This case is Rural Cellular Association and T-Mobile USA v. FCC and USA, and consolidated cases, U.S. Court of Appeals for the District of Columbia, App. Ct. Nos. 08-1069, 08-1070, and 08-1076. See, February 20, 2008, petition for review [PDF] of the RCA and T-Mobile, to which is attached the FCC's order.

See also, story titled "FCC Extends E911 Location Tracking Rules to Interconnected VOIP" in TLJ Daily E-Mail Alert No. 1,589, May 31, 2007.

People and Appointments

3/10. New York Governor Eliot Spitzer, who in his previous position as Attorney General of New York, engaged in aggressive regulation and prosecution of international businesses, including some technology companies, issued a statement regarding a federal criminal investigation that encompasses his association with prostitute. David Patterson, the Lieutenant Governor, would become Governor following Gov. Spitzer's resignation. Andrew Cuomo is the New York Attorney General.

Martin Discusses Complaints Against Comcast and Verizon Wireless

3/7. Federal Communications Commission (FCC) Chairman Kevin Martin gave a speech at Stanford University's law school.

He discussed open wireless platforms, quantifying broadband deployment, network neutrality, the pending complaint against Comcast, the pending complaint against Verizon Wireless, and VOIP patent litigation. Martin spoke harsh words about Comcast's network management practices, which affect consumers' use of BitTorrent. In contrast, he distinguished the petition against VW regarding blocking of certain text messages on the basis that VW promptly changed its practice.

The FCC did not release either a prepared text or transcript of this speech. This article quotes from an audio recording in the Stanford web site.

See, full story.

More News

3/7. The Federal Communications Commission (FCC) released an Order and Declaratory Ruling approving, subject to limitations, the petition for declaratory ruling filed by Mobile Satellite Ventures Subsidiary LLC (MSV) and SkyTerra Communications, Inc. to allow indirect foreign ownership of MSV in excess of the 25 percent benchmark set forth in 47 U.S.C. § 310(b)(4). This Order and DR also approves the petition for declaratory ruling of Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, L.P. for permission to to increase their ownership in MSV, but not to exceed a non-controlling de jure or de facto 49.99 percent equity interest and 49.99 voting interest. FCC Commissioner Michael Copps wrote in his concurring statement that the "still has not conducted a comprehensive investigation into the effects of private equity investment on Commission licensees". This Order is FCC 08-77.

House Subcommittee Amends PRO-IP Act

3/6. The House Judiciary Committee's (HJC) Subcommittee on Courts, the Internet and Intellectual Property (SCIIP) amended and approved HR 4279 [LOC | WW | PDF], the "Prioritizing Resources and Organization for Intellectual Property Act of 2007", also known as the PRO IP Act.

Rep. John Conyers (D-MI), Rep. Lamar Smith (R-TX), Rep. Howard Berman (D-CA), and others introduced this bill on December 5, 2007. This lengthy bill addresses remedies for infringement and counterfeiting and the organization and funding of government efforts to enforce intellectual property rights. For a summary of the bill as introduced, see story titled "Representatives Introduce PRO IP Act" in TLJ Daily E-Mail Alert No. 1,683, December 5, 2008.

Rep. Conyers, the Chairman of the HJC, stated in opening that counterfeiting and piracy of intellectual property harms the U.S. economy, and therefore, "we need to radically step up our efforts because the problem is expanding faster than our enforcement efforts can keep up".

Rep. Smith, the ranking Republican on the HJC, wrote in his opening statement that intellectual property is "critical to preserving a strong American economy and promoting American workers", and that "the investment needed to create and produce world-leading intellectual property is in stark contrast to the easy, massive, unauthorized reproduction and distribution of fraudulent and unlicensed products and services".

He said that more must be done to ensure that the government has the necessary resources, and the "PRO-IP Act provides a strong foundation".

The Subcommittee approved an managers' amendment [3 pages in PDF], and then the bill as amended.

See, full story.

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3/6. The U.S. Court of Appeals (8thCir) issued an opinion [PDF] in Steinbuch v. Cutler, affirming in part and reversing in part the District Court's dismissal for lack of personal jurisdiction and failure to state a claim. Robert Steinbuch, a former Senate Judiciary Committee (SJC) counsel for former Sen. Mike DeWine (R-OH), filed a complaint in U.S. District Court (DArk) against Jessica Cutler, a former staff assistant for Sen. DeWine with whom he associated, alleging invasion of privacy and intentional infliction of emotional distress in connection with statements that she made in an internet blog and book based upon the blog. Steinbuch also named as defendants Hyperion Books (which published Cutler's book [Amazon] titled "The Washingtonienne"), Home Box Office (which holds an option to develop a television series based on the book), Disney Publishing Worldwide (parent company of Hyperion), and Time Warner (parent company of HBO and Time Warner Book Group, distributor of the book). The District Court dismissed all claims either for failure to state a claim, or for lack of personal jurisdiction. Steinbuch brought the present appeal. The appeal as to Cutler has been stayed by her filing of a bankruptcy petition. The Court of Appeals affirmed the dismissals as to all defendants, except Hyperion Books. This case is Robert Steinbuch v. Jessica Cutler, et al., U.S. Court of Appeals for the 8th Circuit, App. Ct. No. 07-1509, an appeal from the U.S. District Court for the District of Arkansas. Steinbuch has also filed a civil action in the District of Columbia, D.C. No. 05-970 (PLF/JMF).

Go to News from March 1-5, 2008.